Hey all, I'd love for you to take a look at a calculator I built and let me know if you find it useful and if there are any issues.
Background:
I've never been much of a FIRE person myself. On the whole I've stayed away from sacrificing my now for a nebulous potential future. I did what I considered responsible (401(k) matching, etc), but didn't make big bets. But I'm also a big proponent for knowing when is "enough".
I recently did the math, and discovered that "enough" was a lot closer than I expected. I'm 38, and from what I'm seeing retirement at age 45 as difficult but achievable, while retirement at 50 is a no-brainer. That's assuming the standard 7% nominal growth, 4% SWR, etc. and also comfortable with returning to the workforce to fund my excess and so on. I'm not aiming to fully stop working, I just want to no longer be _coerced_ to work.
The tool:
Part of "doing the math" meant building out a good Desmos calculator to find when my savings growth was likely to hit my savings targets. So that's what I built and that's what I'm asking y'all to take a look at. I've done what I can to validate the underlying math (both using my own education as well as leveraging some AI tools to check my math). But there's no substitute for more eyeballs.
The tool shows 3 targets, all in real dollars (i.e. adjusted for inflation):
- The Fat target: Treats mortgage as part of normal expenses (i.e., portfolio covers P&I and PTI via withdrawals).
- The Lean/Debt-free target: Discounts expenses by the mortgage P&I, assuming the home is fully paid off.
- The Hybrid target (the one I'm targeting): The debt-free target + the remaining principal on the mortgage (discounted for inflation). This is the target where you could pay off the mortgage and still cover all expenses, but allows you to keep arbitrage between your investments and the mortgage.
The tool allows for a "coast" period, where no further savings contributions are made, but no withdrawal is made either.
Nitty details:
- Tax drag on withdrawals isn’t explicitly modeled here and would be covered under “expenses.”
- This is all estimates, so fine-grained detail isn’t the goal. That’s why specific tax liability is left out. But anything that would cause it to scale differently should be called out.
The request:
Please poke holes in this. I did my best to document what each variable means, but I might be using some nonstandard notation. The formulas will be close to textbook form, but might have common factors cancelled out and simplified. Double check that the formulas I'm using are sound and appropriate for their use.
At this point I don't think it's safe to use until folks have properly reviewed it, but if it checks out I think it's something people might find useful. For me, personally, knowing the number I needed to save caused my eyes to glaze over. But seeing "8 years" made it more real for me.
Note: in the link I'm providing I've obscured my actual numbers, so don't take this as an analysis of my actual situation.
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