FIRE Retirement Calculator

Frequently Asked Questions

What is FIRE (Financial Independence, Retire Early)?

FIRE stands for Financial Independence, Retire Early. The goal is to accumulate enough invested assets that the passive returns cover your living expenses — making paid work optional. You reach FIRE when your portfolio is large enough to sustain your lifestyle indefinitely, typically measured using the 4% rule.

What is the 4% rule?

The 4% rule (from the 1998 Trinity Study) states that withdrawing 4% of your portfolio each year gives you a historically high probability of not running out of money over a 30-year retirement. This means your FIRE number is 25× your annual expenses. For example, if you spend $50,000 per year, you need $1,250,000 invested to retire.

How is my FIRE number calculated?

Your FIRE number is calculated as: Annual Expenses ÷ Withdrawal Rate. Using the 4% rule, this simplifies to Annual Expenses × 25. This calculator computes your FIRE number automatically based on your annual expenses and chosen withdrawal rate — adjust the withdrawal rate slider to see how a more conservative or aggressive rate affects your target.

Why does this calculator use inflation-adjusted (real) returns?

All projections use real returns (investment return minus inflation rate). This keeps every figure in today's purchasing power, so your FIRE target represents what that money is actually worth now — you don't need to separately estimate how inflation will erode your future nest egg. A 7% nominal return with 2% inflation is equivalent to a roughly 5% real return.

What is geo-arbitrage and how can it accelerate retirement?

Geo-arbitrage means relocating to a city or country with a lower cost of living so your savings stretch further. If moving from New York to Lisbon cuts your annual expenses by 40%, your FIRE number shrinks by 40% too — and you may retire years earlier. The Faster Retirement Plan section below the calculator shows exactly how many years earlier you could retire in over 50 destinations worldwide, using Numbeo's 2026 Cost of Living + Rent Index.

What is sequence-of-returns risk?

Sequence-of-returns risk is the danger that a large market loss early in retirement permanently depletes your savings, even if the long-run average return matches your plan. With the exact same average annual return, a portfolio that drops 37% in year one (as the S&P 500 did in 2008) may run out of money years before one that earns the same returns in a different order — because early withdrawals lock in losses before a recovery can help. The stress test above simulates the 2008 crash sequence (−37% / +26.5% / +15.1%) in your first three retirement years, showing exactly how many years sooner your portfolio would deplete.

What does the Monte Carlo simulation show?

The Monte Carlo simulation generates 10 random return sequences using your assumed mean return and a volatility estimate, then plots how your portfolio grows or shrinks under each path. Green paths survive to age 100; red paths deplete early. The survival percentage is a rough probability indicator — not a prediction. Real returns are not independently random year to year, and past volatility may differ from future volatility. The simulation shows the range of plausible outcomes rather than a single optimistic projection. A 90%+ survival rate under moderate volatility is a reasonable target before committing to a retirement date.