Monthly spending

Monthly spending sets the size of the target.

Monthly spending is annualised for both the spending threshold and the duration requirement.

Question this answersHow does monthly spending set the amount the portfolio needs to cover?
Simple termsEstimate, not adviceExplains calculator inputs
  1. 01
    What it means

    Start with the plain meaning.

  2. 02
    How it affects the year

    See how this connects to the estimate.

  3. 03
    What to check

    See what the estimate leaves out.

Why this matters

What this means.

Spending sets the amount the portfolio is expected to fund. It shapes both the threshold and the amount tested through age 100.

Year impact

How this can move the year.

Higher spending raises both capital checks and can move the Financial Independence Year later. Lower spending reduces both checks and can move the year earlier.

How it is used

How the calculation uses it.

The calculation treats monthly spending as a constant amount in today’s money, then annualises it for the threshold and duration checks.

Estimate limits

What can make the estimate change.

Housing, dependants, healthcare, lifestyle, one-off costs, or later-life spending may differ from the monthly amount entered.

Checks

Checks before you use the number.

Use these prompts to read the estimate carefully. They are not recommendations.

  • Check whether irregular annual costs are reflected in the monthly figure.
  • Check whether housing and debt payments are represented consistently.
  • Check whether the figure reflects the spending level you want to test.

Read next

Read one assumption at a time, then use the calculator when you want to test the inputs.

Next in this path 2 of 5Withdrawal rateUndefeated sets the spending-based check with a portfolio target. For context, 25x annual spending is mathematically equivalent to a 4% spending-to-portfolio ratio. The separate duration requirement still applies.

Related assumptions

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