Are we there yet?? Work Freedom Age calculator

Handy pocket sized version of DL's new Work Freedom Age Calculator!
Handy pocket sized version of DL’s new Work Freedom Age Calculator!

It struck me recently that I should really try to estimate if I’m even on track to reach FI based on dividend income, and if I’m not, what I would need to do to reach it. And since this thought involved making another Calculator which is always fun, I thought I’d do that instead of doing what I should be doing; namely some work at home.

So here’s my first attempt at a target retirement age calculator.

I’ve done some high-level estimates in the past in trying to project the next 30 years of expected living expenses, monthly income and so forth. Those estimates usually arrive at me retiring at around 70. And considering that expenses won’t be as high when I do retire means that this timeframe is likely a worst case number.

To keep things fairly simple, I’ve not included such adjustments in the calculator below. I’ve set it up where you can enter an initial monthly living expense / budget and your age. The living expenses will then be increased each year by the inflation amount that you enter and displayed in the chart in red.

On the income side, the calculator needs your current (average) income from investments (it doesn’t care how much capital you have) and how much you expect your income to grow organically per year if you didn’t add any new investments. In addition it allows a yearly contribution amount and an expected initial yield on those contributions. The dividend income from the yearly contributions is combined with the organic dividend growth to give a new monthly income amount which is displayed in green.

The intersection between the two lines is when your dividend income exceeds your living expenses, aka the Crossover Point. I’m calculating the age you’ll be when you reach that point.

The ‘kink’ in the green line is where I made the assumption that no new capital is added at age 65 and over, so the dividend growth is organic at that point and that’s a lower growth rate than before age 65.

My “Work Freedom Age” calculator

What I like about this calculator is how the chart dynamically recalculates its axes depending on the age you enter. That took a bit of fussing around in Excel but it works pretty well and it kept my inner geek happy!


What really made me revisit this topic was a recent post about the amounts needed to live of dividend income and if it’s worth it.

The article makes valid points, and it’s certainly something to think about. In my case, if I’m honest with myself, the desire for living off dividend income is based purely on fear of running out of money during retirement. The idea of constantly selling investments to live off each year is just depressing.

What’s certainly clear though is that you need much more money to live off dividend income, than you do if you’re adopting a total return strategy. If you’re living entirely from dividend income you’re not selling any investments and you’re living off a fairly low yield on a large capital amount and essentially ignoring any capital gains you make each year. If you’re living off total return then you’re taking advantage of any capital gain (except when it’s negative) although the number of shares you own each year is reducing. On the other hand you probably don’t need to be 100 years old and have $10 million in the bank.


In the defaults to my calculator, I’ve used current values for me. I will say that the results as shown aren’t achievable since I can’t afford to invest $60,000 a year for the next 30 years. However, what the results don’t show is

  1. My mortgage payment will finish before I retire which will reduce living expenses by $1,000 a month.
  2. I’m not including my retirement (401k) account in the above calculations.

But it sets a good target / point of reference for just how much money is needed if I want to keep my budget intact through retirement without touching my retirement accounts.

Incidentally with these numbers, I estimated the overall portfolio as being around $3,000,000 when I’m 70 and $10,000,000 if I lived to 100. These are fairly conservative growth numbers too (4% total capital growth).


Quote of the day

Life is a dream for the wise, a game for the fool, a comedy for the rich, a tragedy for the poor.

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29 thoughts on “Are we there yet?? Work Freedom Age calculator”

    1. Hi Dividendpuppy,

      I’ve not been able to reproduce that issue – I’m wondering if it’s a regional thing … did you try “0,9” (comma) or “0.9”? I get weird results if I put “0,9” but everything looks fine with all combinations of “0.9”, “.9”, “.9%” etc that I’ve tried.

      Best wishes,

  1. Really very nice calculator, DL. Thanks for that! I will be playing around with this for ages working out different scenarios!

    It really emphasises the importance of two things:

    (1) Getting as much capital working for you as quickly as possible, and;

    (2) Ensure dividend growth companies are very high on your investment watch list! High yield is only as good as the growth that accompanies it over the long run!

    High dividend growth investments are something I have been increasingly focusing on recently. Indeed, today I invested in soft drinks company Britvic for that reason (just wrote up my reasoning here: as well as WPP a while back.

    Incidentally, I think you’re missing Britvic from your dividend champions list. As far as I can tell, they have increased their dividends (except in one year where it was held) consistently since being listed in 2006. A new contender to add?

    Thanks again for this. I now have to resist the urge to play with it in order to get some work done!

    1. Hi D2,
      Yes those are two key points, as well as the inevitable keeping to keep the growth of living expenses down.

      Congrats on the BVIC.L purchase! I’ll pop over and comment later tonight.

      I did take a quick look at their dividends; I’m tracking them as a 2 year growth length at the moment because of the dividend hold in 2012 as you mention. I plan on relaxing the FY calculations to allow for dividend holds so they’ll get extra growth length – I just haven’t gotten around to change the calculation function yet!

      Appreciate the feedback and I’m glad you found the calculator useful.

      Best wishes,

      1. Yes, I think including those that hold dividends is probably pretty fair. As long as it is not for a too prolonged period of time, I think in some regards it is an admirable choice. I’d rather they be financially responsible and hold during uncertainty than to continue gung ho and raise the spectre of a cut soon after!

        Thanks, I am quite happy with my Britvic purchase. I am trying to beef up my consumer facing exposure at the moment. Infuriatingly, the price dropped quite a bit today. Such is life! I still got a good deal, I believe.

        I look forward to reading what you have to say!

  2. I have been looking for something like this for some time DL. It has helped me realize if I want to retire on dividend income alone around 65 I need to bump my savings from 10% to 20%. It was eye opening and I thank you for it. I also assumed my house will be paid off and kids will be out of the house in my calculations.

    1. Hi DFG,
      You’re welcome and I’m glad you found it helpful to help with your projections.

      I suppose if your kids aren’t out of your house by then, at least they should be paying you some rent! 🙂

      Best wishes,

  3. Thanks for linking to my post about living off the dividends. I was a pretty hardcore dividend growth investor but I decided that a passive approach was a better fit for me. Nothing against dividend investing – it’s a fine strategy – but I started to notice my behavioural biases might do more harm than good in the long term.

    You mentioned the fear of outliving your money and I think that drives a lot of investors to want to live off the income and not touch their capital. That’s a valid point, and again, in my own situation, since I have a workplace pension there is no need for me to live strictly off the dividends.

    1. Hi Robb,

      I enjoyed reading your article – I’ve always held both low expense mutual funds & individual stocks in my income portfolio so I can see a little of both sides of the discussion. It’s certainly hard to escape behavioral biases, especially as confidence in investing and picking stocks increases.

      I do like dividend paying stocks that are committed to long term dividend growth since I think that makes the company more disciplined and conservative. I favor the tortoise over the hare in that regard. But I also like the convenience and ease of index investing too.

      Ultimately though, as you mention, personal finance is exactly that: personal. Individual goals, objectives and personal situation should shape any investment strategy and not the other way around.

      Thank you for stopping by and commenting!

      Best wishes,

  4. OK, I entered my numbers and I will end up working until my death. So my only hope is to trade options properly and create income trading options and invest into dividend stocks for the next 10 years and then hopefully be able to trade for living.

    Thanks for the calculator, great tool.

    1. Hi Martin,
      Working till death doesn’t sound good but hopefully knowing just how far you have to go can help you make a plan to get there early.

      It sounds like you’re working on increasing your income, so be careful with the risks involved and also consider if a total return strategy for part of your investing would help too.

      Best wishes,

  5. I wish I was a geek! I’m fascinated by people like you. But truth is I’m a geek retarded! haha! I entered rough numbers and I’d need to work way longer than what is projected… so yeah, I think I should either revise number or make sure my strategy kills your calculator! 😛

    Thank’s for making this though, really nice!



    1. Hi Mike,
      Haha yes I’m like a little Dilbert, I just don’t do the pocket protectors or ties.

      Would definitely love to read that you’re crushing my calculator! It’s important to have a realistic and achievable plan, and if the numbers don’t fit, look at how you might change your plan, assumptions or expectations.

      Best wishes,

  6. DL,

    This is a bit discouraging but that just means we have more work to do. The upside is that if we start adding more money and spending less money over time we can hopefully retire with dividend income by the time we are 60. Just need to keep moving forward.

    Thank you for sharing.

    Have a great weekend!


    1. Hi Forward Dividends,

      It’s not my intent to discourage anyone with this calculator; I just wanted to find a simple way to estimate “can I make FI with my current assumptions”? Being realistic is important and hopefully results will challenge people to review their assumptions and plans, or even challenge the calculations in the calculator 🙂

      I think that expenses will typically drop in retirement and I have not factored that into my calculator. You can simulate this by starting with a lower monthly budget, e.g. if you think you’ll spend 50% less in retirement then put your starting expenses as 50% of your actual expenses.

      I’m not showing that yearly contributions will likely increase over time either which would give an additional boost to income.

      But it certainly highlights that starting early and keeping expenses under control is critical as you mention.

      Best wishes,

  7. Great tool! It has been a fun 20 minutes messing around with the different combinations. My current age is 50, and I can promise you that is not going to happen haha Looks like I have some work to do.


    1. Hi Bert,

      I’m confident you’ll find a way to bring that age forward and crush the calculator!
      Did you have any estimates / projections about your target retirement age / contributions before you used the calculator and if so, were the results in the same ball park?

      Best wishes,

  8. Hey,

    Great calculator. It is an eye opener for me. I am new to the FIRE community since early this year and stil have a lot to learn. Blogs and simulators like this help.

    One feature request: how to factor in a mortgage. It means that in year X, my expenses will drop and my savings will increase. just a thought…

    Using some of my numbers in the calculator, I will be FIRE at 92! great! This is a sharp contrast with my own calculations I started today, there I can retire way sooner. Major reason for the difference: I based myself on the total return. This is perfectly in line with what you make as comments on the calculator: dividend investing requires way more money!

    I do understand the fear that yoy have to run of money in retirment. It is in the back of my head as well. I have no idea yet on how to vercome this. I am thinking of combining different strategies: index for total return and selling assets over time, dividend portfolio for some fun expenses the first years and to cover the basics later on, maybe even convert a part of the portfolio in an annuity, add a real estate investment to assets…

    Thank god I have still many years to figure out what to do.

    1. Hi Amber Tree,

      Congrats on starting your journey to FIRE, it’s always great to see another member of the community starting out.

      That’s a good suggestion about allowing for the mortgage adjustment…I’ll see what I can do about putting that in a future version as there was another change I wanted to make too.

      The calculator is quite conservative I think so the results tend to be an older retirement age than might be expected. But certainly if you’re comparing total return vs. dividend income, the numbers will be different as you’ve noted.

      I think your idea of combing different strategies makes sense, and I do something similar too with a mix of total return, low cost index funds and dividend stocks. I don’t think you have to be “all-in” any one approach – I think the key point about investing is to manage risk.

      The other side of the equation to income is managing expenses. I think this is really the secret weapon for successful FIRE. If you can manage and control expenses and live within your mains, over time you’ll end up with a much better view of exactly how much you’ll need to retire, and the lower those expenses are the earlier retirement might be.

      Wishing you all the best on your journey and I look forward to reading more from your blog.

      Best wishes,

    1. Hi Captain,
      The calculator just makes a simple calculation based on the growth of income given a fixed annual contribution and yield compared to expected expenses. In reality, a fixed annual contribution is unlikely (it’d typically increase yearly as income increases etc), so the results will be on the conservative side.

      Expenses in retirement may be reduced too from non-retirement levels due to lifestyle changes and other income sources such as social security.

      Do keep in mind that a spend-only-dividends approach does require you to save a lot more money for retirement than you’d likely need since it really just means a low withdrawal rate in retirement. If the calculator shows a result that leads people to double-check their own plans then that’s probably a good thing.

      Anyway, I’d encourage you to do your own projections / estimates based on your actual situation and I’m always interested in seeing those kind of projections.
      Best wishes,

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