Question 1

What is the FIRE number?

Accepted Answer

Your FIRE number is the amount of money you need invested to live off your portfolio indefinitely. It is calculated as your annual expenses divided by your safe withdrawal rate (typically 4%), so if you spend 6 lakh per year, your FI number is 1.5 crore.

Question 2

What is a good savings rate for FIRE?

Accepted Answer

A savings rate of 50% or more can help you reach financial independence in 15-17 years. The higher your savings rate, the faster you reach FI. A 70% savings rate can get you there in under 10 years.

Question 3

What is the 4% rule in FIRE?

Accepted Answer

The 4% rule states that you can withdraw 4% of your portfolio in the first year of retirement, then adjust for inflation each subsequent year, and your money should last at least 30 years. It is based on the Trinity Study.

Financial Calculators