Your Net Worth Target: What You Need and When You'll Get There
Most people have a vague sense that they should be "saving more" but no concrete target and no timeline. This calculator changes that. Based on your annual expenses, desired retirement age, and expected investment returns, it calculates your exact net worth target — and shows you precisely when you'll reach it given your current savings rate and starting position.
The net worth target for financial independence is typically 25× your annual expenses (the 4% rule). If you spend $60,000/year, your target is $1.5M. If you spend $40,000/year, it's $1M. The timeline to reach that target is entirely determined by your savings rate — the percentage of income you save and invest each month.
Why Savings Rate Matters More Than Income
A high income with a low savings rate reaches financial independence later than a modest income with a high savings rate. Someone earning $150,000 and saving 10% ($15,000/year) is on a slower path than someone earning $80,000 and saving 40% ($32,000/year). Your savings rate — not your income — is the primary variable that determines when you reach your net worth target.
The Compounding Acceleration Effect
As your net worth grows, investment returns begin to contribute more than your contributions. A $500,000 portfolio at 7% returns generates $35,000/year in growth — more than many people save annually. This acceleration means the final stretch to your target happens faster than the early years. The hardest part is building the initial base; after that, compounding does increasingly heavy lifting.
How to Reach Your Target Faster
The three levers are: increase income (raises, promotions, side hustles), reduce expenses (lowers both your monthly spend and your target), and optimise investment returns (minimise fees, maximise tax-advantaged accounts). Of these, reducing expenses has a double benefit — it both increases your savings rate and reduces the target you're aiming for.