FIRE number
$1,000,000
FIRE Number Calculator
FIRE = Financial Independence, Retire Early. Here is the number you are aiming at.
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You will spend / year
%
Your FIRE number
$1,000,000
At $40,000/yr, you need about $1,000,000. 20 years away at your pace.
Years to reach
20
Monthly income
$3,333
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How this is calculated
FIRE number = annual spending / withdrawal rate. The 4% rule (a 4 percent withdrawal rate) is the same as needing 25x your annual expenses. The years to reach assume a 7% return on your invested balance.That number won't hit itself, and idle cash never gets there.
Start closing the gap with OpenTradeEstimate based on your inputs. Not financial advice. Past performance does not guarantee future results.
How the FIRE number is calculated
Your FIRE number is the size of the portfolio that can fund your lifestyle without a paycheck. It comes straight from your spending and the rate you plan to withdraw each year.
- Estimate your annual spending in retirement, the money you need each year to live.
- Divide it by your withdrawal rate. At the 4% rule that is the same as multiplying by 25, because 1 divided by 0.04 equals 25.
- The result is your FIRE number, the invested balance that can support that spending indefinitely.
What is the 4% rule?
The 4% rule says you can withdraw about 4 percent of your portfolio in your first year of retirement, then adjust that amount for inflation each year, with a low chance of running out over a 30 year retirement. A 4 percent rate is why a FIRE number is often quoted as 25 times your annual expenses.
Is a 4% withdrawal rate safe?
It is a rule of thumb, not a guarantee. It came from historical US market data and assumes a diversified portfolio. Early retirees with a longer horizon, or anyone worried about a weak first decade of returns, often use a lower rate like 3 to 3.5 percent, which raises the FIRE number.