Your FIRE number is the amount you need invested to cover your living costs from your portfolio for the rest of your life. The quick version is annual spending times 25, the target popularized by the FIRE movement[1]. A household spending $60,000 a year needs $1,500,000. That shortcut is a good start, but it can be off by hundreds of thousands of dollars in either direction.
What is the FIRE formula?
The FIRE formula, sometimes called the FIRE equation, is one line:
FIRE number = annual spending in retirement ÷ safe withdrawal rate
So 100,000 ÷ 0.04 = 2,500,000: spending $100,000 a year at a 4% withdrawal rate takes $2,500,000 invested. Dividing by the rate is the same as multiplying by its inverse: 25x at 4%, 28.6x at 3.5% and 33.3x at 3%. Spending, not income, goes into the formula, and it is measured in today's dollars.
The FIRE equation for time
The second half of the math is how long it takes to get there. If you have P invested, add C at the end of each year and earn a real return r, the years to reach a target T are:
years = ln((T × r + C) ÷ (P × r + C)) ÷ ln(1 + r)
With $50,000 invested, $30,000 added a year, a 5% real return and a target of $1,500,000 ($60,000 of spending at 4%), that is 24.0 years. The FIRE calculator runs this year by year from your own numbers and tests the result against market history.
Why is the FIRE number 25 times your spending?
Because 25x is the inverse of a 4% withdrawal rate. In 1994 William Bengen tested historical US returns and found that withdrawing 4% of a portfolio in year one, then raising the amount with inflation, lasted at least 33 years in every period[2]. The 1998 Trinity study confirmed it: over 30 years, 4% withdrawals succeeded 95%-98% of the time depending on the stock and bond mix[3].
The formula works at any rate you choose:
FIRE number = annual spending ÷ withdrawal rate
| Spending | 5% (20x) | 4.5% (22.2x) | 4% (25x) | 3.5% (28.6x) | 3% (33.3x) |
|---|---|---|---|---|---|
| $40,000 | $800K | $889K | $1M | $1.14M | $1.33M |
| $60,000 | $1.2M | $1.33M | $1.5M | $1.71M | $2M |
| $80,000 | $1.6M | $1.78M | $2M | $2.29M | $2.67M |
| $100,000 | $2M | $2.22M | $2.5M | $2.86M | $3.33M |
| $150,000 | $3M | $3.33M | $3.75M | $4.29M | $5M |
Our calculation. Multiple of spending in brackets. Today's dollars, before adjusting for Social Security or pensions.
How do you estimate your retirement spending?
Start from what you actually spend, not what you earn. Pull 12 months of bank and card statements and total them, because averages from a few good months understate irregular costs. Then remove what will end before retirement (a mortgage, childcare, commuting, retirement saving itself) and add what will start (health insurance, more travel).
If you need a sanity check, US households spent an average of $81,905 in 2025, and households headed by someone 65 or older spent $64,445[15]. At 25x, those budgets need $2,047,625 and $1,611,125. Your number can be far lower or higher. That is the point of building it from your own budget: every $1,000 a year you cut from spending lowers the target by $25,000 at 4%, and by $28,571 at 3.5%.
Which withdrawal rate should you use?
Use the rate that matches how long your money must last. The 4% rule was built for 30-year retirements. Someone retiring at 45 may need 50 years, and research suggests 3.25%-3.5% survived the worst historical conditions over 50-60 years[4]. Morningstar's 2025 estimate for a 30-year retirement with 90% success is 3.9%[5].
| Retirement length | Research says | Our backtest, 60/40 | Multiple |
|---|---|---|---|
| 30 years (retire at 65) | About 4%[3], 3.9%[5] | 3.70% | 27.0x |
| 40 years (retire at 55) | Between the two | 3.45% | 29.0x |
| 50+ years (retire at 45) | 3.25%-3.5%[4] | 3.25% | 30.8x |
"Our backtest" is the highest rate, in steps of 0.05%, that never ran out in any start year from 1928 using Damodaran's annual returns[10], 60% S&P 500 and 40% 10-year Treasuries, rebalanced yearly. The full results are in our analysis of the 4% rule, and you can replay your own balance through the same history with the savings longevity calculator.
FIRE number at withdrawal rates from 3% to 5%, for three spending levels. Today's dollars.
- $40,000/yr
- $60,000/yr
- $80,000/yr
How do you adjust your FIRE number for real life?
The 25x rule assumes one flat spending number forever and no other income. Four adjustments make it fit your actual plan.
1. Subtract Social Security and pensions
Guaranteed income reduces what the portfolio must pay, but only from the age it starts. Full retirement age is 67 for anyone born in 1960 or later; claiming at 62 cuts benefits by 30% and waiting to 70 adds 24%[7]. Get your estimate from the Social Security Administration[8]. The right method looks at each year of retirement: before benefits start the portfolio pays your whole budget, and after that only spending minus income. Every year is valued at the same rate, the one at which your withdrawal rate lasts exactly as long as your retirement, so the early years get the same safety margin as the rest. With no other income this gives exactly spending ÷ withdrawal rate. Our FIRE number calculator does this math for you.
2. Add taxes on withdrawals
Your FIRE number has to cover the tax bill as well as the spending. Traditional 401(k) and IRA withdrawals are taxed as ordinary income, so if all your money is pre-tax, gross up your spending before you multiply. With the 2026 federal brackets and standard deduction[11], and no other income:
| After-tax spending | Federal tax, single | FIRE number, single | Federal tax, joint | FIRE number, joint |
|---|---|---|---|---|
| $40,000 | $2,977 | $1,074,432 | $867 | $1,021,667 |
| $60,000 | $5,705 | $1,642,614 | $3,227 | $1,580,682 |
| $80,000 | $11,244 | $2,281,090 | $5,955 | $2,148,864 |
| $100,000 | $16,885 | $2,922,115 | $8,682 | $2,717,045 |
Our calculation at 4%: the withdrawal that leaves the spending after 2026 federal income tax with the standard deduction. State tax not included.
A married couple spending $80,000 from pre-tax accounts owes about $5,955 in federal tax, which adds $148,864 to their FIRE number. This is the worst case. Qualified withdrawals from a Roth 401(k) are not taxed[16], and in a taxable account you are taxed only on gains, often at the 0% long-term rate below $98,900 of joint taxable income[11]. A mix of Roth, taxable and pre-tax money gives you the most room to keep the bill small, so the true number usually sits between the plain multiple and the column above. Add state income tax if your state has one.
3. Budget for health insurance before 65
Early retirees buy their own coverage until Medicare starts at 65[14], and it is often the biggest line that employer coverage was hiding. The average benchmark (second-lowest-cost silver) Marketplace plan for a 40-year-old costs $625 a month in 2026[12]. Insurers may charge older adults up to three times what they charge a 21-year-old, along a federal default age curve[13], so the same plan costs much more at the ages early retirees buy it:
| Age | Benchmark premium, monthly | Per year | Adds to FIRE number at 4% |
|---|---|---|---|
| 45 | $706 | $8,474 | $211,854 |
| 50 | $873 | $10,481 | $262,031 |
| 55 | $1,091 | $13,087 | $327,171 |
| 60 | $1,327 | $15,927 | $398,181 |
| 64 | $1,467 | $17,606 | $440,141 |
Our estimate: KFF's 2026 US average for a 40-year-old scaled by the federal default age curve. Before premium tax credits; actual premiums vary widely by state and county, and a few states use their own age curves.
Premium tax credits can cut these costs sharply, but the enhanced subsidies expired at the end of 2025, so the cliff at 400% of the poverty level is back for 2026[9]. Because the cost stops at 65, it belongs in the bridge years, not in a flat multiple. Take a couple who retire at 55 on $60,000 a year, with Medicare costs already in that budget, plus two unsubsidized benchmark premiums that start at $26,174 a year and rise with age until 65. Valued year by year, their FIRE number at 4% is $1,774,911: $274,911 more than 25x their budget, but $379,431 less than adding the first-year premiums to spending for life. Healthcare doesn't vanish at 65 either: households headed by someone 65 or older spent $7,986 a year on it in 2025, more than the $7,317 spent at 55-64[15]. Get a real quote on your state's Marketplace before you fix your number.
4. Spread lumpy expenses
Cars, roofs and big trips do not show up in a monthly budget. Divide each by how often it recurs and add it to annual spending, so a $36,000 car every 12 years becomes $3,000 a year.
5. Let spending fall when costs end
A mortgage that ends a few years into retirement works like income that starts later: the portfolio covers it only until it stops. Someone retiring at 50 on $70,000 a year, $18,000 of it a mortgage that ends at 58, needs $1,429,888 at 4%. That is $320,112 less than 25x the current budget, and $129,888 more than 25x the budget without the mortgage, because the payments still have to be funded for 8 years. Children leaving home, or a car loan that ends, can be handled the same way: enter the drop as income that starts at that age in the FIRE number calculator.
How is the adjusted FIRE number calculated?
When spending or income changes during retirement, a single multiple no longer works. The calculators value each year's net spending (spending minus any income that year) at one real rate and add them up. That rate is the one at which your withdrawal rate lasts exactly as long as your retirement, so every year carries the same safety margin as the withdrawal rate itself:
| Withdrawal rate | 30 years | 40 years | 50 years | 60 years |
|---|---|---|---|---|
| 3% | -0.71% | 0.97% | 1.81% | 2.27% |
| 3.5% | 0.34% | 1.86% | 2.59% | 2.99% |
| 4% | 1.31% | 2.68% | 3.33% | 3.67% |
| 4.5% | 2.22% | 3.46% | 4.03% | 4.32% |
Our calculation: the real annual rate at which withdrawing that share of the starting balance, rising with inflation, lasts exactly that many years.
A 4% withdrawal over 30 years implies a real rate of only 1.31%; over 50 years, 3.33%. With flat spending and no other income this method gives exactly spending ÷ withdrawal rate. With a pension, Social Security or a paid-off mortgage, it prices the expensive early years with the same caution as the rest, instead of assuming an average market return. Your expected return never enters the FIRE number; it only changes how fast you get there. The full derivation is in our methodology.
Worked example: from 25x to a real FIRE number
A couple wants to retire at 50 and plans for the money to last to 95. Their core budget is $62,000 a year. They expect $6,000 in taxes, $10,000 for health insurance, and a $36,000 car every 12 years. Their combined Social Security estimate is $36,000 a year from 67.
| Step | FIRE number |
|---|---|
| 25x the core budget ($62,000) | $1,550,000 |
| Add taxes, healthcare and the car ($81,000 a year) | $2,025,000 |
| Subtract Social Security from 67 (the portfolio pays the full budget from 50 to 66) | $1,611,100 |
| Use 3.5% for a 45-year retirement | $1,799,677 |
Our calculation, money lasting to 95. Each year's spending is valued at the rate implied by the withdrawal rate over 45 years: 3.06% a year after inflation at 4%, 2.28% at 3.5%. The expected market return does not change these figures.
The final target is higher than the naive 25x figure by $249,677. Every step matters: the hidden costs push the number up, Social Security pulls it down, and the longer horizon pushes it back up.
Should a FIRE number be in today's dollars?
Yes. Keep the number in today's dollars and compare it with a projection that also removes inflation, which is how our calculators work. If you want to know the dollar figure your account statement will show, inflate it: at 3% inflation, a $1,500,000 target that you reach in 20 years will read about $2,709,167 on that day. Both describe the same buying power. The mistake is mixing them, for example comparing a future-dollar projection from a brokerage website with a today's-dollar target, which makes you look much closer than you are.
What mistakes make a FIRE number wrong?
- Using today's spending while still paying a mortgage or childcare that will end before or soon after retirement.
- Counting home equity as part of the portfolio.
- Using 4% for a 50-year retirement. Our backtest shows how quickly long horizons lower the safe rate.
- Ignoring the bridge years before Social Security, which a simple multiple cannot capture.
- Forgetting investment fees. A 1% advisory fee takes a quarter of a 4% withdrawal before you spend a cent.
How often should you recalculate your FIRE number?
Once a year, and after any big life change: a move, a new child, a paid-off mortgage, or a change in health coverage. Because the number is in today's dollars, it only needs to move when your real spending or your plan changes, not every time prices rise. Recheck your Social Security estimate each year too, since it can change with each year of earnings you add to your record.
Once you know your number, the next question is when you will reach it. If you would rather start from a retirement date than a savings rate, try how much do I need to retire. Our FIRE calculator projects your savings forward, and the Coast FIRE guide explains when you can stop adding to it.