Calculate your personal savings rate from income and expenses with years-to-FIRE projection at different savings rate levels.
A savings rate is one number: savings divided by income, where savings is what you earn minus what you spend. This calculator takes an income figure and an expense figure, subtracts, and reports the percentage, then converts that percentage into years-to-FIRE using the standard 25-times-spending (4 percent rule) target and a compound-growth formula. The part that surprises people is how nonlinear the result is: raising a 10 percent rate to 20 percent removes about 15 years from the working stretch, while going from 70 to 80 percent removes barely three. The rate itself is simple; what you count as income and expenses decides everything.
A concrete input and expected output from the current implementation.
Input
Monthly take-home income: $6,000. Monthly expenses: $3,600.
Expected output
Savings rate: 40%. Savings: $2,400 per month ($28,800 per year). Years to financial independence at a 5% real return and a 25-times-spending target: about 22.
Savings is 6,000 - 3,600 = 2,400, and 2,400 / 6,000 = 0.40, so the rate is 40 percent. The 22-year figure is the standard compound-growth result for a 40 percent rate under the stated assumptions, the same figure the FIRE community's savings-rate table gives.
Income and expenses can cover any span as long as both cover the same one; the percentage comes out identical whether monthly or annual. Savings is the difference, and the rate is savings divided by income. So $6,000 of income with $3,600 of spending is 40 percent, and spending everything produces zero no matter the income. Doubling both numbers leaves the rate unchanged.
The years-to-FI figure inverts a compound-growth calculation: your annual savings accumulate at a real return, and the clock stops when the balance reaches 25 times annual spending (the 4 percent rule), usually computed at a 5 percent return assumption. It is the same math behind the FIRE community's 'shockingly simple math' table, and it assumes the rate holds every year.
No, and that is the point of the projection being a rule of thumb. The 4 percent figure came from historical US data on portfolios that mostly survived 30 years. If you expect to retire for 40 or 50 years, need to fund healthcare out of pocket, or hit a bad sequence of returns early, a lower rate is safer. Treat it as a planning heuristic, not a guarantee.
It depends on the definition you want, which is exactly why benchmarks disagree. Principal paydown builds equity, so many FIRE calculators count it as saving while counting interest as an expense. If you are comparing your number to a published average, use the same convention they use; if the tool you are using has a fixed convention, your result is only comparable to results computed the same way.
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