The 4% Rule · Financial Independence
FIRE Number Calculator
Your FIRE number is the amount of money you need invested to never work again. It's calculated using the 4% rule — one of the most well-studied principles in personal finance. Here's yours.
What is the 4% rule?
The 4% rule comes from the Trinity Study — a 1998 analysis of historical market returns that found a diversified portfolio could sustain withdrawals of 4% per year without running out of money over a 30-year period in 95%+ of historical scenarios.
In simple terms: if you have $1,000,000 invested, you can spend $40,000 per year indefinitely (assuming average market returns continue). If your annual expenses are $40,000, your FIRE number is $1,000,000.
FIRE Number = Annual Expenses ÷ Withdrawal Rate
At 4%: $40,000 ÷ 0.04 = $1,000,000 (same as 25× annual expenses)
At 3.5%: $40,000 ÷ 0.035 = $1,142,857 (≈ 28× annual expenses)
At 3%: $40,000 ÷ 0.03 = $1,333,333 (≈ 33× annual expenses)
Is the 4% rule still valid?
The 4% rule was calculated using US market data and assumes a portfolio of roughly 60% stocks and 40% bonds. It has been both supported and challenged by subsequent research. The key criticisms for early retirees are: it was designed for 30-year retirements, not 40–50 year ones; current bond yields are lower than historical averages; and it doesn't account for sequence-of-returns risk (retiring into a bear market).
For early retirees, most financial planners recommend a 3–3.5% withdrawal rate — meaning 28–33× annual expenses. This gives significantly more margin.
Frequently asked questions
Does my FIRE number include my home?
No. Your FIRE number should be in liquid invested assets — stocks, bonds, index funds. Your home is a liability (costs money to maintain) unless it generates rental income. Many FIRE advocates own their home outright in retirement, but the FIRE number itself is calculated separately from home equity.
What investment return should I assume?
The 4% rule assumes a 7% nominal return (roughly 5% real, after inflation) from a diversified portfolio of global equities and bonds. If you invest in a global equity index fund, 7% is a reasonable long-term assumption — though past returns don't guarantee future results.
Should I use my current expenses or my expected retirement expenses?
Use your expected retirement expenses — what you'll actually spend when you stop working. For many people, this is lower than current expenses (no commuting, work clothes, childcare if kids are grown). For others it's higher (more travel, healthcare). Think carefully about what your retired life actually costs.
How do I track progress toward my FIRE number?
The simplest way: divide your current portfolio value by your FIRE number. If you need $1.5M and have $300K, you're 20% of the way there. The
amipoor.com tool calculates this live and shows your projected FIRE date based on your savings rate and investment returns.