Financial Oracle
When Can You Stop Working?
How the Financial Oracle Works
This calculator determines your Financial Freedom Number — the investment portfolio size needed to generate enough passive income to cover your living expenses indefinitely, using the 4% safe withdrawal rate. It then projects when you'll reach that number based on your current trajectory.
The concept comes from the FIRE (Financial Independence, Retire Early) movement: once your invested assets generate enough income to cover your expenses, working for money becomes optional. You've achieved financial independence.
The Formula
Time to Freedom: Iterative compound growth until NW ≥ Freedom Number
Accelerating Your Freedom Date
- Reduce expenses for double impact — Cutting $500/month from spending does two things: it increases your monthly savings by $500 AND reduces your Freedom Number by $150,000. That's the power of the "reduce the denominator" strategy.
- Invest in low-cost index funds — Minimize fees. A total stock market index fund with a 0.03% expense ratio versus an actively managed fund at 1% can mean hundreds of thousands more in your portfolio over 20 years.
- Max tax-advantaged accounts first — 401(k), Roth IRA, HSA. Tax savings accelerate compound growth. A dollar saved in taxes today is worth much more than a dollar in 20 years.
- Increase income aggressively — While cutting expenses has limits, earning potential is theoretically unlimited. Skill development, job changes, side businesses, and strategic career moves can add thousands per month.
- Stay the course during downturns — Market drops are temporary. The S&P 500 has recovered from every decline in history. Continuing to invest during downturns is like buying stocks on sale — it accelerates your timeline.
Frequently Asked Questions
What is the Financial Freedom Number?
Your Financial Freedom Number is the portfolio size needed to cover your annual expenses from investment returns alone, without ever depleting the principal. Using the 4% safe withdrawal rate: Freedom Number = Annual Expenses × 25. If you spend $60,000/year, you need $1,500,000. Once reached, work becomes optional.
How is the Freedom Date calculated?
The Freedom Date estimates when you'll reach your Financial Freedom Number based on your current savings, monthly contributions, and expected market returns. It uses compound growth projections. The date moves closer as you increase savings or reduce expenses.
What is Coast FIRE?
Coast FIRE is reached when your existing investments, left to grow without additional contributions, will reach your retirement number by traditional retirement age (65). At this point, you only need to earn enough to cover current expenses — you no longer need to save for retirement.
Is the 4% rule reliable?
The 4% rule has a ~95% historical success rate over 30-year periods based on US market data since 1926. Some modern researchers suggest 3.3-3.5% as more conservative. You can improve reliability by being flexible with spending during market downturns and having diversified income sources.