FIRE / Retirement Calculator
Project years to financial independence at a given savings rate.
Overview
A FIRE calculator (Financial Independence, Retire Early) estimates how many years it will take to accumulate enough invested capital to live on portfolio withdrawals indefinitely. The core idea, popularized by writers like JL Collins and the Bogleheads community, is that savings rate — not absolute income — drives the timeline. A household that saves 50% of take-home pay is, by construction, banking one year of expenses for every year worked, which collapses the math from "decades" to "about 17 years."
The output is a target nest egg, the projected years to reach it, and the implied passive income at the chosen safe withdrawal rate. The model is deterministic and ignores sequence-of-return risk, healthcare costs, taxes on withdrawals, Social Security, and changing expenses through life stages. It is a planning aid for ballparking trade-offs (raise income, cut expenses, change asset allocation), not a guarantee of retirement readiness.
How it works
Annual expenses divided by the safe withdrawal rate gives the target portfolio value — at 4%, that is 25× annual expenses. Starting from a current balance, each year the portfolio grows by the real (inflation-adjusted) return on existing assets plus the annual savings amount: balance_{n+1} = balance_n × (1 + r) + savings. The calculator iterates that recurrence until the balance hits the target. In closed form, years to FI is ln((target × r + savings) / (start × r + savings)) / ln(1 + r).
Examples
- Spending $40,000/year, saving $30,000/year, starting at $50,000 invested, expecting a 5% real return: target is $1,000,000 at the 4% rule; FI arrives in roughly 17 years.
- Same household but spending only $30,000 — target drops to $750,000 and FI lands closer to 12 years. Cutting expenses both lowers the goal and raises the savings rate.
- Starting from zero with a 60% savings rate on a $100,000 take-home: about 12.5 years to a 25× expenses target.
- A 25% savings rate on the same income: closer to 32 years — half the savings rate more than doubles the timeline.
FAQ
Is 4% still the right withdrawal rate?
The original Trinity study found 4% survived all historical 30-year retirements. Longer horizons or richer valuations argue for 3.0%–3.5%.
Does this account for Social Security?
No. Many planners treat Social Security as a bonus stream that arrives mid-retirement and reduces required portfolio size.
What return should I assume?
Use real (after-inflation) returns. Historical US equities sit around 6%–7% real; a balanced 60/40 closer to 4%–5%.
What is "Coast FIRE"?
Reaching a balance that, with no further contributions, will compound to a full FIRE number by traditional retirement age.
Is FIRE realistic on a normal income?
Yes for many — the dominant variable is savings rate, not income. Higher incomes accelerate the timeline if expenses do not scale.