FIRE calculator
Calculates the target portfolio implied by your annual spending and a withdrawal rate, and counts how many years it would take to reach it with your current savings.
How it calculates
target = annual spending / withdrawal rate · each year: portfolio = portfolio × (1 + r) + annual savings
- Inputs: age, current portfolio, monthly income and spending, annual return (%) and withdrawal rate (%).
- Annual savings = (income − spending) × 12; savings rate = (income − spending) / income.
- The target is expressed in today’s money and savings do not grow over time, so the return you enter should be read as a real (inflation-adjusted) return.
- The count stops at 100 years.
Example with the default values
Age 25 · portfolio 10,000 · income 2,500/month · spending 1,500/month · 7% · withdrawal rate 4%
→ Target 450,000 · savings 12,000/year (40%) · 19 years (age 44)
Limitations
- The 4% withdrawal rate comes from historical studies of the US market (Bengen, 1994; Cooley, Hubbard and Walz, 1998). It is not a guarantee.
- It does not simulate the withdrawal phase, the order of returns, taxes, fees or pensions.
- It is a calculation tool, not financial advice.