FIRE Calculator
Financial Independence, Retire Early
Calculate your path to financial freedom with inflation-adjusted projections
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Path to Financial Independence
Understanding FIRE (Financial Independence, Retire Early)
FIRE is a lifestyle movement with the goal of gaining financial independence and retiring early. The model became particularly popular among millennials in the 2010s, gaining traction through online communities via blogs, podcasts, and online discussion forums.
Those seeking to attain FIRE intentionally maximize their savings rate by finding ways to increase income and/or decrease expenses. The objective is to accumulate assets until the resulting passive income provides enough money to cover living expenses throughout one's retirement years.
The Core Principles
- ✓High Savings Rate: Saving 50-70% of income rather than the standard 10-15%.
- ✓Frugal Living: Intentional spending and minimizing lifestyle inflation.
- ✓Low-Cost Investing: Investing in broad market index funds (ETFs) for long-term growth.
The 25x Rule
The most common benchmark for financial independence is having saved 25 times your annual expenses.
FIRE Number = Annual Expenses × 25
Time to FIRE Formula:
Time = [ln((A/E) * (r-i) + 1) / ln(1 + (r-i))] / ln(1+r)
(Simplified approximation based on savings rate)
This is based on the 4% Safe Withdrawal Rate, assuming your portfolio grows enough to sustain withdrawals indefinitely.
Types of FIRE
Lean FIRE
Retiring with a minimalist lifestyle and lower-than-average expenses.
Fat FIRE
Retiring with a generous budget for travel, dining, and luxury.
Barista FIRE
Retiring from the "rat race" but working a low-stress part-time job for benefits.
Coast FIRE
Saving enough early so compound interest hits the target without further contributions.