Enter your details and click "Calculate FI" to see your results.
What is Financial Independence (FI)?
Financial Independence (FI) is the state where you have enough passive income to cover your living expenses, meaning you no longer need to work for money. It's a powerful concept that offers freedom, security, and the ability to pursue your passions without financial constraints. Achieving FI doesn't necessarily mean you stop working entirely; it means you have the choice to do so.
The FI Number and the 4% Rule
A cornerstone of the FI movement is the "FI Number" – the total amount of money you need in your investment portfolio to be financially independent. This number is commonly derived using the "4% Rule" (or 25x Rule). The 4% Rule suggests that you can safely withdraw 4% of your investment portfolio each year, adjusted for inflation, without running out of money over a typical retirement period (e.g., 30 years). Therefore, your FI Number is generally calculated as:
FI Number = Annual Expenses × 25
If you prefer a more conservative approach, you might use a 3.33% withdrawal rate (30x your annual expenses) or a more aggressive 5% withdrawal rate (20x your annual expenses). The "FI Target Multiple" in the calculator allows you to adjust this factor.
Key Factors Influencing Your Journey to FI
Annual Expenses: This is the most critical factor. The lower your annual expenses, the lower your FI Number, and the faster you can reach your goal.
Savings Rate: The percentage of your income you save and invest directly impacts how quickly your portfolio grows. A higher savings rate dramatically accelerates your journey to FI.
Investment Returns: The growth rate of your investments (after accounting for inflation) plays a significant role. Consistent, reasonable returns compound over time, helping you reach your FI Number faster.
Current Investment Portfolio: The more you've already saved, the less time it will take to reach your target.
How to Use This Calculator
Our Financial Independence Calculator helps you estimate your FI Number and the time it might take to achieve it. Simply input the following:
Current Annual Expenses: Your total yearly spending.
Current Investment Portfolio: The total value of your current savings and investments.
Annual Savings Contribution: How much you plan to save and invest each year.
Expected Annual Investment Return (%): Your anticipated average annual return on investments, ideally after inflation.
FI Target Multiple: The multiplier you use to determine your FI Number (e.g., 25 for the 4% rule).
The calculator will then provide your estimated FI Number and the number of years until you reach financial independence based on your inputs.
Disclaimer
This calculator provides estimates based on the information you provide and common financial independence principles. It does not account for taxes, significant life changes, unexpected expenses, or market volatility. Investment returns are not guaranteed. It is recommended to consult with a qualified financial advisor for personalized advice.
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function calculateFI() {
var currentAnnualExpenses = parseFloat(document.getElementById("currentAnnualExpenses").value);
var currentInvestments = parseFloat(document.getElementById("currentInvestments").value);
var annualSavings = parseFloat(document.getElementById("annualSavings").value);
var expectedReturn = parseFloat(document.getElementById("expectedReturn").value);
var fiMultiple = parseFloat(document.getElementById("fiMultiple").value);
var fiResultDiv = document.getElementById("fiResult");
// Input validation
if (isNaN(currentAnnualExpenses) || currentAnnualExpenses < 0 ||
isNaN(currentInvestments) || currentInvestments < 0 ||
isNaN(annualSavings) || annualSavings < 0 ||
isNaN(expectedReturn) || expectedReturn < 0 ||
isNaN(fiMultiple) || fiMultiple = fiNumber) {
yearsToFI = 0;
} else if (annualSavings === 0 && realReturnRate === 0) {
fiResultDiv.innerHTML = "With no annual savings and no investment return, you will never reach your FI number of $" + fiNumber.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + " unless your current portfolio already meets it.";
return;
} else {
while (currentPortfolio < fiNumber && yearsToFI < maxYears) {
currentPortfolio = currentPortfolio * (1 + realReturnRate) + annualSavings;
yearsToFI++;
}
}
var monthlySavings = annualSavings / 12;
var resultHTML = "Your estimated FI Number (Target Portfolio Value) is: $" + fiNumber.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + "";
if (yearsToFI === 0) {
resultHTML += "Congratulations! Based on your inputs, your current investment portfolio already meets or exceeds your FI Number. You are financially independent!";
} else if (yearsToFI >= maxYears) {
resultHTML += "Based on your inputs, it would take " + maxYears + "+ years to reach financial independence. Consider increasing your annual savings or reducing your expenses to accelerate your journey.";
} else {
resultHTML += "Estimated Years to Financial Independence: " + yearsToFI + " years";
}
resultHTML += "Your equivalent Monthly Savings Contribution: $" + monthlySavings.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
fiResultDiv.innerHTML = resultHTML;
}