Retire Early or Work Longer?
How much do you actually need to walk away? Enter your numbers and see when you hit financial independence.
FIRE Number: The amount you need invested so that your portfolio can sustain your annual expenses indefinitely. Calculated as annual expenses ÷ withdrawal rate. At a 4% withdrawal rate and $55,000 in expenses, you need $1,375,000.
Coast FIRE: The age at which your current savings alone — with zero additional contributions — will grow to your FIRE number by your target retirement age. Once you hit Coast FIRE, you only need to earn enough to cover current expenses.
The two biggest levers are your savings rate and your expenses. Cutting expenses does double duty: it reduces your FIRE number AND increases how much you save. A 50% savings rate typically means ~17 years to FIRE regardless of income level.
FIRE: Financial Independence, Retire Early
FIRE is a movement built on a simple idea: save aggressively, invest wisely, and build enough wealth to make work optional. It's not about being lazy — it's about having the freedom to choose how you spend your time.
What Is a FIRE Number?
Your FIRE number is the size of the investment portfolio you need to sustain your lifestyle indefinitely. The standard formula is simple: annual expenses divided by your withdrawal rate. At a 4% withdrawal rate, a person spending $50,000 per year needs $1,250,000 invested.
The 4% rule comes from the Trinity Study, which found that a diversified portfolio of stocks and bonds historically survived 30+ year withdrawal periods at a 4% annual rate. More conservative planners use 3.5% or 3%, while those comfortable with some flexibility use 4–5%.
Why Savings Rate Matters More Than Income
The most counterintuitive insight in FIRE is that your savings rate — not your income — determines when you can retire. Someone earning $200,000 who spends $180,000 is further from FIRE than someone earning $80,000 who spends $40,000.
At a 50% savings rate, most people can reach FIRE in roughly 17 years regardless of income. At 25%, it takes about 32 years. At 75%, it takes about 7 years. The math is relentless and doesn't care about your salary — only the gap between what you earn and what you spend.
Types of FIRE
Lean FIRE: Retiring on a minimal budget, typically under $40,000/year in expenses. Requires less savings but offers less margin for error.
Fat FIRE: Retiring with a larger budget, often $100,000+ per year. Requires a much bigger portfolio but maintains a comfortable lifestyle.
Coast FIRE: The point where your existing investments will grow to your FIRE number by traditional retirement age — even if you never save another dollar. You still need to earn enough to cover current expenses, but the pressure to save aggressively disappears.
Barista FIRE: Semi-retirement where you work part-time for health insurance and basic expenses while your portfolio grows. Named after the common suggestion to work at Starbucks for the health benefits.
The Two Levers That Matter
Lever 1: Cut expenses. Reducing spending does double duty — it lowers your FIRE number AND increases how much you save. Cutting $10,000 from annual expenses reduces your FIRE number by $250,000 (at 4%) and adds $10,000 to your annual savings.
Lever 2: Increase income. Earning more only helps if you save the difference. A $20,000 raise that gets absorbed by lifestyle inflation does nothing for your FIRE timeline. A $20,000 raise that goes straight to investments accelerates everything.
What This Calculator Assumes
This model assumes constant income, expenses, and investment returns — none of which are realistic over a 10–30 year period. In reality, your income will likely grow, your expenses will shift, and market returns will be lumpy. Use this as a directional tool: it tells you roughly how long the journey is, not exactly when you'll arrive.
It also doesn't account for Social Security, pensions, taxes on withdrawals, or healthcare costs — all of which matter in a real retirement plan. Consider this a starting point, not a complete plan.
Frequently Asked Questions
Is the 4% rule still valid?
It's a reasonable starting point. The original Trinity Study covered 30-year periods; if you're retiring at 35, you need your money to last 50+ years. Many early retirees use 3.5% or maintain some flexibility — willing to cut spending in bad market years.
What about healthcare before 65?
This is the biggest practical challenge for early retirees in the US. Options include ACA marketplace plans (subsidies are income-based, and early retirees with low realized income often qualify), health sharing ministries, part-time work with benefits, or COBRA for the first 18 months.
How do I access retirement accounts before 59½?
Several strategies exist: Roth conversion ladder (convert Traditional to Roth, wait 5 years, withdraw penalty-free), Rule of 72(t) / SEPP (substantially equal periodic payments), or simply having enough in taxable brokerage accounts to bridge the gap until 59½.
What is Coast FIRE useful for?
Coast FIRE is useful as a stress-reduction milestone. Once you hit it, you can take a lower-paying but more fulfilling job, go part-time, start a business, or take a sabbatical — knowing that retirement is already funded by your existing investments even if you never save another dollar.
Should I include my home equity in my FIRE number?
Generally no, unless you plan to sell and downsize. Your FIRE number should represent investable assets that can generate income. A paid-off home reduces your expenses (no rent/mortgage), which lowers your FIRE number, but the equity itself isn't generating cashflow.