From what I observed in this forum, many tend to use the term how much they earn, how much they save, how much net asset worth now etc.
Financial independence when you retire does not take into consideration all these things. Mike Tyson may earn millions in a single fight, that doesn't make him live comfortably in later part of his life.
Many stated in this forum their net worth is more than 1.0m. Look carefully, the 1.0m comprises mainly of condo at present value 1.5m less 600k loan outstanding. Other assets presumably comprise of cash, share, car, and
CPF saving.
Please take note property price may go up and down. Property needs maintenance, need to pay taxes and insurance.
To achieve financial independence means that you can live with the quality of life similar to what you have while in full employment. Need not think thrice to spend extra few dollar here and there. Able to replace household items and mode of transport when necessary. Up keep and house maintenance as usual.
Simple test whether you have achieve financial independence will be :
1. You have a mortgage-free home.
2. If you have cash asset equivalent to 100 times last draw monthly gross pay (i.e before tax,
CPF contribution, or what ever deduction).
3. If you can generate 65% replacement income from your nest eggs.
4. If you are paying 20% income tax at the time of retirement.
5. If you have been saving in what ever form (or commitment) at 15% of your last drawn gross pay and nil when retire.
6. If you can earn 10% ROI pa on your nest eggs consistently.
7. If inflation does not exceed 4% pa.
8. If you only spend up to the replacement income every year (already inclusive of 4% inflation per year);
9. If you do not intend to leave anything to your children other than the house you are staying.
10. If you do not live longer than 79 years (4 year longer than life expectancy right now).
So, when you already achieved the above criteria, regardless of your age (age 40, 50, 60 up to you), you should be able to live the same quality of life
at the time of your retirement.
Note: Cash asset to include
CPF, cash, FD, share, bonds, unit trusts, second house that can generate income. By no means contribution from children to be included.