FIRE Calculator: Financial Independence
Calculate your path to Financial Independence, Retire Early. Discover your FIRE number and when you can achieve financial freedom.
Master the FIRE Movement
What is FIRE?
FIRE = Financial Independence, Retire Early
A lifestyle movement focused on extreme savings and investment to achieve financial independence and retire far earlier than traditional retirement ages (typically in your 30s or 40s).
The Core Principle: Save 50-70% of your income, invest aggressively, and live off 4% of your portfolio indefinitely.
The FIRE Formula
Your FIRE Number = Annual Expenses x 25
This is based on the 4% safe withdrawal rate (the "Trinity Study")
Example: $50,000/year expenses = $1,250,000 FIRE number
Savings Rate = (Income - Expenses) / Income
The most powerful lever in your FIRE journey
50% savings rate = ~17 years to FIRE | 70% = ~8.5 years
The Power of Savings Rate
- • 10% savings rate: 51 years to FIRE
- • 25% savings rate: 32 years to FIRE
- • 50% savings rate: 17 years to FIRE
- • 75% savings rate: 7 years to FIRE
Types of FIRE
Lean FIRE
- • Minimalist lifestyle
- • $25,000-$40,000/year spending
- • FIRE number: $625K-$1M
- • Achieve faster, less flexibility
Regular FIRE
- • Moderate lifestyle
- • $40,000-$60,000/year spending
- • FIRE number: $1M-$1.5M
- • Balanced approach
Fat FIRE
- • Comfortable/luxurious lifestyle
- • $80,000-$150,000+/year spending
- • FIRE number: $2M-$4M+
- • More flexibility, takes longer
Coast FIRE
- • Enough saved to coast to 65
- • Can stop aggressive saving
- • Work part-time or passion job
- • Less stress, more flexibility
Barista FIRE
Work a low-stress part-time job for healthcare benefits while investments grow. Named after people who work at Starbucks for insurance.
FIRE Acceleration Strategies
Reduce Expenses
- • House hack (rent out rooms)
- • Drive used cars (or no car)
- • Cook at home 90%+ of meals
- • Cancel subscriptions ruthlessly
- • Geo-arbitrage (move to LCOL area)
Increase Income
- • Negotiate salary aggressively
- • Job hop every 2-3 years
- • Build side income streams
- • Develop high-income skills
- • Start a business
FIRE Pitfalls to Avoid
- Underestimating healthcare costs (can be $15,000-$25,000/year pre-Medicare)
- Ignoring sequence of returns risk (early bad years devastate portfolios)
- Not planning for lifestyle inflation or children
- Sacrificing health/relationships for higher savings rate
- Not having a plan for purpose/meaning after FIRE
- Using too aggressive withdrawal rate (3.5% is safer for early retirees)
Your FIRE Action Plan
- Calculate your FIRE number using the calculator
- Track every expense for 3 months to understand spending
- Maximize tax-advantaged accounts (401k, IRA, HSA)
- Invest in low-cost index funds (VTSAX, VTI)
- Build multiple income streams
- Review and optimize monthly - treat savings like a game
Frequently Asked Questions
THE BASIC FORMULA:
FIRE Number = Annual Expenses x 25
This is based on the 4% safe withdrawal rate from the Trinity Study, which found that withdrawing 4% of your portfolio annually (adjusted for inflation) has a 95%+ success rate over 30 years.
EXAMPLES:
• $30,000/year expenses = $750,000 FIRE number
• $50,000/year expenses = $1,250,000 FIRE number
• $80,000/year expenses = $2,000,000 FIRE number
• $100,000/year expenses = $2,500,000 FIRE number
ADJUSTING FOR EARLY RETIREMENT:
If retiring before 50, consider using 3.5% or even 3% withdrawal rate:
• 4% rule: Expenses x 25
• 3.5% rule: Expenses x 28.6
• 3% rule: Expenses x 33.3
For early retirees (40+ year retirement):
$50,000 expenses at 3.5% = $1,428,571 needed (vs $1.25M at 4%)
KEY INSIGHT: Reducing expenses by $10,000/year reduces your FIRE number by $250,000. Cutting expenses is often faster than earning more!