Financial independence (FIRE) calculator
Financial independence arrives when your invested net worth is about 25 times your annual spending, assuming a 4% withdrawal rate. On $3,500 a month in spending you'd need roughly $1,050,000, and the variable that shortens the timeline most isn't your return — it's your savings rate.
Formula: Target nest egg = annual spending / withdrawal rate. Years are calculated by compounding net worth plus monthly savings month by month.
Financial independence (FIRE) calculator
Calculate the nest egg that would let you live off your investments and how many years it takes at your current savings rate.
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How to use it
- Monthly spending and income. The gap between them defines your real savings rate.
- Current invested net worth. Only assets that generate a return, not your primary home.
- Return and withdrawal rate. A 4% withdrawal rate is standard; 3.5% is more conservative.
- Try scenarios. Cut spending by $200 and see how much the timeline shortens.
Savings rate is king
Cutting spending has a double effect: it raises what you save each month and lowers the nest egg you'll need forever. That's why a 40% savings rate shortens the path far more than an extra point of return, which you don't control anyway.
- 20% savings rate: roughly 35 years
- 40% savings rate: roughly 20 years
- 60% savings rate: roughly 12 years
What counts toward your number, and what doesn't
Only assets that can fund your spending count: index funds, stocks, bonds and rental property net of expenses. Your primary home doesn't generate income, and your emergency fund should be kept separate, since its job is covering surprises, not producing a return.
Frequently asked questions
- Is 4% still realistic today?
- The rule comes from research on the US market. For globally diversified portfolios and long horizons, many planners now use 3–3.5% as a more conservative figure.
- Should I include Social Security?
- If you retire near full retirement age, yes — it lowers the nest egg you need. For very early retirement, plan without it until you reach the eligible age.