The money you need for early retirement
Based on a series of papers known as the Trinity Studies, you need to save 25-30 times your expected annual expenses to have enough money to last you for the rest of your life.
This multiple is based on the percentage of your investment growth that you would be able to withdraw per year. A safe early retirement withdrawal percentage is between 3%-4%.
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How long it will take you to save enough
How long it will take you to amass 25 times your income is based on the percentage of your income you save.
When you save 20 percent of your income, assuming a five percent average annual return, you'll hit 25 times your yearly income in just over 40 years.
The four percent rule
The four percent rule states that you could withdraw four percent of your principal balance every year and live on this indefinitely. That means you need to save 25 times your annual expenses to become financially independent.
The four percent rule is not perfect. There is no risk-free inv...
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