Financial freedom calculator

Two steps. The first sizes the target using the 4% rule, which inverted is the "rule of 300": if you can withdraw 4% a year, you need 300 times your monthly spending.

target wealth = desired monthly income × 300

The second works out the monthly contribution that reaches that figure in the years you have left, at an 8% annual return, using the standard payment formula:

contribution = target × r / ((1 + r)^n − 1)      r = 0.08 / 12    n = years × 12

Note what it does not do: it does not count what you have already saved. The figure it returns is the contribution needed starting from zero, so if you already hold assets your real contribution is lower.

• It uses the 4% rule, which comes from a study of thirty years of twentieth-century US markets. For a fifty-year retirement, or with high fees, the safe rate is lower and the wealth needed higher.
• It assumes a constant 8% annual return. That is optimistic for a mixed portfolio and ignores sequence risk: a bad run right as withdrawals begin changes the outcome entirely.
• It excludes your current wealth, any state pension, inheritances, and any future income other than work.
• Everything is in today's money: neither the target nor the contribution is inflated along the way.
• It ignores tax, which in the withdrawal phase can be a meaningful share of real spending.