Financial Independence Planner

What does the FI planner do?

The goal of the Financial Independence (FI) planner is to help you plan your early retirement, from now until the end of the retirement. It is meant to be an easy point of entry to know where you stand in your journey to financial independence.

It will answer questions like:

• How much do I need to retire early?
• When can I retire?
• How well will my portfolio support my withdrawals?

How does this work?

First, this calculator will estimate when you will be able to retire early. For that, it will compute your FI number, which is the amount of FI net worth you will need to retire. This number is based on your withdrawal rate and your retirement expenses.

Then, it will compute when you will reach this target. For this, it will use your current income, your savings rate, and the standard returns of your portfolio to compute how many years and months you will need.

Finally, the tool will also compute your chances of success in retirement (chances that you do not go down to zero). This is based on your time in retirement (using life expectancy), your portfolio, and your withdrawal rate. This is done using historical data (the details are the same I am using for my Trinity Study articles).

As an add-on, the FI planner will also show you how your portfolio would behave in three different situations, including returns and withdrawals. In each case, I use 20-year CAGR returns of the portfolio, adjusted by 75% (to account for Swiss francs). Then, we can use different percentiles for different returns:

• Pessimistic returns are in the 30th percentile
• Standard returns are in the 50th percentile (median)
• Optimistic returns are in the 70th percentile.

This is only an estimate since, in practice, your portfolio will not grow linearly but will have ups and downs.

Using this FI planner

Using this FI planner is meant to be fairly simple. You will need to fill out all the information based on your situation and then click on the calculate button.

If you need a bit more information, here is what each of the field mean:

• Birth year is the year you are born.
• Life expectancy is how long you think you will live. Currently, life expectancy in Switzerland is 86 for women and 85 for men. You can use your family history to estimate this better.
• Your retirement expenses are how much you will spend in retirement, per year.
• The withdrawal rate is how much of your initial portfolio you will withdraw each year. If you need additional information on how to choose it, you can read our article on how to implement an early retirement.
• Your annual income before retirement is how much you earn today.
• Your savings rate is how much of your income you can save each year.
• Your FI net worth is your current net worth that you can use in retirement. The FI net worth only includes things you will be able to use in retirement. For instance, a house is not included.
• Age of social security is at what age you will start receiving a pension from the first pillar.
• The amount of social security is how much you will get from social security, per month.
• The amount of extra income is any other income you will get in retirement, per month.

Need more options?

If you think of any more options or features for this FI planner, please let me know in the comments below. I plan to improve it over time.