Financial Independence, Retire Early (FIRE) Calculator
Estimate how many years it will take to reach your FIRE number.
(Typically 3-4%)
Understanding the FIRE Calculator and the FIRE Movement
The Financial Independence, Retire Early (FIRE) movement is a lifestyle focused on aggressive saving and investing to achieve financial independence sooner than traditional retirement ages. The core idea is to build a portfolio of assets large enough that the income generated from it can cover your living expenses indefinitely, allowing you to stop working if you choose.
How the FIRE Calculator Works
This calculator estimates the time it will take to reach your FIRE number based on your current savings, expected future contributions, investment growth, and your target withdrawal rate for annual expenses. Here's a breakdown of the logic:
Current Savings: The starting point of your investment journey.
Annual Contributions: The amount you plan to save and invest each year. This is crucial for accelerating wealth accumulation.
Assumed Annual Investment Growth Rate: This represents the average annual return you expect from your investments. It's important to be realistic and consider market volatility. A common assumption is historical stock market returns (e.g., 7-10% before inflation).
Estimated Annual Living Expenses: The amount of money you anticipate needing each year in retirement. This is the target your investment portfolio needs to support.
Safe Withdrawal Rate (SWR): This is the percentage of your investment portfolio you can withdraw each year without depleting the principal over the long term. The "4% rule" is a popular guideline, suggesting that withdrawing 4% of your portfolio annually has a high probability of lasting 30 years or more.
The Calculation Logic
The calculator performs a year-by-year simulation:
Calculate FIRE Number: The target portfolio size is determined by dividing your Estimated Annual Living Expenses by your Safe Withdrawal Rate.
FIRE Number = Annual Expenses / (Safe Withdrawal Rate / 100)
Yearly Simulation: Starting with Current Savings, the calculator simulates each year:
Add Annual Contributions to the current savings.
Calculate the growth on the total amount (savings + contributions) using the Annual Investment Growth Rate.
Growth = (Total Savings + Contributions) * (Annual Growth Rate / 100)
Update the total savings for the next year:
New Savings = Total Savings + Contributions + Growth
Increment the year counter.
Check for FIRE Achievement: The loop continues until the total savings reach or exceed the calculated FIRE Number. The number of years simulated is your estimated time to FIRE.
Important Considerations
This calculator provides an estimate. Real-world results can vary due to:
Inflation: The calculator does not explicitly adjust for inflation. Your expenses may increase over time, and the real return on your investments might be lower.
Taxes: Investment gains and withdrawals may be subject to taxes, which are not factored into this basic model.
Market Volatility: Investment returns are not guaranteed and can fluctuate significantly year by year.
Changes in Expenses: Your lifestyle and expenses might change unexpectedly.
Contribution Consistency: Maintaining consistent annual contributions is key.
Use this tool as a guide to understand the power of saving, investing, and compounding. Adjust the variables to see how different choices impact your path to financial independence.
function calculateFIRE() {
var currentSavings = parseFloat(document.getElementById("currentSavings").value);
var annualContributions = parseFloat(document.getElementById("annualContributions").value);
var annualGrowthRate = parseFloat(document.getElementById("annualGrowthRate").value) / 100; // Convert percentage to decimal
var annualExpenses = parseFloat(document.getElementById("annualExpenses").value);
var withdrawalRate = parseFloat(document.getElementById("withdrawalRate").value) / 100; // Convert percentage to decimal
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(currentSavings) || currentSavings < 0 ||
isNaN(annualContributions) || annualContributions < 0 ||
isNaN(annualGrowthRate) || annualGrowthRate < -1 || // Allow for potential negative growth
isNaN(annualExpenses) || annualExpenses <= 0 ||
isNaN(withdrawalRate) || withdrawalRate 1) { // Withdrawal rate should be between 0 and 1 (0% to 100%)
resultDiv.textContent = "Please enter valid positive numbers for all fields.";
return;
}
// Calculate the FIRE number (target portfolio size)
var fireNumber = annualExpenses / withdrawalRate;
var totalSavings = currentSavings;
var years = 0;
// Simulate year by year until FIRE number is reached
// Add a safety limit to prevent infinite loops in extreme scenarios
var maxYears = 100;
while (totalSavings < fireNumber && years = maxYears) {
resultDiv.textContent = "Calculation limit reached. FIRE might take longer than " + maxYears + " years or inputs may need adjustment.";
} else {
// Format the result nicely
var formattedFireNumber = fireNumber.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedTotalSavings = totalSavings.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML = "It will take approximately " + years + " years to reach your FIRE number." +
"Target FIRE Number: $" + formattedFireNumber + "";
}
}