How the calculator works
- Every month, your savings go in first, then the month's market gain is applied. Annual rates are converted to monthly rates with (1 + rate)^(1/12) − 1.
- Your FI number is set by your withdrawal strategy and grows with inflation, so it keeps the same buying power in the future.
- Your FI date is the first month in which your projected wealth reaches that number. After it, the chart shows how your portfolio develops while you withdraw.
- Savings changes let you model a raise, a career break or a lower savings rate later on.
This is a projection, not financial advice. It assumes a constant market gain and inflation, no taxes or fees, and savings at the start of each month. Real markets go up and down, so treat the result as a guide and review it regularly.
Three withdrawal strategies
The same spending needs a different portfolio depending on what should happen to the money after you stop working.
Continue growing
Stop saving once your portfolio can fund your spending at the safe withdrawal rate and keep growing.
Preserve capital
Stop saving once your portfolio's growth pays for your withdrawals. Its buying power stays the same.
Spend it down
Stop saving once your portfolio lasts exactly until your last day. Die with zero.
What is the 4% rule?
The 4% rule says you can withdraw 4% of your portfolio in the first year of retirement, raise the amount with inflation each year, and very likely not run out of money for 30 years. It comes from the Trinity study of historical US stock and bond returns.
Turned around, your FIRE number is your annual spending divided by 4%, or 25 times your annual spending. Spending $40,000 a year means a FIRE number of $1,000,000. Many people who retire early choose 3% to 3.5% for a longer retirement.
Example: same spending, three strategies
Say you have $50,000 invested today, add $500 a month and want to spend $2,000 a month in retirement. With an average market gain of 8% and inflation of 2%, the three withdrawal strategies give:
| Strategy | FIRE number (today's money) | Financially free in |
|---|---|---|
| Continue growing | $600,000 | Feb 2055 |
| Preserve capital | $420,886 | Aug 2049 |
| Spend it down | $301,697 | Oct 2044 |
Same spending, very different targets: what you want to happen to your money after you stop working decides how much you need.
Frequently asked questions
What is a FIRE number?
Your FIRE number is the portfolio value at which your investments can pay for your living costs without a salary. With the 4% rule it is 25 times your annual spending.
How much do I need to retire early?
Multiply the yearly spending you plan for in retirement by 25, which is the 4% rule. Spending $2,000 a month is $24,000 a year, so you need about $600,000. A lower withdrawal rate, such as 3.5%, raises the target to about 29 times your spending. The calculator works out the number for your strategy, market gain and inflation.
How is my FI date calculated?
The calculator grows your portfolio month by month with your savings and the expected market gain. Your FI date is the first month in which it reaches your FI number, adjusted for inflation up to that month.
What if I want to keep working but stop saving?
That is Coast FIRE: you save until growth alone will reach your FI number by a normal retirement age, then stop saving and only earn what you spend. Work out when that is with the Coast FIRE calculator.
Which withdrawal strategy should I pick?
Continue growing (the 4% rule) suits most people and leaves money behind. Preserve capital keeps your wealth's buying power intact forever. Spend it down needs the smallest portfolio but is planned to reach zero at the end of your life.
What does today's buying power mean?
All amounts are shown in today's money: $1,000 in 2045 buys what $1,000 buys now. Switch to “Inflation-adjusted” under the chart to see the actual future numbers including inflation.
What is sequence-of-returns risk?
A market crash in the first years after you stop working hurts more than one later on, because you sell investments while prices are low. The calculator assumes a steady market gain, so keep a buffer: a lower withdrawal rate, a cash reserve or spending you can cut in bad years.
Is my data stored?
No. The calculator runs in your browser. Your inputs are only kept in the page address so you can bookmark or share your plan.
Is this financial advice?
No. It is a projection based on the assumptions you enter. Real returns vary from year to year and are not guaranteed.
Sources
- William P. Bengen (1994): Determining Withdrawal Rates Using Historical Data. Journal of Financial Planning.
- Philip L. Cooley, Carl M. Hubbard, Daniel T. Walz (1998): Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable (the Trinity study). AAII Journal.
