Financial Independence Day – September 2026

Our friend Even Steven has convinced me to to dig a little deeper into my financial independence day (“FI day”). In previous posts I had estimated that I would become financially independent by age 40 which would be in year 2028. I had run the numbers quickly in the past and realized that this was probably a conservative and achievable goal. The reason I had not sit down and actually crunched the numbers is because of how many variables could actually affect the outcome. Even the slightest change in my assumptions could throw off my calculation by years. Therefore I did not want to set myself up for disappointment. But then I sat back and thought, why not set a goal and then try to beat it! Below is my calculation, along with explanations of my assumptions.

FI Day

 

 

 

 

 

 

 

 

Rate of return – I used 7% as my annual rate of return on my investments. The S&P 500 has returned approximately 11 to 12 percent annualized for the past 30 years including dividends, but historical returns do not dictate future returns so I went a little more conservative on this. In other financial independence day calculations I’ve seen anywhere from 5 to 9 percent used, so I settled in the middle. I like to keep it simple, stupid – so a large majority of my net worth will be in broad market low-cost index funds (thanks Mr. Bogle).

Spend inflation – I expect my annual expenses to increase with inflation at about 3 percent.

Safe withdrawal rate (“SWR”) – I will use the common 4 percent safe withdrawal rate to calculate when my investments alone can support my spending. For more information on the SWR, I’d start with jlcollinsnh’s stock series.

Assumed savings increase – I think I can add $5k a year to my annual savings which is a combination of raises, bonuses, side income, etc.

Year & Age – Self explanatory… I’m getting old. No longer “just graduated” from college.

Annual Savings – I should be able to save around $40k this year which includes pre-tax 401k, HSA, Roth IRA, student loan debt pay down, and savings to after-tax accounts.

Net Worth at End of Year – The calculation of this column is net worth at end of prior year times 7 percent plus the annual savings.

Annual Spend – I assumed $3k a month for expenses. I spend a little less than that a month right now but I do plan on traveling more in the future, and I currently share living expenses (apartment and utilities) with two roommates which I don’t plan to do for too much longer. This amount just increases with inflation at 3 percent a year in my calculation.

This is definitely a category that can fluctuate greatly going forward as I don’t plan on living and renting in Manhattan forever, especially after financial independence.

FI? – This is a simple calculation to see if 4 percent of my net worth will cover my annual spend.

As you can see by my calculation I project my FI day to occur in 2026 when I am 38 years old. According to my calculation, I’ll actually get there a few months before December 2026, so my FI day goal is officially September 2026. I’m going to do everything in my power to get there before then, but as we know a million different things can occur between today and September 2026, and therefore I’m going to keep an open mind to any of the changes that may come.

I think one of the most important parts to this financial independence journey is staying flexible and being able to adapt to changes. If the S&P 500 drops 10 percent tomorrow, I would not think of it as detrimental to my goal, but a great opportunity! I am currently saving more than I ever have and I would use it as a great buying opportunity. Same goes for if I decide to strike out on my own entrepreneurial endeavor. This new career path may pay less and postpone my FI date, but if it offers me more flexibility and more happiness, then this would also not be a disappointment at all.

Did I miss anything that you have included in your FI day calculations? Does this seem like a good FI day calculation that I can use and update every year? When is your projected FI day?

48 thoughts on “Financial Independence Day – September 2026

    1. Fervent Finance Post author

      According to “The Worst Retirement Ever” post by Go Curry Cracker, it should last me forever! I’ve also done a lot of research on the 4% SWR (jlcollinsnh is a great place to start) so I am fairly comfortable with the 4% SWR as I’m a flexible person and wouldn’t mind buckling down for a few years if the markets were to tank. Plus I don’t plan on earning NO outside income during my financial independence. Even $5k a year in extra side income during this time would greatly increase my chances of success. One of my assumptions in my calculation was also that I am single for the whole time so no extra income from a spouse. Therefore there are a bunch of ways I’ll be able to “pad my cushion” during FI, especially if I have a spouse that continues to work at least for a little while.

      Reply
  1. InsiderAccountant

    It sounds like it was a worthwhile exercise, since you have probably adjusted your goal to age 38 rather than 40 now that you know 38 is a real possibility!

    I have a vague goal of $1m by age 40 (plus debt-free house and my superannuation), but even that is a bit simplistic. I played around with it one time and realised that if I firmed up some of the numbers and calculated taxes accurately it could easily be a couple of years earlier. The whole exercise can be quite motivational if you put a bit more science behind the numbers, despite the inherent uncertainty of predictions so far into the future.

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    1. Fervent Finance Post author

      I agree with the motivational factor. 11 years still seems so far away. First goal is to get that cut to 10!

      I’m assuming a “supperannuation” is some time of pension fund in Australia. Please elaborate more or point me to a post that you have about it. I’d like to learn more. Thanks.

      Reply
        1. Fervent Finance Post author

          Thanks – looks like employers are required to contribute to the supperannuation which is not the case with the 401k. Also most people think the 401k is not accessible until 59.5 years old but many bloggers such as jlcollinsnh, Root of Good, and Go Curry Cracker have shown us some work-arounds for that. Maybe this is a possibility with the supperannuation?

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          1. InsiderAccountant

            Unfortunately there isn’t a good way of accessing superannuation before 55 without being slugged with an enormous tax bill.

            There are some hardship provisions that can allow access but eligibility needs to be assessed on a case by case basis and it is usually only allowed in cases of serious illness or extreme financial hardship. So no, there isn’t a way of accessing it early in the way that the bloggers you have listed have for the US system, which is a real shame!
            InsiderAccountant recently posted…The things we think and do not sayMy Profile

          2. Fervent Finance Post author

            I guess you can look on the bright side that it is 55 and not 59.5 as it is here. Less time to figure out how to bridge the gap. We can access most retirement accounts before with the ways mentioned, but things like Roth IRA appreciation and earnings cannot be accessed until 59.5 without a big penalty/tax hit. Take care!

    1. Fervent Finance Post author

      I agree with the variables part. So many things could change mine personally. I’ve always taken on the more stressful, demanding jobs because they pay better, but maybe one day before FI I will say “enough is enough” and take on a true 9-5 which most likely will pay less. This will change my numbers greatly, but the happiness factor may trump my FI day.

      Looking forward to your calc Brian!

      Reply
  2. Even Steven

    Well you know I love this!

    I do have one question on the student loan debt repayment part. So with my calculations, I use my student loan as liability and currently say that the $199.85(You have no idea how much I hate that number) is part of my expenses each month so $2,398.20 annually, however when this is paid off, which is shortly, this expense then increases my savings rate instead of needing an extra $59,955(25 X Annual Expense), needing less, so I don’t count that in my expenses.

    I guess what I’m asking is I don’t think I’ve seen a student loan payment included in the annual savings, tell me more about this:)
    Even Steven recently posted…What Would Warren Buffett Do? WWWBD?My Profile

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    1. Fervent Finance Post author

      I’m glad you enjoyed it! Thanks for the motivation to sit down and actual calc it.

      Good question on the student loans. The student loan balance is included in my net worth as a liability. I don’t include the principal portion of my payments in expenses as the accounting entry (for those accountants out there) would be Debit to Student Loan Liability and Credit to Cash, and this would be a wash on the net worth statement. The interest expense portion is only about $20 a month since my rate and balance are pretty low. Once my loans are paid off that $20 will probably just turn into two more Chipotle meals a month anyways 🙂

      Hope that cleared it up.

      Reply
  3. Mr. SSC

    We came up with our number basically by taking our annual spending and lifestyle as it is now, and adding in healthcare costs (since we wouldn’t have those covered by an employer), payoff for a mortgage, kid costs (assumed because who knows), and then backed into how much we would need to cover those costs until we’re 62. Since our 401k’s will already be covering those costs and then some by the time we get to the age to draw on them, that was the least of our worries.
    In the beginning, we added a 10% cushion, and we have our personal fun money/allowance that adds a cushion if we need it. Mrs. SSC loves running simulations with cfiresim calculator and adjusting 7% ROR, or 3.5% SWR vs the standard 4%, and playing with healthcare costs.
    All of those gave us a good idea how flexible we might need to be, and how well our number held up under various scenario’s.
    I’d say it looks good, but don’t forget health care unless you’re already paying it out of pocket now, and if you get married/kids, you may need to readjust your budget, but it shouldn’t change your date by much.
    It looks good though!
    Mr. SSC recently posted…Our money went where??? April 2015My Profile

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    1. Fervent Finance Post author

      You are correct as I did not specifically address healthcare costs. My actual monthly spend is currently less than $3k so I have a little buffer in there, and I expect it to go down in FI as I will not have the reoccurring costs that come with working in business (such as business clothing, and eating out more since I have less time to cook, etc.) and I will move to a lower COL area than Manhattan. I also may have a spouse who continues to work a little longer after me who I could mooch health insurance from.

      My expenses also include living costs for me living alone, which could get split if I were to share a home with a spouse. Just so many variables that I like to keep this thing simple. I’d get headaches trying to think of every little variable that could change my FI date. My key is being flexible! Of course once I get closer to FI things like the cost of health insurance would definitely get input in my calculations.

      Reply
    1. Fervent Finance Post author

      Hi Tawcan. I have thought about that. But I expect my expenses to actually decrease once I “settle down”. Embedded in my $3k a month of expenses is about $1,200 of rent. Once I move out of NYC that could translate into a $225k home (20% down, 30 year, 3.75%, including $4,500 in RE taxes). That would be with my spouse contributing nothing. Now my taste in women is not free loaders so they would be contributing something to the pie! 🙂

      Mr. and Mrs. Root of Good feeds, clothes, and puts a roof over their family of 5 on about $32k a year, including some awesome vacations. So there is definitely some fat embedded in my budget, which I did to be conservative.

      Reply
      1. The Professor

        I was going to stay the same. Having two kids will increase expenses significantly. I would venture somewhere in the realm of $10,000 – $15,000 extra per year? Extra health insurance, food, diapers, clothes, ballet lessons, and everything else would definitely be over $10,000.
        The Professor recently posted…A Budget for a Young FamilyMy Profile

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        1. Fervent Finance Post author

          Hi Professor. I would agree with you if I planned on going at it alone, but I don’t. Another income will easily offset any future expenses of having a family that I have not included in my calculations, as I have already included all the “roof over your head” costs in my expenses. Thanks for stopping by.

          Reply
  4. Our Next Life

    This looks great! One question, since you asked 😉 — How are you accounting for a future home purchase? Thinking down payment especially, though maybe you’d plan to pay cash if you could? Though our home will be paid off when we reach FI/RE, we are setting some funds aside to do some home renovations and buy a small RV, that we aren’t factoring into our overall funds.
    Our Next Life recently posted…early retirement is a marathon, not a sprintMy Profile

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    1. Fervent Finance Post author

      I have $1,200 of rent included in my expenses. That could be replaced with a mortgage. I’m not opposed to having a mortgage during FI. As for the down payment, I’d probably put 20% down and have a spouse to split at least part of it with. Also there is possibility my income may outpace my estimate and then the down payment would come from there.

      Great questions!

      Reply
  5. Gen Y Finance Guy

    The great thing about having a target is that you subconscious goes to work on achieving that goal even when you are not thinking about it.

    I have found that my goals pretty much become self-fulfilling prophecy’s. You your focus goes your energy flows.

    Looks good my friend!

    Reply
    1. Fervent Finance Post author

      I agree! The wheels were already in motion but maybe now they’re a little more greased 🙂

      Thanks GYFG!

      Reply
  6. Andrew@LivingRichCheaply

    Congrats to you on thinking ahead. I wish I knew about early FI when I was your age…although my income was much lower back then. Having a family definitely throws a wrench into the equation, but if you find a spouse who shares your goals then it will work. Do you mind me asking where you plan or moving to? I think one thing holding me back is the fact that housing in NYC is so expensive (and I live in Queens…not LIC/Astoria). Rent for a 1 bedroom was about $1575 and we just purchased a co-op recently. Sometimes I wonder how it would be if we moved to a lower cost of living area…but our family/friends are here so that’s tough.
    Andrew@LivingRichCheaply recently posted…Going from Ordinary to ExtraordinaryMy Profile

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    1. Fervent Finance Post author

      The only reason I am in NYC is due to the higher earning potential. My current position can only really be done in the bigger 15 or so cities in the US (at least that’s where companies have their offices to do this). Most of my family and friends are in the Northeast so my only options are NYC or Boston, both of which have pricey real estate.

      I have thought about doing my job remotely outside of a big city and then traveling when needed, but I think I need some more seniority on the job before I can swing that. I think I’ll settle some where in New England at some point, but I am not a fan of the winter, so maybe the whole East coast is in play. It also seems like everyone in this FI/RI community can’t say enough good things about Colorado. I honestly have no idea where I’ll end up, but those are some thoughts 🙂

      Reply
  7. Mrs. PoP

    Looks great! And as you get a little further along your path, you may find you need to keep revising that date closer and closer as we have made our goals a bit more aggressive over the past few years when it seemed as though we would meet them too easily.
    Mrs. PoP recently posted…PoP Balance Sheet – April 2015My Profile

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    1. Fervent Finance Post author

      Thanks! You guys are for sure crushing it in the net worth building department!

      Reply
  8. Jason@Islands of Investing

    Looks like a very achievable goal Fervent Finance, especially with your very reasonable annual spending! I really got into this same calculation recently and built my own calculator which included a few ‘lumpy’ future expenses and changes in income. My FI day is definitely looking a little later than yours, but the first step is to get a good handle on the maths, then you can start pulling the levers a little harder!

    Also agree it’s very important to stay open minded and flexible – who knows what life will throw at us and how our goals and values might change!

    Best of luck on the FI journey!

    Cheers,

    Jason
    Jason@Islands of Investing recently posted…Million Dollar Islands update – April 2015My Profile

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    1. Fervent Finance Post author

      Thanks a lot Jason. It was a fun exercise. It’s nice to know what is potentially achievable. I’ll be definitely open to updates to my calc over the next few years… hopefully for the better 🙂

      Reply
    1. Fervent Finance Post author

      Steve you really need to stop hanging out in the spam folder! With the way you two have been killing it lately 2019 definitely sounds doable! Then you can be sipping (insert beverage of your choice) in Sedona!

      Reply
  9. Ryan

    Have you researched what the average annual return is for the duration you have until FI?
    Everyone uses the 30 year average returns of the stock market, but those trying to achieve FI are not looking to work and contribute for that long.

    You say spending could fluctuate greatly, but I would also be concerned about what that average rate of return will be for something much less than 30 years.

    Reply
    1. Fervent Finance Post author

      Past performance is not indicative of future results* I sound like one of those investing commercials you see on CNBC. According to the link at the bottom, the average 10 year rolling returns has been between 10 and 11 percent since 1936. Over a 10 year period the market can have negative returns as it did during the great depression and 2008. But I’m a law of averages guy and won’t bet on it happening to me. If it does and I have to work 5 years longer, oh well. I’ll buy some index funds at really cheap valuations. Thanks for stopping by Ryan.

      Reply
    1. Fervent Finance Post author

      Thanks for the advice NNL. Living in NYC where lifestyle inflation runs rampant can sometimes be tough to deal with. But I’ve build up a strong defense. Take care.

      Reply
  10. Lifestyle Accountant

    Nicely done FF!

    I haven’t actually done the calculation myself so you’ve inspired me to do the same. Now that I won’t have a steady income since I quit my job, it’s going to be a lot harder to project.

    No doubt in my mind that you’ll actually reach FI sooner than your estimate. You possess the right mindset and attitude in the first place and aren’t accountants super conservative in their estimates anyway?!
    Lifestyle Accountant recently posted…Planning A Mexican AdventureMy Profile

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    1. Fervent Finance Post author

      Thanks L.A. Will definitely not be the easiest to calculate with all the variables involved in setting off on your new entrepreneurial endeavor. I try to under promise and over deliver 🙂 Best of luck!

      Reply
    1. Fervent Finance Post author

      I agree Mark. The linear increase is definitely not accurate, but I think it could come close with my lumpy salary increases/bonuses/promotions over the next 10 or so years just as you pointed to. As an accountant these estimates are hopefully conservative 😉

      Reply
    1. Fervent Finance Post author

      The calculation can be quite fun and enlightening. Good luck Chella, and you are correct – the journey is the best part!

      Reply
  11. MarciaB

    My thinking here on the increase in savings is that it shouldn’t be a set $$ each year, but a set %% increase instead. So if you increased it $5000 from 2015-2016 – that’s a 12.5% increase.

    What would it look like if you increased your savings each year by 12.5%?

    Reply
    1. Fervent Finance Post author

      Good point MarciaB. I thought about this as well. The conclusion I came to is I’ll be able to secure more raises, income increases earlier in my career, and the consistent $5k increase a year is more of a buffer / conservative estimate as time progresses (hopefully at least). Thanks for stopping by.

      Reply
    1. Fervent Finance Post author

      I agree. I’m very flexible with my plan, so if returns are less than expected then I’ll just pivot and alter my strategy.

      Reply

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