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Financial independence: how much do you need

Find the savings you need to live off your investments, how much to put away each month, the age you reach independence and how long the money lasts, all in today’s money.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Oct 31, 2026

Example values. Everything is in today’s money: inflation is already removed.

Ages
Saving phase
Income phase

In the income phase people usually hold a more conservative portfolio, with a lower return.

Strategy
Wealth target
Inflation and taxes

Tax applies to the nominal return (inflation + real gain), so the real after-tax return is lower than the one you typed.

Your inputs stay only on this browser and are not sent anywhere. Untick to delete them.

—Savings needed at age 55
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Milestones

Your savings life cycle

Saving until you stop contributing, then withdrawals for the income you want. The dashed line is the savings target.

Tap the chart to see the values.

Where your income comes from after you stop

Average monthly income at each age: portfolio returns, drawing down savings, other income and the shortfall if the money runs out.

Tap the chart to see the values.

The cost of waiting

The same contribution, starting now, in 5 years or in 10 years, stopping at the same age.

Tap the chart to see the values.

What if the return or the age change?

Your simulation is in the center.

Rows: real return while saving. Columns: age at which you stop contributing.

Year by year

In today’s money. Each row closes like this: Opening balance + Contributions + Returns − Withdrawals = Closing balance, and one year’s closing balance is the next year’s opening balance.

Next step

Take this page’s results to another calculator with the fields already filled in.

Stress-test the plan with Monte Carlo →See how long the savings will last →

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Real after-tax rate = (1 + ((1 + real) × (1 + inflation) − 1) × (1 − tax)) ÷ (1 + inflation) − 1; monthly rate = (1 + yearly)^(1/12) − 1
Live off the returns: target = PV(income until other income starts) + (income − other income) ÷ i, discounted to that age
Spend it down: target = PV(income) until other income + PV(income − other income) until the final age
Monthly balance = previous × (1 + i) + contribution − withdrawal; contribution needed = (target − projection without contribution) ÷ effect of 1 unit of contribution

Assumptions and limits

  • Constant rates: projected or past returns do not guarantee future results. This is not investment advice.
  • Values in today’s money, monthly compounding, contributions and withdrawals at the end of each month; tax on the nominal return.
  • It ignores specific tax rules for retirement accounts and future changes to pension rules.

Official sources and references

Frequently asked questions

What does financial independence mean?

Having enough invested that its returns, plus any other income such as a pension, cover your living costs without a paycheck. The calculator shows how much you need at the age you want to stop and how much to save each month to get there.

How much do I need to live off my investments?

Roughly the yearly income you want divided by the real return. For $5,000 a month with a 4% real return that is about $1.5 million; if you are willing to spend the money down by a certain age, you need less.

How do I read the default example?

A 30-year-old wants $5,000 a month from age 55, with $2,000 of other income from 67, living off the returns. The target is $1,474,012 at 55; saving $1,500 a month gets you to $871,155, $602,857 short. Closing the gap takes $2,716 a month, or contributing until about 62 years and 10 months. Without changes, the money lasts until about age 79.

What is the 4% rule?

A finding from U.S. studies such as the Trinity study: withdrawing 4% of the starting portfolio per year, adjusted for inflation, lasted 30 years in most historical periods. It is a reference, not a guarantee; longer retirements or weaker markets may need a lower rate.

What real return should I use?

For a diversified portfolio, 3% to 5% a year above inflation is a prudent assumption; inflation-linked government bonds show what you can get with low risk. Use a lower rate for the income phase, and remember that the tax rate you enter lowers the real after-tax return.

What does the calculator leave out?

It uses constant returns, so it does not show the risk of a bad sequence of years; the Monte Carlo calculator does. It also ignores specific tax rules for retirement accounts, changes in pension rules and big one-off expenses such as health care.

When should I talk to a professional?

When you are close to stopping work, have significant savings or need to decide about pensions, retirement accounts, real estate or estate planning. A fee-only financial planner can build the portfolio, stress-test the plan and order withdrawals to reduce taxes.

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How much money do you need to live off your investments

Financial independence means having savings that, on their own, produce the income you need. The math depends on three numbers: the monthly income you want, the real return (above inflation) and how long the money has to last.

Living off the returns only

To never touch the principal, savings must equal yearly income ÷ real return. For $5,000 a month with a 4% real return, that is $1.5 million. With a 5% real return, $1.2 million. Small differences in the rate change the figure a lot, which is why the calculator includes a sensitivity table.

Spending savings down

If you accept that savings will shrink over time, the amount needed falls. The calculator shows up to what age the money lasts for each monthly withdrawal. This is a reasonable option for people who will also receive a public pension, a workplace pension or other income from a certain age.

The 4% reference

Studies using U.S. market data from the 1920s onward, such as the Trinity study, found that withdrawing 4% of the starting portfolio per year, adjusted for inflation, lasted 30 years in most historical periods for a mix of stocks and bonds. It is a reference point, not a rule or a guarantee: other countries, other periods and longer retirements can need a lower rate. To test the risk of bad years, try the Monte Carlo calculator.

What speeds things up most

  • Saving more: early on, the contribution matters more than the return.
  • Starting early: each extra decade of compounding multiplies the result.
  • Needing less income: every $500 less per month cuts the savings needed by well over $100,000.

All values in the calculator are in today’s money, with inflation removed, so you can compare them directly with your current cost of living.