FIRE Calculator

FIRE stands for Financial Independence, Retire Early. It is a movement focused on aggressive saving and investing so you can stop working full-time much earlier than the traditional retirement age. The goal is to build a portfolio large enough to cover your living expenses indefinitely.

Traditional retirement usually happens at 60 to 67. FIRE aims for financial independence decades earlier by saving 50% or more of your income. The math relies on keeping expenses low and investing the difference in broad market index funds.

Not necessarily. Many people who reach FIRE continue working on projects they enjoy. The point is that work becomes optional because your investments cover your expenses. Some call this "work optional" rather than full retirement.

Lean FIRE means retiring on a very low budget, often under $40,000/year. Fat FIRE targets a more comfortable lifestyle with higher spending. Barista FIRE means you have most of your expenses covered but work part-time for extras or health insurance.

You need your annual expenses (or income minus savings), current savings, expected annual savings going forward, and an assumed investment return rate. The FIRE number is typically 25 times your annual expenses based on the 4% withdrawal rule.

Track all your spending for a few months including housing, food, insurance, transport, and entertainment. Your annual expenses equal your income minus what you save. Be honest about discretionary spending since underestimating expenses is the most common FIRE planning mistake.

The safe withdrawal rate is the percentage of your portfolio you can spend each year without running out of money. The most cited number is 4%, based on the Trinity Study, which showed a 4% initial withdrawal (adjusted for inflation) survived 30 years in most historical scenarios.

The US stock market has returned roughly 7% per year after inflation over the past century. This is a long-term average and individual years vary widely. A diversified index fund portfolio is the most common way FIRE planners aim for this return.

FIRE is more achievable with a higher income and lower cost of living, but the core principles apply to anyone. Even if early retirement is not realistic, saving aggressively still brings financial security. The gap between income and expenses is what matters most.

Inflation erodes purchasing power over time, meaning your expenses will rise. Using a 7% return already accounts for roughly 3% inflation (real return is about 4%). Your FIRE number should be based on today's expenses, and the 4% rule adjusts withdrawals for inflation each year.