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You have invested today—
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If you started with the capital you need
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Financial independence
How much do you need to stop working?
If markets typically return more than 4% a year, the 4% you take out can come out as profit and the core capital can stay. Change the rate and inflation and see if it lasts. iThe idea: you withdraw about 4% of your capital at that moment. If the market usually returns more than that 4%, that slice comes out as pure profit and you do not eat the principal. It is not a guarantee; it is a starting point.
How it works
This calculator estimates how much you need invested to stop depending on a salary, using the 4% rule. Write what you want to live on each month, the withdrawal rate, inflation, how many years the money has to last and the return you expect. It shows the pot you need, how much you already have and how far you are from it.
The 4% rule comes from studies of historical US data: taking about 4% of the pot in the first year, and then raising that amount with inflation, lasted at least 30 years in almost every period tested. The quick version is simple: yearly spending × 25.
An example
If you want to live on $3,000 a month, that is $36,000 a year. Multiply by 25 and you get about $900,000. With $250,000 invested today, the same $3,000 a month would last only about nine years, while the full $900,000 keeps paying for the whole period and usually ends up bigger than it started.
Frequently asked questions
Is 4% safe?
It is a starting point, not a guarantee. It comes from US data in one of the best markets of the century. Many studies with other countries suggest a more prudent 3% to 3.5%, especially if the money has to last more than 30 years.
Why does the order of the years matter?
It is called sequence risk. A crash in the first years of withdrawals hurts much more than the same crash at the end, because you are selling when prices are low. That is why a cash cushion and some flexibility help.
Does the 4% include taxes and fees?
No. The rule is calculated before taxes and fund fees, so what really reaches your account is less. It is worth counting that in.
What if I spend in euros or pesos?
The multiplication is the same in any currency: yearly spending × 25. You can change the currency of the site in the menu.