FIRE: Your Savings Rate Matters More Than Your Income
The core of FIRE (Financial Independence, Retire Early) isn't how much you earn — it's your savings rate. A higher savings rate creates a double effect: your annual spending (and therefore your target FIRE number) shrinks, while the amount you invest each month grows. The commonly cited "4% rule" says that withdrawing just 4% of your portfolio each year in retirement should let your money last, which is why the inverse of that rate — 25x — is used as the multiplier for your annual spending to set your FIRE number. This calculator uses your savings rate, expected return, and current assets to compound toward that target and estimate how many years it will take.
How the Calculation Works
| Step | Item | Formula |
|---|---|---|
| 1 | Estimated Spending | Income × (1 − Savings Rate) |
| 2 | FIRE Number | Spending × (100 / Withdrawal Rate) |
| 3 | Annual Savings | Income × Savings Rate |
| 4 | Years to FIRE | Time to compound current assets + savings to target |
This calculator assumes a constant savings rate and return every year, a simplification of real-world volatility. Income changes, market swings, taxes, and inflation can all affect your actual timeline, so treat this as a reference estimate and set a conservative withdrawal rate if you want a larger safety margin.
Frequently Asked Questions
It shrinks your target amount while increasing your monthly investment at the same time — a double effect.
Withdrawing just 4% of your portfolio yearly in retirement should let it last long-term; its inverse, 25x, sets the FIRE number.
It's based on historical U.S. data and isn't guaranteed — many use a more conservative 3%-3.5% rate instead.
※ Actual timelines depend on income, spending, and market conditions. This is a simplified estimate for reference only.