Can I afford to retire early?
You can sketch an answer from spending, investable assets, and a withdrawal rate. You can afford the date only if that sketch still works after healthcare, taxes, and a bad early market. A calculator is the sketch. A plan is the test.
Arc · Published September 18, 2026 · Updated September 18, 2026
The three numbers
Divide spending by a withdrawal rate you are willing to live with. Compare that target with the portfolio you will actually have on that date, not the portfolio you have today.
- Annual spending you cannot easily cut, in today's dollars.
- Investable assets, excluding the house you will keep living in.
- Years between the last paycheck and other income such as Social Security.
Example
Age 50, $1.2 million invested, $70,000 of spending, 4% rule. The portfolio covers $48,000. The gap is $22,000 a year, or about $550,000 of assets at 4%. Working longer, spending less, or counting a later Social Security benefit can close it. Ignoring it does not.
Costs a paycheck currently hides
Health insurance is the usual surprise in the United States. So are taxes if withdrawals come from pre-tax accounts, and a mortgage that felt small next to a salary. Put those into spending before you treat the date as real.
Common questions
Should I include Social Security?
You can, if you model the years before it starts as a separate problem. A 4% rule on the whole portfolio double-counts income you will receive later.
Sources
- Bengen, William P. “Determining Withdrawal Rates Using Historical Data.” Journal of Financial Planning, 1994.
Keep going
Related reading
The 4% rule
The 4% rule is a starting withdrawal rate from historical research, not a promise.
Related reading
What is a FIRE number?
A FIRE number is annual spending divided by the withdrawal rate you are willing to use.
Related reading
Sequence-of-returns risk
Early losses hurt more once you are withdrawing than while you are still contributing.
Related reading
How much cash should I hold?
Hold cash for near-term bills and shocks. Extra cash is a choice about return, not safety theater.
Tools
Retirement calculator
Project a nest egg from savings, contributions, and a real return, then compare it with spending.
Tools
FIRE number calculator
Divide annual spending by a withdrawal rate to get a portfolio target.
Tools
Safe withdrawal calculator
Multiply a portfolio by a withdrawal rate to see year-one spending.
Playbooks
Raise your savings rate
A general way to lift the share of income you keep, without a personality transplant.
Playbooks
Build an emergency fund
A common sequence for putting a cash reserve in place without stalling everything else.
Educational estimate only. Not tax, legal, or investment advice, and not a prediction of what your accounts will do. Methodology