How Much Do You Need for Early Retirement? (How to Calculate Your FI Number)

Podcast Description

What’s your financial independence number (FI/FIRE number)? Are you being too conservative, or are you cutting things close? Do you even have one? Today, we’re taking a deep dive into this hotly debated topic to help you build a nest egg that will support your early retirement!

Welcome back to the BiggerPockets Money podcast! How much money do you actually need to retire? For years, the four-percent rule has been the “official” stance of the FI community. But why is it, then, that so many people continue saving and investing when they can comfortably retire? In this episode, Scott and Mindy talk about their own FI numbers, how they calculated them, and how their financial positions have evolved over time. You’ll learn whether the four-percent rule still works today or if you need a larger buffer!

If you’re worried about inflation, one of the best things you can do is keep your living expenses in check. This might seem out of your control, but there are several ways to either lock in certain costs or eliminate them entirely. We’ll discuss the many advantages of a paid-off house, self-managing your rental properties in retirement, and a one-time investment that could help you save thousands of dollars over your lifetime!

In This Episode We Cover

How to calculate your financial independence number (and when to adjust it!)

The four-percent rule explained (and whether it still works in 2024)

Why most people chasing FIRE don’t retire on the four-percent rule

How to control your expenses and protect against inflation in retirement

The “home run” investment that could save you thousands of dollars

And So Much More!

Links

The 4% Rule: The Easy Answer to “How Much Do I Need for Retirement?”

(00:00) Intro

(01:18) Calculating Your FI Number

(07:37) Does the 4% Rule Work?

(15:32) Locking in Your Expenses

(22:40) How to Combat Inflation

(31:48) Retiring on a Different Portfolio Mix

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-570

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Inflation Nation Causing Inversion Confusion