Your FI Number: How Much Do CRNAs Need to Walk Away? (The 4% Rule and the Trinity Study)
Adapted from Episode 5 of The Financial Cocktail podcast. Listen wherever you get your podcasts, or read the full episode below.
Today we’re tackling one of the most underappreciated parts of personal finance, and a cornerstone of the FIRE (financial independence, retire early) playbook: figuring out exactly how much you need to walk away from earned income.
That’s your FI number, the portfolio size you need to leave the OR for good and stop passing gas for a living. It isn’t a guess, and it isn’t a vibe. You need a number and a heading, something to set your sights on and build your goals around.
Let’s start with a sobering statistic. A 2025 Northwestern Mutual study found that Americans believe they need $1.26 million to retire comfortably, yet most fall far short of that target.
Here’s the good news: CRNAs are uniquely positioned to beat these averages. We have high incomes and a strong capacity to save. But that only works if you know your number and your goal. So let’s walk through the formula.
What Is an FI Number?
Financial independence is the point where your investment portfolio covers your cost of living indefinitely, and earned income becomes optional instead of required. That’s the real essence of retirement. It’s not age 65. It’s a ratio, not an age.
It helps to separate FI from FIRE. FI is the number. The “RE,” retiring early, is a choice you get once you reach it. Many people keep working after they hit financial independence, and I plan to as well. But financial independence is the goal.
Where the 4% Rule Comes From
The FIRE community talks constantly about the 4% rule. It traces back to 1994, when financial planner William Bengen published research in the Journal of Financial Planning that used historical market data to determine safe withdrawal rates.
In 1998, three professors at Trinity University expanded on that work in what became known as the Trinity study. The analysis has been updated many times since, including by retirement researcher Wade Pfau, with more recent data.
All of this research has the same objective: identify a safe withdrawal rate. That’s the percentage of a portfolio a retiree can withdraw each year, adjusted for inflation, with a low probability of running out of money over a 30-year retirement.
The conclusion has held up remarkably well across market cycles, including the dot-com bubble and the 2008 recession: an initial withdrawal of roughly 4%, adjusted for inflation each year.
The Formula: Cost of Living × 25
Now flip the 4% withdrawal rate into a savings target. If 4% of your portfolio funds one year of spending, your portfolio needs to be 25 times your annual cost of living.
FI number = annual cost of living × 25
You can also write it as annual cost of living ÷ 0.04. It’s the same equation said two ways. I find “times 25” easier, but pick whichever resonates with you.
I’m not a super detailed budgeter. I don’t have time for that, and we save enough as it is. But it’s important to know your annual cost of living. Monthly spending fluctuates with seasonal travel and so on, so the annual number is the one to track, especially year over year so you can spot trends.
A quick example
Say your annual cost of living is $100,000. I’m a round-number kind of guy.
$100,000 × 25 = $2.5 million
That’s $2.5 million in your portfolio, not your net worth. They’re two different things. Your FI number doesn’t include equity in your home, a vacation home, or your cars. It has to be in accounts you can actually draw from to pay your cost of living: your 401(k), Solo 401(k), IRA, brokerage, and savings accounts. (Yes, there are nuances like HELOCs, but we’ll keep the FI number tied to portfolio value.)
If your cost of living looks more like a higher-cost CRNA household, say $250,000 a year, which isn’t unheard of, your FI number jumps to $6.25 million.
Cost of Living Is the Biggest Lever
Because of that 25x multiplier, a small increase in your cost of living creates a large increase in your FI number. Yes, return assumptions matter too. But a small, ongoing change in spending becomes a large, permanent change in your target.
Every $1,000 a year of added spending raises your FI number by $25,000.
Add $10,000 a year, about $833 a month, and your FI number rises by a quarter million dollars.
That quiet $200-a-month subscription or gym membership is $2,400 a year. It sounds easy to cover on a CRNA salary, but it adds $60,000 to your FI number without a single big purchase.
This works in your favor, too. Trimming $10,000 a year from your cost of living lowers your target by $250,000. That’s a lot faster than trying to out-earn or out-invest the problem. You can simply cut the excess.
That’s why we keep coming back to tracking your dollars. It doesn’t have to be nitpicky, but you need to know where you stand, how much you spend, and your savings rate. The Moneymoon is what sets you on the right path. It gets your portfolio started, so you’re already well on your way to your FI number before the bigger cost-of-living increases arrive.
The single best argument for tracking spending month to month instead of estimating it is to keep your FI number reasonably accurate, so your SMART goals stay appropriate and you end up where you want to be, when you want to be there.
How We Set Our First FI Number
One of my guilty pleasures, which I’ve spent far more time on than I should, is a compound interest calculator. There are plenty of free ones online, and I have one on my phone. You enter a starting balance, a monthly deposit, a time frame, and an expected annual return.
That’s how Mrs. TFC and I set our first FI number years ago. We took the cost of living for an average family of four and added a 1.25x multiplier. If the average family of four could live on about $75,000 a year, we’d aim for about $88,000.
Then we plugged in our variables:
Starting net worth: $0
Monthly deposit: $20,000, essentially my after-tax salary, while we lived on hers
Annual return: 8%
Time frame: age 28 to 35, a seven-year runway
That produced about $2.2 million, which became our first FI number: $2.2 million to $2.5 million, with $2.5 million reflecting a cost of living rounded up to an even $100,000.
Yes, there are nuances, like how much sits in taxable versus tax-advantaged accounts and how you’ll access it. But we were looking for a heading. If we could invest $20,000 a month from our late 20s to our mid-30s and earn 8%, we’d land in the low-to-mid $2 millions, right around our FI number.
The Danger of Ignoring Sequence of Returns Risk
I’m a big Dave Ramsey fan. I grew up listening to him on the radio and kept listening for years. But one of the most dangerous ideas I hear on his show is the dismissal of sequence of returns risk.
The argument goes something like this: if your mutual funds return 10% to 12% a year, you can live off a similarly high percentage of your portfolio. A $1 million portfolio supports $100,000 or more a year forever. Not a problem.
That couldn’t be more wrong. Ask anyone who lived through a severe downturn without earned income. It’s brutal advice.
Here’s why. Two retirees can earn the exact same average return over seven years and end up in very different places, depending on when the bad years hit relative to their retirement date.
The Trinity study accounts for this by testing every rolling historical period. It assumes you might have retired the day before a big crash or at the very bottom of one. The person who retires right before a crash sees their accounts drop quickly over the next year or two. The person who can cover their cost of living with earned income during those years, and keep investing at market lows, may end up far above their starting balance 30 years later.
What happens when the bad years come first
Say you retire with a $2 million portfolio. Two or three years of poor returns plus withdrawals shrink it to $1.2 million. That can happen. Big drawdowns do happen.
Your original 4% withdrawal is now closer to 8% of what’s left. And the good years are only half as good, because a 10% return on $1.2 million is very different in real dollars from 10% on $2 million.
Someone who retires straight into a downturn may never fully recover to the trajectory of someone who had some earned income or blunted the downside. Maybe that person worked two extra years and avoided withdrawing during the worst stretch. Same returns, different sequence, very different outcomes.
How to protect yourself
This is a strong argument for flexibility as you approach your target date. If you have to retire in a certain year, you have no optionality. Some options:
Coast FIRE, where a part-time or PRN job bridges a couple of years and covers your spending
A buffer above and beyond your FI number before you walk away
A lower withdrawal rate if you plan to retire in your 30s or 40s. Dropping from 4% to 3%, or even 2%, improves your odds over a 40- or 50-year retirement.
The Trinity study found very high historical success rates for a 4% withdrawal from a balanced stock-and-bond portfolio over 30 years. But we don’t know what the future holds. The data goes back to 1926, and while later updates include the post-2008 period, past performance is never a guarantee.
Asset Allocation on the Way to FI
Your FI number tells you the destination: the ballpark you need to reach. Your asset allocation is what cushions the ride once you’re there, especially when sequence of returns risk becomes your biggest potential nightmare.
The generic guideline you’ll see online is 100 minus your age in stocks. A more aggressive modern version uses 120 minus your age. So a 30-year-old would hold roughly 70% to 90% stocks, and a 60-year-old closer to 40% to 60%, near that 50/50 blend most generic advice lands on.
If you still have earned income, you can weather the storms. Markets recovered after the dot-com bubble and 2008, and equities delivered great returns afterward. I’m a CRNA, not a financial advisor, but historically, investors who held 100% stocks in their early and mid-career, while they still had earned income, ended up far better off than those who sat in a conservative 50/50 mix.
The real job of bonds
Bonds are there to cushion drawdowns, not to maximize growth.
In 2008, the stock market fell about 57% from peak to trough. With a $5 million portfolio, that’s roughly a $2.8 million paper loss. Now imagine you were following advice to withdraw 10% to 12% a year because that’s what your mutual funds “earn.” With about $2.2 million left, you’d be burning $500,000 to $600,000 a year.
If the market doesn’t recover within two or three years, that $2.2 million becomes $1.7 million, then $1.1 million. When the market finally rebounds, your returns are based on $1.1 million, and you never get back to $5 million because your withdrawal rate was far too high.
In 2020, the drawdown was less severe, about 34%, but that still knocks roughly $1.7 million off a $5 million portfolio.
In both cases, if you held on and didn’t pull money out, your portfolio would have recovered and grown well beyond where it was. The key is having earned income to cover your cost of living, or minimizing withdrawals during downturns, to blunt the downside.
Example funds
JL Collins set the standard here, and his approach is easy to use at Vanguard, Fidelity, Schwab, or through target date funds. If you invest on your own:
VTI (Vanguard Total Stock Market ETF): a diverse basket that holds the whole U.S. stock market
BND (Vanguard Total Bond Market ETF): currently yields around 3.5%. It’s not a growth holding. Its job is to roughly keep pace with inflation and blunt the downside, so I don’t hold much of it early in my career, when I’m focused on growth.
VWEHX (Vanguard High-Yield Corporate Fund): if you want to get a little saucy. It currently yields around 5.5% to 6%. Not great on returns, but it sucks less.
Rebalancing
Roughly speaking, young investors might sit around 80% stocks, tapering toward about 50% over time, but stay flexible. Some research supports a stock-heavy mix like 75/25 even in retirement. Yes, that’s higher than conventional advice. Data doesn’t have feelings.
Don’t be afraid to let your allocation drift 25% in either direction. During a big drawdown, I’d go 100% stocks even close to or in retirement, because I believe our capital markets will come back. Maybe not tomorrow or next year, but they will. If markets run hot and you have a big expense coming, like a down payment, backing off toward 50/50 might be right.
Generally, around 75/25 stocks to bonds is a good place to be. Rebalance once or twice a year; there’s no need to do it weekly or monthly.
Remember: I’m a CRNA who passes gas for a living, not an attorney or a CPA. This is content I find genuinely interesting, shared for education.
Savings Rate: How Long It Takes to Reach FI
Mr. Money Mustache popularized this idea years ago. Your FI number tells you the destination; your savings rate tells you how long the trip takes.
And that “$1 million” you see in so many articles as the magic retirement number? It’s nowhere close anymore. Even average earners will likely need $2 million to $4 million.
Your savings rate is simply the share of your take-home pay you don’t spend. Starting from zero, here’s roughly how long it takes to reach FI:
10% savings rate: about 51 years
20%: about 37 years
30%: about 28 years
40%: about 22 years
50%: about 17 years
60% to 70%: about 10 years
At 10%, you’re looking at roughly 50 years. For CRNAs starting in their late 20s or 30s, that’s not really on the horizon. At 20%, you shave off 13 years, but starting at 30, do you really want to work until 67? That’s your call.
At 40%, this is where it gets exciting. Most people won’t save 40% of their take-home pay. But if you do, starting at 30 or 35, you’re looking at about 22 years of earned income. You’ll retire earlier than most and live a comfortable life. At 50%, it’s about 17 years.
Get a little fanatical at 60% to 70%, and you’re talking about roughly a decade. The tradeoff is that you’re not living on much, although it’s all relative: 30% to 40% of a CRNA income is still a solid living.
What I’d like to see
Generally, I’d like CRNAs saving 25% to 50% of their net income. That puts you somewhere between 15 and 30 years from financial independence, depending on market returns, your goals, and whether your costs rise or fall.
For context, the average American saves only a few percent of their income. Even a 20% to 30% savings rate puts a CRNA far ahead, and an employer 401(k) match pushes you further still.
Inflation: Your FI Number Isn’t Static
Retirement planning involves a ton of variables, and inflation is one of the big ones. Fortunately, the 4% rule accounts for inflation. With an $80,000 cost of living, you’d withdraw $80,000 in year one, then a bit more each year as prices rise.
But your FI number isn’t static either. Your cost of living and your target portfolio both climb with inflation.
Today, an $80,000 cost of living means an FI number of $2 million. If retirement is 10 years away, expect that $80,000 to cost more like $105,000, pushing your FI number to about $2.6 million.
If you’re 30 now and retiring in 30 years, that same $80,000 of buying power could cost nearly $200,000 a year, putting your FI number around $4.85 million.
That’s why people in their 20s and 30s who think $1 million will set them for life are mistaken. It doesn’t even set you up now. By then, a typical trauma center CRNA might earn $500,000 or $600,000, and a family of four could need $3 million to $6 million to cover a normal cost of living. Nothing crazy. Everything costs more, and inflation is a real bear.
Plan for Your Cost of Living at Retirement
Inflation only tells half the story. Your FI number should reflect your cost of living at retirement, not today. That means separating your permanent cost of living from major expenses that will shrink or disappear before you get there.
Expenses that may disappear
Your mortgage is usually the big one, for CRNAs just as for everyone else, only with a bigger number. If you pay $4,000 a month and the mortgage will be paid off before or shortly after your target date, whether that’s 35, 45, or 75, that’s nearly $50,000 a year that shouldn’t be baked into your long-term FI number.
Personal debt, like student loans, credit cards, and car loans, is temporary by design. Paying it off aggressively before your target date shrinks the number you need to hit.
Expenses that may grow
Health care costs tend to rise.
Vehicles: if you retire in your 40s, you’ll probably buy several more cars along the way, maybe a $50,000 vehicle every handful of years.
Travel and other extras: some people in the FIRE community budget for more spending in early retirement, not less.
Example: How much two line items matter
Say your annual cost of living today, including a mortgage and other debt, is $150,000. If you retired today, your FI number would be about $3.75 million.
If you stay in the same house and pay off the mortgage and debts before retiring, your cost of living might drop to $90,000, making your FI number closer to $2.25 million.
That $1.5 million swing comes entirely from two line items disappearing. A single static cost-of-living snapshot can badly overstate, or understate, what you actually need.
Other questions matter too. Will you pay for your kids’ college? Do you have no kids or six kids? Will they be out of the house when you retire?
Recalculate as life changes
This isn’t meant to be a moving target that discourages you. Yes, $2.2 million is very different from $3.8 million. But your FI number is a formula you recalculate periodically, not something you set once and forget. Your life will change, and so will what you want.
Maybe you planned to stay in your house but decide to downsize into a 55-and-older community. Instead of a $4,000 mortgage, you use your home equity to buy a condo or pay lower rent, freeing up, say, $300,000 to flow into your portfolio and count toward your FI number.
Or maybe you upgrade. More retirees are actually increasing their square footage going into retirement, even with no kids at home. If that’s what you want, great, just account for it. Instead of a $3.8 million FI number, you might need $5 million.
Run the numbers and adjust along the way. You don’t even have to do it every year. Just sit down periodically with your spouse or anyone else affected.
Where the 4% Rule Falls Short
Not surprisingly, the Trinity study and the 4% rule aren’t perfect. Before you treat 25x as a magic number, let’s address a few honest pushbacks. Nuance is half the conversation.
1. It looks backward. Bengen’s original study and the later updates all rely on historical data going back to 1926. There’s no guarantee the next 30 to 60 years will match or beat the past. These are all educated guesses.
2. A 30-year horizon doesn’t fit every retirement. This one applies to me. The original studies tested retirements of 15 to 30 years. If you retire in your 30s or 40s, and especially as a health care provider who knows how to take care of yourself, a 40-, 50-, or even 60-year retirement isn’t unusual. Your sustainable withdrawal rate may be meaningfully below 4%, likely around 2% to 3.5% on the longest horizons.
3. Static spending isn’t realistic. The 4% rule assumes you withdraw the same inflation-adjusted amount every year, good market or bad. Real life doesn’t work that way. When inflation recently spiked to around 9%, that $80,000 would have jumped to about $87,000 almost overnight.
In reality, retirees tighten up after a downturn and loosen up after a good year. During a big market drop, you might aim to spend $60,000 of your planned $80,000. After a year when your portfolio is up 20%, that might be the time for a new car or another extra expense.
This dynamic “guardrails” spending strategy gives you much more flexibility and makes market swings far less damaging. If you’re willing to match your spending to your portfolio’s performance, you can start with a higher withdrawal rate, perhaps 5% to 6%, and still do very well.
What the latest research says
Bengen published new research in 2025 putting the updated safe withdrawal rate at about 4.7%, using a diversified portfolio.
Morningstar has been more conservative, citing elevated market valuations, and recently put its estimate at about 3.7%.
Vanguard offered a fairly broad range of roughly 3.5% to 4.5%.
So the answer lands anywhere between about 3.5% and 5%. Those are big differences, but a range still gives you something to aim for. In your 20s, you probably won’t have a great handle on your long-term cost of living. In your 30s, in the messy middle of life, you’ll have a much better idea.
The research will keep evolving as interest rates change, as stocks perform differently, and as markets recover faster or slower than before. These are estimates built from history, not guarantees. Staying flexible improves your odds of success.
Why I Still Love the Framework
Despite its flaws, I love this framework because it’s unbelievably simple. No other approach turns an abstract goal like “I don’t want to work forever” into a concrete number: cost of living × 25.
It’s a great starting point that you can refine later. You need somewhere to start, and the $1 million that gets preached online just isn’t going to cut it.
The 4% rule also has remarkable historical resilience. Bengen’s original research was built around the worst historical starting points, retirements that got hammered in their first few years, and the 4% withdrawal rate still lasted 30 years. In more typical periods, higher withdrawal rates often worked too.
Think of 25x as a conservative floor, not a ceiling. Then layer on buffers and flexibility based on your situation, age, risk tolerance, and how the market actually performs. If you plan an FI date 20 years from now and find yourself way ahead of schedule 10 years in, just adjust.
Prepare for sequence of returns risk. Plenty of CRNAs work a little PRN into their 60s and 70s. That may or may not be for you, but it gives you a lot more cushion around your FI number.
And be willing to adjust your spending. A big mortgage and other fixed expenses leave you little room to maneuver. Big purchases, like a $100,000 vehicle for each of you, aren’t flexible either, and they eat into your principal quickly.
Ultimately, your FI number gets you moving in the right direction. The nuance is what keeps you safe and determines your margin for flexibility.
Recap
Calculate today’s number: cost of living × 25 gives you a ballpark for financial independence, the point when you no longer need earned income.
Cost of living is the biggest lever in the formula, far more than whether you assume an 8%, 6%, or 10% return. Track it closely and update it regularly.
Separate temporary costs from permanent ones. A mortgage and debt you’ll pay off shouldn’t inflate your long-term target, unless you plan to upgrade your housing in retirement.
Treat the 4% rule as a starting point. Your right number might be 3%, 2%, or as high as 6%, depending on your buffer, age, life expectancy, and spending flexibility.
Build a buffer for sequence of returns risk, and match your stock-and-bond mix to your timeline and your tolerance for drawdowns as FI approaches.
Savings rate, not just income, controls your timeline to FI.
The “right” withdrawal rate is a genuine, ongoing debate, with estimates around 3.5% to 4.7% depending on who you ask and how long your retirement runs. For a 10- to 20-year retirement, higher rates may work fine. For 30 to 60 years, stay closer to the conservative end.
Revisit your number about once a year. Look at your cost of living, your family’s situation, and how the market is performing.
Knowing your number changes everything. It turns retirement from a guess into a plan, a heading you can actually work toward.
I’m a CRNA, not a financial advisor, CPA, or attorney. This post is for education only and is not individualized financial, tax, or legal advice. Historical returns do not guarantee future results, and all projections are for illustration.
