Are you decades away from your Financial Freedom, or is it just around the corner? See for yourself.
Sanjib Saha
14 Dec 2025
Wouldn’t it be nice if our financial habits could get us to a place where we’d no longer need any ongoing income to sustain our lifestyle going forward? That’s what Financial Freedom means. Once you’re there, you can choose to keep working and adding to your wealth, but you don’t have to.
How to get there sooner rather than later? Earn a high income? Live a frugal lifestyle? Chase market-beating investment return? What if the answer is: none of the above?
The most reliable way to accelerate your journey to financial freedom is to maintain a high savings rate relative to your income. A high income doesn’t help much if your living expenses are proportionately high. Similarly, a frugal lifestyle can still be too expensive with a low income.
Not convinced? See for yourself using the calculator below. It takes only three inputs.
First, your Gross Annual Income. Include your total income from your job, plus any additional gross income from non-financial assets such as rental properties but leave out any income from your financial investments.
Second, your Total Annual Savings. This should include your contribution to retirement accounts, anything you save in bank accounts or transfer to brokerage accounts in a year, any stock compensation you receive but don’t spend, and so on.
Lastly, input your Total Investments – your retirement accounts, bank accounts, brokerage accounts and so on. Do not include home equity, non-financial assets, assets earmarked for specific financial goals such as college savings, and so on.
Go ahead and give it a try. Be sure to check out the fine prints at the bottom of this post.
Not comfortable with putting your financial information on the tool? Try the simplified version if you don’t mind slight inaccuracy.
The Fine Prints:
Expenses: Your annual expenses are calculated by subtracting your annual savings from your gross income. The tool also reduces your expenses by estimated Social Security withholdings, while counting everything else including taxes. Social security benefits are not included as future income, but you can treat it as a retirement buffer.
Inflation: All numbers are shown in today’s dollar, with inflation expectations built into the tool by assuming that your gross income during your earning years and your lifetime expenses will simply keep pace with inflation.
Investment Returns: The tool assumes your investment portfolio is allocated between risky assets (such as globally diversified stocks) and safer assets (such as cash, CDs and bonds) in an “age-appropriate” manner. This means a heavier allocation to stocks at younger ages, gradually shifting towards more stable investments as you grow older, while still maintaining a minimum stock allocation later in life. The tool uses historical performance of global stocks and bonds as a proxy for long-term expected returns.
Withdrawal Rate: The tool doesn’t rely on any fixed or sliding withdrawal rate. Instead, it assumes that in retirement, you’d withdraw your annual spending needs from your portfolio each year and let the balance grow. If you don’t run out of money by age 100, you’re golden.
Precision is not Accuracy: Keep in mind that the calculator gives only a rough estimate and you should use the results accordingly. For example, the result may give you a sense of whether you’re looking your financial freedom in your late 50s or early 60s – not whether it will be at age 59 versus 60. Everyone’s situation is different, and the future is inherently uncertain. With only three inputs, the results are necessarily approximate and may be off by a few years.
Why does a high savings rate make the real difference regardless of the actual income level?
Because if you can save at a high rate, it means you’ve been able to keep a tight lid on your expenses and therefore need less money to support yourself when your income stops. At the same time, you’re saving more, which helps you reach that reduced target sooner.