How to use this calculator
- Enter your Annual spending: what you expect to spend per year once you stop working.
- Add what you have Invested today and the Amount you invest per year.
- Set the Real annual return, which is the return after inflation, so all figures stay in today's money.
- Choose a Safe withdrawal rate, then read your financial independence number, progress today and years to reach it.
The FIRE number
Financial independence means your portfolio can pay for your life without a salary. The target is found by turning the withdrawal rate around: if you can take out 4% a year, you need 25 times your annual spending. A 3.5% rate needs about 28.6 times.
FIRE number = Annual spending / Withdrawal rate; Balance(y) = Balance(y−1) × (1 + r) + S- Annual spending = what you expect to spend per year in retirement
- Withdrawal rate = share of the portfolio withdrawn per year (4% = 0.04)
- r = real annual return (after inflation)
- S = amount you invest each year
The calculator then adds your yearly investing to the balance, grows it by the real return, and counts the years until the portfolio crosses the target.
Example: $48,000 of spending
Suppose you spend $48,000 a year, have $150,000 invested and add $36,000 a year at a 5% real return. At a 4% withdrawal rate your number is $1,200,000, you are 12.5% of the way there, and you reach it in 17 years with $1,274,055.94.
Using a more cautious 3.5% rate lifts the target to $1,371,428.57 and the timeline to 18 years. A small change in the rate adds a year because the target moves by about $171,000.
The two levers: spend less or invest more
Spending appears twice: it sets the target, and whatever you do not spend can be invested. Cutting spending from $48,000 to $36,000 lowers the target to $900,000 and shortens the timeline to 13 years in the same example, assuming you keep investing the same $36,000.
Raising investing from $36,000 to $48,000 a year gets you there in 14 years. Both help, but lower spending usually has the larger effect because it works on both sides of the equation. See what your savings rate is on the budget calculator.
Using the result
Treat the output as a roadmap, not a date. Check your progress each year and adjust. If the years to FIRE are too many, change one lever at a time. If you plan to retire in your 40s, a withdrawal rate below 4% gives more margin, since the portfolio must last longer. The retirement calculator is better for a traditional retirement age with nominal returns and a pension timeline.
Keep an emergency fund separate from the invested portfolio so a surprise bill never forces you to sell at a bad time.
What the calculator does not cover
It assumes a constant real return, a fixed withdrawal rate that holds up forever, and constant spending. Real markets are volatile, and a poor sequence of early returns can break a plan that works on average. It also leaves out taxes, health insurance before government coverage begins, changing expenses, part-time income and one-off costs. The 4% figure comes from historical studies of US markets over particular periods and is not guaranteed for you.
Frequently asked questions
What does FIRE stand for?
Financial Independence, Retire Early. The idea is to build a portfolio that covers your spending so work becomes optional.
Why use a real return?
A real return is after inflation, so your spending and portfolio stay in today's money and you do not have to inflate the target.
What is the 4% rule?
It says you can withdraw 4% of your starting portfolio each year, adjusted for inflation, and expect it to last about 30 years in historical US data. It is a guideline, not a promise.
How can I reach FIRE faster?
Reduce spending, raise the amount you invest, or both. Higher returns help but carry more risk, so do not rely on them.
What if the calculator says it never reaches the target?
Your yearly investing is probably too small compared with your spending. Increase investing or lower the spending target.