FIRE number: the 25× rule, explained

In 1998, three finance professors at Trinity University in Texas — Cooley, Hubbard, and Walz — published a paper called "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable." They ran historical simulations of US stock and bond portfolios from 1926 onward, testing how often a retiree could withdraw a fixed percentage of the starting balance, adjusted for inflation, for 30 years without running out.

Their headline finding: a 50/50 stock/bond portfolio supported a 4% initial withdrawal rate in 95% of the 30-year rolling windows they tested. Invert 4% (1 / 0.04) and you get 25. That is the arithmetic behind the rule. If your portfolio is 25 times your annual expenses and you withdraw 4% every year (inflation-adjusted), the Trinity backtest says you almost certainly do not run out over 30 years.

The rule is called the Trinity rule, or the 4% rule, or the safe withdrawal rate (SWR). Bengen, separately in 1994, reached a similar conclusion with a slightly different methodology — he called his version SAFEMAX. The academic community converged on 4% as the default.

30-year horizon. The Trinity study tested 30 years. If you retire at 65, that works. If you retire at 45 and expect to live to 90, you are planning for 45 years, and 4% gets less safe the longer the horizon.

US market history from 1926. The simulation uses the best-documented stock market in the world during the most favorable century for US equities. Replicating the same study with international markets (Japan post-1989, Europe post-1999) gives materially different failure rates.

Constant inflation-adjusted withdrawals. The simulated retiree withdraws 4% the first year, then increases the withdrawal by CPI every year, regardless of how the portfolio performs. Real retirees rarely do this — they cut spending in bad years. Flexible withdrawal strategies push the safe rate higher.

Modern researchers — Michael Kitces, Wade Pfau, Bengen himself in 2020 — argue that for horizons longer than 30 years or starting valuations above historical averages, 3.0–3.5% is the more honest number. That would push the multiplier from 25 up to 28–33. For a $60k spender, the difference is $180,000 to $480,000 of extra nest egg.

Regular FIRE. The default: annual expenses × 25 (or × 28–33 if you prefer Bengen-modern). This is what most FIRE content means when it says "the number."

Lean FIRE. Austere spending — think $25,000–$40,000/year for a single person, often in a low-cost-of-living area. Lean × 25 retires earlier because the target is smaller, but leaves no margin for medical shocks.

Fat FIRE. Upper-middle-class comfort — $100,000–$150,000+/year. Takes a decade or two longer to accumulate but buffers lifestyle inflation and healthcare surprises.

Coast FIRE. The portfolio size today that, with zero further contributions, compounds to Regular FIRE by a chosen retirement age. The formula is Regular / (1 + real return)^years remaining. Once you hit Coast, you can switch to a lower-paying, lower-stress job that covers expenses but saves nothing, and still retire on schedule.

Barista FIRE. Semi-retirement with part-time income covering part of your expenses. If $60k/year in expenses and $20k/year in part-time income, the portfolio only has to fund $40k, so the target drops to $1M. Trades pure independence for lower accumulation and ongoing workforce connection.

Input: current age 30, current savings $50,000, annual expenses $50,000, monthly contribution $2,000, expected real return 5% (balanced portfolio after inflation), SWR 4%. Output in the calculator: FIRE number $1,250,000. Time to FIRE: approximately 24 years, so retirement at 54.

Lean FIRE at 60% of expenses ($30k/year → $750k target): about 17 years, retire at 47. Coast FIRE with the same starting numbers and target age 65: roughly $375k — once you cross that, you can stop contributing and still hit $1.25M by 65. Your current $50k is 4% of the Regular target and about 13% of the Coast number.

Change one lever: bump the savings rate from $2,000/month to $3,000. Time to Regular FIRE drops from 24 years to about 19. Bump the real return from 5% to 6%: drops another two years. The real killers are starting late and low savings rate, in that order.

Using nominal returns. Stocks returning 10% nominal is not the same as 7% real. Use real returns in FIRE math or your target will arrive 5–10 years later than the calculator says.

Planning with current expenses. Your retirement spending is not your current spending. Subtract mortgage once paid off, subtract the kids' college line once they finish, add healthcare before Medicare kicks in (US: plan $10,000–$15,000/year above ACA subsidies between retirement and 65), add a travel budget if that is why you want out.

Counting home equity toward the FIRE number. The house covers a housing expense — it does not generate withdrawals. Including it in the portfolio double-counts. The only exception is if you genuinely plan to downsize and invest the difference.

Ignoring taxes on withdrawals. Traditional 401(k) and IRA withdrawals pay ordinary income tax. Roth is tax-free. Taxable brokerage pays capital gains. Add a 10–25% buffer to your expense number to cover the tax drag.

The FIRE calculator on the site runs all five variants side by side. It uses the closed-form future-value-of-annuity equation to give you exact years-to-FIRE for each scenario, plus a projection chart showing where your portfolio crosses the FIRE line. You can also see the monthly contribution needed to hit FIRE in exactly 10 years — a useful reality check on whether your current trajectory is on pace.

Start with your honest numbers: current portfolio, honest retirement expenses in today's dollars, a conservative real return, and SWR 3.5% if your horizon is over 30 years. Read the time-to-FIRE number and compare it to the life you imagine. The gap between what you want and what the math says is what this calculator is for.