How to use the fire calculator
- Enter your expected yearly spending in retirement, in today's dollars, and a withdrawal rate. Many people start from 4% as a rule of thumb.
- Enter your invested savings today and the amount you save each year.
- Enter an expected return and inflation. The tool uses the inflation-adjusted return, so every figure stays in today's dollars.
- Read your FIRE number and the time to reach it. The table shows the number at other withdrawal rates, and the CSV lists your balance each year.
Formula
FIRE number = yearly spending / withdrawal rate
Real return = (1 + nominal return) / (1 + inflation) - 1
Monthly growth = (1 + real return)^(1/12) - 1
Each month: balance = balance x (1 + monthly growth) + yearly saving / 12
Stop at the first month the balance is at least the FIRE number
Saving is held constant in today's dollars, which means your actual dollar contributions rise with inflation. If your savings stay the same in nominal dollars, the true time is longer.
Worked examples
The default case: $48,000 of yearly spending at a 4% withdrawal rate gives a FIRE number of $1,200,000. With $150,000 saved (12.5% of the way), $30,000 saved a year, a 7% return and 2.5% inflation (a real return of about 4.39%), the target is reached in 18 years 10 months. At age 40 that would be about age 58.8.
Other withdrawal rates: the same spending needs $1,600,000 at 3% and $960,000 at 5%. A lower rate needs a larger portfolio, which is the cost of extra caution.
No inflation: starting from zero and saving $24,000 a year at 5% with no inflation, a $1,000,000 target takes 22 years 10 months.
Where the withdrawal rate comes from
The 4% figure is a rule of thumb that grew out of studies of historical US market returns over roughly 30-year retirements. It does not guarantee anything. A person retiring in their 30s or 40s needs a portfolio to last much longer, many planners consider a lower rate for that reason, and market conditions at the start of retirement matter a great deal. Use the table of rates to see how much the target moves.
What the time estimate leaves out
The projection uses one constant return, but real returns are uneven. A sharp decline early in retirement, called sequence of returns risk, can damage a portfolio that looked fine on average. Taxes on withdrawals, health insurance before Medicare age, changing spending, Social Security and pensions are not modeled. If you will receive other income later, your needed portfolio could be smaller.
Spending is the largest lever. Each $1,000 less spent a year lowers the target by $25,000 at a 4% rate and also means you need to save less. Try a few spending levels.
Lean, regular and fat versions
You can use the same tool for variations. Enter a smaller spending figure for a lean plan or a larger one for comfort. Entering your savings and the annual amount shows whether the plan is realistic. If the result says more than 100 years, the inputs do not reach the goal at any practical timescale, which is a signal to change spending, savings or the target.
Assumptions and limits
- One constant return and one constant inflation rate for the whole period. The order of returns is ignored.
- Saving happens evenly through the year and keeps its purchasing power, so it rises with inflation.
- Spending is a single figure in today's dollars, with no changes in retirement.
- Taxes, fees, health care costs, Social Security, pensions, home equity and market crashes are not modeled.
- The example return, inflation and spending are illustrations, not forecasts or market data.
- This is a planning scenario, not financial advice. A withdrawal rate does not guarantee your money will last.
Frequently asked questions
What is a FIRE number?
It is the portfolio size at which a chosen withdrawal rate covers your yearly spending. Divide yearly spending by the withdrawal rate. At $48,000 of spending and 4% the number is $1,200,000.
Is 4% a safe withdrawal rate?
No rate is guaranteed. The 4% rule came from historical analysis of US returns over roughly 30 years. Longer retirements, lower expected returns or poor early market performance can call for a lower rate, so view it as a starting point.
Why does the calculator use an inflation-adjusted return?
Spending and the target are in today's dollars, so growth must be measured after inflation. Using the real return keeps everything consistent and avoids comparing future dollars with today's needs.
What does progress today mean?
It is your current invested savings divided by your FIRE number. At $150,000 against $1,200,000 you are at 12.5%. It only counts invested savings, not your home or other assets.
Why does it say more than 100 years?
With your savings and return, the portfolio would not reach the target in 1,200 months. Raise your savings, lower the target by spending less, or check your return assumptions.