FIRE calculator
When could you stop working if you wanted to? Work out your FIRE number and how many years you have left until financial independence.
What is FIRE?
FIRE stands for Financial Independence, Retire Early. The idea is to build an invested portfolio large enough for its returns to cover your spending indefinitely. From that point on, working becomes optional.
The FIRE number and the 4% rule
A classic study from Trinity University looked at how much could be withdrawn each year from a stock and bond portfolio without running out within 30 years. Its popular takeaway is the 4% rule: if you withdraw 4% of the portfolio in the first year and adjust that amount for inflation, the money is very likely to last. Turned around, your FIRE number is:
FIRE number = annual spending / withdrawal rate = annual spending × 25
For retirements longer than 30 years, many people prefer a more cautious rate of 3 to 3.5%.
Your savings rate is almost everything
The second chart shows something surprising: how many years you have left depends mainly on what percentage of your income you save, not on how much you earn. Saving more works twice: you build wealth faster and you get used to living on less, so your FIRE number shrinks. With a 10% savings rate it takes about 51 years; with 50%, about 17; with 70%, under 9 (starting from zero with a 5% real return).
Real return
The calculator works in today’s money, so it uses the real return: the nominal return minus inflation. Historically, a global stock portfolio has returned roughly 5 to 7% a year in real terms over the long run, with some very good and some very bad years.
Simplified simulation with a constant return. It ignores taxes, fees, Social Security or state pensions and sequence-of-returns risk (bad years right after you retire). This is not financial advice.
Frequently asked questions
How much money do I need to retire with the 4 % rule?
About 25 times your annual spending. If you spend 24,000 a year, your FIRE number is 600,000 invested; with 30,000 of spending, 750,000. For a wider safety margin, use a withdrawal rate of 3.5 % (about 28.6 times spending) or 3 % (33 times).
What are Lean FIRE, Fat FIRE and Coast FIRE?
Lean FIRE means retiring on a tight budget that covers only the basics. Fat FIRE means doing it with generous spending, which requires a much larger portfolio. Coast FIRE is having enough invested already that, without adding anything more, it will grow to your FIRE number by retirement age, and Barista FIRE means topping up returns with a part-time job.
Does the 4 % rule work outside the United States?
The original study used US stock market data, one of the best-performing markets of the 20th century. Later studies with data from many countries suggest that, with a global portfolio and horizons of 40 years or more, a rate of 3 to 3.5 % is more prudent. You should also account for taxes and fees, which can be significant.
What savings rate do I need to retire early?
Starting from zero with a 5 % real return, saving 10 % of income takes about 51 years to reach financial independence, 25 % about 32, 50 % about 17 and 70 % under 9. What matters is the percentage you save, not how much you earn: that is why raising your savings rate speeds things up so much.