How to Calculate Your FIRE Number and When You Can Retire
Find your financial independence number with the 4% rule, see how your savings rate sets your timeline, and what Coast FI means, with a free calculator.
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Free tool: FIRE CalculatorFIRE stands for financial independence, retire early: saving and investing enough that your portfolio can cover your living costs, so work becomes optional. Two numbers drive the whole plan: how much you need, and how fast your savings rate gets you there. This guide explains both, using the free FIRE Calculator.
Your FI number
FI number = yearly spending in retirement ÷ safe withdrawal rate
At the classic 4% withdrawal rate, that's 25 times your yearly spending. Spending $50,000 a year means an FI number of $1,250,000.
The 4% rule comes from studies of US market history in which withdrawing 4% of a portfolio in the first year, then adjusting for inflation, lasted at least 30 years in most periods. Early retirees planning for 40 or 50 years often use 3% to 3.5% to be safer. At 3.5%, the FI number for $50,000 of spending rises to about $1,428,571.
Your savings rate sets the timeline
Your savings rate, the share of take-home pay you save, matters more than your income, because it raises how much you invest and lowers how much you need at the same time.
Example: age 30, $50,000 invested, $90,000 a year take-home pay, spending $50,000 (the same in retirement), a 5% real return (after inflation) and a 4% withdrawal rate:
- Savings rate: 44% ($40,000 a year)
- FI number: $1,250,000
- Financially independent in 17.8 years, around age 48
How the savings rate changes the timeline, starting from the same $50,000:
| Savings rate | Years to FI |
|---|---|
| 10% | 46.1 |
| 20% | 33.8 |
| 30% | 25.9 |
| 40% | 20.0 |
| 50% | 15.3 |
| 60% | 11.3 |
| 70% | 7.9 |
Cutting spending to $36,000 (a 60% savings rate) lowers the FI number to $900,000 and gets there in about 11.3 years.
Coast FI
Coast FI is the amount that, invested today, would grow to your FI number by a traditional retirement age without any more saving. In the example, that's about $226,613 to reach $1,250,000 by 65. Once you pass it, you only need to earn enough to cover your current spending.
Plan for the risks
- Health insurance before Medicare at 65 can be a large cost for early retirees.
- Sequence of returns: a market crash early in retirement does more damage than one later.
- Taxes on withdrawals depend on which accounts your money is in.
- Spending changes: retirement spending can differ from today's, up or down.
The calculator uses a real return, so all amounts are in today's dollars. For a traditional retirement plan, see How Much Do I Need to Retire?
How to use the FIRE Calculator
- Open the FIRE Calculator.
- Enter your age, invested savings and yearly take-home income.
- Enter your yearly spending now and in retirement, in today's dollars.
- Enter a real return (after inflation) and your safe withdrawal rate.
- Read the results: when you could be financially independent, your FI number, savings rate, years to FI and Coast FI number, with a chart of your portfolio against your FI number and a table of years to FI by savings rate.
Frequently asked questions
How do I calculate my FIRE number?
Divide your yearly retirement spending by your withdrawal rate. At 4%, multiply your spending by 25: $50,000 a year needs $1,250,000.
What savings rate do I need to retire early?
It depends on your starting point and returns, but in the example a 50% savings rate reaches FI in about 15 years, and 70% in about 8.
Is the 4% rule safe for early retirement?
It was based on 30-year retirements. For longer retirements, many people plan around 3% to 3.5% or stay flexible with spending.