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How to Calculate Your FIRE Number (Step by Step)

The FIRE number is the amount of money you need invested to achieve financial independence. Here is exactly how to calculate yours — plus a free calculator to do it in seconds.

The Core Formula: The 4% Rule

The most widely used method comes from the Trinity Study, which found that withdrawing 4% of your portfolio annually, adjusted for inflation, has a very high probability of lasting 30+ years.

FIRE Number = Annual Expenses × 25

Why 25? Because 1 ÷ 0.04 = 25. If you spend $40,000/year, your FIRE number is $40,000 × 25 = $1,000,000.

Step-by-Step Calculation

Step 1: Calculate Your Annual Expenses

Track every dollar you spend for 3-6 months. Include rent or mortgage, food, utilities, insurance, transportation, and entertainment. Do not forget irregular expenses like car repairs or medical bills — average them out monthly. Multiply by 12 to get your annual expenses.

Step 2: Multiply by 25 (The 4% Rule)

Annual Expenses × 25 = Your baseline FIRE number. This assumes a 4% safe withdrawal rate. If your annual spending is $50,000, your FIRE number is $1,250,000.

Step 3: Adjust for Inflation

If you are 10 years from retirement, $50,000 today will be roughly $67,000 at 3% annual inflation. Your FIRE number should reflect future expenses, not today's. Use a 3% inflation rate for conservative planning.

Step 4: Factor In a Safety Margin

Many FIRE practitioners prefer a 3.5% or even 3% withdrawal rate for extra safety, especially for retirements longer than 30 years. At 3.5%, multiply expenses by 28.6 instead of 25. At 3%, multiply by 33.3.

What About Coast FIRE?

Coast FIRE is the point where your existing investments will grow to your FIRE number by your target retirement age — even if you never invest another dollar. You only need to cover your living expenses ("coast") until then.

Coast FIRE Number = FIRE Number ÷ (1 + r)^n

where r = expected annual return and n = years until retirement

Calculate your FIRE number now

Enter your numbers in our free calculator. All calculations run locally — no data leaves your browser.

Open FIRE Calculator

Key Takeaways

  • Your FIRE number = annual expenses × 25 (using the 4% rule)
  • Track real expenses for 3-6 months — guessing leads to wrong targets
  • Adjust for inflation, especially if you are more than 5 years out
  • Consider a 3-3.5% withdrawal rate for retirements longer than 30 years
  • Coast FIRE lets you stop contributing early if compound growth does the rest