Early Retirement Calculator
Use this interactive calculator to determine when you can achieve financial independence and retire early based on your current financial situation.
$75,000
$45,000
$50,000
7% per year
3% per year
How it works:
- The calculator determines when your investment returns can cover your annual expenses
- Target portfolio = Annual Expenses ÷ Withdrawal Rate
- Your savings rate is the most important factor for early retirement
- Assumes expenses remain constant and accounts for compound growth
How It Works
Section titled “How It Works”The calculator uses the following formula to determine your path to financial independence:
- Savings Rate: Calculated as (Income - Expenses) / Income
- Target Portfolio: Your annual expenses divided by your safe withdrawal rate
- Years to FI: Based on compound growth of your savings and current portfolio
Key Assumptions
Section titled “Key Assumptions”- Safe Withdrawal Rate: The percentage of your portfolio you can withdraw annually in retirement
- Investment Returns: Expected annual return on your investment portfolio
- Constant Savings: Assumes you maintain consistent savings and expenses
Tips for Using the Calculator
Section titled “Tips for Using the Calculator”- Be Conservative: Use realistic return expectations (5-7% is reasonable for stock/bond portfolios)
- Include All Expenses: Don’t forget taxes, healthcare, and lifestyle inflation
- Consider Multiple Scenarios: Try different withdrawal rates to see how it affects your timeline
- Update Regularly: Recalculate as your financial situation changes
The path to financial independence is a marathon, not a sprint. Small increases in your savings rate can dramatically reduce the time to reach your goal.