Let AI Calculate When You’ll Hit FI (in 5 Easy Steps)
Because the real advantage is having an AI algorithm worry about money so you can worry about beach umbrella placement.
☕️ The question I hear most: “So… when can I retire?”
Every coffee catch‑up, every DM, every Sunday BBQ—same question, with minor variation.
- “How early can I retire?”
- “Could I call it quits at 45?”
- “What’s my freedom date?”
- “How do I make sure I don’t run out of money?”
This is what my friends, family and readers want to know.
Truth is, its more of an equation, than an answer. The aim is to figure out your figure – your FI (Financial Independence) Number.
The bad news is, you can’t answer any questions about your retirement, or even start planning for it, without knowing this number.
The good news is, AI can accelerate your path to financial independence, from helping you pinpoint your FI number, to tracking your expenses and estimating future earnings. But life isn’t a spreadsheet, it’s a circus. Enter AI, the ringmaster that juggles your ever‑changing expenses, market returns and life’s little surprises along the way, without dropping the ball!
AI can accelerate your path to financial independence, from helping you pinpoint your FI number, to tracking your expenses and estimating future earnings
They first and key step to determining your FI Number (how much you need to save in your Freedom Fund) is to know your current annual expenses and how those may change over the short, medium and long term. For instance maybe you’re married now and about to have your first child, or about to become an empty nester, or embarking on a new life flying solo.
For a numbers geek like myself, this is easy because I track all my expenses in a spreadsheet. Some people use apps like Monarch, Simplif, CoPilot or Pocketmoney. But many people don’t, that’s ok, because AI can get you the information you need, quickly, without the fancy dashboard!
💡 Top Tip: Export your last 12 months of bank data as CSV, drop it into ChatGPT with the prompt, “Classify spending categories and calculate my rolling 12‑month average.” You’ll get a dollar number in under 60 seconds.
💡 Top Tip: Ask an AI bot to estimate your possible future expenses based on changes in your family structure and lifestyle stage.
1️⃣ How AI Calculates Your Expenses
| Traditional Way | AI‑Assisted Way |
|---|---|
| Manual budget in Excel | Open‑banking feeds pipe every transaction into an AI model that auto‑tags needs vs wants, smooths out one‑offs, and spits out a true annual spend in minutes |
| Guess future family expenses | AI models the cost of each child, based on your location, the probable cost of a wedding, divorce, caring for parents |
| Guess future living, healthcare or kids’ uni fees | Generative model ingests CPI forecasts, Medicare policy talk, and College/Uni fee trends to create probabilistic cost curves |
Let’s use my family’s as an example. We currently spend $80,000* USD a year, or about $6,650 a month. We anticipate our expenses in activities will decrease in the future when our daughter goes to college, but our medical expenses may increase, offsetting any savings. And we have a separate savings account for her university expenses already established, so we don’t include those costs in our annual budget. So for us, we are leaving the $80,000 figure flat in our model, adjusting only for CPI. Your situation may have more significant future adjustments for each life stage.
Note: I got a lot of feedback from readers on our annual spend figure – mostly telling me I need to get out more! Don’t worry, we get out plenty – spending $25-50k a year on holidays! I should point out everyone’s number is different. For us, we do not have a housing expense, as our mortgage is paid off, we own our cars outright and we don’t have school fees, as we have a separate savings account we draw from for that. Be sure whatever number you use represents the amount of expense you’ll likely have once you start drawing down in retirement. So if you’re on track to have your mortgage paid off before then, or won’t have school fees, don’t include it them in your expense number.
2️⃣ Figuring Out Your Figure
Without knowing how much you’ll need in your Freedom Fund, you’re flying blind. Spend too much, and you’re stressed. Spend too little, and you miss out on life’s joys out of fear of running out of money.
Here’s an example of what amount someone with annual expenses of $80,000 might need to save, depending on how they plan to draw down their funds during retirement, and the associated risks involved. It’s based on a research-backed rule of thumb called The 4% Rule based on historical market data.
The 4% rule (I call it a guideline) for retirement budgeting suggests that a retiree should be able to withdraw 4% of the balance in their retirement account(s) in the first year after retiring, and then withdraw the same dollar amount, adjusted for inflation, every year thereafter for approximately 30 years.
This uses a simple formula of:
When your spending isn’t a flat line
The classic FI Number = Annual Spending ÷ 0.04 assumes you’ll spend roughly the same, inflation-adjusted, for the rest of your life.
Real life? More like a roller-coaster: bigger mortgage-free years, kid-at-university years, adventure-travel years, quieter grand-kids-and-gardening years.
Here are a couple of practical ways to adapt the formula when you expect expenses to jump every decade or so:
Use the highest decade’s spend (“Peak-spend method”): Identify the period you’ll spend the most (e.g. ages 50-60, kids in college, travel splurges). Base the FI equation on that figure. This method is simple and very safe, but may overshoot what you actually need.
Or you can let the bots do the heavy lifting as AI tools excel at this mix-and-match modeling:
Pipe in your spending forecasts:
Prompt to ChatGPT: “My annual expenses will be $90 k for 2026-2035, $110 k for 2036-2045, and $75 k thereafter (all today’s dollars). Assume a 4 % real return. What lump-sum today gives me a 95 % chance of funding this for 40 years?”
3️⃣ Pinpoint When You’ll Cross the Finish Line—AI-Style
Ok, so just when will you finish the rat race? AI can take all your inputs and estimate how old you (and your partner) will be when your Freedom Fund will reach it’s goal.
💡 Top Tip: You don’t have to look up each portfolio, prompt your bot to tell you the 1, 5 and 10 year returns for your portfolio (e.g. VTSAX and VOO). Prompt your bot to create a weighted average return rate across your portfolio, eg. VTSAX 50%, VOO 30% and Bonds at 20%)
Quick DIY prompt
“I’m 37, earn $120 k gross (3 % annual raises), spend $80 k, have $450 k invested (70/30 split VTSAX and bonds VBTLX, 0.3 % fees) and a $350 k mortgage at 5.5 % with 18 years left. I put 6% in my retirement fund each month and my employer matches 50%. Assume CPI = 2.5 %, real return of portfolio = 5 %. At what age will my portfolio hit $2 M (my FI Number) with 90 % confidence? Show me the yearly balance table.”
Copy-paste that into ChatGPT and you’ll have a personalized FI-age forecast while you pour yourself a happy hour drink.
4️⃣ “What If?” Scenarios
Because nothing ever goes to plan.
Once you have a baseline FI number, AI becomes your personal crystal ball:
💡 Top Tip: Have a play with scenarios, ask your bot if you make one extra mortgage payment a year, how much will that save me in interest? If I refinance my home loan to 5.2%, how much quicker will I have it paid off?
- Increase savings rate? watch FI age move down in real time
- Downshift to 3‑day weeks? Large‑language models can recalculate cash‑in vs cash‑out and show the new FI date.*
- Market meltdown? Monte Carlo reruns with the S&P doing its worst 1970s doomsday impression.
- Slower market? Test a 1 % lower return environment → does FI age jump from 53 to 57?
- New side hustle? AI projects added income, tax offsets, and yes—what if that hustle dies in year five.
- Geo‑arbitrage fantasies? Feed in cost‑of‑living indices for Lisbon or Chiang Mai and watch your FI number do the limbo.
Each scenario can spit out a probability wheel showing the % chance your money survives 30, 40, 50 years.
5️⃣ Dynamic Adjustments—Because Life Doesn’t Go to Plan
AI can monitor, alert and iterate:
- Monthly Check‑ins: A GPT agent reviews your latest spending, investment returns and interest rates. If your FI date slips six months, it pings you with three choices—spend less, earn more, invest smarter.
- Event Triggers: Baby arrives? Mortgage paid off? AI recalculates overnight and emails a fresh FI roadmap with colour‑coded actions.
- Market Volatility Guards: Set guardrails—if portfolio drawdown > 15%, AI suggests a temporary safe‑spend rate or part‑time gig ideas.
🚀 Take‑Off Checklist
✅ Gather: Download 12–24 months of spending data
✅ Calculate FI#: Feed ChatGPT your expenses + withdrawal assumptions
✅ Estimate FI Age: Feed ChatGPT your age, savings, return rates, and future assumptions
✅ Stress-Test: Model at least three scenarios—market crash, income drop, side hustle
✅ Automate: Set quarterly re-runs triggered by data imports or life events
✅ Adjust: If the AI flags a shortfall, tweak spend, earnings, or asset mix
Final Word
Your FI number isn’t static —it’s a living metric. AI turns it from a one‑time guess into a real‑time GPS. Let the algorithms chew the numbers while you make the BIG decisions, like whether your ideal retirement has more surf, snow, or sangria.
Ready to hand the math to the machines? Give this customized AI Assistant a try, as it has been designed with the Live Richly philosophy in mind! Now, let’s find out how many Mondays you have left to hit snooze!
Now, for the disclaimers....the bottom of ChatGPT screen says “ChatGPT can make mistakes. Check important info.” So of course, you need to use the tool for what it is, a very clever research assistant. It can take you from “I don’t know have any idea if I can ever retire” to “I think I have a good shot at retiring at 60 if I stay on track, or maybe at 57 if I just make a few changes” in under an hour or two.
By all means, once you’ve laid out your plan on what you’ll continue to do, stop doing and start doing in order to get you to the finish line by your desired date, bring it to a financial advisor (one that charges a flat fee for guidance). They’ll be blown away by you putting more effort into it than a google search. Ask them to poke holes in it, point out what you hadn’t considered and what was missed.
ChatGPT isn’t perfect. As it clearly notes – it can make mistakes. And it’s absolutely not a financial advisor. Don’t use it to make decisions on how to invest your savings.
But what it is easy, fast and helpful and completely iterative. Your chats are saved and you can come back any time and say, hey did you remember to include a CPI in your calculation and if so, what rate, – can we change it to 3%.
And unlike me, it’s getting more accurate and faster as it ages, meaning you likely won’t need my guidance much longer.
LIVE RICHLY. FIND HAPPY.
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Kathleen McDowell is an investor, writer, and financial educator. She shares how to build wealth and reach financial freedom for the sole purpose of having the ability to live a rich life ON YOUR OWN TERMS and SPEND TIME ON WHAT MATTERS MOST.
She offers free financial education—no courses to buy, no crypto pitches, no hidden agenda. Just honest, practical advice from someone who’s achieved financial freedom and wants to help you do the same. Because it’s frustrating to see people stuck in jobs they don’t love or stressed about money, simply because they haven’t been shown the way out.
