Why multiply annual expenses by 25?

Multiplying by 25 is the inverse of the 4% safe withdrawal rate. A $1M portfolio withdrawing 4% = $40,000/year. If you spend $40K/year, you need $1M to be financially independent.

How do I calculate my annual expenses accurately?

Track 3-6 months of actual spending, annualize it, then adjust for retirement changes. Include taxes on withdrawals.

What if I want a more conservative estimate?

Use a 3% or 3.5% withdrawal rate (33x or 29x expenses) for a 50-year retirement or low-risk approach. The 4% rule was designed for 30-year retirements.

Financial Independence Number Calculator

Calculate the investment portfolio size needed to achieve financial independence. FI Number = Annual Expenses x 25 (based on the 4% safe withdrawal rate).

Use the full interactive calculator below, or

Related Calculators

FIRE Number

Finance & Accounting

Safe Withdrawal Rate

Finance & Accounting

Retirement Income Needs

Finance & Accounting

Financial Independence Number Calculator

Related Calculators

Frequently Asked Questions

Why multiply annual expenses by 25?

How do I calculate my annual expenses accurately?

What if I want a more conservative estimate?