🎯Time to FI Calculator
Monte Carlo simulation to estimate years to Financial Independence
What is the Time to FI Calculator?
This calculator uses Monte Carlo simulation to estimate how long it will take you to reach Financial Independence (FI). Unlike simple calculators, it runs thousands of simulations accounting for market volatility, giving you a realistic view of possible outcomes.
How Monte Carlo Simulation Works
Monte Carlo simulation runs thousands of scenarios with randomized market returns based on historical data. Each simulation projects your portfolio growth over time, accounting for your contributions, withdrawals, and market volatility.
Understanding Safe Withdrawal Rate
The Safe Withdrawal Rate (SWR) is the percentage of your portfolio you can withdraw annually without depleting your funds. The famous "4% rule" suggests you can withdraw 4% per year with low risk of running out of money over 30 years.
Frequently Asked Questions
Why are the 10% and 90% percentiles important?
They show the range of possible outcomes. If the 10th percentile shows 8 years and 90th shows 15 years, it means in 80% of simulations you reached FI between 8-15 years.
What volatility should I use?
Historical stock market volatility is around 15-20%. More conservative portfolios might use 10-12%.
What if I never reach FI?
The "Never Reach FI" percentage indicates scenarios where your portfolio doesn't hit the target. If it's high, consider increasing savings or reducing expenses.
Financial Accuracy
Disclaimer: This calculator provides estimates for informational purposes only. This is not financial, tax, or legal advice. Please consult a qualified financial advisor for advice specific to your situation.