# When can I retire early with FIRE?

Computes your FIRE number (yearly spending ÷ withdrawal rate) and how long it takes to reach it from your savings and what you save, at a real return.

- Page: https://www.acalculator.org/finance/fire-calculator
- JSON spec: https://www.acalculator.org/finance/fire-calculator.json
- Version: fe67656f629c

## Default answer

Example with the default inputs (Your age 30, Yearly spending in retirement $50,000.00, Invested today $100,000.00, You save $2,000.00, Expected yearly return 7%, Prices rise each year by 3%, Safe withdrawal rate 4%): Spending $50,000.00 a year needs $1,250,000.00 at a 4% withdrawal rate; saving $2,000.00 a month, you reach it at age 54.9.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| age | Your age | Your age now. |
| spending | Yearly spending in retirement | What you expect to spend each year once you stop working, in today’s money. |
| saved | Invested today | What you have invested for retirement now. |
| save | You save | What you invest per month or per year, in today’s money: it rises with prices. A yearly amount is split into 12. |
| rate | Expected yearly return | The yearly return before inflation. It stays the same every year. |
| inflation | Prices rise each year by | The yearly inflation rate. The real return is (1 + return) ÷ (1 + inflation) − 1. |
| swr | Safe withdrawal rate | The share of your savings you plan to spend in the first year of retirement, often 4%. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| fireAge | You reach financial independence at age | Your age now plus the years it takes for your investments to reach the FIRE number. |
| years | Years to go | The months until your investments reach the FIRE number, divided by 12. |
| fire | Your FIRE number | Yearly spending ÷ safe withdrawal rate, in today’s money. |
| progress | How far you are | What you have invested today as a percent of the FIRE number. |
| contributed | You’ll save | Everything you invest until you reach the FIRE number, in today’s money. |
| growth | Real growth | The growth after inflation until you reach the FIRE number. |
| status | Reached by age 100? | Shown when your investments do not reach the FIRE number by age 100. |

## Method

FIRE number = yearly spending ÷ withdrawal rate; each month, in today’s money, balance = balance × (1 + i) + savings, with i = ((1 + R) ÷ (1 + inflation))^(1/12) − 1, until the balance reaches the FIRE number.

## Assumptions

- All amounts are in today’s money: your savings and spending rise with prices.
- The return and inflation stay the same every year. Real returns go up and down.
- Savings are added at the end of each month.
- The withdrawal rate is a rule of thumb from past market returns, not a guarantee that the money lasts.
- Taxes, fees, and Social Security are not included.
- This is an estimate for planning, not financial advice.

## Worked examples

1. age = 30, spending = $40,000.00, saved = $40,000.00, save = 3,000, rate = 0%, inflation = 0%, swr = 4% gives fire = $1,000,000.00, years = 26.666667, fireAge = 56.666667, progress = 4%, contributed = $960,000.00. Source: hand calculation in content.mdx: 40,000 ÷ 0.04; (1,000,000 − 40,000) ÷ 3,000 = 320 months.
2. age = 30, spending = $50,000.00, saved = $100,000.00, save = $2,000.00, rate = 7%, inflation = 3%, swr = 4% gives fire = $1,250,000.00, years = 24.916667, fireAge = 54.916667. Source: month by month at the real return in content.mdx; checked in Python.
3. age = 45, spending = $60,000.00, saved = $2,000,000.00, save = $0.00, rate = 5%, inflation = 3%, swr = 4% gives fire = $1,500,000.00, years = 0, fireAge = 45. Source: hand calculation in content.mdx: $2,000,000 is already above 60,000 ÷ 0.04.
4. age = 30, spending = $50,000.00, saved = $0.00, save = $100.00, rate = 0%, inflation = 0%, swr = 4% gives status = Not by age 100, fire = $1,250,000.00. Source: hand calculation in content.mdx: 840 months × $100 = $84,000, far below $1,250,000.
5. age = 30, spending = $12,000.00, saved = $100,000.00, save = $2,000.00, rate = 2%, inflation = 5%, swr = 4% gives fire = $300,000.00, years = 11.083333, fireAge = 41.083333. Source: hand calculation in content.mdx: a negative real return, n = ln((F × i + S) ÷ (B × i + S)) ÷ ln(1 + i) = 132.8.

## FAQ

### What is FIRE?

FIRE stands for "financial independence, retire early". The idea is to save and invest enough that your investments can pay for your spending, so work becomes optional, often well before a usual retirement age.

### What is my FIRE number?

It is your yearly spending divided by your safe withdrawal rate. At 4%, that is 25 times your yearly spending: $50,000 a year needs $1,250,000. At 3.5% it is about 28.6 times.

### Where does the 4% rule come from?

From studies of past US stock and bond returns (Bengen, 1994; Cooley, Hubbard and Walz, 1998). Taking 4% in the first year and then raising it with inflation lasted at least 30 years in most historical periods. Early retirees may need their money for 40 or 50 years, so many choose a lower rate to be cautious. It is a rule of thumb, not a guarantee.

### Why does the calculator use a real return?

Your spending will rise with prices, so the calculator works in today’s money. It turns your expected return into a real return: (1 + return) ÷ (1 + inflation) − 1. A 7% return with 3% inflation is a 3.88% real return. Your savings are also in today’s money, so they rise with prices each year.

### What speeds up reaching financial independence?

Two things matter most: how much you save and how much you spend. Spending less lowers the FIRE number and frees money to save, so it works twice. The return matters too, but you do not control it.

### What does the calculator leave out?

Taxes, fees, Social Security, pensions, and changes in spending over time. Social Security can lower what your savings must pay later: if you were born in 1960 or later, your full retirement age is 67. It also uses one steady return; real markets go up and down.

## Sources

- W. P. Bengen, "Determining Withdrawal Rates Using Historical Data", Journal of Financial Planning, October 1994.
- P. L. Cooley, C. M. Hubbard, D. T. Walz, "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable", AAII Journal, February 1998.
- U.S. Securities and Exchange Commission, Investor.gov compound interest calculator and formula. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Real rate of return (the Fisher relation): S. A. Broverman, Mathematics of Investment and Credit, chapter 1.
- Social Security Administration, Benefits Planner: born in 1960 or later. https://www.ssa.gov/benefits/retirement/planner/1960.html