Including retirement accounts
A year, after tax, plus your 401(k) contributions
A year. You invest $30,000: 40% of your pay
More options· 7% growth, 4% withdrawals
A year, after fees
A year
4% is the usual rule
Of what you spend now: $45,000 a year
If you stopped investing
You could retire at
50
In 20 years, 10 months, investing 40% of your pay
- Your FIRE number
- $1,125,000
- Savings rate
- 40%
- Invested now$50,000
- You invest$625,000
- Investment growth$456,356
What this means
Your FIRE number is what you’d spend in a year divided by the 4% you’d take out. Spending $1,000 a year less lowers it by $25,000.
That’s why spending matters twice: you invest more now and need less later.
Coast FIRE
| Coast FIRE number today | $250,067 |
| Invested now | $50,000 |
Keep investing until about 38. After that, your investments could grow to $1,125,000 by 65 without you investing any more, so you’d only need to earn what you spend.
Before you can use your 401(k) and IRA
| You retire at | 50 |
| You can use your 401(k) and IRA from | 59½ |
| Years to bridge | 8½ years |
| Spending to cover | $390,000 |
Hold about $390,000 of your FIRE money in a brokerage account, or as Roth IRA contributions, which you can take out at any age.
If you leave a job in or after the year you turn 55, you can use that employer’s 401(k) without the 10% penalty.
What would change it
| Spend 10% less | At 47 · 3 years sooner |
| Spend 10% more | At 54 · 3½ years later |
| Growth 1% lower | At 52 · 2 years later |
| Withdraw 3.5% a year | At 52 · 2 years later |
Spending less helps twice: you invest more now, and you need a smaller pot later.
Assumptions in this estimate
- Everything is in today’s money: your pay, spending and investments keep pace with 2.5% inflation, so 7% growth is 4.4% a year after inflation. Real returns go up and down; a bad first few years of retirement matters most.
- Your FIRE number is what you’d spend in a year of retirement divided by the withdrawal rate: at 4%, 25 times your spending. The 4% rule comes from US studies of 30-year retirements; for a longer early retirement, many people use 3% to 3.5%.
- What you don’t spend is invested each month. Taxes on investment growth and withdrawals aren’t included.
- Social Security isn’t included. It would cover some of your spending later in life, so you may need less.