Work out the annual saving required to reach a financial independence target by a chosen date.
The existing portfolio is compounded forward first, and only the remaining gap has to be funded by new savings. Dividing that gap by the annuity factor converts it into the annual contribution required. Expressing the answer as a required savings rate is what makes it actionable — an annual figure means little without the income it has to come from.
FIRE Savings
Annual saving = (target − current × (1+r)ⁿ) ÷ (((1+r)ⁿ − 1) ÷ r)
Annual saving = (target − current × (1+r)ⁿ) ÷ (((1+r)ⁿ − 1) ÷ r) The existing portfolio is compounded forward first, and only the remaining gap has to be funded by new savings. Dividing that gap by the annuity factor converts it into the annual contribution required.
Expressing the answer as a required savings rate is what makes it actionable — an annual figure means little without the income it has to come from.
This calculator takes 5 inputs: Target portfolio, Current portfolio, Years available, Expected real return, Annual net income. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.