Savings Rate Calculator
Calculate Your Savings Rate & Time to FI
Gross Annual Income
Annual Taxes Paid
Annual Expenses
$
Annual Savings
$
Current Portfolio Value
Your Savings Rate:
N/A%
Estimated Years to FI
N/A
The Shockingly Simple Math to Early Retirement
In the world of Financial Independence, your Savings Rate is king. It's more important than your income and more powerful than your investment returns. Why? Because it's the only number that attacks the problem from both sides.
Every dollar you save brings you closer to your goal, but it also represents a dollar you've learned to live without. By increasing your savings rate, you simultaneously build your nest egg faster AND reduce the size of the nest egg you'll ultimately need. This calculator shows you the powerful relationship between your savings rate and your time to financial freedom.
How to Use This Calculator
1. Enter Your Income and Taxes
Input your gross annual income and the total annual taxes you pay to determine your net (after-tax) income.
2. Allocate Your Net Income
Use the slider to allocate your net income between annual expenses and annual savings.
3. See Your Results
The calculator will display your savings rate as a percentage of your net income and estimate the number of years it will take you to reach Financial Independence based on that rate.
Interpretation & Strategy
The bar chart shows the surprisingly predictable relationship between savings rate and the time to financial independence (assuming a 0 starting portfolio and 5% real returns). A 10% savings rate takes over 50 years. But a 50% savings rate? You're saving one year's worth of expenses for every year you work, cutting your time to FI to under 17 years.
This is the lever to pull if you want to retire early. Focus on increasing the gap between your income and your spending.
Ready to Refine Your Plan?
- Dive Deeper into Your Timeline with our Time to FI calculator for a more detailed projection.
- Revisit Your FIRE Number to see how reducing your expenses lowers your ultimate goal.
Frequently Asked Questions
How is Savings Rate calculated?
Savings Rate is typically calculated as the amount you save divided by your income. There are two common ways to measure it: (Amount Saved / Gross Income) or (Amount Saved / Net Income). This calculator uses your Net (after-tax) Income for a more accurate reflection of your financial effort.
Why is Savings Rate more important than investment returns for early retirement?
While investment returns are important, you have very little control over them. In contrast, you have significant control over your savings rate by managing your income and expenses. A high savings rate has a dual benefit: you accumulate wealth faster, and you learn to live on less, which reduces the total amount of money you need to retire.
What does 'Years to FI' mean here?
This is an estimation based on the 'shockingly simple math' popularized by Mr. Money Mustache. It assumes a 5% real (after-inflation) investment return and calculates how many years it would take to go from your current portfolio value to a portfolio 25 times your annual expenses. It's a powerful illustration of how your savings rate is the primary driver of your FI timeline.