FIRE Calculator (Financial Independence, Retire Early)

What Is FIRE?

FIRE (Financial Independence, Retire Early) is a movement built around aggressive saving — typically 40–70% of income — to accumulate enough invested assets to live off investment returns indefinitely.

The FIRE Number

Your FIRE number is the portfolio size at which you can sustainably withdraw your annual living expenses. Based on the Trinity Study (1998), a 4% annual withdrawal from a diversified portfolio has historically been sustainable for 30 years in 95% of scenarios. Your FIRE Number = Annual Expenses ÷ 0.04 (or Annual Expenses × 25).

How to Use the FIRE Calculator

How to Calculate Your FIRE Number by Hand: Worked Example

The FIRE math needs only division. Say your household spends $40,000 per year. At the classic 4% safe withdrawal rate, the FIRE number is $40,000 ÷ 0.04 = $1,000,000 — the familiar "25 times expenses" shortcut, because dividing by 0.04 is the same as multiplying by 25. At a more conservative 3.5% withdrawal rate, the target rises to $40,000 ÷ 0.035 = $1,142,857. Notice that trimming just $5,000 of permanent annual spending lowers the 4% target by $125,000 — cutting expenses shrinks the goal 25 times faster than it shrinks your budget.

How many years until you reach financial independence?

Starting from zero and investing $40,000 per year at a 7% return, the future value of an annuity formula shows the $1,000,000 target arrives in almost exactly 15 years: $40,000 × [(1.07¹⁵ − 1) ÷ 0.07] ≈ $40,000 × 25.13 ≈ $1,005,000. This is the engine behind the famous savings-rate table — at a 50% savings rate on an $80,000 net income, financial independence takes roughly 15 working years regardless of how large the income is, because both the target and the contributions scale together.

Which Type of FIRE Should You Aim For?

The single formula supports several strategies, each just a different expense input.

What is Lean FIRE vs Fat FIRE in dollar terms?

Lean FIRE means retiring on a deliberately frugal budget — commonly $25,000–$40,000 of annual spending, implying a portfolio of $625,000–$1,000,000 at 4%. Fat FIRE targets a comfortable lifestyle of $100,000 or more per year, requiring $2.5 million and up. The strategies differ less in math than in risk tolerance: a lean budget leaves little slack for medical costs or inflation surprises, which is why many Lean FIRE plans pair with a 3.25–3.5% withdrawal rate.

How does Coast FIRE change the calculation?

Coast FIRE asks a different question: how much must be invested today so that compounding alone hits the target by traditional retirement age, with no further contributions? A 30-year-old aiming for $1,000,000 at 65 needs $1,000,000 ÷ 1.07³⁵ ≈ $93,700 invested now. After reaching that milestone, they only need to earn enough to cover current living costs — the portfolio "coasts" the rest of the way.

Is Barista FIRE just partial retirement?

Essentially yes. In Barista FIRE, part-time work covers a slice of expenses — often chosen for employer health coverage — so the portfolio only funds the remainder. If part-time income covers $15,000 of a $40,000 budget, the portfolio must supply $25,000, dropping the required balance at 4% from $1,000,000 to $625,000. Every dollar of reliable side income permanently removes $25 from the FIRE number.

How does a market downturn right after quitting your job affect FIRE?

This is "sequence of returns risk" — the same average return produces very different outcomes depending on when the bad years happen. A portfolio that drops 20% in year one of retirement, before any recovery, must sell more shares at depressed prices to fund the same withdrawal, permanently shrinking the base left to recover. Retirees close to their FIRE date commonly build a cash buffer of one to two years of expenses specifically to avoid selling into a downturn, drawing from cash while equities recover instead.

Frequently Asked Questions