Financial Independence Calculator (FIRE)

Financial independence (FI) means your investment portfolio generates enough passive income to cover all living expenses indefinitely. The core calculation uses the 4% Safe Withdrawal Rate (SWR) derived from the Trinity Study, a landmark analysis of 30-year retirement survival rates across historical market conditions.

FI Number Formula:

FI Number = Annual Expenses / Safe Withdrawal Rate

Using the standard 4% SWR: FI Number = Annual Expenses × 25

Years to FI

There is no tidy closed form. The calculator walks the portfolio forward month by month, adding your savings and compounding the return, and stops at the first month the balance clears the FI number.

Worked example: Annual income: $72,000 Annual expenses: $48,000 FI Number = $48,000 × 25 = $1,200,000

Current portfolio: $120,000 Annual savings: $24,000, so $2,000 a month Expected real return: 7%/year

Enter exactly that above and the answer is 17.3 years. Of the $1.2M you end up with, $534,000 is money you put in and the rest is growth, which is the whole argument for starting early rather than saving harder later.

Impact of savings rate on years to FI

Starting from zero, at a 7% return, with the FI number set at 25× expenses. These are the calculator’s own figures, so you can reproduce any row by entering an income, setting expenses to the matching share of it, and leaving current savings at zero.

Notice the shape. Going from 10% to 20% buys back ten years; going from 60% to 70% buys back about two. The early increases in savings rate are worth far more than the heroic ones, which is the opposite of how most people approach it.

Variations on the 4% rule:

• 3% SWR (FI × 33): more conservative, suitable for 40+ year retirements
• 3.5% SWR (FI × 28.6): common choice for early retirees
• 5% SWR (FI × 20): used when retirement is 20 years or less

Income sources (Social Security, pension, rental income) reduce the portfolio target dollar-for-dollar: Adjusted FI = (Expenses − Passive Income) × 25