FIRE Calculator
FIRE Calculator
Find the age you could reach financial independence, and retire early if you want to.
All amounts are in today's money. The dashed line is your FI number; the green line is your savings.
This is a simple projection for education, not financial advice. Real returns vary year to year, and taxes, healthcare and changes in income are not modelled. Nothing you type is sent anywhere.
What FIRE means
FIRE stands for Financial Independence, Retire Early. Financial independence means your investments are large enough to pay for your spending indefinitely, so working becomes optional. Retiring early is only one choice: many people use the freedom to change careers, work part time, or take a break.
The calculation is simple. Your FI number is your yearly spending divided by a withdrawal rate. At 4%, you need 25 times your yearly spending. Each year, your savings grow by the return after inflation and you add what you save, until the total passes your FI number.
The 4% rule and its limits
The 4% rule comes from historical studies of United States stock and bond returns, which found that withdrawing 4% of the starting portfolio each year, adjusted for inflation, would have lasted at least 30 years. It is a guideline, not a guarantee.
- For a retirement of 40 or 50 years, many planners use a lower rate such as 3.25% to 3.5%. Try changing the withdrawal rate above.
- Future returns may differ from history. A poor market in the first years of retirement does the most damage.
- Income such as a pension, Social Security or part-time work reduces how much you need to withdraw.
Variations you will hear about
- Lean FIRE: a very frugal retirement budget, so the FI number is smaller.
- Fat FIRE: a generous budget, so the FI number is larger.
- Coast FIRE: you have saved enough that, left to grow, it reaches your FI number by traditional retirement age, so you only need to cover current expenses.
- Barista FIRE: part-time income covers part of your spending.
Related: the savings calculator, the future value calculator and the retirement calculator.
Frequently asked questions
Why use "income after tax"?
Spending comes out of after-tax money, so it is the right base for working out both how much you save and how much you spend.
Why is everything in today's money?
Using the return after inflation keeps the numbers comparable with what things cost now, so you do not have to guess future prices.
What savings rate should I try?
Change it and watch the age move. The relationship is steep: going from saving 20% to 50% of income can cut decades off the timeline, because you both save more and need less.