FIRE Calculator - Financial Independence Retire Early

What is FIRE Number ?

The FIRE number (Financial Independence Retire Early) is the amount of money you need in investments to retire and live off your savings indefinitely. It is typically calculated using the 4% rule, which assumes you can withdraw 4% of your total savings annually without running out of money.

By using this this calculator you can determine the amount of savings required to achieve Financial Independence, Retire Early (FIRE) based on your annual expenses and withdrawal rate. It will help you to estimate how much money you need in investments to sustain your lifestyle without active income.

How to calculate FIRE Number ?

A common method to determine the FIRE number is based on the 4% Rule, which suggests that you can withdraw 4% of your total savings annually without running out of money.

Formula:

FIRE Number = Annual Expense * 100/4 = Annual Expense x 25

For example, if your annual expenses are $40,000, your FIRE number would be:

40,000 x 25 = $1,000,000

How to Adjust FIRE Number for Inflation?

Since inflation increases the cost of living, your future annual expenses will be higher than today's expenses. You can calculate the inflation-adjusted FIRE number using the future value formula:

Future Annual Expenses = Current Annual Expenses x (1+Inflation Rate)^Years until Retirement

Then, apply the FIRE formula:

Inflation-Adjusted FIRE Number = Future Annual Expenses x 25