UK FIRE calculator

How FIRE is calculated

FIRE (Financial Independence, Retire Early) targets the asset level at which your portfolio can sustain your living expenses indefinitely:

FIRE number = annual expenses × (1 / safe withdrawal rate)

At the traditional 4% rule, that's 25× annual expenses. At 3.5% (safer for long horizons), roughly 28.5×; at 3.0%, 33×.

Worked example

• Annual expenses: $40,000 → FIRE number at 4%: $1,000,000; at 3.5%: $1,140,000
• Current savings: $50,000, contributing $2,500/month at 5% real return
• Years to $1M target: ~16 years

Going from a 4% to 3.5% safe withdrawal rate (more conservative) adds about 1.5 years to the same plan. Lowering expenses by $5,000/year (to $35,000) cuts time to FIRE by roughly 2 years — saving more matters less than spending less, because every dollar of reduced expense both lowers the target AND raises available savings.

Savings rate is the dominant variable

At a 5% real return, time to FIRE by savings rate (Mr. Money Mustache's "Shockingly Simple Math"):

• 10% savings rate: ~51 years to FIRE
• 25%: ~32 years
• 50%: ~17 years
• 65%: ~10.5 years
• 75%: ~7 years
• 80%: ~5.5 years

FIRE flavours

• Lean FIRE: Minimalist budget (often under $40,000/year household). Common in lower-cost regions.
• Fat FIRE: Luxury spending ($100,000–$200,000+/year). Much larger portfolio required.
• Coast FIRE: Enough invested that, with no further contributions, it grows to a traditional retirement target by 65. Lets you scale back work without saving more.
• Barista FIRE: Enough to cover most expenses; part-time work fills the gap (often for healthcare access in the US).

Common mistakes

• Assuming the 4% rule is bulletproof for 50-year retirements. It was studied for 30-year periods. For longer horizons, 3.0–3.5% is more defensible.
• Forgetting healthcare in the US. Pre-Medicare retirees often need $10,000–$30,000+/year for insurance.
• Ignoring sequence-of-returns risk. Retiring into a market drawdown can permanently impair the portfolio. A 1–3 year cash buffer helps.
• Lifestyle creep after FIRE. Many "retired" people unconsciously expand spending; budget tracking remains valuable.

What this calculator doesn't cover

• Sequence-of-returns risk (Monte Carlo modelling)
• Tax planning around early withdrawals (Roth conversion ladders, SEPP/72(t))
• Geographic arbitrage (lower-cost-of-living countries)
• Pension or Social Security income that supplements withdrawals
• Healthcare cost inflation specifically (typically runs higher than CPI)

For deeper FIRE modelling, see Big ERN's Safe Withdrawal Rate series and FIRECalc.