FIRE Number Calculator Formula
Understand the math behind the fire number calculator. Each variable explained with a worked example.
Formulas Used
FIRE Number
fire_number = annual_expenses / (withdrawal_rate / 100)Progress
progress = current_savings / (annual_expenses / (withdrawal_rate / 100)) * 100Remaining to Save
remaining = max(annual_expenses / (withdrawal_rate / 100) - current_savings, 0)Variables
| Variable | Description | Default |
|---|---|---|
annual_expenses | Annual Expenses(USD) | 40000 |
withdrawal_rate | Safe Withdrawal Rate(%) | 4 |
current_savings | Current Savings(USD) | 200000 |
How It Works
FIRE Number
FIRE Number = Annual Expenses / Withdrawal Rate
At a 4% withdrawal rate: FIRE Number = Annual Expenses x 25
Once your investment portfolio equals your FIRE number, you can theoretically live off the returns indefinitely.
FIRE Variants
Worked Example
$40,000 annual expenses, 4% withdrawal rate, $200,000 saved.
- 01FIRE number = $40,000 / 0.04 = $1,000,000
- 02Progress = $200,000 / $1,000,000 = 20%
- 03Remaining = $1,000,000 - $200,000 = $800,000
Frequently Asked Questions
What is FIRE?
FIRE stands for Financial Independence, Retire Early. It is a movement focused on extreme saving and investing to retire decades before the traditional retirement age.
Is the 4% rule safe for early retirees?
The 4% rule was designed for 30-year retirements. Early retirees with 40-50 year horizons may want to use 3-3.5% for added safety.
How do I calculate my annual expenses?
Track all spending for 3-12 months. Include housing, food, insurance, transportation, healthcare, entertainment, and a buffer for unexpected costs.
Learn More
Guide
Retirement Savings Guide
A comprehensive guide to retirement savings. Learn how much you need to retire, the best account types, contribution strategies, employer matching, and how to build a retirement plan at any age.
Ready to run the numbers?
Open FIRE Number Calculator