FIRE Number Calculator

The arithmetic is one line: number = annual expenses ÷ withdrawal rate. At $4,000 a month, which is $48,000 a year, and a 4% withdrawal rate, the target is $1,200,000. Dividing by 4% is the same as multiplying by 25, which is where the familiar "25 times your annual expenses" shorthand comes from. A 3.5% rate is roughly 28.6 times; a 3% rate is 33.3 times. Notice how steeply the target climbs as the rate falls — that curve is the single most important thing to understand on this page, because it means small changes in the assumed withdrawal rate move the goalpost by hundreds of thousands of dollars. The input that deserves the most attention, though, is annual expenses, and it works in the opposite direction. Every $100 a month you permanently remove from your spending lowers the target by $30,000 at a 4% rate. Spending is the term that appears in the numerator of the target and in the denominator of your savings rate simultaneously, which is why it moves the timeline more than anything else you can control.

The 4% idea did not come from theory. It came from back-testing: researchers in the 1990s ran historical sequences of US stock and bond returns through a simulated retirement, withdrawing a fixed inflation-adjusted amount each year, and asked how often the portfolio survived. Around 4% of the starting balance was the rate that held up across the large majority of historical starting years for a portfolio with a substantial stock allocation. Three qualifications travel with that result and are usually dropped in the retelling. First, the horizon tested was typically about 30 years — a conventional retirement. Someone retiring at 40 is planning for fifty years or more, and a rate that survives 30 years does not automatically survive 50. Second, the data was US market history, a specific and unusually favourable record. It is a sample of one country over one century, not a law. Third, it was a statement about historical frequency, not a guarantee. "It worked in most past sequences" is a genuinely useful finding and it is not the same thing as "your money will last".

While you are accumulating, the order of your returns barely matters — the same set of annual returns in any order produces roughly the same ending balance. Once you start withdrawing, order becomes decisive. The reason is that a withdrawal during a downturn sells more shares to raise the same dollars, permanently removing capital that would otherwise have participated in the recovery. Two retirees with identical average returns over thirty years can end up in completely different places depending on whether the bad years landed early or late. This is sequence-of-returns risk, and it is the main reason a fixed withdrawal percentage is a rule of thumb rather than a plan. The common responses are all about flexibility rather than precision: holding a cash or bond buffer to draw on instead of selling equities in a bad year, trimming spending temporarily when the portfolio falls, or using a variable withdrawal rule that adjusts with the balance rather than fixing a real dollar amount for life. The calculator above models none of that — it produces a single target from a single rate.

The timeline is a straightforward month-by-month loop: your current balance grows at the real return you enter, your monthly contribution is added, and the loop stops when the balance reaches the target. Entering a real return — growth above inflation — is what keeps the answer coherent, because the target itself is expressed in today's spending. Mixing a nominal return with today's expenses would silently overstate how quickly you arrive. Everything else in the model is a simplification. Returns are treated as a smooth constant, whereas real markets deliver them in violent, uneven bursts. Contributions are assumed steady, whereas income and life are not. Taxes are absent, and they are not a rounding error: the account type your money sits in — taxable brokerage, traditional or Roth — changes both what you accumulate and what a withdrawal actually delivers to you. Fees are absent too, and a percentage point of annual cost compounds against you exactly the way returns compound for you. The practical use of the projection is comparative. Change one input, see which direction and how far the timeline moves. Treat the specific year it prints as an illustration, not a forecast.

Retiring decades before the conventional age introduces problems that a withdrawal rate does not describe. Health coverage is the largest one in the United States, because Medicare eligibility begins at a set age and anyone retiring before it must arrange and pay for coverage independently, at a cost that changes with the market and with the household's income. Leaving it out of the expense figure understates the target substantially. Social Security works in the other direction: benefits eventually arrive and reduce the amount the portfolio must produce, but the amount depends on your earnings record and on the age at which you claim, and years out of the workforce affect that record. The Social Security Administration publishes your own estimate, which is far more useful than any generic assumption. Then there are access rules. Money in tax-advantaged retirement accounts is generally subject to early-withdrawal penalties before a specified age, with a set of exceptions and strategies that are genuinely technical. Contribution limits for those accounts are set by the IRS and adjusted periodically. None of this is a reason not to plan. It is a reason to treat the number on this page as the opening question rather than the answer, and to check the specifics with a qualified professional. Nothing here is investment, tax or retirement advice.