FIRE Calculator
Calculate your path to financial independence and early retirement.
Understanding FIRE
FIRE (Financial Independence, Retire Early) is a movement focused on extreme savings and investment to achieve financial independence at an early age.
Key FIRE Concepts
- Financial Independence: Having enough wealth to live without needing to work for money.
- 4% Rule: A guideline suggesting you can withdraw 4% of your portfolio annually in retirement with a high probability of success.
- Savings Rate: The percentage of your income that you save rather than spend.
- FIRE Number: The amount of money you need to save to achieve financial independence (typically 25-30 times your annual expenses).
FIRE Strategies
- High Savings Rate: Aim to save 50-70% of your income to accelerate wealth building.
- Reduce Expenses: Minimize lifestyle inflation and focus on value-based spending.
- Increase Income: Look for ways to earn more through career advancement or side hustles.
- Tax Optimization: Maximize tax-advantaged accounts and tax-efficient investments.
- Investment Strategy: Focus on low-cost, diversified index funds for long-term growth.
FIRE Variations
- Lean FIRE: Targeting minimal expenses in retirement (typically under $40,000 annually).
- Regular FIRE: Standard FIRE approach with moderate retirement expenses.
- Fat FIRE: Targeting higher retirement expenses for a more luxurious lifestyle.
- Barista FIRE: Saving enough to cover basic expenses, then working part-time for healthcare and extra income.
- Coast FIRE: Saving enough that your investments will grow to your FIRE number without additional contributions.