Michelle and I often talk about the “FI Number”: your annual spending x 25. This is the amount of money you need in your nest egg to retire [based on the Trinity study, see show notes]. By retire, we mean you can live off this amount forever assuming you take a 4% withdrawal every year for your annual spending.
Knowing my FI number helped me set a goal that I could move toward, but knowing these three additional numbers gave me a clearer picture of what my finances really looked like relative to my future. Those three numbers are your (1) Coast FI number (2) Lean FI number (3) Fat FI number.
Here are quick definitions from the How To Money blog.
Show Notes:
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