1. What is FIRE Number?

The FIRE (Financial Independence, Retire Early) Number represents the total savings needed to sustain your living expenses indefinitely using the safe withdrawal rate. It's a key concept in financial independence planning.

2. How Does the Calculator Work?

The calculator uses the FIRE formula:

Where:

• Annual Expenses — Your yearly spending needs in retirement
• Safe Withdrawal Rate — Typically 4% (0.04) based on the Trinity Study

Explanation: This calculation determines how much capital you need so that withdrawing a small percentage annually covers your expenses without depleting your savings.

3. Importance of FIRE Number

Details: Knowing your FIRE Number helps you set clear financial goals and track progress toward financial independence. It's the foundation of retirement planning in the FIRE movement.

4. Using the Calculator

Tips: Enter your annual living expenses and preferred safe withdrawal rate (typically 4%). The calculator will show your target savings amount needed for financial independence.

5. Frequently Asked Questions (FAQ)

Q1: Why is 4% the standard withdrawal rate?
A: Based on the Trinity Study, 4% had a high success rate for 30-year retirements. Many FIRE planners use 3-3.5% for longer retirement periods.

Q2: Should I include taxes in annual expenses?
A: Yes, your FIRE Number should cover all expenses including income taxes, healthcare, and unexpected costs.

Q3: Does this account for inflation?
A: The 4% rule includes inflation adjustments, but you should review your numbers periodically.

Q4: What about investment returns?
A: The safe withdrawal rate assumes your portfolio earns enough to cover withdrawals and inflation over time.

Q5: Can I use this if I have pension income?
A: Yes, subtract guaranteed income from annual expenses before calculating your FIRE Number.