For years, I assumed there was a formula everyone else already knew and I just hadn’t found yet. Multiply your expenses by 25. Take 4% of your portfolio. Plug in a number, get an answer, done. When I actually sat down to work out my own financial independence expenses, taking into account Singapore cost of living and all, I realised the formulas were a starting point — not the answer.
Why the Standard Formulas Weren’t Enough
The common shortcuts assume your expenses today are the expenses you’ll have for the next 30 years. Mine weren’t. Housing costs shifted once my flat was paid off. Some categories dropped away entirely — no more commuting costs, fewer work-related expenses. Others grew, especially as I stepped into caregiving for both my parents at the same time. A single multiplier couldn’t capture any of that.
So instead of starting with a target number, I started with categories.
My Framework for Financial Independence Expenses
Rather than one lump “monthly expenses” figure, I broke my spending into three buckets:
Fixed, non-negotiable costs — things that don’t change much regardless of lifestyle: housing-related costs, insurance, basic utilities, groceries.
Lifestyle costs — the flexible layer: dining out, travel, hobbies, gifts. This is the bucket most FIRE calculators quietly ignore, and the one most likely to blow up your plan if you underestimate it.
Adhoc, Irregular and future costs — the ones people forget until they hit: healthcare as you age, home repairs, family obligations that show up without warning. I built in a buffer here rather than pretending these wouldn’t happen.
Once I had real numbers for each bucket — tracked over actual months, not guessed — I had something far more useful than a formula: a picture of what my life actually cost to run.
Want to work out your own number? I turned this exact process into the free FIRE Guide & Progress Checklist — the formulas, the stage-by-stage targets, and a simple checklist to see how close you already are.
If you want a deeper framework for thinking about money this way, Your Money or Your Life by Vicki Robin and Joe Dominguez is the book that shaped how I approach it — it’s less about budgeting and more about understanding what your spending actually costs you in life energy.
Then I Stress-Tested It
A number based on one calm, ordinary year isn’t a plan — it’s a snapshot. I asked myself harder questions: What if a parent needed full-time care? What if the market dropped 30% the year I was counting on it most? What if “lifestyle costs” crept up because I finally had time to enjoy them?
This is where having multiple income sources mattered. Rental income covering the fixed, non-negotiable layer gave me a floor that didn’t depend on market conditions. Dividends and a bond portfolio gave me flexibility above that floor, without needing to sell assets at the wrong time.
What I’d Tell Someone Starting This Exercise
Don’t start by asking “what’s my number.” Start by asking “what does my actual life cost, in real categories, over real months.” The number falls out of that — and it’s a number you can actually trust, because it’s built from your life, not someone else’s rule of thumb.
If you haven’t started tracking this way yet, Start Here walks through where I’d begin. For a Singapore-specific look at retirement income planning more broadly, the CPF Board’s retirement planning resources are a solid reference point.
— Eunice
My Fifty Freedom | Build the wealth that buys back your time
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