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Next toolsAssumptions and methodology
Transparent calculation notes for FIRE Calculator.
Formula used
Savings compound once a year, and annual savings are added at year end and rise with inflation. FIRE is the first year the balance reaches the inflation-adjusted target. Goal mode solves the first-year savings or current corpus needed by the target age.
Methodology
- Calculate the FIRE number in today's rupees from annual expenses and withdrawal rate.
- Inflate the FIRE number to each future year.
- Project savings with annual compounding and inflation-linked contributions.
- Report the first year savings reach the target, or not reached by age 100.
Core assumptions
- Annual expenses reflect long-term lifestyle spending.
- Expenses are entered in today's rupees and inflated to the FIRE year.
- Savings contributions continue consistently and rise with inflation each year.
- Return, inflation, and withdrawal-rate assumptions stay stable.
Not included
- Taxes, healthcare shocks, changing lifestyle costs, and sequence risk are simplified.
- Withdrawal-rate rules are planning heuristics, not guarantees.
About FIRE Calculator
Guide1What is FIRE (Financial Independence, Retire Early)?
FIRE stands for Financial Independence, Retire Early. It is a movement and financial strategy focused on aggressive saving and investing to accumulate enough wealth that the returns from your investments can cover your living expenses indefinitely, allowing you to retire much earlier than the traditional age of 60.
The core idea is to save 50-70% of your income, invest aggressively, and reach a corpus that sustains your lifestyle through passive income. In the Indian context, where the cost of living is relatively lower, FIRE can be achieved with a more moderate corpus than in Western countries.
2The FIRE Number and 25x Rule
Your FIRE number is the corpus you need to achieve financial independence. The most common method to calculate it is:
FIRE Number = Annual Expenses × 25
This is based on the 4% safe withdrawal rate — the idea that you can withdraw 4% of your corpus annually (adjusted for inflation) without running out of money over a 30-40 year retirement. In India, considering higher inflation, some experts recommend a 3 to 3.5% withdrawal rate, leading to a 28 to 33x multiplier.
This calculator states your FIRE number in today's rupees and inflates it to the year you reach FIRE. At 6% inflation, ₹1.5 crore today becomes about ₹4.3 crore in 18 years, so your savings must reach the larger figure.
3Types of FIRE
- Lean FIRE: Achieving financial independence with a minimalist lifestyle and lower expenses
- Fat FIRE: Accumulating a larger corpus to maintain a comfortable, higher-spending lifestyle
- Barista FIRE: Having enough investments to semi-retire and work part-time for supplementary income
- Coast FIRE: Having enough invested that compounding alone will grow it to a full FIRE number by traditional retirement age
4How to Use This FIRE Calculator
- Step 1: Enter your current age, annual income and the share of income you save (savings rate).
- Step 2: Enter the annual expenses you expect in retirement, in today's rupees, and your current savings.
- Step 3: Set the expected return, inflation and a safe withdrawal rate. 4% is the classic rule; 3 to 3.5% is a more conservative choice for India, which the Conservative scenario tests.
- Step 4: Projection shows the age your savings reach the inflation-adjusted FIRE number. Goal solves the savings you need to retire by a target age.