Where the FIRE number comes from
FIRE stands for Financial Independence, Retire Early. Your FIRE number is the portfolio size at which investment withdrawals can cover your spending indefinitely, or at least for a very long retirement. The usual shortcut is to multiply yearly spending by 25, which is the same as dividing it by a 4% withdrawal rate.
FIRE number = (yearly spending − other income) ÷ withdrawal rate
Spending $50,000 a year gives a FIRE number of $1.25 million at 4%. If a pension, rental income or part-time work will cover some of that, subtract it first, since every dollar of other income reduces the portfolio you need by $25.
Choosing a withdrawal rate
The 4% figure comes from studies of historical US market returns over 30-year retirements. Early retirees may need their money to last 40 or 50 years, so many use 3.25% to 3.5% for extra safety, which raises the target to roughly 29 to 31 times spending. The bars show how much the choice moves your number.
Spending is the input that deserves the most care. Track a full year of real spending, include healthcare, which can be a large cost before Medicare eligibility at 65 in the US, and allow for lumpy items like cars and home repairs.
How long it will take
The second half of the calculation projects your invested balance forward using a real return, meaning a return after inflation. That keeps everything in today's money, so a FIRE number of $1.25 million still means $1.25 million of today's buying power when you get there. A real return of 4% to 5% is a common planning figure for a stock-heavy portfolio.
Common questions
What is the FIRE number for $40,000 a year?
$1 million at a 4% withdrawal rate, or about $1.14 million at 3.5%.
Is the 25x rule safe?
It has held up well historically for 30-year retirements. For longer early retirements, 28x to 33x adds margin.
Should my FIRE number include my house?
Usually not, unless you plan to sell it or rent it out. Count only assets that will produce income or be sold to fund spending.
What about taxes in retirement?
Include the tax you expect to pay on withdrawals in your yearly spending figure.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.