FIRE Calculator

About the Fire Calculator

FIRE — Financial Independence, Retire Early — means saving aggressively (50%+ of income) to retire decades before traditional retirement age. The maths is simple but unforgiving: your savings rate determines how many years to FI. This page covers the formula, withdrawal safety, and the variants (LeanFIRE, FatFIRE, CoastFIRE).

The Formula

FIRE number = Annual spending × 25 (the 4% rule). Years to FI ≈ depends on savings rate: 25% savings rate → ~32 years; 50% → ~17 years; 65% → ~10 years; 75% → ~7 years.

Worked Example

Annual spending $40,000. FIRE number = $1,000,000. Current savings $100,000. Savings rate 60% on $80,000 take-home (saving $48,000/year). At 7% real return, years to FI ≈ 13 years. Reduce spending to $35,000 (FIRE number $875,000) and save the difference: ~11 years.

Savings rate is the master variable

Income matters less than savings rate. Someone earning $200,000 saving 20% reaches FI later than someone earning $80,000 saving 50%, because the high earner's lifestyle creates a bigger FIRE number to support. Cut spending: it both shrinks your target and grows your savings.

LeanFIRE / FatFIRE / CoastFIRE

LeanFIRE: retiring on ~$30k-40k/year, requires ~$1M. FatFIRE: $100k+/year retirement, $2.5M+. CoastFIRE: save enough early that compounding alone gets you to traditional retirement — then you can 'coast' on a lower-income job.

Sequence of returns risk in early retirement

A 30-40 year retirement is much more vulnerable to early-bad-returns than a 30-year traditional retirement. Many FIRE practitioners use 3.5% withdrawal rate, hold a year of expenses in cash, and remain flexible to earn income if markets dip in early years.

Common Mistakes

• Underestimating lifestyle inflation in retirement. The 4% rule assumes consistent spending; many retirees spend more, especially on travel.
• Forgetting healthcare. Pre-Medicare coverage is expensive — budget $1,000+/month/person.
• Ignoring sequence risk. A 20% drop in year 1 of retirement is dramatically worse than year 10.

Frequently Asked Questions

Is the 4% rule safe for 50+ year retirements?
Historically marginal. Many FIRE-ers use 3.5% or stay flexible with spending.

Do I need to quit my job at FI?
No — many FI people keep working because they enjoy it. FI is the option, not the obligation.

This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making significant financial decisions.