Monthly expenses €2,500
All fixed + variable costs per month
Current savings €50,000
Invested capital today
Monthly savings €1,000
Amount invested each month
Target monthly income €2,500
Passive income goal (rente)
Annual return 6%
0%ETF avg ~6-8%15%
Withdrawal rate 4%
2%Standard 4% rule6%

What Is Financial Freedom?

Financial freedom means having enough passive income or savings to cover your living expenses without relying on a paycheck. It is the point where work becomes a choice rather than a necessity, giving you control over how you spend your time.

This calculator uses the 4% safe withdrawal rule, based on the Trinity Study, which found that retirees could withdraw 4% of their portfolio in the first year and adjust for inflation each subsequent year with a high probability of not running out of money over a 30-year period. Your financial freedom number is simply your annual expenses multiplied by 25 (the inverse of 4%).

For example, if your monthly expenses are $4,000 ($48,000/year), your target nest egg is approximately $1,200,000. Once your investments reach this amount, the growth and dividends should theoretically sustain your lifestyle indefinitely. The FIRE (Financial Independence, Retire Early) movement popularized this approach.

The calculator also shows a timeline: how many years it will take to reach your freedom number based on your current savings, monthly contributions, and expected investment returns. A higher savings rate dramatically shortens the timeline. Someone saving 50% of their income can reach financial independence in roughly 17 years, while a 10% savings rate takes around 51 years.

Related tools: FIRE Calculator, Compound Interest Calculator, Savings Rate Calculator