Financial freedom calculator
Financial freedom is a sum, not a feeling. It is the capital that covers your monthly spending at a withdrawal rate you trust. This gives you that sum and the year you would reach it.
Financial freedom
- Capital you need
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- You get there in
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- Of that you save yourself
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How to use it
Start with what you actually spend per month, not what you earn. The withdrawal rate decides how large the pile has to be, and three to four percent is where most people land. Then add what you already hold and what you save each month.
An example
Mia spends 2,500 euro a month and works with 3.5 percent, so she needs about 857,000 euro. She holds 60,000 and saves 800 a month at 6 percent, which gets her there in roughly 26 years. Raising the rate to 1,200 euro cuts it to 22.
What the result leaves out
The target moves with inflation while the number here does not, so treat it in today’s money. It also assumes your spending stays flat, and health, children and housing rarely agree.
Questions people ask
Four came from a 30 year retirement in US market history. People who stop working at 45 need the money to last much longer, so most of them plan with three to three and a half.
Spending, always. The capital has to cover the life you lead, and every hundred euro you cut from monthly spending takes roughly 34,000 off the target.
No. Withdrawals are usually taxed on the gain, so the real target sits above this one. Adding ten to twenty percent is a rough way to allow for it.