All calculators are downloadable Excel spreadsheets that allow you to save and amend your own personal data.With all the spreadsheets, enter your personal data in the purple coloured cells.
years to financial independence calculator
Your own personal countdown clock that will update automatically and tell you how many years/days until you are financially independent according to the 4% rule. To learn more about the 4% rule and financial independence click here.
years to financial independence grid
Your one stop shop to view how long it will take for you potentially be financially independent under different income and spending scenarios. Again, this calculator uses the 4% rule of retirement.
Retirement planning spreadsheet
This spreadsheet will let you know how much you may need to retire, when you can retire, how much you can spend, how much you need to earn, what investment returns you may need, and more. It looks at your entire lifetime, both prior to retirement and during retirement.
Most other calculators only allow a few changes to income and spend, but this sheet allows you to change your spend and income annually if you like. Which is great if you are taking a non traditional path to retirement such as variable business income, going part time in middle age before returning to full time, taking sabbaticals, and so on. It’s a great sheet for running any different scenarios you may be considering to see which may be be the best path forward for you. The great thing with this being your own personal excel spreadsheet is that you can save and make copies to run several different lifetime scenarios.
Because it is a powerful spreadsheet in terms of what it provides, it does rely on several of your own inputs and assumptions. Because of this I have made a video for this spreadsheet on how it works. I strongly suggest you watch it first to get the full benefit of the sheet. I recommend watching at 1.5 x speed as I’m a pretty slow talker!
As always, this is information only. It does not replace personalised advice by a long stretch. But it can provide some much needed clarity around what is and isn’t within the realms of possibility.
Annual savings targets for FIRE
A neat calculator that allows you to have clear annual targets on your way to FIRE. For someone 10 years from FIRE it can seem a long way away, chasing a seemingly foreign amount of money. This calculator breaks it down so you have a yearly target. How much you can target 9 years out from retirement, 8 years out, and so. Having these mini targets on the way to the full amount can be quite motivating.
For ease of use, you enter the amount you want to retire with in todays dollars. That allows you to not have to worry about trying to guess how much you may need in future inflated dollars. Enter your current age and also your age you’d like to retire. For your assumed investment returns, make sure you enter the returns after all fees, tax, and inflation. For example, if you are invested in a mix of bonds and shares that you expect to return 6%, but you expect investing costs of 0.5%, tax of 1% and inflation of 2.5%, then put your investment returns as 2%.
By using after inflation investment returns, it allows you to not have to worry about entering and calculating future based numbers. This is handy as there are cells in rows 8 and 9 for you to enter your annual take home income and your annual spend. Important you use today’s dollars, otherwise you will overshoot how much you need for retirement.
This is not intended to be a post retirement calculator. You can find those in the retirement calculators. However, feel free to include any spend or income after retirement to see how that changes how much you need each year.
If you do need help determining how much you may need to retire then you can also get some answers from the retirement calculators too.
A final note on this calculator is don’t treat the targets as gospel. Don’t be ecstatic if you meet the target or disappointed if you don’t. They are just targets. Estimates. Some years investment returns may be better than expected. Other years worse. Some years spend or income may be more or less than expected. Things happen, often outside of our control. Targets may be missed. Just know they are ball park guides and as long as you are getting closer you are doing well.
coast fire calculator
Coast FIRE is where you have saved up enough money to only do part time work or take on a lower income as long as you don’t touch your investments. They will grow to your desired retirement amount thanks to compounding. In other words, only needing to earn enough to cover your expenses, but not necessarily add to your savings. Basically slowing down before you get to financial independence. This calculator will give you a Coast FIRE number you can aim for if this is a path your are interested in taking. You can read more about Coast FIRE here.
Coast fire grid
This is an extension of the previous Coast FIRE calculator. The difference being this grid gives you an immediate snapshot of how much money you may need under a whole bunch of assumptions. Different ages. Different retirement amounts wanted. Different investment return and retirement age assumptions. It’s all there so you can see for yourself the difference small changes may make.
With Coast FIRE, you maybe in a position to slow down much sooner than you thought.
Barista FIRE calculator
Barista FIRE is similar to Coast FIRE, where the idea is to stop working full time or stop relying on a higher income prior to retiring. It’s a form of being able to slow down or leave a higher pressured or higher time commitment job. Ideal for those who want a better work/life balance in mid life.
In other words, trying to capture a lot of the upside of financial independence earlier in life.
Barista FIRE is typically more advanced on the financial independence timeline than Coast FIRE. With Coast FIRE you typically need to be able to cover your annual expenses. With Barista FIRE you may only need a small amount of income to cover just a small portion of your expenses.
This calculator will show at what age you may be able to reduce your income and by how much. It will also show you at what age you may fully be able to retire. It compares the Barista FIRE results against if you didn’t go down the Barista FIRE path. A nice touch for New Zealand is it does include KiwiSaver savings too.
Just a few notes on the calculator inputs:
There is a section to make changes to your annual spend once you hit Barista FIRE if you want. With more time available, your spending patterns may change. i.e more time for travel and leisure, less need for eating out, etc.
For retirement spend, input future inflated dollars. For example, if you expect to spend $60,000 a year in retirement in today’s dollars but you don’t expect to retire for 10 more years, you want to add inflation to your $60,000. It may be closer to $80,000 in this example.
For retirement spend, it’s important you deduct any income you expect too. For example, if you expect to spend $80,000 in retirement but receive $30,000 a year income, your retirement spend is around $50,000. Use the $50,000 number in this example.
If you are unsure on a safe withdrawal rate, maybe use 4% as the default. You can read more about safe withdrawal rates here, here, and here.
For the average investment returns make sure you deduct all fees and taxes from your assumptions. For example, if you expect 6% returns but have 1.5% tax and 0.5% investment fees, put down 4%.
For the KiwiSaver assumptions, it’s important to enter both your current PRE TAX income and also your assumed PRE TAX income whilst you are in the Barista FIRE stage. Note that tax will be much lower on a lower income.
For the one off income or spend, there is the opportunity to add three entries for any one off income or spend (outside of normal income and spend) you expect. For example, paying for a wedding or a house deposit, or receiving an inheritance. If it is a spend event, just make sure you use the minus symbol for any number you enter. If you have no expected one off income or spend events, then make sure those cells are left blank.
The line graph can take a small amount of time to update with changes to your assumptions due to the amount of data in the back end. If the line graph doesn’t update in a timely enough fashion for you, you can update the graph manually by clicking on the formula tab and then clicking ‘calculate now’.
Finally, you may not be able to see both standard FIRE and Barista FIRE on the line graph of the results for quite some time. That is because the results are the same up until the point you decide to start Barista FIRE.
One thing to be weary of is if your FIRE number is well before access to KiwiSaver age and/or a large percentage of your investments are in KiwiSaver, rather than outside of KiwiSaver. In that instance, there is a risk of not having enough money outside of KiwiSaver to bridge the gap between your retirement and access to KiwiSaver. This calculator is not a retirement planning calculator. I have plenty of those here. It is not helping you decide how much you need to retire. It is just helping to provide an idea of how much you could scale back at work and for how long, and comparing that to how long it would take if you continued on your current full time path. It’s a useful tool for making decisions. For example, do you work 10 more years full time and retire in 10 years, or do you work 3 more years full time, and 15 more years part time, before being able to retire? Retiring 8 years later, but working 7 years less of full time work. There is no one right answer. It differs for everyone. It is just presenting the paths. The options.
The crossover point calculator
The crossover point was introduce by the book “Your money or your life”. The gateway book that lured me to the attractiveness of financial independence. The premise of the book is that money can be used to buy options and time.
Our time on earth being limited and we need to be conscious of where we place all our energy. Money being the key tool in helping us direct our energy to the right places to live our best lives.
One of the key concepts in the book was ‘the crossover point’. It’s the point at which your investment income exceeds your monthly spending. In other words, financial independence. I consider the crossover point a bit excessive for many. I feel it can be OK to drawdown capital in retirement. There’s no point dying with more money than you started retirement with if it means not living your best life. But it’s a useful concept nonetheless.
This calculator includes a line graph that shows your progress over the years towards the ‘crossover point’. Quite nice looking back over time to see how far you have come.
As always, just enter your data in the purple cells.
There is the option to input your spend and investments every month but I recommend less frequently. You don’t need to check in so often. Besides the line graph will probably be a bit condensed if you enter your data monthly for 15 years. Maybe quarterly or semi annually will do.
If you happen to have an investment property or ongoing income from any source after retirement and need to include that income as part of your total investment income, then just deduct your net income (after all costs) from your expenses. For example, if your monthly spending is $7,000 and your monthly income in retirement is $3,000, then put your monthly spending as $4,000.
Feel free to send me any feedback or improvements for the calculator.
Life energy calculator
Life energy is another important concept from the book “Your money or your life”. It refers to the fact that money is something that you trade your life energy for. In other words, you pay for money with your time. The exchange of time for money is often not as good as you think either. Many people think of income in terms of pre tax amounts. But that is dangerous. What really matters is what you receive in the hand (after all tax and fees). And you shouldn’t stop at tax and ACC fees. There are further costs and time to working such as getting ready, winding down, travel time, parking costs, putting kids in daycare, and so on.
This calculator lets you input all the costs and time associated with your income and will let you know what your real hourly income is. This is your income after all costs and time has been considered and is often lower than you think. This is the number that you are exchanging your life energy for. Is it worth it? How many hours of work are really needed for that purchase you are thinking about?
Hopefully this calculator will help you be a bit more conscious with your money choices. It may even be useful with helping decide between two jobs or two forms of income. Maybe with deciding how much to work too.
You can enter information in any of the purple cells. If none of the purple cells apply to you just ensure they are left blank. Finally, for the further expenses and time something can be a time cost only, a money cost only, or both a money and time cost. For example, daycare is a money cost but doesn’t really cost you much time. Blobbing out on the couch recovering from work may be a time cost but not a money cost.
For personalised advice on your retirement planning needs, then get in touch for a no obligations chat to see how we may be able to add value for you.
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