FIRE calculator: your FIRE number and the years to reach it

How to use the FIRE calculator

FIRE stands for financial independence, retire early: having enough invested that withdrawals could pay your bills, so paid work becomes optional. The calculator works out the size of that pot and the years it takes to build.

1. Enter Take-home pay per year and Spending per year, both after tax. The line under spending shows your savings rate.
2. Add what you have Already invested and Your age.
3. Under Assumptions, check Return after inflation (5% to start with) and Withdrawal rate (4%).
4. Pick Spending in retirement: Lean (75% of today), Same as today or Fat (150% of today).
5. If a state pension or Social Security will pay part of your costs later, switch on that toggle, then enter the yearly amount in today’s money and the age it starts.

Every amount is in today’s money, so the return should be a real return (the return after inflation).

How the numbers are worked out

The FIRE number is the spending your pot has to cover, divided by the withdrawal rate:

FIRE number = (spending in retirement − pension income) ÷ withdrawal rate

Pension income means a state pension, Social Security or a workplace pension that pays a set amount. The years come from the formula for a pot growing at a fixed rate, with your saving added at the end of each year:

years = ln((N × r + s) ÷ (A × r + s)) ÷ ln(1 + r)

N is the FIRE number, r the return after inflation, s what you save each year (take-home pay minus spending), A what’s already invested, and ln the natural logarithm.

The defaults are a take-home pay of 60,000 a year, spending of 40,000 and 25,000 invested, in whichever currency you pick. So N = 40,000 ÷ 0.04 = 1,000,000, and you save 20,000 a year, a 33% savings rate. Then years = ln((1,000,000 × 0.05 + 20,000) ÷ (25,000 × 0.05 + 20,000)) ÷ ln(1.05), which is ln(70,000 ÷ 21,250) ÷ 0.0488 = 24.4 years. Starting at 30, you’d get there at about 54.

The three boxes under the result run these changes for your own numbers. Spending 10% less does the most because it works twice: you save 4,000 more a year, and the target falls by 100,000 to 900,000.

If pension income starts after the age you’d stop work, the calculator adds a bridge: the value, at your return, of the pension you’d go without until it starts. How long the bridge runs depends on when you stop, and when you stop depends on the target, so the calculator finds the age at which the two agree.

Your savings rate decides most of it

Starting from zero, at a given return and withdrawal rate, the years depend on one thing: the share of take-home pay you save. Spending sets the target and the gap between pay and spending sets how fast you fill it, so someone taking home 30,000 and someone taking home 300,000 who both save 30% need the same 28.0 years.

The table assumes 5% a year after inflation, a 4% withdrawal rate, saving at the end of each year from nothing, and the same spending in retirement as now. Each step is worth most at the low end: going from 10% to 20% takes almost 15 years off (51.4 down to 36.7), while 60% to 70% takes off 3.6. Money already invested shortens every row.

Where the 4% rule comes from

The 4% default comes from two studies of US market history.

William Bengen’s Determining Withdrawal Rates Using Historical Data appeared in the Journal of Financial Planning in October 1994. He used returns on US shares and intermediate-term Treasury bonds from 1926 and tested a retirement starting in each year. Each retiree took a percentage of the starting pot in year one, then the same amount raised with inflation every year after. With half the pot in shares, a 4% first withdrawal never ran out in under 33 years (the worst start was 1966), while 4.25% could run out in 28. He suggested holding 50% to 75% in shares.

Philip Cooley, Carl Hubbard and Daniel Walz, finance professors at Trinity University in Texas, ran a similar test in the AAII Journal in February 1998, now known as the Trinity study. They used the S&P 500, long-term high-grade corporate bonds and returns from 1926 to 1995. With 4% withdrawals raised for inflation, a mix of 75% shares and 25% bonds lasted the full 30 years in 98% of the 41 starting years; half and half lasted in 95%.

Both studies have limits for anyone stopping work early:

• They used one country’s history. Nobody knows whether future returns will look like the US between 1926 and 1995, us included.
• They tested retirements of up to 30 years. Someone stopping at 45 may need the money for 45 years or more, and the Trinity authors concluded that “early retirees who anticipate long payout periods should plan on lower withdrawal rates.”
• Neither took off fund fees, and both left out tax (Bengen assumed tax-deferred accounts). A 1% yearly fee comes out of the same return.
• Withdrawals follow inflation only, even after a crash. Bengen’s worst results came from retirements that ran into the 1973 to 1974 fall, when share prices dropped while high inflation pushed withdrawals up. In his own example, a 1929 retiree who cut withdrawals by 5% after the first fall had 20% more money by 1949.

A lower withdrawal rate raises the target. For 40,000 a year, 4% needs 1,000,000, 3.5% needs 1,142,857 and 3% needs 1,333,333. With the other defaults, 3.5% adds two years (26.4 instead of 24.4) and 3% adds 4.4.

Scroll is education, not advice. Our lessons and calculators explain how money works in general. They don’t know your circumstances, so they can’t tell you what to do with yours. For that, speak to a qualified, regulated adviser in your country.

State pensions and reaching your money early

A state pension changes the sum twice. It cuts the spending your pot covers for life; if you stop work before it starts, though, the pot covers those years in full.

Say Priya is 32, lives in Leeds, takes home £36,000 a year and spends £24,000, with £20,000 invested. Without a pension her FIRE number is £600,000, about 24 years away at 5% after inflation (age 56). The full new State Pension is £241.30 a week in 2026/27, or £12,547.60 a year, and for someone her age State Pension age is 68 under current law. Switch it on from 68 and the calculator gives £426,235: £286,310 to cover the other £11,452.40 of her spending for life, plus a £139,925 bridge to 68. Her date moves to about 19.3 years away (age 51).

Lean, Fat, Barista and Coast FIRE

The names describe the budget, or how much work carries on. Lean FIRE means living on less: the calculator’s Lean preset uses 75% of today’s spending, which with the defaults means a 750,000 target and 20.4 years. Fat FIRE is the opposite. Its 150% preset needs 1,500,000 and 30.7 years.

Barista FIRE means leaving full-time work while part-time pay covers some of your costs. Enter that pay as pension income from the age you’d switch. The calculator treats it as lasting for life, though, so if you plan to stop the part-time job at some point, the number will be too low.

Coast FIRE is the point where what you’ve invested would grow to your FIRE number by retirement with nothing more added; the Coast FIRE calculator works it out.

Three people, three currencies

The calculation doesn’t change with the currency. These three hypothetical savers all assume 5% a year after inflation and a 4% withdrawal rate, with no state pension entered.

Ananya gets there first, at about 47, because she saves the biggest share of her pay. Mateo, saving the smallest share from the smallest start, needs the longest. Any fund fee comes off these returns, and the investment fee calculator shows what 0.5% or 1% a year costs over the same decades.