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FIRE Calculator

How to use

  • At the beginning, you need to enter your current age, current annual income, and annual expenses.
  • You should also input your current total assets, along with the allocation of these assets across different investment types (the total should add up to 100%). Different investment types will have different rates of return.
  • You may enter decimal values if you believe they provide a more accurate estimate.
  • The investment return rate is an estimate of how your invested money grows annually. This calculator will provide a default value for your convenience, but you can update it for a more precise estimate. Based on the past 10 years of S&P 500 returns, this rate is typically above 7%.
  • The inflation rate reflects how your cash loses value over time. This is usually around 3%, though the number can vary depending on the country.
  • The Safe Withdrawal Rate (SWR) estimates the percentage of your assets you can withdraw each year for daily expenses. This is typically set at 4%. The lower this rate, the harder it is to achieve FIRE (Financial Independence, Retire Early), as it means you need a higher total amount of assets.

What is FIRE

FIRE is an acronym for Financial Independence, Retire Early, which literally means a financial status that allows you to retire early and no longer be restricted by your current financial status. This concept believes that work should not be the whole of life, as long as you have saved enough money, through the compound interest of the investment to receive a fixed percentage (commonly 4%) of the amount of money as living expenses, you can achieve the purpose of early retirement.

FIRE formula

This calculator is built on the standard FIRE calculator, with one additional step included. This is how to calculate your FIRE number:

The formula to calculate your FIRE number using the Safe Withdrawal Rate (SWR) is:

FIRE formula

The formula to calculate your end-of-year savings is:

FIRE formula

Compound interest calculation is one of the core components of the entire calculator.

The standard compound interest formula is:

FIRE formula