● Money & small business
Years to financial independence by savings rate: the table, at 3%, 5% and 7% returns
How long until your investments can pay for your life? Starting from zero, the answer depends almost entirely on one number: your savings rate, the share of take-home pay you don't spend. Your income drops out of the math. Here's the table, and why. To plug in your own numbers, including money you've already invested, use the FIRE calculator.
The table
Years until invested savings reach 25 × yearly spending (a 4% withdrawal rate), starting from $0, with savings added at the end of each year. Returns are after inflation, so everything is in today's dollars.
| Savings rate | 3% return | 5% return | 7% return |
|---|---|---|---|
| 10% | 70 years | 52 years | 42 years |
| 15% | 57 | 43 | 36 |
| 20% | 47 | 37 | 31 |
| 25% | 40 | 32 | 28 |
| 30% | 35 | 28 | 25 |
| 40% | 26 | 22 | 20 |
| 50% | 19 | 17 | 15 |
| 60% | 14 | 13 | 12 |
| 70% | 10 | 9 | 9 |
Why income drops out
Your savings rate moves two things at once. A higher rate means more going in each year, and it also means you're living on less, so the target (25 × spending) is lower. Both sides scale with income. Someone earning $40,000 and someone earning $250,000, each saving 30% from zero, reach financial independence in the same 28 years at a 5% return; the richer one just needs a bigger pile.
What moves the answer most
- The savings rate, by far. Going from 20% to 50% cuts 37 years to 17 at a 5% return. No realistic change in returns does that.
- Returns matter most at low savings rates. At 10%, the difference between a 3% and 7% return is 28 years; at 50%, it's 4 years. The more you save, the less you depend on the market.
- The withdrawal rate. Planning on 3.5% instead of 4% (a more cautious figure for retirements longer than 30 years) raises the target by about 14%: at 5% returns, 20% savings goes from 37 to 40 years, and 50% from 17 to 19.
- A head start. The table starts from zero. With $85,000 already invested on $92,000 of take-home pay, a 20% savings rate reaches FI in 33 years instead of 37, and 50% in 15 instead of 17.
How to use it
Work out your real savings rate: take-home pay minus everything you spent last year, divided by take-home pay. Then read across your row at 3% and 5% to see a cautious and a middle case. If the gap between them is large, raising your savings rate is the more reliable lever.
Every figure comes from the same year-by-year model as our FIRE planner, which was checked against an independent simulation. These are projections from stated assumptions, not predictions, and not financial advice.