FIRE Calculator

FIRE Calculator: Your Path to Financial Independence and Early Retirement

The FIRE movement (Financial Independence, Retire Early) has transformed how millions of people think about work, money, and the purpose of saving. At its core, FIRE is about accumulating enough invested assets that the passive income from those assets covers your living expenses indefinitely, giving you the freedom to work on your own terms or not at all. This calculator computes your FIRE number, estimates how many years it will take to reach financial independence based on your current income, expenses, and savings rate, and shows you how sensitive your timeline is to changes in your savings rate.

What Is the FIRE Number?

Your FIRE number is the total amount of invested assets you need to sustain your annual spending indefinitely without employment income. It is calculated by dividing your annual expenses by your safe withdrawal rate. With the traditional 4% rule, if you spend $50,000 per year, your FIRE number is $50,000 / 0.04 = $1,250,000. Once your investment portfolio reaches this amount, you can theoretically withdraw 4% each year (adjusted for inflation) and never run out of money over a 30+ year retirement. The beauty of this calculation is its simplicity: your FIRE number depends entirely on your spending, not your income. A person earning $200,000 who spends $100,000 has the same FIRE number as someone earning $100,000 who also spends $100,000.

The 4% Rule and Safe Withdrawal Rates

The 4% rule originated from the 1998 Trinity Study, which analyzed historical U.S. stock and bond returns from 1926 to 1995. The researchers found that a portfolio of 50% stocks and 50% bonds had a 95% success rate of lasting at least 30 years with 4% annual withdrawals adjusted for inflation. Since then, the rule has been debated extensively. Some researchers argue that a 3.5% or even 3% withdrawal rate is more appropriate given current lower expected returns and longer retirement horizons. Others point out that the 4% rule assumes rigid spending patterns, while most retirees can reduce spending during market downturns. For FIRE practitioners who retire in their 30s or 40s and need their portfolio to last 50-60 years, a more conservative withdrawal rate of 3.25% to 3.5% is often recommended.

Types of FIRE

The FIRE community has developed several variations to fit different lifestyles and ambitions:

• Lean FIRE: Achieving financial independence with a minimalist lifestyle and lower expenses, typically $25,000 to $40,000 per year for an individual. This requires a smaller portfolio (roughly $625,000 to $1,000,000) but demands frugal living in perpetuity.
• Fat FIRE: Financial independence with a more comfortable or luxurious lifestyle, typically $80,000 to $150,000+ per year in expenses. This requires a significantly larger portfolio ($2,000,000 to $3,750,000+) and a higher income or longer accumulation phase.
• Barista FIRE: Accumulating enough that your portfolio covers most of your expenses, but you continue working part-time (often at a job that provides health insurance, like a coffee shop) to cover the gap and maintain social connections.
• Coast FIRE: Saving aggressively early in your career until your portfolio is large enough that compound growth alone will carry it to your full FIRE number by traditional retirement age. After reaching Coast FIRE, you only need to earn enough to cover current expenses, with no additional saving required.

Why Savings Rate Is the Most Important Variable

The sensitivity table in this calculator demonstrates a crucial FIRE insight: your savings rate matters far more than your investment returns or even your income. A person who saves 10% of their income needs to work approximately 51 years to reach FIRE, while someone saving 50% needs only about 17 years, and someone saving 70% can achieve FIRE in roughly 8.5 years. This is because a higher savings rate accomplishes two things simultaneously: it increases the amount you invest each year while also reducing the amount you need in retirement (since your expenses are lower). This double effect makes savings rate the single most powerful lever you can pull on your path to financial independence. Even a 5% improvement in your savings rate can shave years off your timeline.

Common FIRE Milestones

The path to FIRE is long, and tracking milestones keeps you motivated. Key milestones include: reaching a net worth of $100,000 (which many consider the hardest milestone because compound growth has not yet kicked in meaningfully), hitting Coast FIRE (where your portfolio will grow to your FIRE number on its own), reaching half your FIRE number (the psychological halfway point), and finally crossing your full FIRE number. Many FIRE practitioners also celebrate when their annual passive income exceeds specific expense categories, such as when investment returns cover their housing costs or when dividends alone pay for groceries.

Investing Strategies for FIRE

The overwhelming consensus in the FIRE community is to invest in low-cost, broadly diversified index funds. A simple three-fund portfolio consisting of a total U.S. stock market index fund, an international stock index fund, and a total bond market index fund provides excellent diversification at minimal cost. During the accumulation phase, most FIRE practitioners hold a high allocation to stocks (80-100%) since their long time horizon allows them to ride out market volatility. Tax-advantaged accounts such as 401(k)s, IRAs, and HSAs should be maxed out before investing in taxable brokerage accounts. Understanding the Roth conversion ladder and rule of 55 exceptions is also important for accessing retirement funds before age 59.5 without penalties. The key principles are consistency, low fees, broad diversification, and the discipline to stay invested through market downturns.