FIRE Calculator for Beginners

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"Financially independent, retire early" has a nice ring to it. But if you're new to the FIRE movement, it can be tough to know where to start.

Luckily, FIRE calculators can help give people a specific roadmap to retiring early.

Below, find out how much you should save per month (and per year) to retire by your desired age. Plus, get the breakdown of how each factor affects your FIRE amount.

FIRE Calculator

FIRE isn't your typical savings plan…
FIRE usually involves saving anywhere from 40% to 75% of your income. This means it can be inaccessible for many people. Take some time to figure out if FIRE is right for you. Keep in mind, this article is purely informational - not professional financial advice.

How Do I Calculate My FIRE Number?

It's pretty easy to calculate your FIRE number. Here's the step-by-step:

  1. Multiply your monthly expenses by 12 to get your yearly retirement expenses.

  2. From that number, subtract any yearly passive income you expect to earn in retirement.

  3. Then, divide that number by 0.04 (4%).

  4. Finally, add any big post-retirement expenses and inheritance you plan to leave behind.

Want a breakdown of how FIRE works? Below, review each of the factors that make up your FIRE number.

Step 1: What's Your Retirement Age?

We'll start off easy - how old are you now, and when do you want to retire?

Here's what retirement currently looks like for most folks in the U.S.:

  • Average retirement age: 65 for men, 63 for women[1]
  • Average retirement savings: $50,000 (median across all workers), $152,000 (Baby Boomers), $66,000 (Generation X), $23,000 (Millennials)[2]
  • Main source of retirement funds: Social Security (Boomers), 401(k) (Gen X), 401(k) and personal savings (Millennials)[3]

"Early retirement" looks different for everyone. One person may retire early at 55, another may want to shoot for 40. Just keep in mind that the younger age you aim for, the more challenging it will be.

Step 2: What are Your Retirement Expenses?

How much do you need each year to live comfortably during retirement? To figure this out, consider the following:

  1. Your current monthly expenses
    Many early retirement calculators base your FIRE number on your income.

    However, our calculator bases your FIRE number on your expenses. This is because it's easier to control your spending than your income.

    Plus, basing it on income assumes you spend most of what you earn, which may not be the case for everyone.

    What is the 4% rule of retirement?
    The 4% Rule states that, if you invest roughly 60% in stocks and 40% bonds, you can safely spend 4% of your nest egg each year over 30 years and not run out of retirement savings. It's usually the gold standard when calculating early retirement, and it's used in this calculator too. It's based on the 1998 Trinity Study.[4]

  2. Any large post-retirement expenses
    This category (along with the next one) is entirely optional. It accounts for big expenses after you retire. Note that this is outside of your regular yearly expenses.

    This would include things like a grandchild's tuition or a significant medical procedure.

    Of course, you may not know if those expenses are in your future, so if it doesn't apply to you, feel free to leave this field blank.

  3. Any estate you want to leave behind
    This accounts for any estate or inheritance you plan to leave behind for kids or grandkids.

    According to a 2019 study by the United Income investment firm, based on data from the Federal Reserve, the average inheritance has risen to around $295,000.[5]

    Keep in mind that this number is likely skewed by huge outliers (estates of $1M or more) and that the median inheritance hovers around $55,000.[6]

Step 3: How are You Funding Your Retirement?

Now that you know how much your retirement will cost, it's time to figure out where that money will .

There are plenty of ways you can fund your retirement. Many complex calculators will ask how assets like real estate contribute to your retirement, for example.

But for FIRE beginners, factors like that might not apply, or are completely unknown.

That's why this calculator chooses to focus exclusively on your current portfolio. If you're a working professional with a typical 9-to-5, it's likely that you have a 401(k). In fact, roughly 58 million Americans are active 401(k) participants.[7]

After inputting your current portfolio value, the calculator will factor it in and assume a 10% rate of return.

According to over roughly 100 years of data from the S&P 500 Index, the average stock market return is about 10% per year.[8]

Does the 10% rate of return account for inflation?
The commonly-cited 10% figure is what's called a "headline rate" - meaning it does not account for distorting factors like taxation or inflation. However, our FIRE calculator utilizes the 4% Rule, which does account for inflation.

This section of the calculator also asks for your yearly income, but this figure is used to calculate how much you should contribute per month to achieve your FIRE amount, not to determine the FIRE amount itself.

Step 4: Are You Earning Income During Retirement?

This is also an optional field, and may not apply to some readers.

However, if you're fairly confident that you'll be receiving some passive income as a retiree, this is where you can add it in.

Your passive income doesn't have to be a rental income or anything substantial. If you think you'll be participating in some sort of casual side hustle, that's fair to include. In fact, according to a study from Prudential, 34% of freelance/side hustle workers identify as retirees. [9]

Step 5: Finally, See Your FIRE Number

After all figures are accounted for, the FIRE calculator will give you a few numbers:

  1. Your FIRE Target: This is how much you need to have saved by your desired retirement age in order to abide by the 4% Rule.

  2. Your Target Monthly Contributions: How much you need to put into your savings each month, accounting for your desired retirement age, your current portfolio balance, and the trajectory of your portfolio.

  3. Your Target Yearly Savings Percentage: What percentage of your yearly income your suggestion contributions will be.

  4. Your Target Yearly Savings Amount: How much you need to put into your savings each year, accounting for your desired retirement age, your current portfolio balance, and the trajectory of your portfolio.

If your target yearly savings percentage is more than 100% of your income, that means some adjustments are probably necessary. Either increase your desired retirement age, dock your post-retirement expenses, or reconsider the feasibility of FIRE for your personal financial situation. Remember: FIRE is not for everyone, and may not even be suitable for most people. But that doesn't mean retirement is not in your future.

Which FIRE Plan is Best for You?

The standard FIRE savings plan isn't right for everyone. In fact, many people follow modified versions that better fit their lifestyle.

Taking this approach is a good idea if you feel overwhelmed by your FIRE number or have different goals for your retirement.

Review the following FIRE types to see which one is best for you.

Type of FIREHow it Works
Standard FIRESave between 40-60% of your income and cut down on spending
Fat FIRELess aggressive; aims for higher standard of living in retirement
Lean FIRERequires aggressive spending cuts to live minimally in retirement
Barista FIREIn-between extremes; work part-time after hitting your FIRE number

What's the 25x Rule for Retirement?

Earlier in this article, you learned about the 4% rule.

The 4% Rule states that, if you invest roughly 60% in stocks and 40% bonds, you can safely spend 4% of your nest egg each year over 30 years and not run out of retirement savings.

But how do you come up with the base value that lets you draw 4% per year?

Easy: just multiply your expected annual retirement expenses by 25. This is the 25x Rule.

In the table below, review what your daily, monthly, and yearly withdrawals would be using the 25x Rule:

Saved Up Total Needed (Using the 25x Rule)For Daily withdrawals ofFor Weekly withdrawals ofFor Yearly withdrawals of

How to Grow Your Retirement Nest Egg

Although this calculator accounts for a typical 60/40 portfolio of stocks and bonds, there are plenty of other ways you can save up for retirement.

Here are a few ways to add even more to your nest egg and get closer to your Golden Years:

  1. First and foremost, opt for Employer Match Contributions
    It's always a good idea to invest in your employer's 401(k), especially if your employer matches contributions.

    Don't have a 401(k)? You can open a Roth IRA and invest your money yourself.

    Note: there are income limits on who can contribute to a Roth IRA versus a Traditional IRA. This changes each year.

  2. Automate with Robo-Advisors
    If you're a beginner and not sure how to invest on your own, consider a robo-advisor. Robo-advisors provide online automated investing services.

    Consider trying Betterment, which has no account minimum. It selects investments for you based on your inputs.

  3. Invest in Dividend Stocks
    Stable companies that perform well on a regular basis often offer dividends to their stockholders.

    With dividend stocks, you can re-invest the dividends and buy more stock. This way, you increase your portfolio without depleting your bank account.

    You can purchase dividend stocks with no trading fees with brokerages such as Ally Invest or M1 Finance.

  4. Invest in Certificate of Deposits
    CDs are a good choice when you want a guaranteed return on your money.

    You can pick terms from a few months to 5 or 10 years. Usually, the longer the term, the higher the return.

    Online banks, like CIT Bank, are known for offering great deals. Read our comprehensive list of short term investments ideas.

  5. Invest in ETFs
    ETFs are professionally managed funds of up to hundreds of securities, so you instantly get diversification with one investment.

    A great place to start is Stash. You can start investing in ETFs with any amount you want, even just $5.

Best investment apps for funding your retirement
  1. Stash for Beginners
  2. Robinhood for Stocks and Cryptocurrency
  3. M1 Finance for Hybrid Automated Investing and DIY App
  4. Acorns for Investing Spare Change
  5. Betterment for Automatic Investing

Bottom Line

The siren call of early retirement is alluring, but keep in mind that the FIRE movement involves aggressive saving and may not be a good choice for everyone.

FIRE is usually ideal for high-earning, frugal individuals who already have a fair amount in their portfolio. If you don't quite fit in that category, it's still a smart idea to do the following:

  • Cut your spending (as much as you're comfortable with)
  • Amp up your saving (at least 20% of your monthly income)
  • Diversify your investments

As long as you're responsible and consistent with your contributions, you should be in decent shape - and your future self will thank you for it!


Holly Zorbas is a assistant editor at CreditDonkey, a personal finance comparison and reviews website. Write to Holly Zorbas at Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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