Financial Independence Calculator
Find out how much wealth you need to live off your investments, and how much you'd need to save each month to get there, in Australian Dollars (AUD).
Your Details
Your Path to Independence
Total Wealth Needed
$729,261
To sustain $5,000/mo from age 55 to age 100
💬 In Simple Words
To reach financial independence at 55 with $5,000 a month, you need to accumulate $729,261. Starting from what you already have, you'd need to save roughly $381/mo over the next 25 years.
Estimate based on a constant return rate, without accounting for inflation or taxes. This projection is for wealth held outside superannuation, since super generally can't be accessed before your preservation age. Actual returns vary. This does not constitute financial advice.
How This Calculator Works
👋 Simple Explanation
The calculator does two sums. First, how much capital you need so that, withdrawing a portion each month, the money lasts until age 100 without running out — the same logic behind the "4% rule" used in retirement planning. Second, how much you'd need to save each month, from today until your target age, to reach that capital.
Wealth Needed = Monthly Income × [1 − (1+r)⁻ⁿ] / r
Where r = monthly return rate (annual ÷ 12) and n = number of months the income needs to last (from your target age until age 100).
How to Speed Up Your Financial Independence
Start as early as possible. Every year you wait to start investing significantly increases the monthly contribution needed to reach the same goal.
Cut fixed expenses before increasing income. Every dollar less in monthly spending directly reduces the wealth needed for your independence — it has double the effect of increasing savings by the same amount.
Diversify across instruments. Combining instruments with different risk and time horizons — like a term deposit and diversified share funds — helps sustain the expected return with fewer surprises. See the article on superannuation vs. investing outside super for how the two fit together in Australia.
Frequently Asked Questions
- How much money do I need to be financially independent?
- It depends on how much you want to spend per month and how many years you need that money to last. This calculator estimates the capital needed to sustain the monthly income you choose from your target age until age 100, assuming a constant annual return.
- What is financial independence?
- It's the point where your investments generate enough passive income to cover your expenses, without depending on a salary. It doesn't necessarily mean stopping work — it means having the option to.
- Why does the calculator assume the money needs to last until age 100?
- It's a conservative reference so you don't run out of money if you live longer than expected. You can adjust your target age to see how the required capital changes based on how many years you want the income to last.