How Much Money You Need to Retire Early

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I’m the first to admit, even though I’m the Millennial Money Honey, math is NOT my strength. 🧮So when I was reading about the formula to calculate your Financial Independence number—current net worth plus average savings rate factoring in taxes, wage growth, investment growth, withdrawal, and inflation—I was v overwhelmed. 😭

Thank goodness my math deficiency is made up by resourcefulness and ability Google. I found this handy dandy online Financial Independence Early Retirement calculator by Financial Toolbelt. 🧰There were quite a few out there, but as a designer, I’m a snob when it comes to resources with good design and functional usability. Other ones weren’t as easy on the eyes. 👀

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Above are my inputs based on what I think is my current savings rate, as well as a conservative estimate on my investment growth. As I’m currently tracking my savings rate from September-October, I might have to update if my actual rate is way off. But anyway, those numbers gave me these results:

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So this is saying I need $1,056,900 ($706K being my hard earned dollars, the rest from earnings) to be able to stop working and withdrawal at a 4% rate every single year until I die. This is great target number for me to aim for, it makes me a bit nervous since it’s saying my take home spending is $2,178/month.

Of course $2,200/month is easy to live off of now, but it doesn’t factor in kids, which I’d love to have. But I know when I “retire," I’m not going to give up working entirely for money, so hopefully me making even $20,000/year for fun will be enough keep me at ease.

Until then, I’m counting down the days until I’m 38 with $1M in the bank and I’ll be financially FREEEEE! (Hopefully I inspire at least one person to join me by then, so I’m not alone. Maybe that’s you? ;)

xo,

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