How the FIRE calculator works
The FIRE Calculator estimates how much money may be needed to reach financial independence and how long it may take to reach that amount.
FIRE stands for Financial Independence, Retire Early.
The calculator is based on a simple idea:
Financial independence is reached when invested assets can support expected annual spending.
Main inputs
The calculator may use:
- current age
- target retirement age
- current portfolio value
- monthly or yearly contribution
- annual spending
- expected annual return before retirement
- expected annual return after retirement
- inflation rate
- withdrawal rate
- contribution growth
- tax assumptions, if available
FIRE number
The FIRE number estimates the portfolio needed to support annual spending.
FIRE Number = Annual Spending / Withdrawal Rate
Example:
Annual spending = $40,000
Withdrawal rate = 4%
FIRE Number = 40,000 / 0.04
FIRE Number = $1,000,000
A lower withdrawal rate creates a higher FIRE number.
Example:
Annual spending = $40,000
Withdrawal rate = 3.5%
FIRE Number = 40,000 / 0.035
FIRE Number ≈ $1,142,857
Inflation-adjusted spending
If the calculator adjusts spending for inflation:
Future Annual Spending = Current Annual Spending × (1 + Inflation Rate)^t
Example:
Current annual spending = $40,000
Inflation = 2.5%
Time = 20 years
Future Annual Spending = 40,000 × (1.025)^20
Future Annual Spending ≈ $65,544
Portfolio growth before retirement
Before retirement, the calculator models growth using investment returns and recurring contributions.
Future Portfolio Value = Current Portfolio Growth + Future Value of Contributions
Simplified:
Future Value = Current Portfolio × (1 + r)^t + Contributions × [((1 + r)^n - 1) / r]
Where:
r = periodic return
t = years
n = contribution periods
Earliest FIRE age
The calculator estimates the first year where projected portfolio value reaches or exceeds the FIRE number.
Earliest FIRE Year = first year where Portfolio Value >= FIRE Number
Then:
Earliest FIRE Age = Current Age + Years Until FIRE
Required contribution
If the user enters a target retirement age, the calculator may estimate the required contribution to reach the FIRE number by that year.
A simplified contribution formula is:
Required Contribution = (Target Future Value - Current Portfolio Growth) / Contribution Future Value Factor
Where:
Current Portfolio Growth = Current Portfolio × (1 + r)^t
And:
Contribution Future Value Factor = [((1 + r)^n - 1) / r]
Example calculation
Example assumptions:
Current age: 35
Current portfolio: $100,000
Annual spending target: $40,000
Withdrawal rate: 4%
Monthly contribution: $1,500
Expected return: 6%
Inflation: 2.5%
Estimated FIRE number in today’s money:
$40,000 / 0.04 = $1,000,000
If spending is inflation-adjusted over time, the future FIRE number will increase.
The calculator then projects the portfolio year by year until the portfolio reaches the required FIRE number.
Why withdrawal rate matters
The withdrawal rate is one of the most important assumptions in a FIRE calculation.
A 4% withdrawal rate means the user estimates needing 25 times annual spending.
1 / 0.04 = 25
A 3.5% withdrawal rate means the user estimates needing about 28.6 times annual spending.
1 / 0.035 ≈ 28.6
A lower withdrawal rate is more conservative but requires a larger portfolio.
What this calculator does not account for
This calculator does not fully model:
- market volatility
- sequence-of-returns risk
- tax law
- pension income
- social security
- healthcare costs
- housing changes
- children or family costs
- part-time income after retirement
- investment allocation changes
- unexpected large expenses
Best way to use this calculator
Use the FIRE calculator to test sensitivity.
Run at least three cases:
- conservative return with lower withdrawal rate
- baseline return with moderate withdrawal rate
- optimistic return with higher contribution growth
The exact FIRE age is less important than understanding which assumptions move it.
Changelog
April 2026
Initial public methodology page created.