FIRE Calculator: How Much Do You Need to Retire Early?

Ready to escape the 9-to-5? The FIRE (Financial Independence, Retire Early) movement has helped thousands achieve early retirement. Our FIRE calculator shows you exactly how much you need to save, when you can retire, and how your investments will grow along the way.

What is FIRE?

FIRE stands for Financial Independence, Retire Early. It is a lifestyle movement focused on achieving financial freedom through aggressive saving, investing, and minimising expenses. The goal is to accumulate enough wealth that your investment returns can cover your living expenses indefinitely, allowing you to retire decades earlier than the traditional retirement age.

The core principle is simple: save a significant portion of your income (typically 50-70%), invest it wisely in low-cost index funds, and let compound growth do the heavy lifting. Once your portfolio reaches a certain size, known as your "FIRE number," you can live off the returns without depleting your principal.

How to Use This Calculator

Our FIRE calculator helps you determine how long it will take to achieve financial independence based on your current situation and savings rate. Here is what each input means:

• Current Age: Your age today, used to calculate your retirement age
• Current Savings: The total amount you have already saved and invested
• Monthly Contribution: How much you can invest each month towards your FIRE goal
• Annual Expenses in Retirement: How much you expect to spend per year once you stop working
• Expected Annual Return: The average return you expect from your investments (7-8% is typical for a stock-heavy portfolio)
• Safe Withdrawal Rate: The percentage of your portfolio you will withdraw each year in retirement (4% is the traditional guideline)
• Annual Contribution Increase: Optional increase to your monthly contributions each year as your income grows

The calculator shows your FIRE number (the total portfolio size needed), how many years until you reach it, and your projected retirement age. The chart visualises your portfolio growth over time compared to your target FIRE number.

Understanding Your FIRE Number

Your FIRE number is calculated using a simple formula:

FIRE Number = Annual Expenses / Safe Withdrawal Rate

For example, if you need $40,000 per year to live comfortably and use the 4% withdrawal rate:

$40,000 / 0.04 = $1,000,000

This means you would need a portfolio of $1 million to safely withdraw $40,000 per year without running out of money. The 4% rule is based on historical research suggesting that a diversified portfolio can sustain this withdrawal rate for 30+ years, even accounting for market downturns and inflation.

The 4% Rule Explained

The 4% rule originated from the Trinity Study, which analysed historical market data to determine a safe withdrawal rate for retirees. The research found that withdrawing 4% of your portfolio in the first year of retirement, then adjusting for inflation each subsequent year, had a high probability of lasting at least 30 years.

However, the 4% rule has limitations:

• It assumes a 30-year retirement: If you retire at 35, you may need your money to last 50-60 years
• It is based on historical US market data: Future returns may differ
• It does not account for flexibility: Most retirees can adjust spending during market downturns

Many in the FIRE community use a more conservative 3.5% or even 3% withdrawal rate to provide additional safety margin, especially for very early retirees. You can adjust the withdrawal rate in the calculator to see how it affects your FIRE number.

Types of FIRE

The FIRE movement has evolved into several variations to suit different lifestyles and goals:

• Lean FIRE: Achieving financial independence with minimal expenses, typically under $40,000 per year. Requires a smaller portfolio but demands a frugal lifestyle.
• Fat FIRE: Retiring with a more comfortable budget, often $100,000+ per year. Requires a larger portfolio but allows for more lifestyle flexibility.
• Barista FIRE: Semi-retirement where you work part-time to cover some expenses and healthcare, reducing the portfolio size needed.
• Coast FIRE: Having enough invested that compound growth will reach your FIRE number by traditional retirement age without additional contributions.

Tips for Reaching FIRE Faster

• Increase your savings rate: The single biggest factor in how quickly you reach FIRE. Even a 5% increase can shave years off your timeline.
• Reduce your largest expenses: Housing, transport, and food typically make up 60-70% of spending. Optimising these has the biggest impact.
• Invest in low-cost index funds: Keeping investment fees low means more of your returns compound over time. Use our ETF fee calculator to see the impact of fees.
• Increase your income: Career advancement, side hustles, or skills development can accelerate your savings rate significantly.
• Track your net worth: Regular monitoring keeps you motivated and helps identify areas for improvement.
• Avoid lifestyle inflation: As your income grows, maintain your current lifestyle and invest the difference.

Related Financial Calculators

Planning for FIRE involves understanding multiple aspects of your finances. Explore our other free calculators:

• Compound Growth Calculator - See how your investments grow over time and understand the power of compounding
• ETF Fee Calculator - Compare fund costs and see how fees impact your long-term returns
• Dividend Investing Calculator - Project passive income from dividend-paying investments

Start Your FIRE Journey

Achieving financial independence requires consistent investing over many years. The right brokerage platform can make a significant difference through lower fees, better tools, and a wider range of investment options.

Browse our broker reviews to find a platform that suits your investing style, or explore our detailed reviews:

• Trading 212 - Commission-free investing with fractional shares and an ISA option
• Interactive Brokers - Low-cost platform popular with serious FIRE investors
• Lightyear - Simple, low-cost European broker for long-term investors
• eToro - Popular social trading platform with copy trading features

Not sure which broker is right for you? Use our free broker matching tool to get personalised recommendations based on your goals.