FIRE Calculator

It's the amount you need invested to cover your spending indefinitely. Divide your yearly spending by your withdrawal rate. At 4%, multiply spending by 25: $40,000 a year needs $1,000,000, and $60,000 needs $1,500,000. Use what you'll spend in retirement, which may differ from today. For example, your mortgage may be paid off, but health insurance may cost more.

It's a guideline from research on historical US stock and bond returns. Withdrawing 4% of your portfolio in the first year, then raising it with inflation, lasted at least 30 years in most past periods. It isn't a guarantee. Early retirees planning for 40 or 50 years often use 3% to 3.5% to leave more room for bad markets.

Hugely. Starting from zero, with 5% returns after inflation and a 4% withdrawal rate, saving 10% of your income takes about 51 years. Saving 25% takes about 32 years, 50% about 17 years and 75% about 8 years. A higher rate means you save more and need less, because you've shown you can live on less.

Lean FIRE means reaching independence with a small budget, often under $40,000 a year, so the target is lower and comes sooner. Fat FIRE means a larger budget, often $100,000 or more, which needs a much bigger portfolio. Both use the same math. Change the spending field above to see how each affects your age.

It's when you've invested enough that, with no more contributions, growth alone will reach your number by a normal retirement age. After that, you only need to earn enough to cover your current spending. To test it, set your spending equal to your income so you save nothing, and see whether you still reach your number by 65.

For a result in today's dollars, use a return after inflation. Stocks have historically returned roughly 6% to 7% a year after inflation over long periods, and a mix with bonds returns less. Many planners use 5% to stay conservative. In our example, 7% gets you there at 46, and 5% at 48.

Usually not, unless you plan to sell it or rent part of it out. Your home doesn't pay your bills, though owning it outright lowers what you spend, and so the number you need. Count retirement accounts, taxable investments and cash beyond your emergency fund in the invested field.

Withdrawals from 401(k)s and IRAs before 59½ usually carry a 10% penalty, but there are exceptions. Options include Roth IRA contributions, which can come out anytime, a Roth conversion ladder, substantially equal periodic payments and the rule of 55 for some 401(k)s. Taxable brokerage accounts have no age limits. Ask a tax professional before relying on any of these.

It's one of the biggest costs for early retirees in the US before Medicare at 65. Options include marketplace plans, which may come with subsidies based on income, a spouse's employer plan or COBRA for a limited time. Budget for premiums and out-of-pocket costs in your spending, as they can easily add several hundred dollars a month.

It can lower what you need later, but most early retirees plan without it until they're eligible. Benefits are based on your 35 highest-earning years, so retiring early may reduce them. You can check your estimate on the Social Security website. If you count it, you can plan to draw a bit more before it starts, and less after.

It's harder but possible over a longer time. The key is the gap between income and spending, not income alone. Someone earning $60,000 who spends $36,000 saves 40%, which can reach independence in about 22 years at 5% real returns. Use our 401(k) calculator and Roth IRA calculator to make the most of tax-advantaged accounts along the way.