Understanding your FIRE projection
What FIRE means
FIRE stands for Financial Independence, Retire Early. In this calculator, financial independence is the first projected month when the portfolio reaches a spending-based target; it does not require or recommend leaving work.
How the FIRE number is calculated
Scenario spending is reduced by other annual FIRE income, with the difference floored at zero. Required portfolio withdrawals are then divided by the withdrawal rate expressed as a decimal.
Why a withdrawal rate is not a guarantee
A withdrawal rate is a planning assumption. Actual sustainability depends on market paths, taxes, fees, spending changes, longevity, and other conditions this deterministic accumulation model does not simulate.
Current spending versus FIRE spending
Current spending is context for today’s finances. Base annual spending in FIRE is a separate future lifestyle target, entered in today’s purchasing power, and it drives all three FIRE numbers.
How other income affects the target
Other FIRE income reduces required portfolio withdrawals. It is not deposited into the portfolio, counted as a contribution, or converted into savings when it exceeds scenario spending.
Lean, Base, and Fat FIRE
Lean uses the reduced-spending multiplier, Base uses 100% of entered FIRE spending, and Fat uses the increased-spending multiplier. These are descriptive targets, not safety ratings.
What Coast FIRE means
Coast FIRE asks whether the current portfolio alone could grow to Base FIRE by the target age under the entered constant real return. It assumes no new contributions and does not imply that stopping contributions is safe.
Why the model uses real return
Spending, income, contributions, targets, and balances are compared in today’s dollars. Nominal return is adjusted for inflation before it is converted into an effective monthly rate.
How inflation changes results
Higher inflation lowers real return when nominal return is unchanged. That can slow portfolio growth, delay projected FI, increase the target-age gap, and raise the mathematical additional contribution estimate.
Why contributions earn return next month
Each month applies return to the beginning portfolio first. Personal and employer contributions are deposited afterward, so new money begins participating in modeled return in the following month.
Target age versus projected FI age
Target FIRE age is the age you choose for a funding check. Projected FI age is calculated independently as the first month the modeled ending portfolio reaches the relevant FIRE number.
Additional monthly contribution
When Base FIRE is short at the target age, a bounded binary search reruns the monthly projection to estimate the minimum extra initial personal contribution. It is a mathematical output, not an action recommendation.
Why employer contributions stay separate
Employer contributions add to the same portfolio but are not personal savings. They use their own entered starting amount and annual step-up and remain unchanged in the additional-personal-contribution solver.
Limits of constant assumptions
The calculator keeps return, inflation, withdrawal rate, spending rules, and annual contribution increases deterministic so sensitivities are easy to compare. Real financial lives rarely follow constant paths.
Volatility and sequence risk
The model does not generate market gains and losses in different orders. It therefore cannot measure market volatility or sequence-of-returns risk, both of which can materially affect actual retirement outcomes.