How to read this number
The 4% rule is an excellent compass and a poor commandment: it comes from markets that returned the average, but real life deals good and bad years in any order. A lower rate (3–3.5%) buys peace of mind against sequence-of-returns risk; that's why it's worth pairing with a cash reserve, a gradual withdrawal-rate glide path, and spending flexibility. Your FI number is a destination, not a promise: revisit it as you approach retirement using a dynamic withdrawal strategy.
What each field means
A quick look at every field and every result.
What you want to be able to spend each year living off your portfolio, in today's dollars.
The percentage of your capital you withdraw each year. 4% is the classic rule; a lower rate (3–3.5%) gives you more cushion against bad years early in retirement.
What you already have invested today. It's only used to calculate how much you have left to save — it doesn't change your FI number.
The main result: your annual spending divided by the withdrawal rate. It's a destination, not an exact promise.
What your FI number would let you withdraw each month, applying the rate you chose.
How many times your annual spending you need saved. With the classic 4% rule, it's always 25×.
The difference between your FI number and what you've already saved.
How to fill in this calculator
Steps to calculate your FI number (expand)
- Enter your desired annual spending, not your salary. What you need to save depends on what you spend, not what you earn. That's the mindset shift behind this whole section.
- Choose your withdrawal rate with the three shortcuts. From the classic 4% down to a conservative 3%. Dropping it by just one point raises the capital you need a lot — try it and see how much.
- Add the capital you've already saved. So you see not just the destination, but how far you still have to go.
- Then move on to the Time to FI calculator. This one gives you the destination in dollars; that one tells you how many years it would take to get there at your savings rate.
Frequently asked questions about this calculator
Why don't I need to enter inflation here, when other calculators ask for it?
Because this isn't a calculation projected over time: it's a ratio between two figures in today's terms (annual spending ÷ withdrawal rate). Your FI number comes out already in today's dollars. Inflation matters when you're projecting how many years it will take to get there — that's what the Time to FI calculator is for.
Why choose a withdrawal rate lower than the classic 4%?
The 4% rule comes from markets that returned the average, but real life deals good and bad years in any order. A lower rate (3–3.5%) buys peace of mind against sequence-of-returns risk: the chance that the first market drops line up right at the start of your retirement.
I already have other income (a pension, rental income...). Where do I enter that?
It doesn't go in "Capital already saved" — that field is for your portfolio only. Subtract it from "Desired annual spending" instead: if your spending is $24,000 and you expect $6,000 from a pension, enter $18,000 as the spending your portfolio needs to cover.
How does this relate to the "Time to FI" calculator?
This calculator gives you the destination: how much capital you need. The other calculator gives you the route: how many years it will take to get there, based on how much you save each month.