Twenty-five times your annual spending. That’s the answer, and it comes from arithmetic rather than a sales deck: if your portfolio can sustain a 4% withdrawal each year, you need 1 ÷ 0.04 = 25 years’ worth of spending invested.
The catch is that “your annual spending” is doing all the work in that sentence, and almost everyone measures the wrong thing.
Start from spending, not salary
Most retirement advice starts with your income. You’ve probably seen the rule that you need “80% of your pre-retirement salary.” Ignore it. Your salary tells you what you earn; it says nothing about what your life costs, and the gap between those two numbers is exactly what determines how fast you can retire.
Someone earning $150,000 and spending $120,000 needs a $3 million portfolio. Someone earning $90,000 and spending $40,000 needs $1 million, and gets there decades sooner despite the smaller paycheck.
So the first real step is unglamorous: figure out what a year of your life actually costs, including the annualized lumpy stuff (insurance, flights, a laptop every few years). Then multiply.
| Annual spending | Target at 25x (4% rule) | Target at 28.6x (3.5% rule) |
|---|---|---|
| $30,000 | $750,000 | $857,000 |
| $50,000 | $1,250,000 | $1,430,000 |
| $80,000 | $2,000,000 | $2,290,000 |
Your number is somewhere on that grid. The rest of this guide is about which column applies to you, and how to move yourself up a row.
Why there are two columns
The 25x figure assumes a 4% safe withdrawal rate, which traces back to the Trinity study: a 1998 analysis of how various withdrawal rates survived 30-year retirements across historical US market data. Withdrawing 4% of the starting balance, adjusted for inflation each year, survived nearly every 30-year window tested.
Two words in that sentence deserve your attention: thirty years.
If you retire at 65, a 30-year plan covers you to 95 and the 4% rule fits. Retire at 45 and you’re asking the same portfolio to survive 50 years, through more bear markets and more chances of a bad early stretch. A brutal crash in your first five years of retirement, while you’re selling shares to eat, damages a portfolio in a way the same crash 20 years in wouldn’t. Planners call this sequence of returns risk, and it’s the main reason early retirees plan around 3.25-3.5% instead, which pushes the multiple to 28-31x spending.
That sounds discouraging. In practice, flexibility buys most of it back; retirees who can trim spending 10-15% in bad years, or earn even modest side income, dramatically improve their survival odds. A rigid number matters less than a plan that bends.
The lever nobody models: where you live
Here’s the part that gets left out of nearly every retirement calculator built for a single country.
Your FI number is 25x spending, and spending is a function of geography. The same life (apartment, groceries, health cover, dinners out) costs wildly different amounts in different cities. Cut your annual budget from $60,000 in a coastal US city to roughly $35,000 in Lisbon or Chiang Mai without lowering your standard of living, and your target falls from $1.5 million to $875,000. You just erased $625,000 of required savings, which at a $2,000 monthly investment rate is well over a decade of your life.
This is geo-arbitrage, and it works in both directions: as a permanent move, or as a bridge phase where you retire early somewhere affordable and let the portfolio keep compounding before returning home.
We built IndepAI around this math. The geo-arbitrage calculator shows how your FI date moves across cities, and our city rankings put real cost data behind each option, so the comparison runs on numbers instead of vibes. If you’re weighing specific countries, start with the country-by-country FIRE comparison.
A worked example, start to finish
Suppose you’re 34, spending $52,000 a year, with $310,000 invested.
Your baseline target is 52,000 × 25 = $1.3 million. Planning a pre-50 retirement, you use 3.5% to be safe: 52,000 × 28.6 ≈ $1.49 million. Saving $2,500 a month with a 7% real return, you’d cross that line around age 48.
Now run the same life at a $38,000 budget in Porto or Valencia. The 3.5% target drops to about $1.09 million, and the same savings rate gets you there just before 45. Three and a half years sooner, same career, same monthly savings; the only variable that changed was the city.
Which target is right? Whichever life you’d actually live. The point is to price both before defaulting to the expensive one.
Find your number in two minutes
You could rebuild this in a spreadsheet, or you can use the FI number calculator: enter your spending, adjust the withdrawal rate, and see the target and timeline update as you type. If you’re younger and the full number feels far away, check the Coast FIRE calculator instead; you may find you only need to front-load savings for a few more years before compounding carries the rest.
The number stops being scary once it’s specific.
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