When it comes to retirement planning, knowing your financial independence number is the first step!
FIN stands for Financial Independence Number
In order to find your FIN, think about how much money you want to make in retirement, when you want to retire, and calculate the inflation rate of what the dollar will be worth in retirement.
As an example, If you wanted to retire 40 years from now making 100k a year, you actually need to retire making 210k a year because due to inflation 210k will spend like 100k does today.
Once your annual income has been determined, divide that number by 4%.
We divide by 4% to follow the 4% rule, which states that if you take 4% of your retirement assets every year you have a 90% greater chance of that money lasting even longer than if you took more.
So we know we need to make 210k a year in retirement, 210k divided by 4% equals $5,250,000
In this example, 5.25 Million dollars is the Financial Independence Number we need to work to.
If you want to calculate your own FIN I recommend using
https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
https://smartasset.com/investing/inflation-calculator#RRQKfUpyBK
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