Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A FIRE number translated from an assumed withdrawal rate is only as reliable as that single rate assumption, since a small change to it moves the target portfolio substantially. The withdrawal rate deserves the same scrutiny as the spending figure itself, not a default acceptance as an established fact.
Before you rely on it
What to check
Test the target at more than one withdrawal-rate assumption rather than treating a single commonly cited rate as settled fact.
The common error
Where people go wrong with FIRE number calculator
Treating one specific withdrawal rate as an immutable constant rather than an assumption worth stress-testing. A modest change in that single input moves the required portfolio meaningfully.
Sensitivity evidence
How initial withdrawal rate changes the target retirement portfolio
| Initial withdrawal rate | Target retirement portfolio | Annual portfolio income |
|---|---|---|
| 2.0% | $2,500,000 | $50,000 |
| 3.0% | $1,666,667 | $50,000 |
| 4.0%worked example | $1,250,000 | $50,000 |
| 5.0% | $1,000,000 | $50,000 |
| 6.0% | $833,333 | $50,000 |
Every input, tested
Which input moves the target retirement portfolio most
| Input | Tested from | To | Target retirement portfolio at each end | Swing |
|---|---|---|---|---|
| Initial withdrawal rate | 3.0% | 5.0% | $1,666,667 to $1,000,000 | $666,667 (53%) |
| Desired annual retirement spending | $72,000 | $88,000 | $1,050,000 to $1,450,000 | $400,000 (32%) |
| Expected annual fixed income | $27,000 | $33,000 | $1,325,000 to $1,175,000 | $150,000 (12%) |
Two variables at once
Target retirement portfolio by initial withdrawal rate and desired annual retirement spending
| Initial withdrawal rate \ Desired annual retirement spending | $64,000 | $80,000 | $96,000 |
|---|---|---|---|
| 2.0% | $1,700,000 | $2,500,000 | $3,300,000 |
| 3.0% | $1,133,333 | $1,666,667 | $2,200,000 |
| 4.0% | $850,000 | $1,250,000 | $1,650,000 |
| 5.0% | $680,000 | $1,000,000 | $1,320,000 |
| 6.0% | $566,667 | $833,333 | $1,100,000 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Desired annual retirement spending | $80,000 |
| Expected annual fixed income | $30,000 |
| Initial withdrawal rate | 4.0% |
| Target retirement portfolio | $1,250,000 |
| Annual portfolio income | $50,000 |
Where the inputs come from
Desired annual spending is what you expect to spend each year once you stop working, in today's dollars. Expected annual fixed income covers pensions, rental income or part-time work that you expect to continue; leave it at zero if you want a fully self-funded number. The withdrawal rate is the annual share you plan to take. Early retirees often use 3.25% to 3.5% because their portfolios must last 40 years or more.
When the result stops applying
The rule of thumb comes from 30-year retirement studies, and a retirement of 40 or 50 years faces greater risk. Healthcare before Medicare, taxes on withdrawals and inflation surprises can all raise the number. The result also depends on spending, which is easier to underestimate than to overestimate. It ignores Social Security, which reduces the number if you count on it.
What to compare it with
The FIRE calculator adds your current savings and shows years to the goal, and the lean, fat and barista variants use different spending levels. The retirement healthcare and early retirement health insurance pages cover the biggest gap before Medicare. The sequence of returns page shows why the first years matter most.
People also ask
Frequently asked questions
What is the FIRE number?
It is the invested portfolio that could support your spending indefinitely, commonly 25 times annual expenses at a 4% withdrawal rate. It signals financial independence, not necessarily quitting work.
Why use a lower withdrawal rate for early retirement?
A longer retirement has more time for bad markets and inflation to erode the portfolio, so many early retirees use 3.25% to 3.5% instead of 4%.
Does the FIRE number include Social Security?
Not unless you subtract it as fixed income. Counting on future benefits lowers the number, but the benefits begin later and depend on your work record.