I haven’t fully committed myself to a timeline for financial independence and early retirement. My numbers feel too fluid at this point to make any predictions. I have no idea how my income will progress. Being so far away from it, it feels a bit silly to try to make any predictions. What’s the point of a goal if the timeline has no meaning? Without a timeline, I’ve committed to saving as much as a can and I’ll leave it at that. It will happen when it happens.
What if, however, I could define the end goal? What is the earliest I could retire if everything completely fell apart today?
What if I never saved again?
I found a fancy formula on Reddit that solves for that exact answer. But first, let’s address a few assumptions.
- One: I don’t add anything to my investments
- Two: I never raid any of the invested assets I currently have.
- Three: All data is inflation adjusted and presented in today’s dollars.
- Four: My lifestyle doesn’t inflate.
The Formula!
X=LN((1+7%)^A*B/C)/LN((1+7%))
where A is my current age, B is my goal of investable assets (I used current annual expenses x 25), C is my current investable assets and 7% is my expected rate of return.
This formula was an amazing burst of fresh air. If I never invest another dime, this math should tell me when my investments can kick off a sufficient return to support me.
This formula is the End Game. With 100% reliance on math, I will be able to retire at the age it outputs.
What is my worst case scenario?
One person on Reddit got an answer of 96.11 years old. Time to save bud! A few others chimed in with answers between 54 and 65 years old.
To calculate my answer, I plugged in 29 for my age, and $1 million as my goal for investable assets. One million dollars should give me and Hubs a comfortable life. I don’t foresee that number going up much unless we can’t get our travel expenses under control.
Initially, I plugged in my current net worth for C. Solve for X.* If I never save again, I’d be financially independent at 71! That’s a good number, especially considering that I started actively saving last year.
However, the more I thought about it, my numbers were flawed. The $1 million covers expenses for me and Hubs. If its for just me, I don’t need that much. The net worth number is also incredibly misleading because of the fluff in there. My car won’t return 7% over time, neither will my car fund or house fund. I cut the fat and only included investable assets. To be more precise, I included Hubs’ investable assets as well, for a sum of just over $100k.
The answer…. 61.88 years old!
If I never saved again, and lived off Hubs and my current invested assets, we could retire when I am 61.88 years old or THE SUMMER OF 2048! Never investing again and I will still be able to technically retire early! This isn’t Frugalwoods or MMM early, but by social security standards, I’ll still be able to retire early!
The amazing thing about 61.88 is that Hubs and I have already invested enough money for me to retire before my mom or dad did. That is a jaw dropping. (Thanks Hubs for the investing head start!)
61.88 is an exciting fun fact! This is a number I can project my retirement around because we all know that I can’t stop saving now 🙂
Here’s the link to Reddit if you want to see the original formula posted by aspiringFI_throwaway.
*I used Excel to solve for x. Let’s not get crazy and try to calculate this by hand.
When could you retire if you never saved again?
