FIRE Calculator

How the result is calculated

1. All amounts are in today’s money. The portfolio grows by the real return: the expected return after inflation and the fund fee. You invest every month; in the advanced mode the saving rises each year by the set rate.
2. In the basic mode you are financially independent once the portfolio reaches a year’s spending divided by the withdrawal rate (at 4 % that is 25 times). In the advanced mode it is the smallest portfolio that would have lasted until the planned age in the chosen share of historical retirements.
3. A historical retirement starts in one of the years from 1928 and lives on the actual returns of the following years: US stocks (S&P 500 with dividends) and 10-year US government bonds, after US inflation, rebalanced to the stock share every January. Each year’s spending is withdrawn at its start.
4. The pension and part-time income lower what the portfolio has to pay: the pension from its starting age, part-time work until its end. Coast FIRE is the amount that grows without further saving, at the real return, to what is needed at the pension age.
5. The Monte Carlo simulation draws 1,000 random sequences of yearly returns with your expected return and the historical volatility of the stock and bond mix.

Assumptions and limits

• Taxes on withdrawals and investment income are not included; enter spending after tax or lower the return.
• History comes from the United States, the only market with returns and inflation recorded reliably for a century; other markets have done worse in some periods.
• Spending stays the same every year in today’s money; real life brings one-off expenses, and spending usually falls with age.
• The pension is your own estimate in today’s money; the calculator does not compute pensions by the rules of any country.

Savings, monthly saving and spending are round examples, not statistics. Inflation starts at the central bank’s inflation target and the return at 7 % as in the compound interest calculator; the pension age of 65 is an example.

Data sources and the period they hold for

Every number a calculator starts with or computes from comes from one of the sources below. Series names are given as the publisher names them. Each row shows the period the data refer to and, where we record it, the day we downloaded them. Official data can be months old when they are published, so check the current figure before you decide.

Official

Published by a central bank, a statistical office, the European Union or another public body.

Research or industry data

A dataset of a university, an index provider, an industry association or a data vendor.

Reported

A figure of an official body that we know only from the press and did not check in the primary source. Treat it as approximate.

Example

A round number of ours, not a statistic. Replace it with your own.