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Analytic Early Retirement Calculator

Investing Retirement Early-Retirement Interactive
Ryan Gibson
Author
Ryan Gibson
Quantitative Analyst | Computer Scientist
Table of Contents

When can I retire? Calculating time, savings, and portfolio
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The key thing to notice here is that your savings rate is far more important for an early retirement than your return on investment. Every cut to your expenses has a dual impact – it increases the amount of money you are saving for your future and reduces the amount of money you’ll need in retirement.

A plot entitled "Years until retirement vs. savings rate, current portfolio of $0" that shows that the time until retirement decreases very sharply as your savings rate increases.
A depiction of retirement timelines across various savings rates, assuming an initial portfolio value of $0. The bold line represents a 5% annual return and 4% withdrawal rate, while the shaded area reflects a spectrum of conservative to aggressive scenarios. An animated version for various initial portfolios is available on YouTube.

Assumptions
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All values above are presented in today’s dollars (i.e., they reflect current purchasing power) and the calculations assume

  • Your “current income” is post-tax.
  • Your cost of living (income minus savings) remains steady, adjusted for inflation.
  • Your “annual savings” are continuously invested.
  • The “annual return on investment” is after taxes and inflation.
  • Your goal is to retire indefinitely (i.e., your net worth in retirement will never shrink).

See also and references
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