The 4% rule is a guideline from the Trinity Study (1998). It suggests that if you invest in a mix of stocks (50-75%) and bonds, you can withdraw 4% of your portfolio in year one, and adjust that amount for inflation every year thereafter, with a 95%+ chance of NOT running out of money for 30 years.

Does the 4% rule work for early retirees?

The Trinity Study looked at 30-year retirements. If you retire at 35, you plan for a 50+ year retirement. In that case, many experts recommend a safer withdrawal rate of 3.25% to 3.5%, meaning you need roughly 30x-33x your expenses instead of 25x.

Does Social Security count toward my FIRE number?

Your FIRE number is based on the 'gap' between your expenses and your guaranteed income. Since you likely won't get Social Security until 62+, calculate your FIRE number to cover 100% of your expenses until age 62, then recalculate the residual need. Most FIRE planners treat Social Security as a 'safety buffer' rather than core income.

What is LeanFIRE vs FatFIRE?

LeanFIRE creates a number based on minimal living expenses (e.g., $40k/year -> $1M invested). FatFIRE creates a number based on a luxurious lifestyle (e.g., $150k/year -> $3.75M invested).

How to Calculate Your FIRE Number

FIRE (Financial Independence, Retire Early) is not about hating work. It's about freedom. It's the moment your investments generate enough money to cover your bills forever, making paid work optional. But what is "Enough"?

Calculate Your Freedom

Use our advanced retirement calculator to see when you can quit.

Launch FIRE Calculator

🔥

The Magic Formula: The Rule of 25

The math behind FIRE is shockingly simple. You are financially independent when you have saved 25 times your annual expenses.

Annual Expenses × 25 = FIRE Number

Why 25?

This number comes from the inverse of the 4% Rule (100 ÷ 4 = 25). The Trinity University study found that historically, you can withdraw 4% of a stock/bond portfolio in the first year of retirement, adjust for inflation, and have a 95-98% chance of rarely running out of money over 30 years.

Example Calculations

Category	Annual Spend	FIRE Number Needed
Lean FIRE	$40,000	$1,000,000
Middle Class	$60,000	$1,500,000
Upper Middle	$100,000	$2,500,000
Fat FIRE	$200,000	$5,000,000

Step 1: Calculate Your Expenses

Most people underestimate this. Do not guess. Look at your last 12 months of credit card and bank statements.

Crucial Tip: You can calculate your FIRE number based on your expected retirement expenses, not your current ones.

Will drop: Mortgage (if paid off), Commuting costs, Childcare, Saving for retirement (you don't need to save for retirement once you ARE retired).
Will rise: Travel, Healthcare (no employer subsidy), Hobbies.

Step 2: Adjust for Risk (Safety Margins)

The 4% rule was designed for a 30-year retirement (retire at 65, die at 95). If you want to retire at 35, you need to plan for 60+ years. The risk is "Sequence of Returns Risk"—a market crash in the first 5 years of your retirement.

To be safe, many early retirees use a 3.5% Withdrawal Rate. This raises the multiplier to roughly 28.6x or 30x.

$60,000 Spend using 4% Rule (25x) = $1.5M
$60,000 Spend using 3.3% Rule (30x) = $1.8M (Much Safer)

The 3 Types of FIRE

LeanFIRE

For minimalists. You optimize expenses to the absolute bone ($30k-$40k). You live in a low-cost area, cook at home, and bike everywhere.

FIRE (Standard)

Maintenance of your current middle-class lifestyle. You don't sacrifice comfort, but you don't spend excessively.

FatFIRE

Retiring wth abundance ($100k+ spend). International travel, new cars, dining out. Requires a significantly larger portfolio ($2.5M+).

Conclusion

The most important variable in the FIRE equation is your Savings Rate. If you save 10% of your income, you will work for 51 years. If you save 50% of your income, you can retire in 17 years. If you save 70% of your income, you can retire in 8.5 years.

Calculate your number. Track your net worth. The journey to freedom begins with simple math.