What is your Financial independence number?
What is your FI (Financial Independence) number?
How to find your FI number: Determine your annual spending in retirement, yes, you need to have a budget! Multiple the above number by 25. Example, if you require $60,000 a year in retirement, then your number is $60,000 x 25 = $1,500,000. $1.5 million is your FI NUMBER. The reason that this math works out is because there is a relationship to the “25 x rule,” which is called “The 4% Rule.” This rule is based on the Trinity Study, which showed that you can spend 4% of your nest egg and remain relatively reassured that your funds would last over 30 years (95-100% chance based on a 50% stock / 50% bond portfolio).
What is your FI number?