How to calculate your FIRE number (and the year you reach it)
Your FIRE number is the invested amount that could fund your yearly spending indefinitely. The classic version is 25 times annual expenses, which is the same as a 4 percent withdrawal rate. Spend $40,000 a year and the number is $1,000,000. The year you reach it depends on how fast you save.
The 25x rule and the 4 percent rate
Dividing yearly spending by a withdrawal rate gives the portfolio needed. At 4 percent, that is spending times 25. A more conservative 3.5 percent gives roughly 28.6 times; a bolder 5 percent gives 20 times. The rate is a judgement about market returns, inflation, and how flexible your spending can be.
Measure spending, do not guess it
The biggest error in FIRE maths is the spending figure. Use a full year of real expenses, including the yearly bills that only appear once. Twelve months of a tracked ledger beats any estimate, and it shows which categories would change in retirement.
Projecting the year you get there
- Start with what you already have invested and set aside.
- Add your monthly saving pace, measured over the last 90 days rather than hoped for.
- Compound monthly at an assumed real return, commonly 4 to 5 percent a year after inflation.
- Step forward month by month until the balance crosses the target.
| Inputs | Value |
|---|---|
| Yearly spending | $53,580 |
| Withdrawal rate | 4% |
| FIRE number | $1,339,500 |
| Already set aside | $67,790 |
| Monthly saving pace | $3,150 |
| Assumed real return | 5% |
| Years to target | About 18 |
What moves the date most
- Spending. Every $1,000 a year you cut removes $25,000 from the target and raises your saving pace at the same time.
- Saving pace. It compounds twice: more invested now and more contributed later.
- Return assumptions. They matter, but you do not control them; keep them modest and let spending and pace do the work.
How Worth Clarity does it
The FIRE card on the net worth page prefills yearly spending from your ledger, your set-aside balances, and your 90-day saving pace, then runs the monthly simulation against the target line. Every input is editable and nothing is saved, so you can test a lower spending figure or a different rate in seconds.
Common questions
- Should the FIRE number include my home?
- Usually not. The number is the invested portfolio you can draw from. A home you live in produces no income to withdraw, though owning it outright lowers the yearly spending you need to cover.
- Is 4 percent still safe?
- It is a well-studied starting point, not a guarantee. Many people plan on 3.5 percent for a longer retirement or keep spending flexible so a bad decade can be absorbed.
- What is Coast FIRE?
- The point where what you have already invested will grow to your FIRE number by a normal retirement age without further contributions. It is the same maths run with a zero saving pace and a longer horizon.
