Time to Retire Calculator
Estimate how many years it will take you to achieve financial independence and be able to retire based on your savings rate.
Quick Use Samples
Retirement Planning
Retirement Timeline
FIRE Numbers
Return Scenarios
Early Retirement Options
Current Progress
Acceleration Tips
- • Increase savings rate by 1% annually
- • Invest in growth assets while young
- • Consider geographic arbitrage
- • Maximize super contributions
- • Reduce expenses in retirement
To reach your retirement goal of $1,500,000, it is estimated to take approximately 22 years. This means you could potentially retire at age 52 with a final projected balance of $1,576,305. This calculation is based on your current savings, an annual contribution of $11,250, and an average annual return of 7%.
Retirement Savings Projection
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What is a Time to Retire Calculator?
A Time to Retire Calculator, often associated with the FIRE (Financial Independence, Retire Early) movement, estimates how many years it will take you to be able to retire based on your current income, expenses, and savings rate. It focuses on the concept that your retirement timeline is determined not by your age, but by how quickly you can accumulate enough investments to live off the returns.
Behind the Formula
The calculator uses your savings rate (the percentage of your after-tax income that you save) as the primary driver. It projects the growth of your current investments by adding your annual savings and applying a compound investment return rate. It determines you can retire when your investment portfolio reaches a size where you can safely withdraw a certain percentage (e.g., 4%) each year to cover your annual expenses indefinitely. The '4% rule' is a common benchmark for this calculation.
Expert Insights
- Your savings rate is the single most important factor in determining your time to retirement. A person who saves 50% of their income can retire in approximately 17 years, regardless of whether they earn $50,000 or $500,000.
- The '4% safe withdrawal rate' is a guideline from a US study and may not be perfect for Australian retirees. Factors like a different asset allocation and the Australian age pension mean the 'safe' rate could be different, but it remains a useful benchmark.
- Financial independence doesn't have to mean stopping work entirely. It means having the freedom to choose to work on projects you're passionate about, without being dependent on the income.
Actionable Tips
- Focus on the 'gap' between your income and expenses. The wider you can make this gap (by either increasing income or decreasing expenses), the more you can save, and the faster you will reach financial independence.
- Track your spending meticulously. You can't improve your savings rate if you don't know where your money is going. Use a budgeting app or spreadsheet to identify areas where you can cut back.
- Invest your savings in low-cost, diversified index funds. This is the most common strategy for FIRE followers in Australia, as it provides exposure to the broad market and benefits from long-term compound growth.
Real-World Examples
The Aggressive Saver
A couple with a high combined income manages to save 60% of their take-home pay. The calculator shows them they could reach financial independence and have the option to retire in just over 12 years.
The Standard Saver
Someone who saves a more typical 15% of their income will find their time to retirement is much longer, likely over 40 years, highlighting the dramatic impact of the savings rate.
The Impact of Reducing Expenses
By making a conscious decision to downsize their home and reduce their annual expenses by $20,000, a person not only increases their annual savings by $20,000 but also reduces the total amount of investments they need to retire, cutting years off their retirement timeline.
Glossary of Terms
FIRE (Financial Independence, Retire Early)
A lifestyle movement whose goal is to gain financial independence and retire early.
Savings Rate
The percentage of your after-tax income that you save and invest.
Safe Withdrawal Rate (SWR)
The percentage of your retirement portfolio that you can withdraw each year without depleting the principal. The 4% rule is a common example.