The formula
How to calculate fIRE age
This puts a date on financial independence. Given what you have invested, what you add each year and what you expect to spend, it solves for the point where the portfolio reaches 25 times your annual costs.
Everything runs in real terms — the return is after inflation, so the answer is in today's money and the spending figure does not need to be inflated. That avoids the most common source of confusion in retirement projections.
Fill in the following:
- Your age now (years)
- Invested today
- Saved per year
- Annual spending
- Real return (%) — after inflation, so the answer stays in today's money
The result updates on every keystroke. The URL updates too, which makes the filled-in version easy to bookmark or send to someone else.
Worked example
Here is the calculation with the starting values:
- Your age now: 34 years
- Invested today: 120,000
- Saved per year: 24,000
- Annual spending: 40,000
- Real return: 5 %
That gives:
- Age at financial independence: 52.5 years
- Years from now: 18.5 years
- FIRE number to reach: 1,000,000
Reading the result
Test the sensitivity before trusting the date. Drop the return from 5% to 4% and the answer typically moves a year or two; cut annual spending by 10% and it moves considerably more, because that change lowers the target and raises the saving at the same time.
Where this goes wrong. Using a nominal return with today's spending. Mixing a 7% nominal return with an un-inflated expense figure understates the target badly and can pull the date forward by five years or more.
Long-run global equities have delivered roughly 5% after inflation. Portfolios holding bonds should assume less. Since the whole answer hinges on it, run the calculation at 4% as well and treat the range as the honest result.
No. State and workplace pensions arriving later reduce what the portfolio has to cover from that point, which usually pulls the FIRE age forward. Bridging the years before they start is the harder part of the problem.
The answer it gives you is age at financial independence. With 34 years your age now, 120,000 invested today and 24,000 saved per year, that comes to 52.5 years. Change any field and the figure moves with it.