How financial independence is calculated
The FI number applies the 4% rule: a portfolio can sustainably support withdrawals of about 4% per year, so the target is 25× (which is 1 ÷ 0.04) your recurring annual spending. Recurring means living + housing only — temporary childcare and education are excluded, since you don't need to fund them in perpetuity.
The year reached is the first year your liquid assets — taxable + retirement, excluding home equity (you still need somewhere to live) — meet that target. The target grows with inflation each year, so the date marks when your assets overtake the rising goalpost.
In this scenario, liquid assets don't reach the target by age 90.
Note: housing still includes mortgage payments while they last, which are temporary, so the target is slightly overstated during mortgage years. The present-value view below prices every future cost (including a finite mortgage) exactly.
Present Value: Earnings vs. Expenses
All future flows discounted to today at 7%.
Income vs. Expenses
Net Worth by Asset Type
Where It Goes
Year-by-Year Summary
| Year | Age | Gross | Tax | Acct tax | Net | Ret + | Taxbl + | Living | Housing | Educ | Debt | 1-time | Net worth | PV future earn | PV future exp |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 30 | $180k | $58k | — | $122k | $0 | -$13k | $79k | $50k | $0 | $5k | $0 | $306k | $3.45M | $4.25M |
| 2031 | 35 | $230k | $74k | — | $156k | $0 | -$33k | $90k | $57k | $36k | $5k | $0 | $280k | $4.02M | $5.02M |
| 2036 | 40 | $389k | $137k | — | $252k | $0 | $0 | $103k | $131k | $65k | $485 | $0 | $447k | $4.35M | $5.46M |
| 2041 | 45 | $496k | $179k | — | $317k | $13k | $0 | $118k | $136k | $50k | $0 | $0 | $829k | $4.4M | $5.81M |
| 2046 | 50 | $634k | $234k | — | $399k | $903 | $0 | $135k | $143k | $64k | $0 | $57k | $1.44M | $4.04M | $6.2M |
| 2051 | 55 | $809k | $305k | $19k | $503k | -$46k | -$45k | $154k | $150k | $271k | $0 | $0 | $1.97M | $2.98M | $6.03M |
| 2056 | 60 | $0 | $0 | — | $0 | $0 | -$356k | $198k | $158k | $0 | $0 | $0 | $3.06M | $798k | $5.69M |
| 2061 | 65 | $0 | $0 | — | $0 | $0 | $0 | $232k | $168k | $0 | $0 | $0 | $3.29M | $1.12M | $5.69M |
| 2066 | 70 | $90k | $0 | — | $90k | $0 | $0 | $274k | $82k | $0 | $0 | $0 | $4.12M | $1.28M | $5.5M |
| 2071 | 75 | $102k | $0 | — | $102k | $0 | $0 | $324k | $96k | $0 | $0 | $0 | $4.78M | $1.21M | $5.27M |
| 2076 | 80 | $115k | $0 | — | $115k | $0 | $0 | $385k | $111k | $0 | $0 | $0 | $5.54M | $1.03M | $4.64M |
| 2081 | 85 | $131k | $0 | — | $131k | $0 | $0 | $459k | $128k | $0 | $0 | $0 | $6.42M | $706k | $3.25M |
| 2086 | 90 | $148k | $0 | — | $148k | $0 | $0 | $549k | $149k | $0 | $0 | $0 | $7.44M | $148k | $698k |
"Ret +" and "Taxbl +" are that year's flows into each bucket (negative = drawdown). "Tax" is income tax on wages + taxable Social Security; "Acct tax" is the ordinary-income tax on retirement-account withdrawals. "PV future exp" is the present value, that year, of all remaining expenses discounted at the 7% return. Shaded row marks retirement.
Nominal dollars. Each person's salary grows at its own rate and stops at their own retirement age; living costs, rent and tuition grow with inflation. Annual saving is split — retirement contributions fill the tax-advantaged bucket, the rest goes taxable; shortfalls draw down taxable first. The down payment converts taxable savings into home equity in the purchase year, and equity grows as the mortgage amortizes and the home appreciates. Financial independence uses the 4% rule on recurring spending: the first year your liquid assets (taxable + retirement, excluding home equity) reach 25× your ongoing annual living + housing costs, excluding temporary childcare and education. The headline FI number is in today's dollars; the achieved year accounts for inflation on both the target and your assets. After retirement, earned income stops; Social Security begins at each person's claim age (inflation-adjusted, with up to 85% taxable via the provisional-income rule). Spending shortfalls are funded from taxable savings first, then from the pre-tax retirement account, where withdrawals are taxed as ordinary income — so that tax shows up as a faster drawdown. A planning estimate, not financial advice.