Calculate the true annual cost of your current lifestyle — and the investment portfolio you need to sustain it in retirement without working. See where lifestyle costs are highest and their retirement impact.
Most people think about money monthly, but financial goals are annual or multi-decade. Seeing your lifestyle cost as an annual figure — and then as the investment portfolio needed to sustain it indefinitely — creates a clarity that monthly figures never do. £2,600/month feels manageable. £31,200/year FIRE requirement of £780,000 from investments makes the connection between lifestyle choices and working years viscerally clear.
The FIRE number (25× annual expenses at 4% SWR) directly links lifestyle cost to working years. A £30,000/year lifestyle requires £750,000 (£18,498 of investment income with State Pension). A £50,000/year lifestyle requires £963,000 (after State Pension offset). The £20,000 annual lifestyle difference requires £213,000 more in portfolio — approximately 4–7 extra working years at typical savings rates.
The traditional guideline is no more than 30% of gross income on housing (rent or mortgage). At 28% of gross income or 35% of take-home, housing is considered affordable. Above 40% of take-home, housing is a financial strain. In London and the South East, housing routinely exceeds 40-50% of take-home for rented accommodation — which compresses spending in all other categories and often makes saving very difficult without unusually high income.