Hi! I’m having trouble with finding the answer to this question. I want to determine my FI number but I’m confused where to include taxes? Should I include them in my annual expenses? Thanks!
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Welcome @Dkl424!
I often give pretty generic examples and get the question “does that include taxes?!” And the answer is, it depends!
What kind of accounts are you investing inside of? i.e. if you’re contributing everything to Roth IRA/401k and you don’t plan to retire until after 59.5, then you won’t owe tax on any of it.
I think in general the 4% rule of thumb is regarding how much you can take out every year. You’ll have to pay whatever tax is owed on any of those withdrawals. If it’s a Roth after 59.5, that tax will be 0. If it’s a taxable brokerage account with huge capital gains, the tax could be significant.
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