Financial independence calculator
Financial independence is not a magic number: it is your annual spending divided by the rate you believe you could withdraw without running out. Enter your figures and you get the target and the timeline at your pace.
- Runs on your phone, not on a server
- We store nothing
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Your numbers
The return is in real terms, after inflation. That way the target is comparable with today's money.
You would need
n/d
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- One year of spending
- n/d
- Still missing
- n/d
- You would get there in
- n/d
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Where the number comes from
The whole calculation rests on one simple idea: if you can withdraw a percentage of your portfolio each year without exhausting it, the portfolio you need is your annual spending divided by that percentage.
The figure most often quoted is 4%, which comes from a 1990s study of US portfolios over 30 years. It is a useful reference, not a law: it depends on the horizon, the mix of the portfolio, fees, taxes and (most of all) what markets do in the first few years. That is why many people use 3% or 3.5%, and why here the rate is yours to choose.
Target = Annual spending ÷ Withdrawal rateAt €2,000 a month (€24,000 a year) and 4%, the target is €600,000. At 3% it rises to €800,000. One percentage point moves the target by a third: the rate is by far the most sensitive input.
The variable that really decides it is your spending
Spending appears twice in this sum, pulling in opposite directions: spending less lowers the target and raises what you can set aside each month. That is why it moves the result far more than the return does, and the return is not something you control.
Cutting monthly spending from €2,500 to €2,000 lowers the target by €150,000 at 4%. No sensible investment decision has that effect, and this one depends entirely on you.
The flip side: the spending figure here is not today's, it is that future life's. It is usually different, no commute, possibly no mortgage, possibly more private healthcare.
What this calculator cannot tell you
It projects a constant return, and real returns never are. Two portfolios with the same 30-year average can end up very differently depending on the order the bad years arrive in: if they land early in the withdrawal phase, they do far more damage.
It also ignores taxes, which change the picture meaningfully in the withdrawal phase and depend on country and product. And state pensions, which for many people cover part of the spending from a certain age.
Use it for what it is good at: seeing the order of magnitude, and above all seeing how it moves when you change spending or contributions. This page recommends no product and does not replace an adviser.
The next step is measuring, not projecting
A twenty-year projection is guaranteed to be wrong. What is not wrong is this month's net worth compared with last month's.
Neto keeps that figure calculated daily, with accounts, investments and debts inside it, and the history to see the slope. It is the only way to know whether the plan you just calculated is actually happening.
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Frequently asked questions
What withdrawal rate should I use?
4% is the most cited reference and comes from a study of US portfolios over 30 years. If your horizon is longer or you want more margin, 3% or 3.5% are common choices. There is no universally correct answer, which is why the field is yours.
What real return should I enter?
Real means after inflation. If you expect 7% nominal with 2% inflation, the real figure is roughly 5%. Using the nominal number here inflates the result and would have you believe you arrive sooner than you would.
Do I count the home I live in?
It counts towards net worth, but it is better left out here: it produces no income and you cannot withdraw 4% of it each year without selling it.
What about state pensions?
They are not in the calculation. If you expect to receive one, your real number is lower from that age, but you still need to cover the years before it.
Is this financial advice?
No. It is a calculation tool for information purposes: it projects the numbers you enter and recommends no product.
Do you store my data?
No. Everything is calculated in your browser and nothing is sent to any server.