FIRE calculator
Calculate your path to Financial Independence and Early Retirement
📊 What is FIRE?
FIRE stands for Financial Independence, Retire Early. It's a lifestyle movement focused on extreme saving and investment to achieve financial freedom at a young age.
The goal is to accumulate enough wealth to cover living expenses through investment returns, allowing you to retire decades earlier than traditional retirement age.
🔍 How This Calculator Works
This calculator uses the following formula to determine your path to FIRE:
- Current Savings: Your existing investment portfolio
- Annual Expenses: Your yearly spending needs
- Annual Savings: How much you save and invest each year
- Growth Rate: Expected annual return on investments (typically 7-8%)
- Safe Withdrawal Rate: Percentage you can safely withdraw annually (typically 3-4%)
- Inflation Rate: Expected annual inflation (typically 2-3%)
❓ Frequently Asked Questions
What is a safe withdrawal rate?
The safe withdrawal rate is the percentage of your portfolio you can withdraw annually without running out of money. The 4% rule is a common guideline, but many FIRE enthusiasts use 3-3.5% for extra safety.
How accurate are these calculations?
These are estimates based on historical market performance. Actual results may vary due to market volatility, changes in expenses, and other factors. Regular review and adjustment of your plan is recommended.
What if I can't save that much?
Start where you are! Even small amounts saved and invested consistently can grow significantly over time. Focus on increasing your savings rate gradually and reducing expenses where possible.
Should I include my home equity?
Generally, no. Your primary residence is not typically included in FIRE calculations unless you plan to sell it and use the proceeds for living expenses.
💡 FIRE Tips
Track your expenses: Know exactly where your money goes to identify savings opportunities.
Increase your income: Look for ways to earn more through side hustles, career advancement, or skill development.
Invest wisely: Use low-cost index funds and maintain a diversified portfolio.
Live below your means: The gap between your income and expenses is your wealth-building engine.
Plan for healthcare: Healthcare costs can be significant in early retirement.