How much money do you need for financial independence?
Your financial independence number starts with the lifestyle you want to fund. Connect annual expenses with a withdrawal assumption, then allow for inflation before retirement.
Start with annual retirement expenses
Today’s FIRE number = monthly retirement expenses × 12 ÷ initial withdrawal rate. Write the percentage as a decimal: a 3.5% assumption means dividing annual spending by 0.035, or multiplying it by about 28.57.
The same equation works in dollars, pounds, euros, yen or any other currency. Keep every amount in the same currency. Changing the currency label does not change purchasing power or convert your savings.
A worked example in US dollars
With monthly expenses of $4,000, annual spending is $48,000. At a 3% withdrawal assumption the target is $1,600,000; at 3.5%, about $1,371,429; at 4%, $1,200,000. These are targets in today’s money, before any inflation between now and retirement.
These percentages are comparison inputs, not validated safe rates for any country. An expense-based target does not establish that a portfolio can fund a particular retirement duration.
Separate today’s money from future money
At an illustrative 3% annual expense inflation rate, $4,000 monthly spending today becomes about $7,224 per month after 20 years. At 3.5%, that implies a future target of about $2,476,953. The larger number funds the same assumed lifestyle at a different price level.
Read how inflation affects your target. Enter nominal investment returns in the calculator: it handles expense inflation separately.
Build a spending estimate you can explain
Include recurring housing, food, utilities, transport, travel, insurance and healthcare expenses. Average annual bills across 12 months. Distinguish costs that will continue in retirement from those that end earlier. Keep emergency reserves, one-off purchases and other goals separate so that the same savings are not committed twice.
Account for your country’s circumstances
Taxes, healthcare costs, pensions and access to retirement accounts differ between countries and individuals. The country selector sets a currency and number format; it does not automatically estimate benefits, apply tax rules, adjust for living costs or determine when money becomes accessible.
For an early retirement, also consider the period before any pension or retirement account becomes available. Benefits that begin later should not be subtracted from spending throughout an earlier retirement without modelling that gap.
Turn the target into a saving plan
Use the FIRE calculator to compare your existing investments and monthly contributions with the inflation-adjusted target. Explore the age-40, 45 and 50 examples and withdrawal-rate comparison. Our methodology explains timing and exclusions.
Explore a range of retirement outcomes
The worked examples above use fixed returns. The optional Monte Carlo simulation explores varying returns, portfolio withdrawals and percentile outcomes. Try your own assumptions →