Savings rate calculator: years to financial independence
See how the share of your income you save sets how many years it takes until your investments could cover your spending.
Your target:
Your savings rate:
Returns aren't guaranteed, and this assumes a steady return every year. Real markets go up and down, which can move the date by years. Not financial advice.
| Savings rate | Years |
|---|
Nothing you type here is saved or sent anywhere.
How this is worked out
- Your savings rate is take-home income minus spending, divided by take-home income.
- Your target is your yearly spending divided by the withdrawal rate. At 4%, that is 25 times your spending.
- Starting from what you have already invested, the calculator adds your savings every month and grows the balance by the return after inflation, until the balance reaches the target. Everything is in today's money.
- The search stops at 70 years.
The link between savings rate and working years was made popular by the "shockingly simple math" of early retirement (Mr. Money Mustache, 2012). The withdrawal rate comes from the Trinity study (Cooley, Hubbard and Walz, 1998), which tested how long portfolios lasted at different withdrawal rates.
What this doesn't account for
- Ups and downs in the markets. A bad run of years just before or after you stop can move the date a lot.
- Taxes and fees on your investments, which lower the return you keep.
- Changes in your spending. Many people spend differently once they stop working.
- Pensions and other income in retirement, which would bring the date forward.
- Not financial advice. For decisions about your own money, talk to a regulated financial adviser.
Common questions
What is a good savings rate?
There is no single right number. Saving 10 to 15% of take-home pay is a common starting point, and at that rate reaching financial independence takes several decades. At 50%, starting from nothing, it takes about 16 years with the assumptions above.
Why does my savings rate matter more than my income?
It does two jobs at once. A higher rate means more invested each year, and a lower level of spending to cover later. That is why the table shows the same number of years for any income.
How is the savings rate worked out?
Take-home income minus spending, divided by take-home income. If you pay into a pension from your salary before it reaches you, add that amount to both your income and your savings.
What does financial independence mean here?
Having enough invested to live on withdrawals at your chosen rate: 25 times your yearly spending at a 4% withdrawal rate. It does not mean you have to stop working.
Are pensions included?
Only what you count as already invested or as part of your savings. State pensions and other income in retirement are not included; they would bring the date forward.