How to Calculate Your FIRE Number

Updated June 2026 · 7 min read

Your FIRE number is the amount you need invested so that your portfolio, not your job, pays for your life. The core math is one line of arithmetic. The useful part is what you do with it: subtract what you already have, and work out how many years of saving close the gap. Here's the whole thing in four steps.

Step 1: Find your real annual spending

Everything starts with what you actually spend in a year, not what you earn. Pull the last 12 months from your bank and card statements and total it. Rent or mortgage, food, transport, insurance, the lot. This is the single most important input, because the entire FIRE number is built on top of it. Guess low here and every other number is wrong.

Use the spending you expect in retirement, not necessarily today's. If your mortgage will be paid off, or the kids will have moved out, adjust for it. If you plan to travel more, add it in.

Step 2: Multiply by 25

This is the headline step. The standard FIRE number is 25 times your annual spending. The 25 comes from the 4% rule: if you withdraw 4% of your portfolio in year one and adjust for inflation after that, history says it lasts about 30 years. Twenty-five times spending is just another way of writing "4% of this covers my spending."

Spend $40,000 a year, and your FIRE number is $1,000,000. Spend $60,000 and it's $1,500,000. The multiplier makes the cost of lifestyle creep brutally clear: every extra $1,000 a year you spend adds $25,000 to the pile you have to build.

If you're retiring early, 25× may be too aggressive. A 30-year withdrawal assumption doesn't cover a 45-year retirement. Many early retirees use a 3.25% to 3.5% rate instead, which means multiplying by 28 to 31. We get into why in Is the 4% Rule Still Safe?

Step 3: Subtract what you already have

Your FIRE number is the destination. What matters for planning is the distance left. Take your current invested assets, your brokerage accounts, retirement accounts, index funds, and subtract them from the FIRE number. Leave out things that don't generate retirement income, like the car or an emergency-fund cushion you won't invest.

If your number is $1,000,000 and you've already got $100,000 invested, your real job is to build the remaining $900,000. That's the figure your monthly saving and market growth have to produce.

Step 4: Work out the years to get there

This is where it stops being abstract. Take how much you invest per year and a return assumption, usually around 7% real (after inflation), and project how long the gap takes to close. Your existing pile keeps compounding while your new contributions stack on top.

Keep the same example: $1,000,000 target, $100,000 already invested, saving $30,000 a year at 7% real. Here's the path.

You cross the million somewhere in year 15. Notice the back half moves faster than the front half, even though you're saving the same amount each year. That's compounding: the growth on the pile eventually outpaces your contributions. In year one, your $30,000 of saving does most of the work. By year 14, the market is adding more than you are.

The number is a moving target

Treat your FIRE number as a checkpoint, not a carved-in-stone figure. It moves whenever your spending changes, so recalculate it once a year. Pay off the mortgage and it drops. Add a kid and it climbs. All you really want is a rough fix on where the finish line sits and how fast you're closing on it, enough that the choices in between get made with open eyes.