What this calculator does
Find out how much you'd need invested to live without a paycheck, and how many years it will take to get there. That's financial independence: your investments pay for your life, so work becomes a choice.
The idea behind it is easy to follow. Say you plan to spend a fixed share of your portfolio (your total investments) each year. Then the portfolio you need is your yearly spending divided by that share. At a 4% withdrawal rate, that's 25 times your spending. At 3.5%, it's about 28.6 times.
This calculator finds that target, often called your FI number. Then it works out how long it takes to reach it from where you are today. It grows your current savings at the return you choose and adds what you invest each year. Then it finds the exact number of years until the balance meets the target. Everything is in today's dollars. So the return you enter is the real return, meaning after inflation.
Where it's used
Why this math matters outside the classroom:
- Setting a savings target. Savers divide $40,000 of yearly spending by a 4% withdrawal rate to get a $1,000,000 target portfolio.
- Timing early retirement. Planners solve 600,000 × 1.05ⁿ = 1,500,000 with logarithms to find that a goal is about 18.8 years away.
- Comparing savings rates. A household compares investing $15,000 or $25,000 a year to see how many years each choice takes to reach the same target.
- Classroom finance. Students sum a geometric series of yearly deposits to see how $25,000 a year grows at 5% over two decades.
Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4, HSF.LE.A.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter what you expect to spend each year once work is optional, in today's dollars.
- Enter your invested savings now and the amount you invest each year.
- Choose a real return (after inflation) and a withdrawal rate. 4% is a common starting point, and a lower rate is more cautious.
- If you like, enter your age to see how old you'd be when you reach the target. Then try different savings amounts or spending levels.
What the inputs mean
- Yearly spending in retirement
- Your expected yearly spending once you stop relying on a paycheck. Lower spending helps twice. It shrinks the target, and it usually frees more money to invest.
- Amount you invest each year
- Everything you add to investments in a year: workplace plan contributions, IRAs and regular taxable investing. Keep it in today's dollars.
- Real return (after inflation)
- Use the return after inflation, because the target and your spending are in today's dollars. If you expect 7% a year and 2.5% inflation, enter about 4.5%.
- Withdrawal rate
- The share of the portfolio you plan to take out in the first year of independence. A lower rate means a larger target. But it leaves more room for poor markets or a long retirement.
Formula and method
target portfolio T = yearly spending ÷ withdrawal rate balance after n years: B = P(1 + r)ⁿ + S((1 + r)ⁿ − 1) ÷ r years to target: n = ln((T + S/r) ÷ (P + S/r)) ÷ ln(1 + r) with no growth (r = 0): n = (T − P) ÷ S
T is the target portfolio and B is the balance. P is what you have invested today, and S is the amount you add at the end of each year. r is the real yearly return as a decimal, so 5% is 0.05. n is the number of years, and ln is the natural logarithm, which undoes growth to find time.
The balance formula has two parts. The first is what today's savings grow into. The second is what your equal yearly deposits grow into, all added up. Mathematicians call that kind of sum a geometric series.
Set that balance equal to the target and solve for n with logarithms to get the years needed. The answer can include part of a year, falling smoothly between year ends. The table shows the actual year-end balances, so you can see when the target is first passed.
If the return is negative, the balance can only level off at S ÷ |r| (S divided by r without its minus sign). When that ceiling is below the target, the calculator explains that the target can't be reached on that plan.
Worked example
You're 30 and spend $40,000 a year. You have $100,000 invested and invest $25,000 a year. You assume a 5% real return and plan on a 4% withdrawal rate.
- Target portfolio: $40,000 ÷ 0.04 = $1,000,000.
- Lump-sum equivalent of the yearly saving: $25,000 ÷ 0.05 = $500,000.
- Years: ln(($1,000,000 + $500,000) ÷ ($100,000 + $500,000)) ÷ ln(1.05) = ln 2.5 ÷ ln 1.05 ≈ 18.78.
- Age at financial independence: 30 + 18.78 ≈ 48.8.
Result: You'd need $1,000,000. On this plan you'd reach it in about 18.8 years, around age 48.8. Today's savings are 10% of the way there.
Understanding the result
The target tells you the size of the goal. The years tell you how far away it is. The two biggest levers are spending and the amount you invest each year. Cutting yearly spending by $4,000 at a 4% rate lowers the target by $100,000. It usually lets you invest more as well.
The return matters too, but it isn't in your control, so test a cautious one. Watching the table can be encouraging. The balance grows slowly at first and faster later, as returns start to match what you put in.
Assumptions and limitations
- A steady real return every year, with the year's investment added at the end of the year.
- Spending and yearly investing stay constant in today's dollars.
- The withdrawal rate is applied to the portfolio on the day you reach the target.
- No taxes, fees or account rules. Enter a return after fees.
- This is an educational estimate, not financial advice. Markets don't deliver a steady return. A run of poor years early in retirement can matter a great deal.
- A withdrawal rate is a planning rule of thumb, not a guarantee. The right rate depends on how long the money must last, your investments and how flexible you can be. Use the withdrawal calculator to test how long a portfolio lasts.
- Taxes on withdrawals, health insurance before Medicare age, Social Security and other income aren't modelled.
Frequently asked questions
What is a FI number?
It's the portfolio size at which planned withdrawals cover your spending: yearly spending divided by your withdrawal rate. At 4%, it's 25 times your yearly spending, so $40,000 a year needs $1,000,000.
Why use a real return instead of the market's average return?
Because the target and your spending are in today's dollars. Taking inflation off the return keeps everything in the same units. So the answer is how many years until your savings reach the goal, both measured in today's dollars.
Is 4% a safe withdrawal rate?
It's a common starting point that comes from studies of past US market returns over 30-year retirements. Someone retiring early may need their money to last 40 years or more. They may prefer a lower rate, such as 3.5%, for extra margin. Nothing guarantees any rate.
Does this include Social Security or a pension?
Not directly. One easy way to allow for them is to subtract the yearly income you expect from your spending before you enter it. Just remember that the income may not start until later in life.
How can I reach financial independence sooner?
Raise the amount you invest, lower the spending you plan for, or both. Try each in the calculator. A higher savings rate shortens the path from both ends. Money you don't spend gets invested, and it also lowers the target.
How this calculator is checked
Method: Target = spending ÷ withdrawal rate; future value of a lump sum plus an ordinary annuity (geometric series), solved for n with logarithms. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.
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