Financial Independence worksheet

1. Years to financial independence: 21.3 years

1. Find the target: divide yearly spending by the 3% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$35,000.00}}{0.03}$$=\mathrm{\$1,166,666.67}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$28,000.00}}{0.04}$$=\mathrm{\$700,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$1,166,666.67}+\mathrm{\$700,000.00}}{\mathrm{\$110,000.00}+\mathrm{\$700,000.00}}\right)}{\ln \left(1+0.04\right)}$$=21.29\text{years}$

4. Add the years to your current age

   $20+21.29$$=41.29$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$110,000.00}}{\mathrm{\$1,166,666.67}}\times 100$$=\mathrm{9.43\%}$

2. Years to financial independence: 23.1 years

1. Find the target: divide yearly spending by the 3% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$42,000.00}}{0.03}$$=\mathrm{\$1,400,000.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$30,000.00}}{0.04}$$=\mathrm{\$750,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$1,400,000.00}+\mathrm{\$750,000.00}}{\mathrm{\$117,500.00}+\mathrm{\$750,000.00}}\right)}{\ln \left(1+0.04\right)}$$=23.14\text{years}$

4. Add the years to your current age

   $25+23.14$$=48.14$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$117,500.00}}{\mathrm{\$1,400,000.00}}\times 100$$=\mathrm{8.39\%}$

3. Years to financial independence: 13.3 years

1. Find the target: divide yearly spending by the 5% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$45,000.00}}{0.05}$$=\mathrm{\$900,000.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$35,000.00}}{0.06}$$=\mathrm{\$583,333.33}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$900,000.00}+\mathrm{\$583,333.33}}{\mathrm{\$100,000.00}+\mathrm{\$583,333.33}}\right)}{\ln \left(1+0.06\right)}$$=13.3\text{years}$

4. Add the years to your current age

   $34+13.3$$=47.3$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$100,000.00}}{\mathrm{\$900,000.00}}\times 100$$=\mathrm{11.11\%}$

4. Years to financial independence: 19.5 years

1. Find the target: divide yearly spending by the 4% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$48,000.00}}{0.04}$$=\mathrm{\$1,200,000.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$27,000.00}}{0.06}$$=\mathrm{\$450,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$1,200,000.00}+\mathrm{\$450,000.00}}{\mathrm{\$80,000.00}+\mathrm{\$450,000.00}}\right)}{\ln \left(1+0.06\right)}$$=19.49\text{years}$

4. Add the years to your current age

   $30+19.49$$=49.49$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$80,000.00}}{\mathrm{\$1,200,000.00}}\times 100$$=\mathrm{6.67\%}$

5. Years to financial independence: 14 years

1. Find the target: divide yearly spending by the 4% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$27,500.00}}{0.04}$$=\mathrm{\$687,500.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$22,500.00}}{0.06}$$=\mathrm{\$375,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$687,500.00}+\mathrm{\$375,000.00}}{\mathrm{\$95,000.00}+\mathrm{\$375,000.00}}\right)}{\ln \left(1+0.06\right)}$$=14\text{years}$

4. Add the years to your current age

   $28+14$$=42$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$95,000.00}}{\mathrm{\$687,500.00}}\times 100$$=\mathrm{13.82\%}$

6. Years to financial independence: 22.6 years

1. Find the target: divide yearly spending by the 3% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$44,000.00}}{0.03}$$=\mathrm{\$1,466,666.67}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$30,000.00}}{0.05}$$=\mathrm{\$600,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$1,466,666.67}+\mathrm{\$600,000.00}}{\mathrm{\$85,000.00}+\mathrm{\$600,000.00}}\right)}{\ln \left(1+0.05\right)}$$=22.63\text{years}$

4. Add the years to your current age

   $30+22.63$$=52.63$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$85,000.00}}{\mathrm{\$1,466,666.67}}\times 100$$=\mathrm{5.8\%}$

7. Years to financial independence: 21.2 years

1. Find the target: divide yearly spending by the 3% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$36,000.00}}{0.03}$$=\mathrm{\$1,200,000.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$26,000.00}}{0.05}$$=\mathrm{\$520,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$1,200,000.00}+\mathrm{\$520,000.00}}{\mathrm{\$90,000.00}+\mathrm{\$520,000.00}}\right)}{\ln \left(1+0.05\right)}$$=21.25\text{years}$

4. Add the years to your current age

   $22+21.25$$=43.25$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$90,000.00}}{\mathrm{\$1,200,000.00}}\times 100$$=\mathrm{7.5\%}$

8. Years to financial independence: 22.3 years

1. Find the target: divide yearly spending by the 4% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$37,500.00}}{0.04}$$=\mathrm{\$937,500.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$20,000.00}}{0.04}$$=\mathrm{\$500,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$937,500.00}+\mathrm{\$500,000.00}}{\mathrm{\$100,000.00}+\mathrm{\$500,000.00}}\right)}{\ln \left(1+0.04\right)}$$=22.28\text{years}$

4. Add the years to your current age

   $25+22.28$$=47.28$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$100,000.00}}{\mathrm{\$937,500.00}}\times 100$$=\mathrm{10.67\%}$

9. Years to financial independence: 15.9 years

1. Find the target: divide yearly spending by the 5% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$42,500.00}}{0.05}$$=\mathrm{\$850,000.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$25,000.00}}{0.05}$$=\mathrm{\$500,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$850,000.00}+\mathrm{\$500,000.00}}{\mathrm{\$122,000.00}+\mathrm{\$500,000.00}}\right)}{\ln \left(1+0.05\right)}$$=15.88\text{years}$

4. Add the years to your current age

   $23+15.88$$=38.88$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$122,000.00}}{\mathrm{\$850,000.00}}\times 100$$=\mathrm{14.35\%}$

10. Years to financial independence: 16.5 years

1. Find the target: divide yearly spending by the 4% withdrawal rate, so that share of the target covers one year

   $\frac{\mathrm{\$39,000.00}}{0.04}$$=\mathrm{\$975,000.00}$

2. Turn your yearly saving into one lump sum that would earn the same each year: yearly saving ÷ return

   $\frac{\mathrm{\$30,000.00}}{0.06}$$=\mathrm{\$500,000.00}$

3. Find the number of years until your savings plus your yearly additions grow to the target, using logarithms

   $\frac{\ln \left(\frac{\mathrm{\$975,000.00}+\mathrm{\$500,000.00}}{\mathrm{\$65,000.00}+\mathrm{\$500,000.00}}\right)}{\ln \left(1+0.06\right)}$$=16.47\text{years}$

4. Add the years to your current age

   $20+16.47$$=36.47$

5. See how far along you already are: today's savings ÷ the target

   $\frac{\mathrm{\$65,000.00}}{\mathrm{\$975,000.00}}\times 100$$=\mathrm{6.67\%}$