## 4% Rule Calculator

How much money do you need to be Financially Independent?

It depends on two things:

Withdrawing 4% is considered safe in the retirement planning community so I stick with that to plan my Financial Independence (FI) number. Using that you will need 25 times your Annual Expenses to be FI. I put the quick math below, or to learn more about the 4% Rule and how much you need to be FI check out my series about what the 4% Rule is. Until then:

It depends on two things:

- How much money you spend a year
- How much are you comfortable withdrawing

**4%**Withdrawing 4% is considered safe in the retirement planning community so I stick with that to plan my Financial Independence (FI) number. Using that you will need 25 times your Annual Expenses to be FI. I put the quick math below, or to learn more about the 4% Rule and how much you need to be FI check out my series about what the 4% Rule is. Until then:

The math here isn't too bad, but let's break it down nicely.

The 4% Rule says you can take out 4% of your portfolio in retirement. So 4% x (FI Number) = (Annual Expenses)

To go the opposite way and figure out your FI Number you divide your expenses by yor withdrawal rate:

(FI Number) = (Annual Expenses) / 4%

This is the same as multiplying your Annual Expenses by the

1 / 4% (or 1 / 0.04) = 25

This is why the 4% Rule is sometimes called the "Multiply by 25 Rule."

If you want to use a more conservative withdrawal rate, like 3% you'd need 33 x (Annual Expenses).

A more aggressive withdrawal rate - 5% - you'd only need 20 x (Annual Expenses)

The 4% Rule says you can take out 4% of your portfolio in retirement. So 4% x (FI Number) = (Annual Expenses)

To go the opposite way and figure out your FI Number you divide your expenses by yor withdrawal rate:

(FI Number) = (Annual Expenses) / 4%

This is the same as multiplying your Annual Expenses by the

*Inverse*of 4% - which is 25.1 / 4% (or 1 / 0.04) = 25

This is why the 4% Rule is sometimes called the "Multiply by 25 Rule."

If you want to use a more conservative withdrawal rate, like 3% you'd need 33 x (Annual Expenses).

A more aggressive withdrawal rate - 5% - you'd only need 20 x (Annual Expenses)