How the calculator works
- Your savings rate: what you don’t spend from your take-home pay is invested each month. Count the super paid in for you as part of your pay, since it’s money you save.
- Your FIRE number: what you’d spend in a year of retirement divided by the withdrawal rate (4% means 25 times your spending).
- Growth: your investments grow at the rate you choose. Everything is in today’s money, so your pay and spending rise with inflation.
Your savings rate sets the timeline
Starting from zero, with 7% growth, 2.5% inflation and a 4% withdrawal rate:
| You invest | Years to FIRE |
|---|---|
| 10% | 55 |
| 20% | 39 |
| 30% | 29 |
| 40% | 22 |
| 50% | 17 |
| 60% | 13 |
| 70% | 9 |
These don’t depend on your income, only on the share of it you invest.
Example
At 30, with $60,000 invested, $85,000 of take-home pay (including super) and $55,000 of spending a year, you invest 35% of your pay. Your FIRE number is $1,375,000 and you could retire at 53. Spend 10% less, and you could retire at 49.
You’d reach Coast FIRE at about 40: from then on, your investments could grow to your FIRE number by 65 on their own.
Bridge years: money outside super
Super is taxed lightly, but it’s locked until your preservation age of 60. Retire at 53 and you’d have 6½ years, about $357,500 of spending, to cover from investments outside super:
- Shares and ETFs in your own name can be sold at any time. Gains on investments held for over 12 months get the 50% capital gains discount.
- Extra mortgage repayments or an offset account lower your spending in retirement, if you own your home.
The super guarantee means a good part of your saving goes into super whether you choose it or not, so plan your investments outside super for the years before 60. See what your super alone could grow to with our super calculator, or plan your spending with the budget calculator.