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How to Use This Calculator
- Enter Your Financial Snapshot: Input your current age, investments, monthly contributions, and other personal financial details.
- Define Your Goals: Specify your desired retirement age and the annual spending you anticipate in retirement.
- Set Your Assumptions: Provide estimates for your annual investment return and the long-term inflation rate.
- Calculate Your FIRE Date: Click the "Calculate" button to see your personalized projection.
- Analyze Your Plan: Review the chart, summary, and insights to understand your path to financial independence and how different variables impact your timeline.
Calculating Your FIRE Number: A Numerical Example
The core of FIRE planning is determining your "FIRE Number"—the amount of money you need to have invested to become financially independent. The calculation is surprisingly simple and is based on the widely-used 4% Safe Withdrawal Rate (SWR).
Let's walk through an example:
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Step 1: Estimate Your Annual Retirement Expenses.
First, determine how much you'll need to live on per year in retirement. This is the most crucial step. Let's assume you need $50,000 per year to live comfortably. -
Step 2: Apply the "Rule of 25".
The "Rule of 25" is the inverse of the 4% rule (100 / 4 = 25). It states that you need to save 25 times your planned annual expenses to reach financial independence. -
Step 3: Calculate Your FIRE Number.
Now, multiply your annual expenses by 25.
Formula: Annual Expenses × 25 = Your FIRE Number
$50,000 × 25 = $1,250,000
In this example, your FIRE Number is $1,250,000. This is the target portfolio value you need to reach. Once you have this amount invested, you can theoretically withdraw 4% ($50,000) each year to cover your living expenses, allowing your portfolio to sustain you throughout a long retirement.
Enter Your Details
Your Projection
Portfolio Growth Over Time
Summary & Insights
Real-World Scenarios
The Aggressive Saver (Alex): Alex is 25, earns $70,000, and already has $20,000 invested. By adopting a "Lean FIRE" approach—living with roommates and minimizing discretionary spending—Alex manages to save and invest $2,000 every month. This high savings rate (over 40% of pre-tax income) is the cornerstone of their plan. Assuming a 7% average annual return, the combination of aggressive contributions and a long time horizon for compounding allows Alex to reach a $1 million portfolio by age 45. This scenario highlights how starting early and maintaining discipline can dramatically shorten a traditional career path.
The Late Starter (Brenda): Brenda is 40 with a stable career earning $90,000, but focused on other goals earlier in life. She now has $50,000 in investments and is ready to get serious about retirement. Her challenge is a shorter time horizon. While her contribution of $1,500/month is substantial, her initial projection shows her reaching her $1 million goal in her early 60s. This doesn't mean early retirement is impossible. Brenda can use this calculator to model changes, such as finding ways to increase her monthly contribution to $2,500 by reducing expenses or generating side income. Seeing the direct impact on her retirement age can provide powerful motivation to adjust her strategy.
Related Calculators
- SIP Calculator for Growing Contributions – Explore how your investments grow over time with annual step-ups.
- Retirement Readiness Calculator – Check if your current savings are on track for retirement.
- Emergency Fund Calculator – Make sure you’re protected with a rainy-day fund before retiring early.
Frequently Asked Questions (FAQs)
Does this calculator account for inflation?
Yes, indirectly. For the most accurate projection in today’s dollars, use a real rate of return (expected return minus inflation rate). By default, the calculator uses your nominal return.
How does the 4% Rule work?
The 4% Rule (from the Trinity Study) suggests withdrawing 4% of your portfolio’s initial value—adjusted annually for inflation—with a high probability it will last 30 years. It assumes a diversified portfolio (typically ≥50% stocks).
What if I want a more conservative withdrawal rate?
If your portfolio tilts more toward bonds or cash, consider lowering your rate to 3%–3.5%. A smaller rate helps protect you against lower long-term returns and severe market downturns.
What if I want a more conservative withdrawal rate?
If your portfolio is more bond-heavy, consider lowering your rate to 3%–3.5%. For example, on a $1,000,000 portfolio:
- At 4% → $40,000/year withdrawn
- At 3.5% → $35,000/year withdrawn
- At 3% → $30,000/year withdrawn
A lower rate cushions against market dips and can help your nest egg last longer.
Can part-time income accelerate my FIRE timeline?
Absolutely. By combining passive withdrawals with side income (e.g., freelancing, rental income), you can safely draw down less from your portfolio and potentially retire years earlier than the calculator’s baseline suggests.
How often should I update my inputs?
Review your savings rate, investment returns, and expenses at least annually. Markets and personal situations change—updating inputs keeps your projected FIRE age accurate and actionable.