F-You Money Calculator

The idea behind the name is a fund large enough that leaving a job is a decision rather than a crisis. This calculator sizes it the simplest way there is: annual spending multiplied by the number of years the fund has to cover, with a percentage added on top for prices rising over that stretch. On the defaults, 60,000 a year for ten years is 600,000, a 15% buffer adds 90,000, and the target is 690,000.

The buffer is right for ten years and short for anything longer

Holding spending level in real terms, the uplift a flat fund needs is the sum of the inflating annual costs over the flat total, which works out at 9.50% for ten years at 2% inflation, 12.03% at 2.5% and 14.64% at 3%. So the 15% default covers a ten-year horizon at inflation up to about 3%. Stretch the same 3% over twenty years and the buffer needed is 34.35%; over thirty years it is 58.58%. The buffer field does not move with the years field, so a longer horizon needs it raised by hand. Which rate applies is a local question rather than a global one, and consumer price inflation by economy is published in the World Bank's open data.

The monthly figure is not an allowance

It is the whole target divided evenly across the months, so it comes out above today's spending: 5,750 a month against the 5,000 a month that 60,000 a year actually costs. The gap is the buffer, and it is there to be eaten by rising prices rather than spent. Reading it as a monthly allowance spends the inflation cushion in year one.

No investment return is assumed anywhere

The model is capital sitting still and drawn down evenly, which makes the target a ceiling: any real return earned while the fund is held stretches it further than the years entered, and any tax or fee on the way out shortens it. That is a deliberate simplification rather than an oversight, because the point of the number is a floor that can be acted on rather than a projection depending on markets behaving.

How it compares with a full independence number

The difference is arithmetic rather than philosophy. A fund meant to last indefinitely at a 4% withdrawal rate on 60,000 of spending is 1,500,000. The ten-year figure here is 690,000, under half as much, which is the whole appeal: it arrives years earlier and it buys a decade of choices rather than a lifetime of them.

Cutting spending moves both sides of the sum

A household spending 60,000 out of 100,000 saves 40,000, and at a 7% return reaches 690,000 in 11.7 years. The same household spending 45,000 saves 55,000 and faces a smaller target of 517,500, which arrives in 7.5 years. The target fell and the saving rose from the same change, which is why spending moves the date further than saving harder does. Those figures assume a steady 7% return, which this calculator does not model and no market delivers evenly.

What sits outside the calculation

Economists have a name for the underlying behaviour: Carroll's buffer-stock model describes households holding a target ratio of wealth to income as protection against income risk, saving hard below it and spending more freely above it, which is a formal version of what this number is for. Outside the arithmetic sit investment returns while the fund is held, tax on withdrawals, uneven spending across the years, costs that can outrun general inflation, and any income earned during the period, all of which would stretch or shorten the runway.