How to calculate your FIRE number (and when you can actually retire)

FIRE stands for Financial Independence, Retire Early. The movement is built around a single idea: save enough money that your investments generate more income than you spend each year. Once that happens, work becomes optional.

Your FIRE number is the specific portfolio value at which you cross that threshold. Calculating it is straightforward. Understanding what drives it, and how to reach it faster, takes more nuance.

The 4% rule

The 4% rule comes from the Trinity Study, a 1998 analysis of historical US stock and bond market returns. It found that if you withdraw 4% of your portfolio in year one and adjust for inflation each year after, a diversified portfolio has historically lasted at least 30 years in 95%+ of historical scenarios.

This gives you the formula for your FIRE number:

FIRE number = annual expenses × 25

If you spend $40,000 per year, your FIRE number is $1,000,000. If you spend $60,000 per year, it is $1,500,000.

The multiplier is 25 because 1 ÷ 4% = 25. Some people prefer a 3% or 3.5% withdrawal rate for more safety margin, which gives a 33× or 28.6× multiplier respectively.

FIRE variants and what they mean for your target

Lean FIRE

Living on a frugal budget — often under $30,000 per year for a single person, $40,000 for a couple. The FIRE number is lower but the lifestyle is more constrained. Common in lower cost-of-living areas or for people with low fixed costs.

Standard FIRE

Retiring on roughly your current spending. No dramatic lifestyle change — the goal is freedom, not austerity.

Fat FIRE

Retiring on a generous budget that allows for travel, dining, and discretionary spending without anxiety. Often $80,000 to $120,000 per year or more. The FIRE number is substantially higher but allows more margin.

Coast FIRE

A milestone rather than a final number: the point at which your current investments, if left untouched, will grow to your full FIRE number by a standard retirement age. Once you reach Coast FIRE, you only need to cover your current expenses — you no longer need to invest aggressively. Many people find this milestone more achievable and motivating than full FIRE.

What drives your timeline

The single most powerful variable in your FIRE timeline is your savings rate, not your income. This is counterintuitive but mathematically robust:

• 10% savings rate: approximately 40 years to FIRE from zero
• 20% savings rate: approximately 32 years
• 30% savings rate: approximately 25 years
• 50% savings rate: approximately 16 years
• 75% savings rate: approximately 7 years

These are approximate, assuming 7% real annual returns and a 25× FIRE multiple. The point holds regardless of the exact numbers: doubling your savings rate cuts your timeline roughly in half. A 10% raise has far less impact than a 10% reduction in expenses.

The actual calculation

To calculate your personalised FIRE timeline:

1. Calculate your current net worth: total assets minus total liabilities
2. Calculate your annual expenses: what you actually spend in a year, not what you think you spend
3. Set your FIRE number: annual expenses × 25 (or your chosen multiple)
4. Calculate the gap: FIRE number minus current invested assets
5. Model the growth: using your expected annual contribution and an assumed real return (5% to 7% is commonly used)

The output is a projected year at which your portfolio crosses your FIRE number. Adjust the contribution amount, the expected return, or the spending target to see how each variable shifts the timeline.

What most FIRE calculators get wrong

Most online FIRE calculators use nominal returns (before inflation). A 10% nominal return with 3% inflation is a 7% real return. The distinction matters: your FIRE number is set in today's dollars, so you need to model returns in real (inflation-adjusted) terms. Using nominal returns overstates how quickly your portfolio will grow in purchasing-power terms.

A good FIRE calculator should also let you model Coast FIRE explicitly, since that milestone arrives significantly earlier than full FIRE and is motivating to track.

Track your progress

The most useful habit in any FIRE journey is a monthly net worth calculation. It takes 10 minutes and provides the most direct measure of financial progress there is. Most people who reach FIRE cite this monthly review as the single habit that kept them on track.