How to use the FIRE calculator
- Estimate annual retirement expenses paid from the portfolio—not current salary.
- Enter current investable savings, excluding cash or property your plan will not spend.
- Add the amount you expect to contribute at each year-end.
- Use an expected real annual return after inflation, preferably after fees.
- Choose a withdrawal-rate scenario and stress-test lower returns or higher expenses.
Include housing, food, healthcare, insurance, taxes on withdrawals, travel and irregular costs. Reliable pension or Social Security income may offset spending during the years it is actually received, but bridge years before benefits begin need separate funding.
How the FIRE number is calculated
The basic calculation divides annual portfolio-funded spending by a chosen initial withdrawal rate. A 4% assumption equals 25 times annual expenses.
FIRE target
FIRE number F = annual expenses E ÷ withdrawal rate w
The accumulation model uses current savings B₀, annual end-of-year contribution C, real return r, and years n. Years to FIRE is the first whole year in which projected balance reaches the target.
Portfolio accumulation
Bₙ = B₀(1 + r)^n + C × [((1 + r)^n − 1) ÷ r]
What the 4% rule actually means
The convention is commonly interpreted as withdrawing 4% of the starting portfolio during the first retirement year, then adjusting that dollar amount for inflation. It does not mean withdrawing exactly 4% of the changing balance every year, and it does not promise that money lasts forever.
The rule grew from William Bengen’s 1994 study of historical U.S. stock-and-bond returns over retirement periods of about 30 years. Actual results depend on retirement length, allocation, fees, taxes, inflation, spending flexibility and especially the order of returns. A much longer early retirement may require a lower starting rate or flexible spending. Read the original study record.
Worked FIRE examples
$50,000 annual spending
At 4%, the target is $1,250,000. Starting with $25,000, saving $24,000 annually and assuming 7% real growth reaches it in 22 years, at about $1.287 million.
$40,000 annual spending
The 4% target is $1,000,000. Starting with $200,000 and adding $30,000 at 5% real growth reaches about $1.063 million after 15 years.
$72,000 annual spending
The target is $1,800,000. Starting with $750,000 and adding $50,000 at 4% real growth first exceeds it after 11 years, at about $1.829 million.
Important: each example uses a smooth hypothetical return. A 7% real return is optimistic and should never be treated as a forecast.
Assumptions and limitations
The projection supplies no probability of success and does not model historical or Monte Carlo return paths. Contributions arrive at year-end, while expenses, contributions and the target remain in real dollars. It excludes sequence-of-returns risk during retirement.
Taxes, account restrictions, fees, healthcare shocks, long-term care, pensions, Social Security, home equity and inheritances are excluded unless reflected in your inputs. The chosen withdrawal rate is a rule of thumb, not a guarantee or personalized recommendation. Revisit the plan regularly before making an irreversible retirement decision.
Use the compound interest calculator to isolate return assumptions, or the DCA calculator to model recurring monthly investments.
Common questions
FIRE Calculator FAQs
What is the 4% rule in FIRE?
It is a planning convention: withdraw 4% of the initial portfolio in year one, then generally adjust that dollar amount for inflation. Historical survival under selected assumptions does not guarantee future success.
Why is the FIRE number 25 times annual expenses?
Four percent is one twenty-fifth of a portfolio. Dividing annual expenses by 0.04 is therefore the same as multiplying them by 25.
Should FIRE calculator returns be before or after inflation?
Use a real return after inflation because the target is stated in today’s dollars. Ideally reduce it for investment fees too. A nominal-return model would also need to inflate future expenses and the target.
Does home equity count toward my FIRE number?
Usually not unless the plan includes selling, downsizing, borrowing against or generating income from the home. Investable assets are more directly available to support withdrawals.
Should I subtract Social Security or pension income from FIRE expenses?
You may subtract reliable after-tax income received during the modeled period. If benefits begin later, separately fund earlier bridge years instead of treating the income as immediately available.
How accurate is a years-to-FIRE calculation?
It shows one mathematical scenario, not a prediction. Actual timing changes with returns, inflation, contributions, taxes, fees and life events. Test several conservative scenarios.
What withdrawal rate should an early retiree use?
There is no universally safe rate. A 3% rate implies about 33.3 times annual expenses, 3.5% implies 28.6 times, and 4% implies 25 times. Lower rates reduce some risk but cannot eliminate it.
What are Lean FIRE, Coast FIRE and Barista FIRE?
Lean FIRE targets lower spending. Coast FIRE means existing investments may grow toward a later target without new contributions. Barista FIRE combines part-time income with partial portfolio withdrawals.