What is your FIRE number? How to calculate financial independence

📅 April 2026⏱ 5 min read🏷 FIRE

FIRE stands for Financial Independence, Retire Early. Your FIRE number is the portfolio size at which your investments can sustain your lifestyle indefinitely — without you ever needing to work again. Here's how to calculate yours.

The 4% rule

The foundation of FIRE planning is the 4% rule, which comes from the Trinity Study (1998). Researchers analysed historical market data and found that withdrawing 4% of a portfolio annually gave a near-100% success rate over 30-year retirement periods, through recessions, crashes, and inflation.

This means: if your annual expenses are $40,000, you need $1,000,000 invested. Withdraw 4% = $40,000/year, and historically your portfolio outlasts you.

FIRE Number = Annual Expenses × 25

Equivalent to: Annual Expenses ÷ 0.04 (the 4% withdrawal rate)

FIRE numbers by annual spending

Annual Expenses	FIRE Number (25×)
$20,000	$500,000
$30,000	$750,000
$40,000	$1,000,000
$60,000	$1,500,000
$80,000	$2,000,000
$100,000	$2,500,000

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The types of FIRE

Lean FIRE — retire on a minimal budget (under $30,000/year). Requires extreme frugality. FIRE number typically $500,000–$750,000.
Regular FIRE — retire comfortably without luxury. FIRE number typically $1M–$2M.
Fat FIRE — retire with the same lifestyle as a high earner. FIRE number $2.5M+.
Barista FIRE — semi-retire. Work part-time (e.g. at a coffee shop) to cover basic expenses while investments grow. Lower target number needed.
Coast FIRE — stop contributing once your invested amount will grow to your FIRE number on its own. You still work, but only to cover current expenses.

Does the 4% rule still work?

The 4% rule was derived from 30-year retirements. If you retire at 40, you may have a 50-year retirement — in which case 3.5% or 3.25% withdrawal rates are safer. Some planners use 3.5% for early retirees, which means multiplying expenses by 28–29 instead of 25.

The rule also assumes a globally diversified portfolio of stocks and bonds. It doesn't work if your money is in cash, bonds only, or speculative assets.

The savings rate is more important than income

Your savings rate — the percentage of income you invest — determines how fast you reach FIRE, not your raw income. Someone earning $50,000 and saving 50% will reach FIRE in the same number of years as someone earning $100,000 and saving 50%. Higher income helps, but lifestyle inflation is what keeps most high earners from achieving financial independence.