How to calculate FI number

 FI : Financial Independence Number: how much money do you need to successfully retire?

How to calculate the FI number?

FI involved societal circumstances and personal circumstances.

Step 1: How much money will you spend in retirement? Please calculate your one-year expenses. Perhaps I can calculate 75% of my current spending. However, I need to consider the inflation rate in the future.

Step 2: Pick the withdrawal rate, it is the percentage of your retirement portfolio that you will convert to cash every year. Refers to the withdrawal rate, which can ensure we never run out of money.

Step 3:

FI number=annual retirement spending/safe withdrawal rate

Your retirement nest eggs should be 25 times your annual spending if the withdrawal rate is 4%.