Comprehensive Calculator Guide
This calculator finds your financial independence number — invested savings whose returns can cover your spending without a salary — and how many years it takes to get there. Spending SAR 10,000 a month, the number is SAR 3,000,000 at a 4% withdrawal rate; starting from 100,000 and investing 4,000 a month at 6%, you reach it in about 24 years.
The 4% rule, halal investing and zakat
At a 4% withdrawal rate your number is 25 times a year’s spending; US studies found such withdrawals lasted 30 years in most historical periods. A lower rate is safer for a longer retirement. Expected returns aren’t guaranteed.
Build the portfolio from Sharia-compliant shares, funds, sukuk and property, and avoid interest-bearing products. Zakat is due on invested wealth that reaches the nisab each lunar year, so count it in your yearly costs or use a lower withdrawal rate.
How to Use
- Enter your monthly spending and current invested savings.
- Enter your monthly investing, the expected return and the withdrawal rate (4% by default).
- Press “Find your number” to see the target, the years to reach it and your progress.
Formula Used
Target = yearly spending ÷ withdrawal rate | Years from monthly savings growing at the expected return
Practical Examples
- Example 1
- SAR 10,000 spending, 100,000 saved, 4,000 a month at 6%: 3,000,000; about 24.1 years.
- Example 2
- SAR 7,000 spending, 3,000 a month from zero: 2,100,000; about 25.1 years.
Important Tips
- Cutting spending shrinks the target and raises what you invest.
Common Mistakes to Avoid
- Assuming a high, steady return every year.
Frequently Asked Questions
- What is a financial independence number?
- Yearly spending ÷ withdrawal rate — 25 times spending at 4%.
- What is the 4% rule?
- Withdraw 4% in the first year and adjust for inflation; it lasted 30 years in most historical periods.
- Is zakat due on investments?
- Yes, when they reach the nisab over a lunar year; the method depends on the investment.