FIRE Calculator

What is the 4% rule?

The 4% rule says a retiree who withdraws 4% of a diversified portfolio in the first year, then adjusts that dollar amount for inflation annually, has historically had a high probability of the money lasting at least 30 years. Flip it around and it becomes a target: sustainable spending × 25 = the portfolio you need, which is exactly what this calculator computes. Spending $60,000 means aiming for $1,500,000; every additional $1,000 of annual spending adds $25,000 to the target — which is why the FIRE community obsesses at least as much over expenses as over returns.

Where does the rule come from?

The 4% rule grew out of research in the 1990s on "safe withdrawal rates" — most famously a study by finance professors at Trinity University that back-tested various withdrawal percentages against decades of historical U.S. stock and bond returns, checking how often each rate would have survived a 30-year retirement. Around 4%, the historical success rates were high enough that the figure became the community's default planning anchor. It's an empirical summary of one country's past markets, though — a very useful rule of thumb, not a law of nature.

What the rule doesn't promise

Treat the output here as a well-grounded target, not a guarantee, because the 4% framework has known soft spots worth weighing together:

• Sequence-of-returns risk. Two retirements with the same average return can end differently if the bad years come first — early losses plus withdrawals compound against you in a way averages hide.
• The 30-year assumption. The historical evidence centers on 30-year retirements. Retiring at 40 means funding 50+ years, and many early retirees plan around 3–3.5% for that reason.
• Pre-tax vs post-tax. "Expenses" must mean spending including the taxes you'll owe on withdrawals; a target built on post-tax spending but funded with pre-tax accounts is quietly too small.
• Nominal projections. The years-to-FI figure grows your savings in nominal dollars, while your real target rises with your cost of living — real returns are the honest yardstick for long horizons.

The inputs you control most

Of the four levers, monthly savings and expenses are the two you can actually steer — and expenses pull double duty, shrinking the target while freeing up savings. Returns are set by markets, and time does its best work when there's a lot of it, which is one more instance of the head start beating nearly everything else. If the years-to-FI number startles you, experiment with the expense field before the return field: cutting $6,000 a year of spending moves the target by $150,000 and adds $500/month to savings — a double effect no realistic rate change matches.