FIRE Calculator

Understanding the FIRE Movement: How to Retiring in Your 30s or 40s

The FIRE (Financial Independence, Retire Early) movement has captured the minds of modern professionals. By utilizing an aggressive savings rate (often 50% to 70% of income) and investing the savings in low-cost index funds, followers can achieve financial freedom decades before the standard retirement age of 65.

The 4% Safe Withdrawal Rule

Your FIRE target number is computed using the **4% Rule**, which is derived from the Trinity Study. The rule states that you can safely withdraw 4% of your total retirement nest egg in your first year of retirement, and adjust subsequent withdrawals for inflation, without running out of money over a 30-year horizon.

To calculate your FIRE target number, multiply your annual expenses by 25. For example, if you spend $50,000 annually, your target FIRE nest egg is $1,250,000 ($50,000 * 25 = $1,250,000).

Common FIRE Variations

• Lean FIRE: Retiring with a minimalistic lifestyle, typically spending less than $40,000 annually.
• Fat FIRE: Retiring with an abundant lifestyle, typically spending over $100,000 annually.
• Coast FIRE: Accumulating enough savings early in life that your portfolio will compound to your target retirement number on its own, allowing you to stop saving additions and work only to cover current living expenses.
• Barista FIRE: Retiring from your corporate job but working a part-time job (such as a barista) to cover daily costs and health insurance benefits.