Learn Your Numbers
Within the FI/RE community, the FI number is calculated by multiplying your annual expenses by 25. At Fidelity, we've put our math and modeling expertise behind what we think is a better calculation. We account for things that most FI/RE calculators don't, like investment asset allocation, taxes, and penalties. With these considerations included, there's a better chance that you can enjoy Financial Independence to the fullest when you get there.
Want to know exactly how we crunch the numbers? Look for the Methodology link below
"Once you have six months [of expenses] saved, you're empowered. You can make more bold choices with your work."
FI/RE with family
Lisa and her husband recently moved to North Carolina and hope to start a family soon. They have been aggressively saving for retirement over the past several years, but they anticipate their savings rate will drop as their expenses related to raising a family rise.
“As you get older, life becomes more complex. If we start a family, we’ll have more expenses...We want to save for their college, put more money into the house.” — Lisa
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*With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. Fidelity does not provide legal or tax advice.
Your FI number is an estimate based on certain inputs you enter into the calculator and key assumptions that can help provide guidance on when you may achieve financial independence. There is no guarantee as financial independence will depend on many factors which cannot be predicted and are subject to change in the future such as income, expenses and market performance. This not designed to be investment or tax advice nor a recommendation on any specific action to take. Instead, this is an educational based experience to illustrate how saving more and spending less can help you achieve FI.
IMPORTANT: The projections or other information generated by the FI Calculator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Your results may vary with each use and over time.
FI Number and Years to FI are based on information you provided and certain assumptions, including market performance assumptions based on hypothetical scenarios using historical index data. Numerous factors make the calculations uncertain, such as the use of assumptions about historical returns and inflation, as well as the data you have provided. Fund fees and other expenses will generally reduce your actual investment returns and are generally not reflected in the hypothetical projections.
Results provided are based on the investment returns of a balanced model portfolio at 90% confidence level of estimated future balances and/or estimated future income. The 90% confidence level represents significantly below average market conditions with 10% of all hypothetical scenarios tested performing worse. This means that in 90 out of 100 market scenarios tested a hypothetical portfolio similar to yours performed at least as well as the results shown and 10 out of 100 performed worse than the results shown.
Please click here to learn more about how we calculate your FI number.