Financial Independence Number Calculator

How it is calculated

The tool divides your yearly spending by the share of the portfolio you plan to withdraw each year: FI number = annual_expenses ÷ (withdrawal_rate ÷ 100). Annual expenses are in dollars per year, and the withdrawal rate is a percentage (4 means 4%). It also shows monthly budget = annual_expenses ÷ 12. Expenses may be zero, but the withdrawal rate must be above 0 and at most 100; a rate of 0, a rate above 100, a negative expense or an empty field gives no result. A lower rate gives a larger target: 4% equals 25 times expenses, 3.5% about 28.6 times. The tool has no inflation, tax, investment-return or pension inputs, so the result is the portfolio needed for the expenses as you enter them in today's money, not a prediction of how long a portfolio lasts.

Common mistakes

• Entering the withdrawal rate as 0.04. The field takes percent, so 4 means 4%; 0.04 means 0.04% and gives a target 100 times too large.
• Using monthly expenses in the annual field. Enter a full year of spending, otherwise the FI number is twelve times too small.
• Leaving out costs that stop only at retirement age, such as health insurance, or one-off costs like a home repair. The number covers only the spending you type.
• Treating the 4% rule as a guarantee. A lower rate such as 3.5% raises the target to $1,371,428.57 for the same spending, and the tool cannot say which rate is safe for you.
• Entering a rate above 100, for example 250. It gives no result, since a portfolio cannot fund more than its whole value each year; even 100 only returns one year of spending.