How much you need to be financially independent
Divide yearly spending by a withdrawal rate. A 4% rate is the same as saving 25 times your spending.
- At a 3% withdrawal rate$1,600,000.00
- At a 3.5% withdrawal rate$1,371,428.57
- At a 4% withdrawal rate$1,200,000.00
- At a 5% withdrawal rate$960,000.00
- At your 4% rate$1,200,000.00
What is a FIRE number
Financial independence means your investments can pay for your life without a paycheck. The FIRE number is the size of the portfolio that gets you there. The most common shortcut is the 4% rule: if you spend 4% of your portfolio in the first year, and adjust that dollar amount for inflation after, the money has often lasted 30 years in historical tests.
To see how a steady monthly deposit grows over time, use the investment growth calculator. For a closer look at compounding, the compound interest calculator shows the math.
Years to FI by savings rate
| Savings rate | Years to FI |
|---|---|
| 10% | 51 years |
| 20% | 36 years and 5 months |
| 30% | 27 years and 8 months |
| 40% | 21 years and 5 months |
| 50% | 16 years and 5 months |
| 60% | 12 years and 3 months |
| 70% | 8 years and 8 months |
The savings rate matters more than income, because a higher rate both builds the pile faster and lowers the spending you need to replace. Moving from 20% to 50% cuts the time by about 20 years in this example.
FI number by spending
| Yearly spending | At 3.5% | At 4% | At 5% |
|---|---|---|---|
| $30,000 | $857,142.86 | $750,000.00 | $600,000.00 |
| $40,000 | $1,142,857.14 | $1,000,000.00 | $800,000.00 |
| $60,000 | $1,714,285.71 | $1,500,000.00 | $1,200,000.00 |
| $80,000 | $2,285,714.29 | $2,000,000.00 | $1,600,000.00 |
| $100,000 | $2,857,142.86 | $2,500,000.00 | $2,000,000.00 |
Limits of the model
- Returns are assumed steady. Real markets are bumpy, and a bad stretch early in retirement can hurt more than the same stretch later.
- The return is after inflation, so spending stays in today's dollars. Inflation can run higher or lower than you assume.
- Taxes, health insurance, and one-time costs are not included. Add them to your spending number.
- Spending can change. Many people spend more early in retirement and less later, or earn some income.
Think of the FIRE number as a target to plan around, then revisit it each year as your life changes.
Frequently asked questions
How do I calculate my FIRE number?
Divide your yearly spending by a withdrawal rate. At the common 4% rule of thumb, that is spending times 25, so $48,000 a year needs $1,200,000.
What is the 4% rule?
It is a rule of thumb that says you can withdraw 4% of your portfolio in the first year of retirement, then adjust for inflation, and the money has often lasted 30 years in past data. It is a guideline from historical studies, not a promise.
How many years until I can retire early?
It depends on your savings rate, current savings, and returns. Saving 30% of $90,000 with $50,000 already invested and an assumed 5% real return reaches $1,575,000 in 25 years and 11 months.
How does my savings rate change the timeline?
A lot. Starting from zero, saving 20% takes about 36 years and 5 months, while saving 50% takes about 16 years and 5 months on the same assumptions.
Should I use 3%, 3.5%, or 4% as my withdrawal rate?
Lower rates are more cautious and need a bigger portfolio. People retiring very early often pick 3% to 3.5%. The calculator lets you change the rate and see every version.
What return should I assume for FIRE planning?
Use a cautious return after inflation, since the future is uncertain. The 5% in the examples is only an assumption. Try a lower number to see how much the timeline changes.
Sources and review
- Rule of thumb based on historical U.S. market studies of retirement withdrawals (the 4% rule), presented as a guideline only