Calculate your path to Financial Independence and Early Retirement. Get detailed projections and visualize your progress with clear, interactive charts.
Financial Independence, Retire Early (FIRE) is a movement that aims to help you achieve financial freedom and retire before the traditional retirement age. This calculator will help you visualize your journey towards financial independence, but before you dive in, it's important to understand the methodology and limitations.
This calculator is a useful tool for estimating your journey to financial independence, but it's important to remember the following assumptions and limitations:
The calculator assumes a fixed annual growth rate for your investments. While historically, the stock market has had an average annual return of around 7%, it's important to remember that past performance doesn't guarantee future results. Market conditions can change, and your actual returns might be different.
We factor in inflation as a constant rate throughout your journey. In reality, inflation rates can vary over time, affecting your spending power differently than projected.
The calculator assumes that your salary will increase at a constant rate every year. However, life can be unpredictable, and changes in your career or job market can impact your income growth.
Your monthly spending is assumed to be constant, adjusted for inflation. In real life, your expenses might change as your lifestyle evolves or due to unexpected events like medical bills, home repairs, or family changes.
We use the popular 4% rule, which assumes that you can withdraw 4% of your portfolio annually without running out of money in retirement. Keep in mind that this rule is based on historical data, and future market conditions might require adjustments to your withdrawal rate.
The calculator does not account for capital gains taxes when you sell investments during retirement. Depending on your tax situation, investment types (taxable vs. tax-advantaged accounts), and withdrawal strategy, taxes could significantly impact your actual available funds and may require a larger portfolio to achieve the same after-tax income.
This calculator helps you get a rough estimate of your journey to financial independence. It's essential to regularly review and adjust your financial plans based on your personal situation and the ever-changing world around us. Stay curious, keep learning, and always be prepared to adapt! 😃