FIRE Number Calculator

FIRE stands for Financial Independence, Retire Early. It's a lifestyle movement focused on extreme saving (typically 50-70% of income) and smart investing to achieve financial freedom decades before traditional retirement age (65). The goal is to accumulate enough wealth that your investment returns cover all living expenses indefinitely, giving you the choice to work on your own terms.

Your FIRE number is the portfolio size needed to retire and live off investments forever. It's calculated as: Annual Expenses × 25 (using the 4% rule). For example, if you spend $50,000/year, your FIRE number is $1.25 million. This is based on the principle that withdrawing 4% annually (adjusted for inflation) has historically allowed portfolios to last 30+ years. More conservative approaches use higher multipliers: 28× for 3.5% or 33× for 3%.

Lean FIRE means retiring with minimal expenses (typically <$40k/year), using a 5% withdrawal rate (20× multiplier). Regular FIRE uses the standard 4% rule (25× multiplier) for moderate spending. Fat FIRE targets a luxurious retirement with generous spending, using a safer 3% rate (33× multiplier). Your choice depends on desired lifestyle and risk tolerance.

Coast FIRE is achieved when you've saved enough that, even without further contributions, compound growth will carry your portfolio to your full FIRE number by traditional retirement age (60-65). At this point, you can 'coast' by working part-time or in lower-paying but fulfilling jobs without needing to save aggressively—just covering current expenses.

The 4% Rule states that withdrawing 4% of your portfolio in Year 1 of retirement—then adjusting that dollar amount for inflation each year—has historically never run out over any 30-year period. It was discovered by financial advisor William Bengen in 1994 after analyzing 75 years of US market data, and was later validated by the 1998 Trinity Study conducted by professors at Trinity University.

Savings rate has a double effect: it increases how much you invest AND proves you can live on less (lowering your FIRE number). A 50% savings rate mathematically leads to FIRE in ~17 years. A 70% rate achieves it in ~8.5 years. Investment returns matter less in early years because the contributions dominate growth. Higher savings rate also provides psychological resilience—you've proven you don't need high spending to be happy.

Inflation erodes purchasing power over time. If you need $50,000/year now and inflation averages 3%, you'll need ~$67,000/year in 10 years to maintain the same lifestyle. Our calculator projects both your expenses AND target FIRE number forward in time, showing you the inflation-adjusted goal you'll actually need when you reach FIRE—not just today's number.

This is the risk that the ORDER of investment returns matters, not just the average. Poor returns early in retirement—while you're making withdrawals—can permanently damage your portfolio even if long-term averages are normal. A 40% crash in Year 1 is far worse than the same crash in Year 20. It's why FIRE practitioners often hold a 'cash cushion' or 'bond tent' in their first few retirement years.

The 4% Rule was based on historical data (1926-1995). Current concerns include: (1) Lower expected bond yields than historical averages, (2) Higher equity valuations (high CAPE ratios), (3) Longer life expectancies requiring 40-50 year retirements. Many advisors now recommend 3-3.5% for early retirees. However, the 4% Rule remains a useful benchmark, and flexible withdrawal strategies (adjusting spending in down markets) can improve success rates.

This calculator uses constant return assumptions for simplicity and quick planning. Real markets are volatile. We recommend: (1) Testing pessimistic scenarios (lower returns, higher inflation), (2) Using a lower rate (3-3.5%) for early retirement, (3) Building flexibility into your plan—side income, variable spending. For comprehensive Monte Carlo simulations with historical volatility, consult a financial advisor or use advanced tools.