FIRE calculator: how it works and why it’s useful
A FIRE calculator helps you estimate the amount of money you may need to reach financial independence (often called your FIRE number). The core idea is simple: if your invested portfolio is large enough, you may be able to withdraw a small percentage each year to cover your living costs.
Many people use a rule of thumb such as a 4% withdrawal rate. In that case, the FIRE number is approximately 25× your annual expenses (because 1 / 0.04 = 25). This tool lets you adjust the withdrawal rate, include your current portfolio, add yearly contributions, and model growth over time using an expected return and inflation assumption.
This financial independence calculator runs locally in your browser. No account is needed and no personal data is uploaded. You can try multiple scenarios quickly: reducing expenses, increasing contributions, changing assumptions, or testing more conservative returns.
The result is an estimate, not financial advice. Markets vary, inflation changes, and real-life spending is never perfectly constant. Still, having a clear FIRE target can help you plan, track progress, and stay motivated.
What is this FIRE calculator used for?
This tool estimates your FIRE number and an approximate timeline to reach it, based on your expenses, current portfolio, yearly contributions, and return assumptions.
Who is this tool useful for?
- Beginners who want a simple FIRE target based on expenses
- Investors tracking progress toward financial independence
- Families comparing lifestyle scenarios and savings rates
- Anyone exploring early retirement planning
Concrete examples
- “If I spend €30,000/year and use 4%, what is my target portfolio?”
- “If I invest €12,000/year at 5% return, how many years could it take?”
- “What if inflation is higher or returns are lower?”
Common mistakes to avoid
- ❌ Mixing nominal returns with real (after inflation) assumptions
- ❌ Ignoring irregular costs (repairs, kids, health, taxes)
- ❌ Assuming returns are stable every year
This calculator uses a simplified year-by-year model. Real life is more complex, but scenarios like this help build intuition.
Limits and possible alternatives
This tool provides an estimate using a constant yearly contribution and constant rates. For detailed retirement planning, some people use full cash-flow models or professional advice.
- Detailed spreadsheet cash-flow projections
- Monte Carlo simulation tools
- Professional financial planning
Educational summary
In short, your FIRE number is commonly estimated by dividing annual expenses by a withdrawal rate (for example expenses / 0.04). This tool adds portfolio growth and contributions to estimate how long it may take to reach that target.