The “Do I Have Enough?” Toolkit

Of those who are on the path to financial independence and early retirement, there seem to be two camps. The first is that group of people who believe “that sounds about right” is more than adequate in terms of preparation. For them a rough 4% rule is all the calculation they need to pull the plug and walk away from paid employment and they will deal with whatever happens when it happens.

I sit firmly in the second camp which comprises those for whom the numbers are critical. We believe the security of our future is based on the accuracy of the maths, so we better damn well get it right. We refer frequently to our spreadsheets, model a range of different scenarios based on varying annual returns and expenditure levels and try to determine every conceivable outcome of our “what if” biased brains.

Different strokes for different folks as they say, I’m not here to say which method is better. I sometimes wish I could take a more relaxed approach and be more like the first group – just chill out and spend my time on something else.

But that’s just not how I’m made. I work with finance all day long in my day job. Spreadsheets are my comfort zone; my security is in knowing the numbers and calculating them in several different ways, triangulating and cross-referencing and checking, checking, checking, so I apply the same discipline to my FIRE calculations.

For me, one self-built spreadsheet is not enough. I want to farm the knowledge of the experts and validate my results. I have several ways of doing this and yes, I realise the principles behind all of these may be the same, but think of it like a psychological comfort blanket. If I keep getting the same answer using different tools then I can’t be too far wrong.

So what are all these methods I am using to validate my FIRE calculations?

Overall Guardrail – The 4% Rule

I love this graphic from Camp FIRE Finance which illustrates how much you need in investments in order to safely withdraw a certain amount from your portfolio each year.

What is FIRE How Does it Work?

This approach is suitable for straightforward situations – where levels of expenditure are likely to be stable over a period of years. My financial plan for retirement is more of a staged approach. I will be retiring when I still have dependant children and so I have modelled my plan over different chunks of years as expenditure varies between having them at home vs university years vs flown the nest.

Nevertheless, once the children are off my hands the 4% rule is relevant for me and so I use this to model Phase 2 of my early retirement – from age 55 onward.

For this I only consider “investable assets” so I don’t include cash reserves and the value of my home. And I deduct from my expenditure any rental or other income I expect to receive in order to give the net amount I will need to withdraw from my investments each year.

The Mad Fientist

The Mad Fientist retired from paid employment at age 34. As well as interviewing some of the biggest names in the FIRE community for his podcast, he has developed a range of tools and calculators in his FI Laboratory. There is something very satisfying about inputting your net worth into his “Time to FI” calculator and being told “You are Financially Independent!”

For a quick answer to “when will I be financially independent” this site is ideal.

The Ultimate Retirement Calculator

For more detailed analysis, The Financial Mentor provides the Ultimate Retirement Calculator which is the best resource of its type I have found.

This one has much more functionality than broad-brush calculators and allows you to enter different types of income at different stages of retirement (useful for adding in state pension or social security) and one-off income events like the sale of a property or an inheritance.

It will tell you year by year inflation adjusted income, out-goings and year-end balance and will let you export the results. For that higher level of detail I have found this resource really useful.


Ok, so, I have my own monster of a spreadsheet. I have validated this via the alternative tools described above. Can I now answer that evergreen question….“Do I have enough?”

Sadly the best answer here will only ever be “probably”.

How Valid Are the Assumptions?

Using several tools to come back to the broadly the same numbers is comforting but really just tells us there is no fatal flaw in a formula. It is using the same assumptions in each model that could be our undoing if they are not sound.

There are two main ways this could go awry – either the % net growth rate after inflation is wildly different than planned, or the projected spending level is inaccurate.

Investment Returns

Nobody knows what future investment returns or inflation will be; these are the big unknowns. We can use history as a guide to the fact that over the long term, a smoothed average growth rate is likely to be between a certain range. This of course can hide a multitude of sins – big upsides in one year followed by big slides the next. And of course there is always the caveat that history is no indication of the future. But using the experience we have gleaned from many multiples of time periods which have seen such major upheavals as world wars, political transformations, mass terrorism events and technology bubbles, to name just a few – we can take some comfort in what range a net average return could be.

Projected Expenditure

You’ve heard this before but when it comes to forecasting spending levels, there is only one way to be materially accurate and that is by tracking your spending over time.

If you don’t know where your money is going now, how can you predict what your spending will be in the years to come? How will you know what to estimate for contingencies if you can’t see what range those unexpected extras usually fall between?

(And before you say that unexpected expenses can’t be narrowed down to a range – consider the unexpected cost of replacing a gear box if you drive a Ford Fiesta compared to a Lamborghini. Compare the cost of a new roof for a six bedroom home to that of a two bedroom home).

I have used a piece of software called Moneydance to track my spending for years. It is remarkable how little it has varied from year to year. Yes, something unexpected always creeps in and this experience assures me I have the correct level of contingency in place.

Do I Have Enough?

So given there are assumptions in play, there is no right or wrong answer. Do I have enough? Probably. If my assumptions are correct (and I have modelled a range of increasingly pessimistic scenarios) then yes I do. Are the actual net returns likely to be somewhere in the range I have tested? Probably.


And before that unnerves me too much, a gentle reminder that there are backups in place. Flexibility – perhaps moving to a 3.5% or 3% withdrawal for a time. Cash reserves – 2 to 3 years of living expenses not counted anywhere else. And finally, state pension from age 67+ also not factored into the plan.

Do I have enough? Probably – more than likely – just not quite definitely.

That’s a difficult concept for someone like me but I’m coming to terms with the fact that you can plan and plan and check and check but at some point, you have to make the leap.

Maybe I’m more like the “sounds about right” camp than I thought.




20 thoughts on “The “Do I Have Enough?” Toolkit”

  1. Awesome – I’m not sure which camp I fall into – I have a touch of the I like simple application of the 4% rule and it’ll all work – but I do have a spreadsheet!

    Anyway I’m pretty sure you will fine and can pull the trigger any day you want – and get that part time job in the library or bookshop.

    Liked by 1 person

  2. I think the benefits of starting very early on the FIRE path is the confidence that you’ll either:

    1) Definitely earn side income, as there aren’t many 33 year olds I know who would want to not do anything once they reach FI – As MMM says; when you do what you love, money will follow.


    2) Be able to go back to work, or work part time. At this age, they probably wouldn’t have been completely spent and burnt out.

    I think that’s the reason why the super early retirees are mostly in camp A. Or a lot of them might end up working an extra few years anyway and go into the 2-3% SWR zones just because they like the work.

    Although I think the worrying part of the super early retirees is not knowing if their expenses are going to go up. They might currently not have children, they might end up moving into a bigger house.

    For me – I think I’ll end up still working after I reach FI. I’d definitely make a change though. I’d love to move to a different country and work until I get my citizenship, being FI would allow me to take any job to get there, and it should create a sufficient ‘safety blanket’s for my FI pot. Unless of course my spending goes up as a result!

    How much would you say your child cost you per year, through different stages of his life? I’ve heard the figure £230k until 18. That just seems ludicrous to me as if you were earning minimum wage, you’d be unable to raise them (and my parents did well enough). I’d love a post on this 🙂

    Liked by 2 people

    1. It’s so hard to pinpoint what children cost unless you itemise your shopping bill line by line. If you ignore things like a larger house so they have a bedroom and the luxuries like holidays during peak periods, I would say mine cost about £3k a year on things directly associated to them – clothes, food etc. More during the nappy years / less if you have more than one of the same sex.
      That doesn’t include childcare – or loss of income if one parent stays at home – I think that is where a large part of that reported number comes from.


  3. I’m with you FIREthe9to5, a total spreadsheet addict I am. But to be honest once you take the leap you have all the flexibility in he world. It doesn’t kill you to reduce your projected spend neither does taking a minimum wage job you love to get some extra bucks. If you are close enough to FIRE I believe the most important thing is to figure out how to fill your time. For me it was a year of learning how to renovate apartments, this year becoming and working a scuba instructor, next year I think I go back to my old work for a little while not because I need to but because it will make a huge affect on compounding my apartments long term providing extra security for my planned kids and because I would love to build a family villa on Bali so need some additional cash infusion as I do never take out loans. Good luck with the leap 🙂 it’s an amazing journey, much better than I could have imagined before leaving the desk job 2 years ago.

    Liked by 1 person

  4. I’m no spreadsheet whizz but have had a few basic ones over the years to track our FIRE plans and know when we reach our enough point. Now we are bascially there and thereabouts I’ve suddenly become more relaxed and ‘probably’ is absolutely ok! It absolutely wouldn’t have been 3 years ago though.

    Liked by 1 person

  5. Although I have got spreadsheets, I reckon I’m closer to the first camp than the second. I’m still a way from my goal so haven’t gone into the minute details of my FIRE income but even when the time comes, I think I would still avoid delving too much to avoid analysis paralysis!

    I’m not working to any sort of SWR, more like an annual amount which I think I will need and this amount will only really be required from the time when I pull the FIRE plug to when I draw down on my DB pension and then the state pension. The pot will be depleted as I don’t have dependants but for obvious reasons, I’d rather it not be depleted to zero!

    With children, it’s understandable that you would be triple/quadruple checking your numbers because going FIRE will affect your family, not just yourself. But like @MsZiYou, I think you’ve probably got enough already.

    Liked by 1 person

  6. I’m also not sure what camp I am in and although I have spreadsheets for our net worth for years now, I’ve only just begun the spreadsheets for the expenses. I’ll figure it out. But also love that graphic from Camp Fire Finance. It really puts things into perspective. Now I have something to show my wife!

    Liked by 1 person

  7. “Enough” is going to be an educated guess at best, as the only way to measure if it was correct is in hindsight.

    Sounds like you’re adopting an evidence based approach and projecting your actual spending forwards, which means your numbers reflect your own preferences/lifestyle choices etc. I do the same.

    Whichever camp you fall into, you need to be able to sleep at night with your decisions… until you confidently can, no amount will be “enough”, regardless of what a spreadsheet tells you.

    Liked by 1 person

  8. That ultimate retirement calculator is AWESOME (thanks for linking) and totally fits us spreadsheet nerds. Love the flexibility and now I don’t have to attempt to build one on my own! Great post.

    Liked by 1 person

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