Your FIRE number is the invested portfolio intended to support annual spending not covered by other income. Divide required annual withdrawals by the planned withdrawal rate. The familiar 25× rule is simply the same formula using a 4% rate: 1 ÷ 0.04 = 25.
FIRE number
If spending is $60,000 and no other income is included, a 4% assumption produces a $1.5 million target. A 3.5% assumption produces about $1.71 million. The target is a planning threshold, not a guarantee that a fixed withdrawal will succeed through every market and life event.
Spending creates the target
Lean, Base, and higher-spending scenarios are useful because spending is partly a design choice and partly uncertain. Lean FIRE describes a lower-cost version of the plan; Fat FIRE is shorthand for a higher-spending version. Coast FIRE asks whether the current portfolio could compound to the future target without additional contributions. These labels provide context, not certifications.
FIRE number by annual spending
| Scenario | Annual spending | Withdrawal rate | FIRE number | Projected status |
|---|---|---|---|---|
| Lean FIRE | $45,000 | 4.0% | $1,125,000 | Reached within selected projection |
| Base FIRE | $60,000 | 4.0% | $1,500,000 | Reached within selected projection |
| Fat FIRE | $75,000 | 4.0% | $1,875,000 | Reached within selected projection |
Worked example
Age 34, $180,000 invested, three spending choices
The household contributes $3,200 personally plus $400 from an employer each month and targets age 52. The model converts a 7% nominal return and 2.5% inflation into a real annual return of 0.0% so portfolio and spending target remain in compatible purchasing-power terms.
At the selected target age, the projected portfolio is $1,561,431 against a Base FIRE number of $1,500,000. The calculator classifies the base plan as “Projected to reach FIRE early.”
Portfolio path toward the Base FIRE target
What builds the portfolio
| Component | Amount |
|---|---|
| Current portfolio | $180,000 |
| Personal contributions | $672,000 |
| Employer contributions | $84,000 |
| Modeled investment growth | $570,913 |
| Total | $1,506,913 |
The withdrawal rate is a risk assumption
An early-retirement horizon can last four, five, or more decades. Sequence-of-returns risk is especially important near the start: early losses plus withdrawals remove capital that cannot participate in a later recovery. A lower starting rate, flexible spending, cash reserves, part-time income, or a later date can add resilience, but none guarantees an outcome.
Withdrawal-rate sensitivity
| Withdrawal rate | Implied multiple | FIRE number |
|---|---|---|
| 3.0% | 33.3× | $2,000,000 |
| 3.5% | 28.6× | $1,714,286 |
| 4.0% | 25.0× | $1,500,000 |
| 4.5% | 22.2× | $1,333,333 |
Include the expenses most likely to be omitted
Taxes, healthcare before and after Medicare eligibility, home and vehicle replacement, family support, and irregular travel or repairs belong in the spending estimate. If the plan relies on other income, align its start date with the model. Income that begins years after leaving work does not reduce the early bridge years in the same way.
Understand what determines years to FIRE
The timeline is driven by the distance between current invested assets and the target, monthly contributions, and real return. Spending affects both sides: lowering current spending can create more room to invest, while lowering planned FIRE spending also reduces the target. That two-sided effect is why lifestyle design can change a FIRE projection more than a small return adjustment.
Employer contributions belong in the portfolio path but are not personal savings. A personal savings rate should use personal contributions; a total contribution rate can include the employer amount. Keeping both visible prevents the match from making household cash flow look tighter than it is.
Coast FIRE isolates the compounding question: is today's portfolio large enough to reach the future target by the chosen age with no new deposits? Reaching Coast FIRE does not mean current spending is funded or that contributions should stop. It means the modeled future target may be covered if time and return assumptions hold.
Plan for the years immediately around the target
Crossing the line after a strong market year is different from crossing it with a wide margin after a weak one. A household can use a valuation buffer, an additional year of work, a part-time transition, or a flexible first-year spending plan. These choices reduce reliance on one portfolio value on one date.
Sequence risk becomes damaging when early withdrawals lock in losses. Flexible spending can help by reducing withdrawals after poor returns, but only the flexible part of the budget can move. Estimate the essential floor before assuming a large percentage cut is available. A separate cash reserve can cover near-term spending, although holding more cash can lower expected long-run return.
Taxes require an account-level plan. A $60,000 spending budget may require more than $60,000 of gross withdrawals, depending on account type, basis, deductions, and location. The FIRE number here uses spending and other income as entered; it does not gross up withdrawals for tax automatically.
Recalculate instead of moving the finish line invisibly
Update the model when spending, portfolio, contribution, or target age changes. Keep the old scenario for comparison. If the target falls because spending was revised, confirm that the new budget includes infrequent replacements and healthcare rather than simply forcing the answer to match the current balance.
Distinguish financial independence from leaving work on a particular date. The portfolio may cross the modeled number while health coverage, vesting, a bonus, a partner's schedule, or a major purchase makes a later transition preferable. It may also fall short while part-time work or another income source makes the lifestyle feasible. The calculation supplies a common financial language for that decision; it does not define the entire decision.