At the end of every month, I sit down in the dimly lit tearoom and calculate numbers. Retirement numbers. I love seeing the countdown ticker go down ever so slightly. 7.1 years to go until retirement. 7.0 years to go…

Sometimes, when the month’s savings exceed expectations, the magical number skips a step.

Nothing brings me more joy than seeing my FIRE (Financial Independence Retire Early) outlook making a leap. For that reason, I consistently bug my wife to write down her numbers. When she forgets, I get savage about it.

It is my joy!

Calculate WHEN to retire

The staggering amount of resources on this topic means you have plenty of choices. Spreadsheets abound with many variations and algorithms. The vast majority, if not all, of these spreadsheets provide a single database to enter all sources of savings, income, and spending habits.

We have a spreadsheet here at launching the DREAM. It is a Frankenstein with hybrid approaches from other spreadsheets. If you fancy what our spreadsheet looks like, you can download it here.

Aside from spreadsheets heaven, other resources include FIRECalc, an online calculator and planner, cFIREsim, an online crowdsourced calculator, and Networthify, another inclusive calculator.

Calculate WHERE to retire

While calculating when you can retire marks the first step in the early retirement dream, figuring out where you can retire with your current saving adds an interesting flavor to the equation.

I could not find a resource that could provide me the “where” along with the “when,” so I created a tool to do that.

To forecast where you can retire, I use data from numbeo.com. Numbeo provides a convenient cost of living index, ranking countries on how much it costs to live there by using New York City as the baseline for which all other countries are compared against.

calculate financial rankings
Cost of Living Rankings

This means that if the cost of living of a particular country were the same as NYC, its index score would be 100. If it were cheaper to live there, the score would be less than 100. I find it interesting that Bermuda is ranked the most expensive country to live in.

Calculating where you can retire becomes a simple math problem. First, to get a more accurate estimate, you need to recreate the index with YOUR city/country as the baseline. Otherwise, you would be comparing your savings in New York City dollars. You can do this with the steps below OR download the automated spreadsheet that provides the calculation for countries AND US cities where you can retire at. See the download section below.

To do this, visit the cost of living estimator on numbeo. Select the city or country most similar to where you live as not all cities are listed here. In my case, I selected Seattle.

calculating financial - cost of living estimator
Cost of Living Estimator

On the next screen, you have the opportunity of changing some details to match your situation, BUT for realigning the cost of living index, the details do not matter. Scroll down to the bottom and grab the total overall estimate monthly spending. For Seattle, that estimate falls around $3,711.52.

Next, we will need to establish the ratio relationship between Seattle’s cost of living and New York City’s estimate because NYC is the baseline on numbeo. Repeat the steps above to get the total overall estimate monthly spending for NYC; leaving everything the same, you should get $4,279.18.

Note that these numbers will change over time. Estimates are refreshed twice a year on numbeo.

The ratio between Seattle and NYC equates to $3,711.52:$4,279.18, which is 0.87.

To reestablish the cost of living index rankings, take the cost of living index number for each country and divide by the ratio. Bermuda’s new index, for example is 150.38:.87 or 172.33. This means that living in Bermuda is 172% more expensive than Seattle.

To calculate where to retire, simply multiply this index by the required savings from your spreadsheet. Subsequently, to calculate how many years it will take before you can retire in these countries, divide the required savings by your average savings per year. The figure below is an example of this calculation.

calculate where to retire
Early Retirement Location Calculator

If the years to retirement number is 0 or negative, you can retire in that country TODAY! Note that I am using random savings numbers for this example. I provide an update on my journey once in a while if you would like to see how I am doing and compare. I also provide my personal investments if you want to see that.

Download and final thoughts

To download this location calculator, click here. You can take the formula and paste it to your current financial spreadsheet. Follow this link to download an inclusive spreadsheet with both the when and where calculations.

A few notes:

  1. This is a simple calculator meant to give you an idea of possible destinations you can retire to and how long it would take to save for such a retirement. It does not explore the finer details specific to your lifestyle and needs – for example, political atmosphere of the country.
  2. Before hitting the GO button for your early retirement, get a professional assessment of your financial situation. The last thing you want to happen is running out of money and being forced to go back to work.
  3. You are free to modify, combine, or otherwise replace whatever you want in the spreadsheet. YOUR financial spreadsheet should reflect what YOU want to do.
  4. Lastly, while early retirement is a beautiful dream, do not forget to live life as you save to make this dream come true.

If you use the location calculator, let me know where you can retire to right now down below. Have suggestions for how to improve the calculator? Let me know below or send me your thoughts via the contact page.