Retirement & Financial Independence Calculation Examples

This is a rough example, but for basic planning it' is enough level of detail to be fairly confident that you have a plan that will work or you. You have to start somewhere so this is that somewhere and it's a pretty good somewhere to boot! Taken as a target around the beginning o the 2020's in the UK.. [1] Decent UK Target = £40K Gross Salary = approx £30K Net Target. [2] Strictly speaking you would now deduct any expenses from that that Net target that will be gone or significantly reduced once retired (such as mortgage expense or annual travel card into work.) for this example, lets assume 25K net equivalent retirement income target. This could be looked at as a conservative estimate so if you wanted to be really robust you might just stick with 30K target. I will both below to give two scenarios (conservative (£25K) and robust (30K) [3] compound 2% per year inflation for the number of years to your target retirement date/year. E.g retire in 10 years would mean a target retirement number of about: - * conservative £30,470 target (in ten years time) * robust £36,570 target (in ten years time) Note: If you think you can build in a part-time income (maybe from a less stressful job or pastime) then this can reduce the target required substantially, and the 25x number below would be reduced. Although this might be between say 50 or 55 years old and the state pension age of 67. This can be factored into the cash flow modelling projection.) [4] Using the 4% withdrawal rate (which again, will suffice for the initial plan) this gives a target retirement sum ('Capital Target') of: - * conservative £30,470 x 25 = £762K target (in ten years time) * robust £36,570 x 25 = £914K target (in ten years time)