What is FIRE?
Financial Independence / Retire Early — a movement built around saving aggressively (30-70% of income), investing in low-cost index funds, and reaching a portfolio that can sustain your spending indefinitely without further employment income.
The 4% rule (and why it's not really 4% anymore)
Based on the 1998 Trinity Study, a 4% annual withdrawal from a 60/40 portfolio gave a 95%+ chance of lasting 30 years historically. For FIRE retirees who need 40-60 years of portfolio longevity, most planners now use 3.25-3.5%. Bill Bengen (author of the original study) has updated his estimate multiple times; 3.3% is common as a conservative floor.
How to read the FIRE number
Your "FIRE number" = annual expenses ÷ withdrawal rate. At 4% SWR, that's 25× expenses. At 3.5%, it's ~28.5×. At 3%, 33×. Keep your expenses low and this number drops dramatically — $40K/yr lifestyle needs $1M; $80K/yr needs $2M.
FIRE variants
- Lean FIRE: retire on a smaller portfolio by keeping expenses low (often <$40K/yr). Geo-arbitrage (Thailand, Portugal, low-cost US towns) is common.
- Fat FIRE: retire with a cushy lifestyle. Usually $2.5M+ for $100K+ in spending.
- Coast FIRE: save enough by age ~35-40 that compound growth alone gets you to traditional retirement age with no additional contributions. Extremely freeing — you can take lower-paying, more enjoyable work.
- Barista FIRE: portfolio covers most expenses + you work part-time for healthcare / fun-money.
The savings-rate math
Mr. Money Mustache's table: savings rate alone determines years-to-FIRE (assuming constant income and 5% real return, starting from zero):
- 10% savings rate → 51 years to FIRE
- 25% → 32 years
- 50% → 17 years
- 65% → 11 years
- 75% → 7 years
Raising your savings rate from 25% to 50% cuts FIRE time nearly in half — because you're both saving more AND needing less to retire on.
What this calculator does NOT account for
- Healthcare pre-65 (can be $10-25K/yr on ACA, factor into expenses)
- Sequence-of-returns risk in early retirement years
- Social Security at 67+ (usually adds a floor worth $20-45K/yr)
- Taxes on withdrawals (Roth ≠ Traditional ≠ brokerage)
- Possible need for paid-off home (reduces required portfolio)