The two numbers that matter
Financial independence comes down to a target (your FIRE number) and a trajectory (how fast your investments grow toward it). Your FIRE number is just your annual spending divided by a safe withdrawal rate — spend less, and the finish line moves closer. The trajectory depends on how much you invest each year and the return you earn.
The biggest lever: your savings rate
Counter-intuitively, income matters less than the gap between what you earn and what you spend. Cutting expenses does double duty — it lowers your FIRE number and frees up more to invest. Raising your yearly contribution above is usually the fastest way to pull your independence age forward.
Frequently asked questions
What is FIRE?
FIRE stands for Financial Independence, Retire Early. The idea is to build investments large enough that the returns cover your living costs, so paid work becomes optional.
What is the 4% rule?
A common rule of thumb that you can withdraw about 4% of your portfolio in the first year of retirement (adjusting for inflation after) with a high chance the money lasts ~30 years. A 4% rate means you need 25× your annual expenses. Lower the withdrawal rate for a bigger safety margin.
How is my FIRE number calculated?
FIRE number = annual expenses ÷ withdrawal rate. At a 4% withdrawal rate, 40,000 of annual spending needs a 1,000,000 portfolio (40,000 ÷ 0.04).
Does this include inflation?
The projection uses your expected return as a nominal rate. For a conservative, inflation-aware plan, enter a real (after-inflation) return such as 4–5% and express expenses in today’s money.
Last updated: June 2026