Simulate your path to financial independence and discover your FIRE age. Calculate how much you need to save and when you can achieve early retirement.
Different approaches to financial independence with varying lifestyle expectations
Minimalist approach focusing on essential expenses only
Standard middle-class lifestyle with moderate comfort
Luxurious retirement with high spending capacity
Enough saved that compound growth will reach FIRE by traditional retirement age
Partial financial independence with part-time work covering some expenses
"The best time to plant a tree was 20 years ago. The second best time is now."
FIRE stands for Financial Independence, Retire Early—a movement focused on aggressive saving and investing to achieve financial freedom decades before traditional retirement age. The core principle is simple: save and invest enough money so that your investment returns cover your living expenses, allowing you to retire in your 30s, 40s, or 50s instead of 65.
Financial independence doesn't necessarily mean you stop working—it means you have the freedom to choose. You can pursue passion projects, start a business, work part-time, or travel the world without worrying about money. The goal is to make work optional, not mandatory.
The FIRE movement gained mainstream attention in the 2010s, but the principles are timeless: spend less than you earn, invest the difference, and let compound interest work its magic. What makes FIRE different is the intensity—FIRE adherents typically save 50-70% of their income, compared to the average American savings rate of 5-10%.
The 4% rule is the cornerstone of FIRE calculations. It states that you can safely withdraw 4% of your portfolio each year in retirement without running out of money. This rule comes from the Trinity Study, which analyzed historical market data and found that a 4% withdrawal rate has a 95%+ success rate over 30-year periods.
Annual Expenses: $40,000
FIRE Number: $40,000 ÷ 0.04 = $1,000,000
Safe Withdrawal: $1,000,000 × 0.04 = $40,000/year
Once you have 25x your annual expenses invested, you can theoretically retire and live off your investments indefinitely.
However, the 4% rule has critics. Some argue it's too conservative (you could withdraw more), while others say it's too aggressive given today's lower expected returns and longer retirement periods. Many FIRE practitioners use 3-3.5% for extra safety, especially for early retirement spanning 50+ years.
Living on a minimal budget, typically $25,000-$40,000/year. Lean FIRE requires the smallest nest egg but demands significant lifestyle sacrifices. Popular with minimalists and those willing to live frugally or in low-cost-of-living areas.
Maintaining a middle-class lifestyle, typically $40,000-$80,000/year. This is the most common FIRE path, requiring a nest egg of $1-2 million. Achievable for most dual-income households with disciplined saving.
Living comfortably without financial constraints, typically $100,000+/year. Fat FIRE requires $2.5-5+ million but allows for luxury travel, dining out, and no budget stress. Usually requires high income or successful business exit.
Having enough invested to cover most expenses, supplemented by part-time work. This reduces the required nest egg by 30-50% and provides health insurance through employment. Great for those who enjoy working but want flexibility.
Having enough invested that you can stop contributing and let it grow to traditional retirement age. You still work to cover current expenses, but you're no longer saving for retirement. Provides peace of mind and career flexibility.
Enter your current age and when you want to achieve FIRE. Most FIRE adherents target ages 35-50, but it's achievable at any age with the right strategy. The calculator will show you if your plan is realistic.
Your current gross income and annual spending. Be honest about expenses—underestimating will derail your FIRE plan. Include everything: housing, food, transportation, insurance, entertainment, and occasional big purchases.
Your total invested assets across all accounts (401k, IRA, brokerage, etc.). Don't include your primary residence unless you plan to downsize or do a reverse mortgage. Only count liquid, investable assets.
Your projected annual investment return. Conservative: 6%, Moderate: 7-8%, Aggressive: 9-10%. Remember, higher returns require more risk. Most FIRE calculators use 7% as a reasonable long-term average after inflation.
The percentage of your portfolio you'll withdraw annually in retirement. The classic 4% rule is standard, but 3-3.5% is safer for early retirement. Higher withdrawal rates increase the risk of running out of money.
Achieving FIRE faster requires pulling one or more of these three levers:
The fastest way to accelerate FIRE is earning more. Strategies include:
Impact: Increasing income from $60k to $90k can cut your FIRE timeline by 5-10 years.
Cutting expenses has a double benefit—you save more AND need less to retire. Focus on the big three:
Impact: Cutting expenses from $50k to $35k reduces your FIRE number from $1.25M to $875k.
Smart investing accelerates compound growth:
Impact: Reducing fees from 1% to 0.1% can add $200k+ to your portfolio over 30 years.
Healthcare before Medicare eligibility (age 65) is expensive. Budget $500-$1,500/month for insurance, plus out-of-pocket costs. This is often the biggest surprise for early retirees.
Retiring right before a market crash can devastate your portfolio. Consider having 2-3 years of expenses in cash/bonds as a buffer, or be willing to return to work temporarily.
Traditional 401k/IRA withdrawals are taxed as ordinary income. Roth conversions, capital gains strategies, and tax-loss harvesting can save tens of thousands annually.
Kids, divorce, health issues, and aging parents can derail FIRE plans. Build in a 20-30% buffer and be flexible. FIRE is a journey, not a rigid destination.
Extreme frugality can lead to burnout and regret. Balance saving for tomorrow with enjoying today. You can't get your 20s and 30s back—find a sustainable middle ground.
Yes! While high earners can achieve FIRE faster, it's absolutely possible on median incomes ($50-70k). The key is maintaining a high savings rate (50%+) through frugality and side income. Many FIRE success stories come from teachers, nurses, and other middle-class professions.
FIRE gives you options—you can always return to work, do consulting, or start a business. Many FIRE retirees find they're more productive and creative when work is optional. The worst case? You have financial security and can choose your next move.
Several strategies exist: Roth IRA contributions (not earnings) can be withdrawn anytime, Rule 72(t) SEPP withdrawals, Roth conversion ladder, and using taxable brokerage accounts first. Proper planning allows penalty-free access to retirement funds.
Most FIRE plans don't count on Social Security—it's treated as a bonus. If you retire very early, you may have reduced benefits due to fewer working years. However, even modest Social Security can significantly boost your retirement security.
Yes, but it's harder. Kids add $10-20k/year in expenses, plus college costs. Many FIRE families succeed by living in LCOL areas, house hacking, and involving kids in the frugal lifestyle. Some delay FIRE until kids are independent.
Use this calculator to determine how much you need to retire.
You can't optimize what you don't measure. Use Mint, YNAB, or a spreadsheet.
Housing, transportation, and food are 60-70% of spending. Start there.
Set up automatic transfers to investment accounts on payday.
Negotiate raises, switch jobs, develop skills, start side hustles.
FIRE takes 10-20 years for most people. Consistency beats perfection.
FIRE is a lifestyle movement focused on achieving financial independence and the option to retire much earlier than traditional retirement age. The core principle is simple: save and invest aggressively to build a portfolio large enough to cover your living expenses indefinitely through investment returns.
The FIRE movement has gained massive popularity as people realize they don't have to work until 65. By living below your means, investing wisely, and following a strategic plan, many achieve financial independence in their 30s, 40s, or 50s.
Your FIRE number is the total amount of money you need invested to retire early. The most common method uses the 4% Rule:
FIRE Number = Annual Expenses × 25
Or: Annual Expenses ÷ 0.04 (4% withdrawal rate)
Example: If you spend $40,000 per year, your FIRE number would be $1,000,000 ($40,000 × 25). With $1 million invested, you could safely withdraw $40,000 annually (4%) without depleting your principal.
The 4% rule is based on historical market data showing that a diversified portfolio can sustain a 4% annual withdrawal rate for 30+ years with a high probability of success.
Living on a minimal budget (typically $25,000-$40,000/year). Requires the smallest nest egg but demands frugal living. Best for minimalists who value freedom over luxury.
Maintaining a comfortable or luxurious lifestyle ($100,000+/year). Requires a larger portfolio but allows for travel, hobbies, and no financial stress. Takes longer to achieve but offers more lifestyle flexibility.
Having enough invested to cover most expenses, supplemented by part-time work. Offers flexibility to pursue passion projects or low-stress jobs while your investments grow.
Having enough invested that you no longer need to save for retirement. Your current investments will grow to support traditional retirement age (65), allowing you to work less stressful jobs or reduce hours now.
Determine your annual expenses and multiply by 25. Be realistic about your lifestyle needs. Use our calculator above to find your personalized FIRE number.
The higher your savings rate, the faster you'll reach FIRE. Many successful FIRE achievers save 50-70% of their income. Cut unnecessary expenses, increase income through side hustles, and automate your savings.
Invest in low-cost index funds with a diversified portfolio. Most FIRE followers use a simple three-fund portfolio: total stock market, international stocks, and bonds. Keep fees low and stay invested through market volatility.
Max out tax-advantaged accounts (401k, IRA, HSA). Understand Roth conversion ladders and how to access retirement funds before 59½ without penalties. Tax optimization can save you tens of thousands.
Monitor your net worth monthly, track your savings rate, and adjust your plan as life changes. Use our FIRE calculator regularly to see your progress and stay motivated on your journey to financial independence.
Healthcare before Medicare eligibility (age 65) can be expensive. Budget $500-$1,500/month for health insurance and unexpected medical expenses.
Your expenses will increase over time. Plan for 2-3% annual inflation. What costs $40,000 today will cost $54,000 in 20 years at 3% inflation.
The 4% rule is a guideline, not a guarantee. Consider a 3-3.5% withdrawal rate for extra safety, especially if retiring in your 30s or 40s.
FIRE is about freedom, not just quitting work. Have hobbies, passions, and purpose planned. Many find part-time work or passion projects fulfilling after FIRE.
Achieving FIRE isn't just about saving money—it's about investing it wisely to maximize growth while managing risk. Here's how successful FIRE achievers build their investment portfolios:
Most FIRE portfolios are heavily weighted toward stocks for maximum growth potential. Popular choices include:
Bonds provide stability and reduce portfolio volatility, especially important as you approach FIRE:
Many FIRE achievers use this simple, effective allocation:
Tax-advantaged accounts are crucial for FIRE success. They allow your money to grow tax-free or tax-deferred, significantly accelerating your path to financial independence. Here's the optimal order for FIRE investors:
Always contribute enough to get your full employer match—it's an instant 100% return on investment. If your employer matches 50% up to 6%, contribute at least 6% to get the full 3% match.
Roth IRAs are perfect for FIRE because contributions can be withdrawn penalty-free anytime. Earnings grow tax-free forever. Use the backdoor Roth strategy if your income is too high for direct contributions.
After securing your match and maxing Roth IRA, return to your 401(k). The tax deduction reduces your current tax burden, and you can access funds early through Roth conversion ladders or Rule 72(t) distributions.
HSAs offer the best tax benefits: deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses. After age 65, you can withdraw for any purpose (taxed as ordinary income, like a traditional IRA).
After maxing all tax-advantaged accounts, invest in regular brokerage accounts. These provide flexibility for early retirement since there are no withdrawal restrictions. Focus on tax-efficient index funds.
Healthcare can cost $15,000-$25,000+ annually for early retirees without employer insurance. Factor this into your FIRE number and consider maximizing HSA contributions.
$40,000 today won't have the same purchasing power in 20 years. Use real (inflation-adjusted) returns in your calculations and plan for 2-3% annual inflation.
Keeping too much in savings accounts or bonds can significantly delay FIRE. Young investors can typically handle 80-90% stock allocation for maximum growth potential.
As income increases, resist the urge to increase spending proportionally. Maintain or even reduce your expense ratio to accelerate your FIRE timeline.
The 4% rule is based on historical data from 1926-1995 and has a 95% success rate for 30-year retirements. However, current low interest rates and high stock valuations may require a more conservative 3-3.5% withdrawal rate. Many FIRE practitioners use 3.5% for extra safety margin.
Yes! Use strategies like Roth IRA contribution withdrawals (tax-free anytime), Roth conversion ladders (access converted funds after 5 years), or Rule 72(t) SEPP distributions from traditional accounts. Many FIRE achievers successfully access retirement funds early without penalties.
This is called "sequence of returns risk." Mitigate it by: keeping 2-3 years of expenses in cash/bonds, being flexible with withdrawal amounts during down markets, having a side income option, or delaying FIRE by 1-2 years to build extra cushion. Consider a bond tent strategy as you approach FIRE.
It depends entirely on your savings rate. At 50% savings rate, you can reach FIRE in about 17 years. At 65% savings rate, it drops to 10 years. At 75%, just 7 years. The key is maximizing the gap between income and expenses. Use our calculator to see your personalized timeline based on your specific situation.
It depends on your mortgage rate vs expected investment returns. If your mortgage rate is below 4-5%, you're likely better off investing the extra money in the stock market. However, some prefer the psychological benefit and reduced risk of a paid-off home. Consider your risk tolerance and sleep-at-night factor.
FIRE planning typically doesn't rely on Social Security, treating it as a bonus. You need 40 quarters (10 years) of work to qualify. For Medicare, you're eligible at 65 regardless of work status. Plan for private health insurance from FIRE until Medicare kicks in, which can be expensive.