Free calculator · 4% rule
FIRE Number Calculator
A FIRE number is the amount you need invested for your portfolio to pay your living costs: your yearly spending divided by your safe withdrawal rate, which is 25 times your yearly spending under the 4% rule.
At a 4% withdrawal rate, spending €40,000 a year needs €1,000,000 invested. With €100,000 invested now, saving €20,000 a year at a 5% real return gets you there in 20 years, 11 months.
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How to calculate your FIRE number
Divide what you spend in a year by the share of your portfolio you plan to withdraw each year:
FIRE number = yearly spending ÷ withdrawal rateAt 4%: FIRE number = yearly spending × 25
The withdrawal rate is the share of your portfolio you take out in your first year of retirement. Under the 4% rule, you then take the same amount, raised with inflation, every year after. A lower rate is more cautious and needs a bigger portfolio: at 3.5% your FIRE number is about 28.6 times your spending, and at 3% it is about 33.3 times.
The time to FIRE starts from what you have invested now, adds what you save each month, and grows the total at your real return, compounded monthly, until it reaches your FIRE number.
Worked example
Say you spend €40,000 a year and plan to withdraw 4%.
- Your FIRE number is €40,000 ÷ 0.04 = €1,000,000, 25 times your yearly spending.
- You have €100,000 invested, so you're 10% of the way there.
- You save €20,000 a year, about €1,667 a month. At a 5% real return, your investments reach €1,000,000 in 20 years and 11 months.
- Plan with a 3.5% withdrawal rate instead, and your FIRE number rises to €1,142,857.
Assumptions
- Everything is in today's money. The return is a real return, after inflation, so your spending and your FIRE number don't need adjusting for inflation.
- The return is the same every year. Real markets rise and fall, and a fall early in retirement does more damage than the average suggests (sequence of returns risk).
- Tax and fees aren't modelled. Include tax on withdrawals in your spending, and use a return after fees.
- Pensions and other income aren't included: the portfolio pays for all of your spending.
- The default 5% real return is the assumption the Addeo app uses in its briefing. It is not a forecast: try 3% or 4% to see a more cautious plan.
- The 4% rule comes from historical US returns over 30-year retirements. It is a rule of thumb, not a guarantee.
FIRE number FAQ
What is the 4% rule?
The 4% rule says you can withdraw 4% of your portfolio in your first year of retirement, then the same amount adjusted for inflation each year, with a high chance of the money lasting 30 years. It comes from US research on historical stock and bond returns: William Bengen's 1994 study and the 1998 Trinity study. It's a rule of thumb from past data, not a guarantee.
Is 4% a safe withdrawal rate for early retirement?
The research behind the 4% rule looked at 30-year retirements. If you stop work at 40, your money may need to last 50 years or more, so many early retirees plan with 3% to 3.5% for extra margin. That raises the FIRE number to between about 28.6 and 33.3 times yearly spending.
Does my home count towards my FIRE number?
Usually not. Count only the investments you'll draw on to pay your living costs. Home equity counts only if you plan to sell or downsize, and then only the money you'd free up. If you'll still pay rent or a mortgage in retirement, include it in your spending.
How do pensions and Social Security affect my FIRE number?
This calculator assumes your portfolio pays for everything. If a workplace pension, the State Pension or Social Security will cover part of your spending, subtract that income from your yearly spending and you need less. If it only starts years after you stop work, your portfolio has to cover all of your spending until then, so the simple subtraction understates what you need.
What are Lean FIRE, Fat FIRE, Coast FIRE and Barista FIRE?
They're the same idea with different budgets or paths. Lean FIRE means retiring on a frugal budget, and Fat FIRE on a generous one. Coast FIRE means having enough invested that growth alone will reach your FIRE number by a normal retirement age, so you only need to earn enough to cover today's costs. Barista FIRE means part-time work pays for part of your spending, so your portfolio can be smaller.
Does this calculator store or send my numbers?
No. The maths runs in your browser, and the page is built so it can't send data anywhere. It has no analytics and no tracking, and it doesn't save what you type.
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