Frequently Asked Questions
What is a FIRE number?
It is the size of the investment portfolio you need so that withdrawing a safe percentage each year covers your living expenses indefinitely. At a 4 percent withdrawal rate, the FIRE number is 25 times your annual spending.
Why does the calculator use 7 percent growth?
Seven percent is a commonly used estimate for long-run nominal returns on a diversified stock portfolio before inflation is removed. You can treat it as approximate; actual returns will vary year to year.
What if I already have enough saved?
If your current portfolio already meets or exceeds your FIRE number, years to FIRE shows zero and you are technically financially independent. Whether to stop working is a personal decision beyond the math.
How does the safe withdrawal rate affect the number?
A lower rate requires a larger portfolio. At 3 percent you need about 33 times annual spending; at 4 percent you need 25 times; at 5 percent you need 20 times. Lower rates give more buffer against bad sequence-of-returns years.
Is 4% really safe as a withdrawal rate?
The 4% rule is a guideline based on historical US market data. Some current researchers suggest 3-3.5% is more conservative given recent market valuations and the low interest rates of the past few decades. For 40-50 year retirements (very early retirement), a safe withdrawal rate of 3-3.5% may be more prudent.
What account types should I use for my FIRE portfolio?
A mix is ideal: tax-advantaged accounts first (401(k), IRA, Roth IRA), then taxable brokerage accounts. The Roth conversion ladder strategy is popular for accessing funds before age 59.5 without penalty.
Should I count my house as part of my FIRE portfolio?
Generally no, unless you plan to sell or downsize. Your home's value does not generate cash flow unless you rent it out, sell it, or use a product like a reverse mortgage.
Does Social Security count toward the FIRE number?
Yes. If you will receive Social Security, that income reduces the spending your portfolio has to cover. If you expect $18,000 per year from Social Security and spend $60,000, your portfolio only needs to cover $42,000, lowering your FIRE number to $1,050,000.
What happens if the market crashes right after I retire?
That is sequence-of-returns risk, the biggest danger of early retirement. To mitigate it: keep 1-2 years of expenses in cash or short-term bonds, use a flexible withdrawal approach (spend less in bad market years), and avoid withdrawing exactly 4% every year regardless of performance.
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Estimates only. Not financial advice.
Financial Disclaimer: Estimates only. Not financial advice.
This calculator provides estimates for informational purposes only. Actual financial outcomes depend on market conditions, personal circumstances, and decisions. Not financial advice. Consult a certified financial planner before making financial decisions affecting your future.