What Is FIRE and How Does the FIRE Number Work?
FIRE stands for Financial Independence, Retire Early. The concept is simple: accumulate enough invested assets that the annual returns cover your living expenses indefinitely. The standard formula uses the 4% Safe Withdrawal Rate from the Trinity Study: your FI Number = Annual Expenses × 25.
FIRE Types Explained
Lean FIRE means retiring on a very frugal budget, typically under $40,000/year. Regular FIRE is the standard approach with a moderate lifestyle. Fat FIRE targets $100,000+/year in expenses for a comfortable retirement. Barista FIRE means semi-retiring with part-time work to cover a gap. Coast FIRE means you've already saved enough that, without adding more, compound growth will hit your FI Number by traditional retirement age.
Frequently Asked Questions
How long does it take to reach FIRE?
It depends almost entirely on your savings rate — the percentage of your income you save and invest. Someone saving 50% of their income can typically reach FIRE in 15-20 years from a zero starting point. Someone saving 10% may take 40+ years.
Does the 4% rule still hold?
The original Trinity Study covered 30-year retirements. For early retirees expecting 40-50 year retirements, many use 3-3.5% to be safer. This calculator lets you adjust the withdrawal rate to match your risk tolerance.
Can I reach FIRE if I'm starting late?
Yes. Starting later means your timeline is shorter, so you'll need a higher savings rate or a higher investment return. Someone starting at 45 saving aggressively can still reach FI in their late 50s — well before traditional retirement age. Focus on maximizing income and minimizing expenses rather than dwelling on the late start.
Should I include Social Security in my FIRE number?
Most FIRE planners exclude Social Security from their FI Number to be conservative. If it shows up later, it's a bonus that lets you withdraw less from your portfolio — extending the runway significantly. You can check your estimated Social Security benefit at ssa.gov.
What investment return should I use in this calculator?
Most FIRE calculators use 7% as a conservative real return (after inflation). The historical S&P 500 average is roughly 10% nominal before inflation. Using 6–7% means your plan survives below-average market conditions.