What is FIRE?
FIRE stands for Financial Independence, Retire Early. The idea is simple: save and invest aggressively until your portfolio is large enough that its returns cover your living costs forever. At that point work becomes optional. The two levers are your savings rate and your FIRE number.
How to calculate your FIRE number
Your FIRE number is the portfolio that can fund your expenses indefinitely at your chosen safe withdrawal rate.
at 4%: FIRE number = annual expenses × 25
To find when you reach it, we grow your current savings each year by your expected return and add your annual savings, until the balance crosses your FIRE number:
The 4% rule explained
The 4% rule comes from the 1998 Trinity Study, which found that retirees who withdrew 4% of their portfolio in year one — then adjusted that amount for inflation — rarely ran out of money over 30 years. It’s a useful rule of thumb, but for very long (50-year-plus) early retirements many planners now prefer a more conservative 3.25%–3.5% withdrawal rate. Lowering the rate raises your FIRE number but adds a safety margin.
Types of FIRE
- Lean FIRE — financial independence on a frugal budget.
- Regular FIRE — your normal expenses covered by the 4% rule.
- Fat FIRE — a comfortable, higher-spending retirement.
- Coast FIRE — you’ve invested enough today that, with no further saving, it grows to your number by age 65.
- Barista FIRE — part-time work covers part of your spending, so you need a smaller portfolio.
Frequently asked questions
The higher the better. Saving 50% of your income can put FIRE roughly 17 years away from a standing start; 25% pushes it past 30 years. Your savings rate matters far more than your income.
7% is a common estimate for real (after-inflation) stock returns based on long-run history, but the future may differ. Try a lower figure like 5% to see a more cautious timeline.
No. It uses a single constant return for simplicity. Real markets are volatile, and the order of good and bad years (sequence-of-returns risk) matters a lot near retirement. Treat the result as a guide, not a guarantee.