What is FIRE?
Financial Independence, Retire Early (FIRE) is a personal finance strategy built on one idea: accumulate enough invested assets that your portfolio generates more income than you spend — making work optional. The earlier you want to retire, the more you need to save, and the longer your portfolio has to last.
This calculator models both phases of the journey in one chart. The purple section shows your portfolio growing through the accumulation phase — contributions compounding toward retirement. The amber section shows the withdrawal phase — annual income drawn down as your portfolio hopefully continues to compound. If the line stays above zero, your plan works.
The 4% rule and your FIRE number
The most widely cited FIRE benchmark is the 4% rule, derived from the Trinity Study: a retiree drawing 4% of their portfolio annually (adjusted for inflation each year) has historically had a very high probability of not running out of money over 30 years. This implies your target portfolio is roughly 25× your annual spending.
For longer retirements — retiring at 40 instead of 65 means potentially 50+ years of withdrawals — many FIRE practitioners use a more conservative 3–3.5% withdrawal rate, implying a target of 28–33× annual expenses. The important thing is to stress-test your number with this calculator, not just work backwards from a rule of thumb.
Why inflation is the hidden variable
Entering retirement income in today's dollars is intentional. Inflation erodes purchasing power: $80,000 today will require roughly $119,000 in nominal terms in 20 years at 2% annual inflation. This calculator inflates your withdrawal each year so the comparison stays in real terms — your actual dollar withdrawals grow, but your real standard of living stays constant. Small differences in the assumed inflation rate (say, 2% vs 3%) can materially shift the outcome over a 30+ year retirement horizon. Use the compound interest calculator to model how changes in return assumptions affect your accumulation target.
Frequently Asked Questions
How much annual income should I enter?
Enter your expected annual spending in retirement, in today's dollars. A common starting point is your current annual expenses, minus work-related costs (commuting, work clothes, lunches), plus healthcare. The 4% rule says your portfolio should be 25× this number — so if you enter $80,000 per year, your implied target portfolio is $2,000,000.
Why is retirement income entered in today's dollars?
Entering income in today's dollars makes the number intuitive — you know what $80,000 buys today. The calculator inflates your withdrawal amount each year using the inflation rate you provide, so in nominal terms your actual withdrawals grow over time. This correctly models real purchasing power: you withdraw more dollars each year, but each dollar buys the same amount as it does today.
What growth rate should I use during retirement?
Many planners use a lower rate in retirement than during accumulation, as portfolios typically shift toward a more conservative mix of bonds and equities. A common assumption is 5–6% nominal during withdrawal versus 7–8% during accumulation. This calculator uses one rate for both phases — for a more conservative stress-test, use the lower end of your expected return range.
What if the portfolio runs out before age 95?
The calculator shows the exact age the portfolio depletes. To fix it, you have four levers: increase monthly contributions during accumulation, push back your retirement age (more growth time, fewer withdrawal years), reduce your target annual income, or assume a higher growth rate. Small changes compound significantly — an extra $300 per month or a 2-year delay can add many years of longevity to your portfolio.