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What’s My FIRE Number? – Easiest Way To Find Out

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Your FIRE number is equal to your annual expenses multiplied by 25.  For example, if your annual spending is $40,000 a year then your FIRE number would be $1 million.  This is assuming you will be using a 4% withdrawal strategy.


FIRE Number = (Annual Expenses) x 25


Knowing your FIRE number is one of the first steps on the journey to Financial Independence (FI).  Most people who achieve FI do so by carefully planning their finances years.  This is why they are successful and are even more prepared for surprises along the way.  


What Is Your FIRE Number?

You can find out your FIRE number by multiplying your annual spending by 25.  Once you have your FIRE number you can calculate how long it will take you to reach financial independence based on your savings rate.  

If you are having trouble tracking your annual expenses you can use a budgeting resource.  I recommend Personal Capital to help you track your expenses throughout the year.

I first started my FIRE Journey by using Personal Capital to calculate my annual expenses.  This made it easy for me to see that I spend about $35,000 a year.  


Using A FIRE Number Calculator

Using a FIRE Number calculator is easy once you know your annual expenses.  You simply plug in your annual expense into the formula.

(Annual Expenses) x 25 = FIRE Number

So, calculating my FIRE number would look like this ($35,000) x 25 = $875,000.

To make it easy, I created a FIRE calculator that displays the potential growth of all your investments.  It helps to predict exactly when you will reach financial independence and how much money would be in each account.  It’s completely free and all you have to do is plug in your numbers.


Download A Free FIRE Calculator!


I believe it can be an amazing tool.  What makes this spreadsheet different is how you can add money from different accounts.  This allows you to better estimate how and when you can access your money once you reach financial independence.


Early Retirement Tax Planning

Using the FIRE Calculator gives you a breakdown of all your accounts.  Each account likely has a different set of rules dictating how and when you are allowed to withdraw funds.  So you can’t treat your HSA money the same as the money in your Roth account.  Another example, you might be contributing to both your 401k & 457 plan but they have very different rules when it comes to withdrawals.  

By using my FIRE calculator you know exactly how much will be in each account.   That can help you pay fewer taxes because you can tax plan before early retirement.  Tax planning helps you keep more of your money throughout your FIRE journey.


Example Of Calculating Your FIRE Number 

The FIRE calculator gives you several key pieces of information:

  • FIRE Number
  • FIRE Date
  • Account Balances

If you are planning for financial independence and know that your yearly expenses are $35,000/ year.  You can calculate your FIRE number: ($35,000) x 25 = $875,000

This is based on a withdrawal rate of 4% ($875,000 x 0.04) = $35,000

This calculator will also estimate a FIRE date by showing you how long it will take your portfolio to grow to this amount.

This is how it looks:

FIRE Number Example

You can see we reach our FIRE Number of $875,000 in Year 10.  Based on the 4% rule, that gives us $35,000 a year to cover our expenses.

The spreadsheet also gives you a breakdown of how much is in each account.  You can later strategize on how to access those funds efficiently, paying the fewest taxes possible.

Money in your 401k or 403b will be available once you are age 59 ½, or earlier using the Roth Conversion Ladder

This example gives you a much more accurate and responsible picture of your FIRE journey.  Tax planning allows you to be confident in your early retirement and avoid penalties from the IRS.

As mentioned earlier, I highly recommend using Personal Capital to keep track of each account in real-time.


FIRE Number and Retirement

The last part is making sure your FIRE Number will last throughout retirement.  Since we are planning an early retirement, our money needs to last us a long time!  Luckily I found the best Post-Retirement CalculatorIt’s a simulator that tells you how safe your withdrawal strategy is, based on the stock market’s past performance.  

This is the final tool for projecting your FIRE journey from start to finish.  With the Post-Retirement Calculator, you can confirm your money will last well into retirement.  

Along the way, you will likely make more money either through a side hustle or from social security benefits.  So this is sort of like a worst-case scenario.

To use the post-retirement calculator, simply input your savings of $875,000 and your annual spending of $35,000, which is 4% of $875,000 (total nest egg).

I ran a scenario for illustration.  The assumptions are:

  • Withdrawals Start At Age 45
  • 25% Flexibility During Bear Markets
  • 10% Average Tax Rate

This is what it looks like:

Post Retirement Calculator

This scenario accounts for all 60 year periods in the stock market from 1871 through 2016.  The results show we have a 99% success rate!  Without earning any money after the age of 45, there is a 99% chance this person will still have money at age 100.

Now it makes sense why they say compound interest is the 8th wonder of the world!  Knowing the stats allows your mind to be at ease and focus on enjoying early retirement to the fullest.

To conclude, this is an exercise that helped me visualize my early retirement plan and thoroughly evaluate my withdrawal strategy.  I recommend everyone use the FIRE calculator and then the Post Retirement Calculator to do the same and crush it!


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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.