Savings Rate Target Calculator

Mr Money Mustache's "Shockingly Simple Math of Early Retirement" shows that years to financial independence depends almost entirely on savings rate — your specific income matters much less. This is counterintuitive but mathematically robust: save 10% of after-tax income, retire in ~50 years. Save 50%, retire in ~17 years. Save 75%, retire in ~7 years.

The logic: savings rate determines both how much you accumulate and what annual expenses it helps to cover. A 75% saver lives on 25% of income — so their required portfolio is much smaller — AND they're saving 75%, growing the portfolio fast. A 10% saver lives on 90% — much higher required portfolio — AND saving only 10%. Two compounding effects in the same direction.

Assumptions: 5% real return (after inflation) on invested savings, 4% safe withdrawal rate in retirement. These are Trinity Study / FIRE community standard assumptions. Actual outcome varies with market performance, but the relative magnitudes are robust across assumption ranges.

How to use it

Input annual after-tax income and current savings rate (percentage of income saved and invested). The tool calculates years to financial independence assuming you maintain the current savings rate and earn 5% real return on investments.

What the result means

Years to FI is when your investment portfolio would generate enough passive income (at 4% withdrawal rate) to cover your current annual spending. This doesn't account for lifestyle inflation — if spending rises with income, the horizon extends. Holding spending stable while income grows is the accelerator that makes FIRE possible.

Educational tool based on published FIRE math. Not personalised financial advice.

Run it with sensible defaults

Using annual after-tax income of 50,000, savings rate of 25%, the calculation works out to 31.9 years. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Annual After-Tax Income and Savings Rate — do not pull with equal force. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.

How the math works

Standard FIRE math from Mr Money Mustache. Assumes 5% real return on investments, 4% safe withdrawal rate (25x annual expenses target). Higher savings rate compounds through both accumulation and reduced target.

Turning the result into a plan

A projection is just a starting point. The real work is setting the monthly amount aside automatically so the saving happens before you can spend it. Most people who hit savings goals set up a standing order on payday; most who miss them rely on willpower at month-end.

What this doesn't capture

The calculation assumes a steady savings rate and a stable interest rate. Real saving journeys include emergencies, windfalls, and rate changes — especially in easy-access products. The figure is a direction of travel, not a guarantee.