Calculate your FI number - the portfolio size needed to cover annual expenses - with withdrawal rate and spending adjustment modeling.
The FI number is the portfolio balance whose annual withdrawal would cover your spending, and this calculator derives it from two inputs: your yearly expenses and the withdrawal rate you plan to live on. The relationship is a single division - expenses divided by the rate - and what surprises most people is how strongly the answer moves: cutting the rate from 4% to 3% raises the target by a third. The spending adjustment input shows what a planned cut or new expense does to the goal, so you can test a lifestyle change before committing years of saving to it.
A concrete input and expected output from the current implementation.
Input
Annual expenses: $48,000 | Withdrawal rate: 4% | Spending adjustment: none
Expected output
FI number: $1,200,000 (48,000 ÷ 0.04; at 4% the portfolio is 25 times annual expenses)
The FI number is annual expenses divided by the withdrawal rate, so $48,000 ÷ 0.04 = $1,200,000. Withdrawing 4% of that balance each year yields exactly $48,000, covering the stated spending.
Annual expenses are divided by the withdrawal rate you enter: FI number = expenses ÷ rate. A 4% rate means the portfolio must hold 25 years of expenses (1 ÷ 0.04), a 3% rate about 33.3 years. The rate is applied mechanically - the tool does not judge whether the rate you choose is safe, appropriate for your age, or consistent with how the portfolio is invested.
The spending adjustment changes the numerator before the division. Adding $1,000 a month at a 4% rate raises the FI number by $300,000, because $12,000 a year divided by 0.04 is $300,000; a reduction lowers it the same way. Because the adjustment applies to the annual figure, monthly amounts must be converted to yearly totals before they are entered.
No. The FI number is arithmetic, not a forecast: it sizes the portfolio so the first year's withdrawal matches your spending. Whether the balance survives decades depends on actual returns, inflation, and the order in which good and bad years arrive. The familiar 4% figure comes from a 1998 study of historical US stock and bond returns, which found inflation-adjusted 4% withdrawals held up over 30-year periods in most cases examined.
Because the target is expenses divided by the rate, and a smaller divisor produces a larger quotient. With $48,000 of annual expenses the FI number is $1,200,000 at 4% but $1,600,000 at 3% - a third more. That gap is the price of a wider margin of safety, and it is why many conservative planners target 3.5% or lower.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
Calculate gross, operating, and net profit margins from cost and revenue with breakeven analysis.
Convert between annual salary and hourly rate with adjustments for work hours, overtime, and benefits.
Calculate sales tax amounts, tax-inclusive and tax-exclusive prices for any tax rate or jurisdiction.
Calculate return on investment from initial cost and final value with annualized ROI and comparison tables.
Convert between markup and margin percentages, calculate selling price, and compare pricing strategies.
Convert numeric amounts to written words for invoices, checks, and legal documents in multiple currencies.