Find the portfolio that covers your yearly spending at a safe withdrawal rate, and the number of years your savings take to reach it.
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Financial independence, often called FIRE, is the point where investment income can cover your living costs without a salary. The target is simply your annual spending divided by the withdrawal rate. Spending 30,000 dollars a year at a 4 percent withdrawal rate needs a portfolio of 750,000 dollars.
The projection starts from what you have invested today, adds your yearly savings, and grows the total at your expected return, one year at a time. It stops at the first year the portfolio reaches the target, so you can see how changing spending or saving alters the date.
It is a planning guideline that a retiree can withdraw 4 percent of the starting portfolio in the first year, then adjust that amount for inflation, with a reasonable chance of lasting 30 years. It is based on historical US data and is not a guarantee for every market.
Use spending. The target depends on what you will withdraw, and that is your annual living costs in retirement. Include housing, food, insurance, taxes and travel, and remove costs you expect to end, such as commuting or a mortgage you have paid off.
No. The projection uses gross returns and a flat withdrawal rate. Taxes on dividends, capital gains and withdrawals reduce what you can actually spend, so either use a lower withdrawal rate or add a tax allowance to your spending.
Use a return after inflation if you want the answer in today's money, and be conservative. Many planners use 4 to 6 percent real. Test a lower number to see how sensitive your timeline is.
If savings are very small compared with the target and returns are low, the portfolio may never grow enough. Increase the yearly savings, lower spending, or raise the return assumption to see what changes the result.
No. The projection runs in your browser and nothing is sent to a server.