The formula
How to calculate fIRE number
Your FIRE number is the portfolio large enough that withdrawals from it cover your spending indefinitely. At a 4% withdrawal rate it works out at 25 times your annual expenses — the single figure the whole financial independence idea rests on.
The 4% figure comes from the Trinity Study, which tested historical US market returns and found that a portfolio of stocks and bonds survived a 30-year retirement in the large majority of cases when the first year's withdrawal was 4% of the balance and then rose with inflation.
What to enter:
- Annual spending — what you expect to spend each year once you stop working
- Withdrawal rate (%) — 4% is the Trinity Study default; 3.25–3.5% is the cautious end
The result updates on every keystroke. The URL updates too, which makes the filled-in version easy to bookmark or send to someone else.
Where a figure is not immediately to hand — a precise interest rate, an exact balance — a reasonable estimate is a perfectly good starting point. Because every result updates instantly, refining a rough guess into the real figure once you have it takes a moment, and nothing about the calculation depends on getting it exactly right on the first attempt.
Why fIRE number matters
FIRE stands for Financial Independence, Retire Early — reaching a portfolio large enough that investment income covers your living costs, so paid work becomes a choice rather than a necessity. It is not a specific account or product, just the point at which the figures below cross over.
Most people who look up a fIRE number calculation already have a specific number in mind — a quote, an offer, a target — and want to check it rather than learn the theory behind it. This page is built for that: enter your own figures, see the result immediately, and change any field to see how the answer moves without redoing the arithmetic from scratch each time.
It is also useful as a sense check before signing anything. A quote, an offer letter or a spreadsheet from someone else can contain an error, an optimistic assumption, or simply a different convention for rounding — running the same inputs through an independent calculator is a quick way to confirm a number before relying on it.
This kind of calculation rarely stands entirely alone. A fIRE number figure usually feeds into a wider decision — how it compares with a competing offer, whether it fits inside a monthly budget, what it does to a longer-term plan — and the value of having it as an exact number rather than a rough guess is that those follow-on comparisons stop being guesswork too. Once one figure in a decision is precise, it is worth making the effort to get the others precise as well, rather than mixing an exact calculation with several estimates and treating the result as equally reliable.
Where the same calculation needs to be run for several different scenarios side by side — three loan offers, two savings plans — the fastest approach is usually to open the calculator in a second browser tab for each one, so that the results can be compared directly rather than overwriting each other in a single set of fields.
Worked example
Here is the calculation with the starting values:
- Annual spending: 40,000
- Withdrawal rate: 4 %
That gives:
- FIRE number: 1,000,000
- Years of spending: 25 ×
- Monthly income it supports: 3,333.33
These figures are only the calculator's own starting values, included so the working is visible rather than hidden inside the tool above. Replace them with your own numbers and the same arithmetic applies — nothing about the method changes, only the inputs feeding it.
Reading the result
Notice that the target is driven by spending, not income. Cutting £5,000 a year from your budget lowers the number by £125,000 at 4% — usually far easier than saving another £125,000.
Where this goes wrong. The 4% rule was built for a 30-year retirement. Retiring at 40 means planning for 50 years or more, and the sustainable rate at that horizon is closer to 3.25–3.5%, which raises the target by around 20%.
A useful check on any unfamiliar result is to compare it against a rough mental estimate first — round the inputs to convenient numbers and see whether the calculator's answer lands in roughly the same territory. A wildly different figure usually means one of the fields was entered in the wrong unit, most often a percentage typed as a whole number where a decimal was expected, or the reverse.
Because 25 is the reciprocal of 4%. Withdrawing 4% a year is the same as needing 25 years of spending in the pot, with market growth expected to replace what you take out.
No. A home you live in produces no income to withdraw. Include it only if you plan to sell and release equity, and in that case count the expected net proceeds, not the market value.
The answer it gives you is fIRE number. With 40,000 annual spending and 4 % withdrawal rate, that comes to 1,000,000. Change any field and the figure moves with it.
Whenever one of the underlying figures changes — a new interest rate, a different balance, an updated term — since the result only reflects what is currently in the fields. There is no need to keep a separate record of past results; the web address for a filled-in version already carries the figures used to produce it.
Not unless a tax rate or a fee is explicitly one of the inputs above. Where it is not, the figure shown is a gross calculation, and any tax due depends on your personal circumstances and current tax rules, which are worth checking separately.
The arithmetic itself is exact — the calculator applies the formula shown above precisely, with no rounding until the final figure is displayed. The uncertainty, where it exists, is entirely in the inputs: an estimated rate or an approximate balance carries that same approximation through to the result.