What Is Your FI Number? How to Find Your Freedom Figure
Your FI number is the size of the portfolio that makes work optional. Here is how to calculate it, and three ways to make it smaller.
Financial independence sounds vague until you put a number on it. Your FI number is the portfolio size at which the returns can cover your living expenses indefinitely: the point where work becomes optional.
The calculation
It comes straight from the 4% rule:
FI number = annual spending ÷ 0.04 (the same as annual spending × 25)
So the whole thing hinges on one input you control more than you think: your annual spending in financial independence.
- Spend $40,000/year → need $1,000,000
- Spend $60,000/year → need $1,500,000
- Spend $100,000/year → need $2,500,000
Why spending matters twice
Lowering your target spending is uniquely powerful because it works on both sides of the equation: a lower number to hit, and (usually) a higher savings rate to get there faster. Cutting $10,000 a year off your planned spending knocks $250,000 off your FI number.
Three ways to shrink your number
- Trim recurring costs. Housing, transport, and subscriptions are the big levers: a permanently lower baseline lowers your number for life.
- Plan for paid-off housing. If the mortgage is gone by retirement, your FI spending drops.
- Count other income. Social Security, a pension, or part-time work reduce how much the portfolio has to cover.
From number to date
Your FI number is the destination; your savings rate sets the speed. To see when you would actually arrive, and the earlier Coast FIRE milestone along the way, run your numbers through the free Coast FIRE calculator.
A number you can name is a number you can plan for.
Try it on your own numbers
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