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shootoday at 12:40 AM2 repliesview on HN

When thinking about years of work until financial independence, its worth understanding the impact that savings rate has - the fraction of post-tax income remaining to invest in growth assets after expenses.

If you're not familiar with savings rate, here's a simple calculator to help build intuition. The assumptions of asset returns & portfolio required to sustain retirement are a bit optimistic, but it's directionally correct: https://networthify.com/calculator/earlyretirement

You need roughly a 15% savings rate to support traditional retirement age. If you're fortunate enough to create & sustain a situation where your income net tax is a lot higher than your annual expenses, the timeline accelerates significantly.


Replies

iboisverttoday at 2:06 AM

FIRECalc https://firecalc.com/ is another planner with more knobs. It has models for decreasing spending with age.

hirvi74today at 2:37 AM

One thing I have wondered about these calculations: is one's annual income supposed to be inclusive of all remunerations? You know, things like employer matches in retirement accounts, health insurance contributions, etc.?

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