What Is a FIRE Number?
The FIRE number is the total savings required to retire and live off investment returns indefinitely. It's based on the 4% Safe Withdrawal Rate (SWR) — the finding that a diversified portfolio can sustain 4% annual withdrawals for 30+ years without running out of money. The formula is simple: Annual Expenses ÷ 0.04 = FIRE Number. For $5,000/month in expenses, the FIRE number is $1,500,000.
The 4% Rule Explained
Developed from the Trinity Study (1998), the 4% rule states that if you withdraw 4% of your portfolio in year one and adjust for inflation each year, you have a 95%+ chance of not running out of money over 30 years. A more conservative version uses 3.5% or 3.3% for longer retirements or higher certainty.
FIRE Variations
- Lean FIRE — Retire on a minimal budget, often under $40,000/year. Requires less corpus but less flexibility.
- Fat FIRE — Retire with $100,000+ annual expenses. Requires a larger corpus but maximum freedom.
- Barista FIRE — Semi-retire with part-time income supplementing a smaller portfolio. Best of both worlds.
- Coast FIRE — Save enough early that compound interest alone gets you to FIRE by traditional retirement age — no more contributions needed.
Frequently Asked Questions
Is the 4% rule still valid in 2025?
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The 4% rule was derived from US market data and has held up across most historical periods. However, with lower expected future returns and higher valuations, some financial planners now recommend a 3.5% withdrawal rate for early retirees with long time horizons. This calculator uses 4% — for extra safety, aim for a corpus 15–20% larger than shown.
Should I include Social Security in my FIRE number?
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Yes — if you'll receive Social Security, you can reduce your required corpus. If you expect $1,500/month from Social Security and need $5,000/month total, your portfolio only needs to cover $3,500/month. Reduce your "monthly expenses" input by your expected Social Security benefit to get an accurate FIRE number.
What if I'm behind on retirement savings?
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Increasing your monthly contribution by even $100–$200 can make a significant difference over 20–30 years due to compound interest. Other levers: extend your working years by 2–3 years (dramatic effect on the corpus), reduce target retirement expenses, or pursue higher-return investments. The most powerful move is increasing income and saving rate simultaneously.