Oxygene Finance

Free calculators

How much is enough to stop work?

One rule of thumb divides a year’s spending by a withdrawal rate: at 4%, that is 25 times the spending. This page works out that number, and how long steady saving takes to reach it.

Your figures

It opens on an example: £32,000 a year of spending, £140,000 invested, and £18,000 a year of saving at 40. Change any of them. Your figures stay in this browser. The sums run on this page; nothing you type is sent to us or kept.

For example a defined benefit pension, rent or the State Pension.

4% unless you change it.

Pensions, ISAs and other investments together.

4% is the app’s own starting assumption: shares at 7% a year, less costs of 0.4%, with inflation at 2.5%.

On these figures

On these figures, the retirement number is about £800,000. At £18,000 a year of saving and 4% growth above inflation, investments reach it in 20 years, at about 60.

  • Retirement number £800,000 £32,000 a year divided by 4%.
  • Invested so far 17.5% £140,000 of £800,000.
  • Time to reach it 20 years At about 60.

In today’s money.

How it is worked out

  • The number is the spending not covered by other income, divided by the withdrawal rate.
  • The years count saving added at the end of each year, with growth above inflation on what is already invested, until the investments reach the number. Everything is in today’s money. It stops looking after 70 years.

What it leaves out

  • Tax. Money taken from a pension is taxed as income; ISA withdrawals are not.
  • When each pot can be reached: a pension cannot be touched before the minimum pension age. The pension bridge calculator works out those years.
  • Returns that rise and fall. Steady growth reaches a number sooner than the same average with bad years early on.
  • It is a rule of thumb, not a plan. Whether money lasts depends on returns, inflation and the order they come in.

More on the assumptions behind the app’s own projection: how the retirement figures are worked out.

Questions

What is a retirement number?

The investments that would pay for a year’s spending at a chosen withdrawal rate. People who talk about financial independence (FIRE) call it the FI number. At 4% it is 25 times the spending not covered by other income.

Where does 4% come from?

From studies of 30-year retirements in the United States. Longer retirements and UK history both point lower, so the projection in Oxygene Finance assumes 3.5% for a plan longer than 40 years.

Does it include the State Pension?

Only if it is added as other income. The full new State Pension is about £12,548 a year, from State Pension age. State Pension age is 68 for anyone born on or after 6 April 1978 under current law. It is reviewed at least every five years, and the government may change the timetable.

Source: GOV.UK

Other calculators

Keeping the figures

This page forgets your figures when you leave it. Oxygene Finance runs the same sums on your own pensions, ISAs, savings and property, for one or two people, and keeps them up to date as your figures change. Features and plans shows what is free and what is Premium.

See a sample household Features and plans Create an account (invitation code needed)

Hear when sign-up opens

Sign-up opens to everyone later. Leave your email address and we will tell you when it does. This does not create an account, and we keep nothing about you but the address.

We send one email to confirm the address. If nobody confirms it, it is deleted after 7 days. Once confirmed, it is kept until you leave the list, or three months after sign-up opens to everyone, whichever comes first. How we handle it: Privacy Policy.

Oxygene Finance provides information, not financial advice. Figures are estimates based on what you enter and on assumptions you can change. For decisions that matter, a regulated financial adviser or an accountant can look at your whole situation.