Formula
The target is the portfolio that could pay the spending at that rate:
FIRE number = yearly spending / withdrawal rate
Four percent is the usual illustration. It is not a guarantee the portfolio lasts.
Assumptions
- Spending stays at the yearly amount you type.
- The withdrawal rate does not change.
Worked example
$40,000 of yearly spending at a 4% withdrawal needs a FIRE number of $1,000,000.00.
Input definitions
- Already invested
- Savings you count toward the target. Zero is allowed.
Limitations
This is an estimate, not a loan offer, tax filing, or investment advice. The currency control changes the symbol only.
Questions
What does FIRE stand for?
Financial Independence, Retire Early. The number is the portfolio target, not an age.
Why is 4% equal to 25 times spending?
Dividing by 0.04 is the same as multiplying by 25.