FIRE Calculator

The number comes from spending, not income

Financial independence means your portfolio covers your spending indefinitely. Income is relevant only because it determines how fast you can build that portfolio; it plays no part in how large the portfolio needs to be.

That has a consequence people find counterintuitive. Reducing spending by $10,000 a year both lowers the target by $250,000 at a 4% withdrawal rate and raises annual saving by $10,000. It works on both sides of the equation at once, which is why spending is the most powerful lever on this page.

The withdrawal rate, and what it is not

The target is spending divided by the withdrawal rate. At 4% that is 25 times spending; at 3.5% it is roughly 28.6 times; at 3% it is 33.3 times. The choice of rate moves the target by hundreds of thousands of dollars.

The much-quoted 4% figure came from a study of historical US returns over 30-year retirements with a particular portfolio. It is not a law, not a government standard, and not a promise. A retirement beginning at 45 may need to last fifty years, which is a materially harder problem than the one that study examined.

This calculator will not tell you which rate to use. It will show you what each one costs, which is the more useful thing.

Real returns, so the target stays in today's money

The projection grows the portfolio at a real return — the nominal return net of inflation — rather than a nominal one. A 7% return against 2.5% inflation is a real return of 4.39%, not 4.5%: the correct calculation is (1.07 ÷ 1.025) − 1.

Working in real terms means the target can stay in today's dollars and the two never drift apart. Growing the portfolio nominally while holding a target in today's money would produce an answer that is wrong by a wide margin over twenty years.

Coast FIRE and Barista FIRE

Coast FIRE is the amount that, left alone with no further contributions, grows to your target by a chosen age. Reaching it means you can stop saving for retirement entirely and still arrive. It is a genuinely useful milestone because it arrives years before FIRE itself and it converts an all-or-nothing goal into a step you can actually reach.

Barista FIRE is the smaller portfolio needed when part-time work covers some of your spending. Cover $24,000 of a $58,000 budget and the portfolio only has to cover $34,000 — at 4% that is $850,000 rather than $1,450,000.

Both are worth calculating precisely because they lower the bar to something reachable, and the psychological difference between "eighteen more years" and "you can stop saving now" is not small.

A worked example

Age 33, $185,000 invested, $135,000 of income, spending $62,000 and saving $48,000, expecting $58,000 of spending when independent, at 7% nominal, 2.5% inflation, 4% withdrawal rate.

The FIRE number is $1,450,000 — 25 times $58,000. The savings rate is 35.6%. At a real return of 4.39%, current assets and $48,000 a year reach the target in about 17 years, at age 50. Coast FIRE by 60 is roughly $430,000, so there are a few more years of saving before the option to stop appears. Barista FIRE with $24,000 of part-time income is $850,000, reached around age 41.

Raise the savings rate to 45% and independence arrives about three years earlier. Drop the withdrawal rate to 3.25% and it moves four years later. Those two levers dominate everything else on the page.

The risk a constant return cannot show

Sequence-of-returns risk is the largest threat to an early retirement, and a steady growth rate makes it invisible. Two portfolios with identical average returns end very differently if one has its bad years early, because withdrawals during a decline sell more shares to raise the same cash and the portfolio may never recover.

The usual responses — a cash buffer for the first years, a flexible spending rule, some willingness to earn again if the first years go badly — are all outside what a calculator can model, and all more important than the third decimal place of the assumed return.

What this does not cover

• Tax. Withdrawals from traditional accounts are taxable, and a mix of account types materially changes what a given portfolio supports.
• Health insurance. Between early retirement and Medicare eligibility this is often the single largest line, and plans routinely understate it.
• Early access rules. Reaching retirement accounts before 59½ needs a specific strategy, and taxable accounts have to bridge the gap.
• Social Security. Fewer working years means a lower benefit, and it arrives decades after an early retirement begins.
• Spending changes. Children, care for parents, and health all move the number in ways a flat figure cannot capture.

For a conventional retirement age with Social Security included, use the retirement calculator. To measure the savings rate this depends on, see the savings rate calculator.