Plot No. 3 · Money & Finance
FIRE Retirement Calculator
Project when you can retire based on your current savings, monthly investing and target retirement spending. Uses the 'multiply by 25' / 4% safe withdrawal rule as the default.
Real returns are net of inflation. The default 4% withdrawal rate comes from the Trinity Study and is a common (but not guaranteed) rule of thumb.
The link saves your inputs so you can bookmark or share this exact result.
How the FIRE projection works
FIRE stands for financial independence, retire early. The idea is to build a pot large enough that a safe annual withdrawal covers your spending forever. This calculator first works out that target pot, your FI number, by dividing your target annual spend by your chosen safe withdrawal rate. At the common 4 percent rate, that is the same as multiplying your annual spend by 25.
It then simulates your savings month by month. Starting from your current invested savings, it grows the pot by a monthly return derived from your expected annual return and adds your monthly investment, repeating until the pot reaches your FI number. The result is the age and number of years at which you hit financial independence.
How to use the FIRE calculator
- Enter your current age and the value of your current invested savings.
- Set how much you invest each month and the real annual return you expect.
- Enter your target annual spend in retirement and your safe withdrawal rate, then read your FI age and FI number.
Worked examples
The default mid-career saver
Inputs: Age 32, current savings 50,000, investing 1,500 a month, 7 percent real return, target spend 35,000, 4 percent withdrawal rate.
Result: An FI number of 875,000 and financial independence reached in about 19.1 years, at roughly age 51.
Lowering the target spend
Inputs: The same inputs but target spend cut to 28,000.
Result: The FI number falls to 700,000, which is reached years sooner, showing how strongly your spending target drives the timeline.
Limitations and common mistakes
Edge cases and limitations
- Use a real return net of inflation, around 5 to 7 percent for a diversified portfolio. Entering a nominal return will make retirement look closer than it is.
- The simulation caps at 70 years. If the inputs never reach the target, it reports that you will not get there at the current pace.
- Tax in retirement is not modelled. Your target spend should be the after-tax amount you need to live on.
Common mistakes
- Using an optimistic withdrawal rate. The 4 percent rule comes from the Trinity Study and is a rule of thumb, not a guarantee, especially for very long retirements.
- Forgetting that the projection assumes steady contributions and returns. Real markets are volatile, so treat the FI age as a midpoint, not a promise.
Frequently asked questions
What is the 4% rule?
The 4% rule, from the Trinity Study, suggests you can withdraw 4% of your initial portfolio per year (adjusted for inflation) with a high probability of not running out over 30 years. To find your FI number, multiply your annual spending by 25.
Should I use a real or nominal return rate?
Use real (inflation-adjusted) returns. Historical real returns for a globally diversified stock portfolio are around 5-7%. Using nominal returns will overestimate how soon you can retire.
Does this account for tax in retirement?
No. Your target spend should be the post-tax amount you need to live on. Where that money comes from (ISA, pension, taxable account) will determine the tax treatment.
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What the 4 percent rule means, why it implies a pot of about 25 times your annual spending, how inflation fits in, and the caveats to plan around.
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