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The FIRE Number Calculator: Math Behind 25x
The FIRE number is the smallest formula in retirement planning: annual spending × 25. A couple spending $40,000 a year from savings needs $1,000,000 of invested assets; $60,000 needs $1.5 million. The multiplier comes from the 4% rule — the historical finding that withdrawing 4% of a diversified portfolio in year one, then adjusting for inflation, survived nearly every 30-year period in US market history.The Calculator Logic
Three inputs drive everything: annual spending (the honest kind, including health coverage), current investments, and annual savings. The gap is what compounding must close. At 5% real growth, money roughly doubles every 14 years; a $300,000 portfolio plus $2,000 of monthly savings reaches $1 million in roughly 15 years, while the same portfolio with zero savings needs over 24.
Where the Savings Rate Does the Work
Savings rate, not income, sets the timeline. At 10% saved, working roughly 50 years is the historical norm; at 25%, about 32 years; at 40%, around 19; at 55%, near 12. The effect is double-edged — saving more both adds fuel and shrinks the target, because a high saver also plans to live on less.
When 25 Is Too Small
Retirements longer than 40 years, spending that starts high, and early decades with poor sequence of returns all argue for 28x–33x — withdrawal rates of 3% to 3.5%. Lean FIRE with flexible spending sits near the other end. Pensions and Social Security reduce the number: $24,000 of guaranteed income replaces $600,000 of portfolio at the 4% rate.
Build Your Own in One Row
In a spreadsheet: =(Annual_Spending * 25 - Current_Investments) / 12 gives the monthly savings the plan requires at zero growth; add a growth assumption and the number falls. Two columns — one at 3.5% withdrawal, one at 4% — bracket the honest range.
The Failure Modes to Guard
The math breaks in three places: unbounded spending (a mortgage paid off at 65 changes the target), sequence risk in the first five years (a bad decade at the start), and healthcare gaps before Medicare. Part-time income covering even $10,000 a year removes $250,000 from the required number.
The formula is simple. The honesty about the inputs is the hard part — and the part worth an afternoon.
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