Financial Freedom Definition
A clear definition of financial freedom and how it's often measured.
Financial freedom is typically defined as having enough assets and passive income to cover your living expenses indefinitely, without needing to work for a paycheck. You are free to choose how you spend your time.
Common definitions
In practice, people often use rules of thumb to define "enough." The 4% rule (from the Trinity Study) suggests that if you withdraw 4% of your portfolio per year, it has historically lasted 30+ years. That implies a "freedom number" of about 25 times your annual expenses. For example, if you spend $50,000 per year, that's $1.25 million. This is a guideline, not a guarantee — market returns and inflation vary.
Freedom number and FIRE number
Your freedom number is the amount you need invested so that 4% (or your chosen withdrawal rate) covers your expenses. Your FIRE number is the same idea but often used when targeting early retirement. Our calculators help you estimate these numbers based on your own inputs; we don't give advice, we give tools.
Related tools
For informational and educational purposes only. This is not financial advice. Consult a qualified financial advisor for personalized recommendations.