Core formulas
Savings rate = savings / income. FIRE number = annual spending / withdrawal rate. Emergency fund target = monthly expenses x target months. Runway months = liquid savings / monthly spending.
Concrete example
Annual spending of 48,000 and a 4% withdrawal assumption gives a simple FIRE number of 1,200,000. At 3.5%, the target rises to about 1,371,429. A 0.5 percentage-point change in withdrawal rate adds more than 171,000 in this example.
Named planning variants
- Coast FIRE asks whether current investments can grow to the target by retirement age without more contributions.
- Barista FIRE includes part-time or lower-stress income to reduce portfolio withdrawals.
- Emergency fund calculators usually use 3, 6 or 12 months of expenses as scenarios, not universal rules.
What can break the estimate
- Taxes and country-specific pension systems.
- Healthcare and housing shocks.
- Sequence-of-return risk early in retirement.
- Inflation higher than the model assumes.
Use the calculators
- Savings Rate Calculator
- FIRE Number Calculator
- Coast FIRE Calculator
- Barista FIRE Calculator
- Emergency Fund Calculator
- Financial Independence Formulas
FAQ
Is a FIRE number a guarantee?
No. It is a scenario target based on spending and withdrawal-rate assumptions. Market returns, inflation and taxes can change the outcome.
Why does withdrawal rate matter so much?
Because the formula divides annual spending by the withdrawal rate. A lower rate requires a larger portfolio target.
References
- Investor.gov: Compound Interest Calculator - Investor education context for compounding, accessed 2026-05-15.
Last reviewed: 2026-05-15.