FIRE FAQs
What is the 4% rule?
The 4% rule is a guideline suggesting you can withdraw 4% of your portfolio in the first year of retirement, then adjust that dollar amount for inflation each year, with a historically high chance of lasting 30 years. In this calculator, your FIRE number is roughly your annual expenses divided by your withdrawal rate (e.g., expenses ÷ 0.04).
How do I choose a withdrawal rate?
Conservative investors often choose 3%–3.5%; others use 4%. Lower rates require a larger portfolio but provide more margin for market volatility and long retirements. Consider your risk tolerance, time horizon, and flexibility to adjust spending.
What return should I use?
Long‑term stock/bond mixes have returned ~5%–8% annually before inflation depending on allocation and timeframe. The expected return input is an estimate—using a slightly lower number adds prudence. Re‑evaluate periodically as markets change.
How should I account for inflation?
This tool simplifies by using a nominal return. For a real (inflation‑adjusted) view, reduce your return by expected inflation (e.g., 7% nominal − 2.5% inflation ≈ 4.5% real). You can also increase contributions over time to offset inflation.
What if I don’t reach my target by the selected age?
Increase contributions, extend the target age, reduce expenses (which lowers the FIRE number), or combine strategies. Small monthly increases can meaningfully accelerate the timeline due to compounding.
How the FIRE estimate works
Your target portfolio is annual retirement spending divided by the withdrawal rate as a decimal. Spending of $40,000 at 4% gives a $1,000,000 target; at 3% it gives approximately $1,333,333. Enter spending and returns on a consistent inflation basis.
The projection assumes a constant return and regular contributions. It does not model market sequences, taxes, fees or changing spending. Reaching the target does not guarantee that withdrawals will last. Compare lower returns, higher spending and a longer retirement before making a decision.
Method guidance reviewed 24 October 2026. CFPB consumer financial tools provide additional budgeting and borrowing guidance. Explore the financial tools hub for related scenarios.