How to calculate your FIRE number (FIRE, Lean, Fat, Coast, Barista)
Short answer: Your FIRE number is your yearly spending in retirement divided by your withdrawal rate: 25 times spending at 4%, about 28.6 times at 3.5%. Lean and Fat FIRE use a smaller or larger budget; Barista FIRE subtracts what part-time work covers; Coast FIRE is the amount that grows to your full number by a later retirement age without more saving.
The formula
FIRE number = yearly spending ÷ withdrawal rate. Spending $60,000 a year at 4% needs $1.5M; at 3.5%, about $1.71M. Use spending in today's dollars, including housing, health insurance and taxes.
Kinds of FIRE
- FIRE: stop working once investments cover all spending.
- Lean FIRE: a small budget, often $40,000 a year or less, so a smaller number.
- Fat FIRE: a large budget, often $100,000 a year or more.
- Barista FIRE: part-time work covers part of spending (and maybe health insurance), so the portfolio covers less. See Barista FIRE.
- Coast FIRE: save enough early that growth alone reaches the full number by a later retirement age; after that you only earn what you spend.
- FINE: Financial Independence, Next Endeavor. Leave a career for a business, a new career or other work that may pay less.
Coast FIRE math
Coast number = FIRE number ÷ (1 + real return)years until retirement. US stocks returned about 7.1% a year after inflation from 1871 on, but individual decades ranged from below zero to over 13%, so use a lower rate, or historical paths as FIRE.PipedHQ does. At 5% real, a $1.5M number 20 years away needs about $565,000 today.
How long it takes
The time-to-target tool shows how long monthly investing took to reach a number in every start month since 1871, and the Journey turns it into a plan with the age you would reach it.
Questions
How do I calculate my FIRE number?
Divide yearly retirement spending by your withdrawal rate. At 4% that is 25 times spending.
What return should I assume for FIRE?
US stocks returned about 7.1% a year after inflation since 1871, but 10-year stretches ranged from about −0.4% (worst 10%) to 13.8% (best 10%). Conservative plans use 4% to 5% real or test against history.
What is Coast FIRE?
Having enough invested that, with no more contributions, it grows to your full FIRE number by your planned retirement age.