What Is the FIRE Number?

Your FIRE number is the total portfolio size you need to retire — the point where your investments generate enough passive income to cover all your expenses indefinitely. It's the core target of the Financial Independence, Retire Early movement.

The formula comes from the Trinity Study, a landmark 1998 analysis of historical market returns that showed a 4% annual withdrawal rate has survived every 30-year period in US market history.

FIRE Number = Annual Expenses ÷ Safe Withdrawal Rate

At a 4% withdrawal rate, that simplifies to: Annual Expenses × 25. If you spend $50,000/year, your FIRE number is $1,250,000. Hit that number and your portfolio can theoretically fund your lifestyle forever.

The 4% Rule Explained

The 4% rule means withdrawing 4% of your portfolio in year one, then adjusting for inflation each subsequent year. Based on historical data, a diversified stock/bond portfolio has supported this withdrawal rate for 30+ year retirement periods over 95% of the time.

Many in the FIRE community use 3–3.5% for extra safety, especially if retiring at 35 vs 65 — a longer retirement requires more cushion. The calculator above lets you adjust this to see the difference.

Why Savings Rate Matters More Than Income

The single biggest lever in FIRE planning isn't how much you earn — it's how much of your income you save and invest. A person earning $60,000 and saving 50% will reach FIRE far sooner than someone earning $150,000 and saving 10%.

FIRE Variations

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Lean FIRE

Retire on a minimal budget — typically under $40,000/year. Requires the smallest portfolio but demands a frugal lifestyle indefinitely.

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FIRE (Regular)

The classic version. Maintain your current lifestyle in retirement. Most calculators use this as the baseline.

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Fat FIRE

Retire with a high-spending lifestyle — $100,000+/year. Requires a much larger portfolio but offers maximum freedom.

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Barista FIRE

Semi-retire with a small part-time income covering some expenses, letting you reach FIRE sooner with a smaller portfolio.

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Coast FIRE

Reach the point where compound growth alone will reach your FIRE number by retirement age — without saving another dollar.

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Potato FIRE

AlgoPotato's version: passive income from your farm + portfolio exceeds expenses. Play the game to experience it.

Frequently Asked Questions

How accurate is this FIRE calculator?

The math is exact — the formula is deterministic given your inputs. The uncertainty is in future investment returns. This calculator uses your chosen return rate as a fixed assumption. Real markets fluctuate, so your actual result will vary. The 7% default is a common real-return estimate (after inflation) for a diversified stock portfolio based on long-run historical averages.

What return rate should I use?

Most FIRE planners use 6–7% as a real (inflation-adjusted) annual return for a diversified equity portfolio. For a conservative estimate, use 5%. For an aggressive estimate, 8–9%. The default of 7% reflects the approximate long-run real return of global equity markets.

Should I use 4% or a lower withdrawal rate?

If you're planning a 30-year retirement (retiring at 65), 4% is well-supported by the data. If you're retiring at 35–45 and planning for a 50+ year retirement, many FIRE practitioners use 3–3.5% to add safety margin. This calculator lets you adjust that rate to see the impact on your FIRE number.

Does this account for government pensions (CPP, OAS, Social Security)?

Not directly — but you can account for it manually. If you expect $12,000/year from CPP/OAS/Social Security, reduce your annual expenses input by $12,000. Your FIRE number will automatically adjust to reflect only the gap your portfolio needs to cover.

What's the fastest way to reach FIRE?

Increase your savings rate. Every 1% increase compounds into years off your timeline. Reducing expenses has a double effect: it lowers your FIRE number AND increases the amount you invest each year. Want to practice FIRE strategies in a risk-free environment? Try AlgoPotato.

Practice FIRE in AlgoPotato 🥔

The free idle game where you grow a farm, build an investment portfolio, and race toward financial independence. No real money. All the lessons.

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