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Retirement Planning: How much corpus do you need for your retirement? FI number tells you everything
- Written by Bhawna Gupta
Published: Zee Business| Updated: Zee Business
Financial Independence (FI) number is your financial freedom number. It is also called Financial Independence, Retire Early (FIRE). This figure represents the total amount of money required to cover your living expenses for the remainder of your life, enabling you to become financially independent and potentially retire early.
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FI number
1/7The FI number is calculated by using the 4 per cent rule, your expenses are multiplied by a figure, usually 25.
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How to calculate your FI number?
2/7First of all, you need to see your annual expenses, the money you spend every year.
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What is 4% rule in FI number?
3/7Then multiply your annual expenses by 25. This is predicated on the notion that you can take out 4 per cent of your investments every year.
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Understand with an example
4/7Suppose your annual expense is Rs 12,00,000, your FI number would be 12,00,000*25= Rs 3,00,00,000.
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Can the FI number same for all?
5/7No, the FI number will be different for all depending on your lifestyle, expenses, and retirement vision.
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Adjusting for inflation
6/7Your future expenses will be higher than your present expenses due to inflation. So, you also need to plan your retirement fund, adjusting for inflation.
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Can I start late?
7/7Yes, you can, but for that you need to save more to achieve your retirement financial goal.
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