Lean FIRE Calculator Formula

Understand the math behind the lean fire calculator. Each variable explained with a worked example.

Use the Lean FIRE Calculator

Formulas Used

Lean FIRE Number

lean_fire_number = lean_fire_target

Amount Remaining

gap = max(lean_fire_target - current_savings, 0)

Years to Lean FIRE

years_to_lean_fire = current_savings >= lean_fire_target ? 0 : (annual_return > 0 ? log(lean_fire_target / max(current_savings + annual_savings / (annual_return / 100), 1)) / log(1 + annual_return / 100) : max((lean_fire_target - current_savings) / max(annual_savings, 1), 0))

Monthly Withdrawal

monthly_withdrawal = lean_fire_target * withdrawal_rate / 100 / 12

Variables

VariableDescriptionDefault
lean_expensesLean Annual Expenses(USD)30000
withdrawal_rateSafe Withdrawal Rate(%)4
current_savingsCurrent Savings(USD)300000
annual_savingsAnnual Savings Rate(USD)30000
annual_returnExpected Annual Return(%)7
lean_fire_targetDerived value= withdrawal_rate > 0 ? lean_expenses / (withdrawal_rate / 100) : lean_expenses * 25calculated

How It Works

Lean FIRE

Lean FIRE means retiring early on a below-average budget. The threshold is typically under $40,000/year (individual) or $60,000/year (couple) in expenses.

Formula

Lean FIRE Number = Lean Annual Expenses / Withdrawal Rate

At 4% withdrawal rate:

  • $25,000/year expenses = $625,000 needed
  • $30,000/year expenses = $750,000 needed
  • $40,000/year expenses = $1,000,000 needed

    • Lean FIRE Lifestyle

  • Housing: Low-cost area, paid-off home, or house hacking
  • Transportation: Used car, biking, public transit
  • Food: Cooking at home, minimal dining out
  • Entertainment: Free/low-cost activities
  • Healthcare: ACA marketplace, health sharing

    • Worked Example

    $30,000 lean expenses, 4% withdrawal rate, $300,000 saved, adding $30,000/year at 7%.

    lean_expenses = 30000withdrawal_rate = 4current_savings = 300000annual_savings = 30000annual_return = 7
    1. 01Lean FIRE number = $30,000 / 4% = $750,000
    2. 02Amount remaining = $750,000 - $300,000 = $450,000
    3. 03Saving $30,000/year at 7% growth
    4. 04Approximately 9 years to reach Lean FIRE
    5. 05Monthly withdrawal in retirement = $2,500

    Ready to run the numbers?

    Open Lean FIRE Calculator