The Freedom Number: what a year of your spending costs to own
Annual spending divided by a withdrawal rate is the capital that spending draws down. $60,000 a year at 4% is $1,500,000. This page works out yours, how long your savings and contributions take to get there at the return you assume — and, from the stored history, what the same plan did through every stretch of the market on record. Arithmetic and history, not advice.
Change any field and the numbers follow. Without JavaScript, the two tables below show the same arithmetic.
Keep the number where you will see it
| Spending a year | 3% | 3.5% | 4% | 5% |
|---|---|---|---|---|
| $30,000 | $1,000,000 | $857,143 | $750,000 | $600,000 |
| $40,000 | $1,333,333 | $1,142,857 | $1,000,000 | $800,000 |
| $50,000 | $1,666,667 | $1,428,571 | $1,250,000 | $1,000,000 |
| $60,000 | $2,000,000 | $1,714,286 | $1,500,000 | $1,200,000 |
| $80,000 | $2,666,667 | $2,285,714 | $2,000,000 | $1,600,000 |
| $100,000 | $3,333,333 | $2,857,143 | $2,500,000 | $2,000,000 |
| $120,000 | $4,000,000 | $3,428,571 | $3,000,000 | $2,400,000 |
| $150,000 | $5,000,000 | $4,285,714 | $3,750,000 | $3,000,000 |
| Real return | Years |
|---|---|
| 3% a year | 39.4 years |
| 4% a year | 34.4 years |
| 5% a year | 30.7 years |
| 6% a year | 27.8 years |
| 7% a year | 25.5 years |
What the number is
A withdrawal rate is the share of a pot taken out each year. At 4%, a pot of $1,500,000 supports $60,000 a year; at 3%, the same spending needs $2,000,000. The rate is an assumption about how long a pot lasts under withdrawals through good and bad markets, and it is the most contested number in retirement arithmetic: the original 4% studies used United States stock and bond history, and later work has argued for less. This page lets you pick it rather than picking it for you. Lower is safer and costs more capital; that trade is the whole question.
Why the return is real, and why there is a band
Everything here is in today's dollars, so the return has to be the return above inflation. A 7% nominal return in a 3% inflation world is a 4% real one, and the freedom number you are chasing rises with prices otherwise. The chart shades two points either side of the return you chose because the single most reliable fact about long-run returns is that nobody knows theirs in advance: a plan that only works at exactly 6% is not a plan. The savings rate moves the outcome more than the return does in the first two decades, which is the reason the contribution field is next to the return field.
What the history replay is, and is not
Where the site has the S&P 500's calendar-year price changes on file, the page runs your exact plan — same starting pot, same monthly contribution — through every window of that length in the record, and reports the worst, median and best ending balance with the years that produced them. It is price only: no dividends, fees or tax, and in the dollars of each year rather than today's. It is not a distribution of what happens next. It is what happened, which is the only thing a calculator can honestly show you about markets. For how unusual any single day's move was, see the tools; for why a fall of 30% needs a rise of 43% to undo, see loss recovery.
One question
If the number is further away than you thought: which field would you rather change — the spending, the contribution, or the rate you are prepared to draw?