The Money with Katie Show How to Create Your Comprehensive Financial Independence Timeline
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Nov 20, 2024 Dive into the intricacies of creating a personalized financial independence timeline using innovative planning tools. Discover how temporary expenses, like childcare, and future income sources can reshape your projections. Learn about key assumptions that drive financial planning, including withdrawal rates and inflation's impact. The speaker shares their own journey to financial independence and offers valuable insights on optimizing retirement income. Plus, get insider tips on the latest planning tool to enhance your financial strategy!
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Defining Financial Independence
- Financial independence (FI) is when investments produce enough income to cover expenses.
- FI depends on spending, not income, and helps define 'enough'.
FI Calculation Inputs: Assets
- Consider current long-term invested assets, excluding funds for other purposes.
- Tag accounts by timeline (long-term, short-term, etc.) for accurate FI calculations.
FI Calculation Inputs: Income, Spending, Taxes
- Know your current gross income, monthly spending, and estimated effective tax rate.
- The Wealth Planner uses these to project future savings and tax liability.