Inputs Explanation

• Annual Income: Your total income from all sources before taxes.
• Annual Expenses: Your yearly living expenses, including rent, utilities, and other necessities.
• Current Net Worth: The total value of your assets minus liabilities.
• Expected Annual Investment Returns (%): The percentage growth you expect from your investments annually.
• Safe Withdrawal Rate (%): The percentage of your portfolio you plan to withdraw each year in retirement. Recommended is 3 - 4%.
• Inflation Rate (%): The rate at which you expect the cost of living to increase each year.

Calculation Methodology

The Financial Freedom Calculator uses your input data to project your future net worth and determine when you can safely retire. Here’s a breakdown of how we calculate it:

• Monthly Projections: We calculate your projected net worth on a monthly basis, factoring in your income, expenses, and investment returns.
• Target Net Worth: This is calculated based on your desired withdrawal rate and annual expenses.
• Savings Rate: The percentage of your income that you save each year, which is critical to reaching financial freedom faster.
• Adjustment for Inflation: We adjust your expenses annually to account for inflation, ensuring your retirement plan is realistic.
• Retirement Feasibility: The tool checks if your projected net worth can sustain your retirement expenses over time.