By Gabriele Denaro · Published 20 September 2026 · Updated 6 October 2026
FIRE stands for Financial Independence, Retire Early. The idea is to save and invest until your investments can cover your living costs through withdrawals alone, at which point paid work becomes optional. The "retire early" half gets the attention. The "financial independence" half is useful to almost everyone.
The number most often quoted is 25 times your yearly expenses, which is the same as withdrawing 4% a year. If you spend €24,000 a year, that is €600,000. If you could live on €20,000, it is €500,000. The calculator below runs this arithmetic for you, together with how long it would take at your current savings.
The 4% figure traces back to William Bengen's 1994 study. It looked at US data from 1926 onward and asked what first-year withdrawal, adjusted for inflation every year, would have lasted at least 30 years in every historical period. For a mix of US large-company stocks and intermediate Treasuries the answer was about 4%. A 1998 study known as the Trinity study, by Cooley, Hubbard and Walz, found that a 4% withdrawal from a 50/50 stock and bond portfolio would have lasted in about 95% of the historical periods tested.
Both studies use US history and retirements of about 30 years. Someone retiring at 40 needs money to last 50 years or more, markets outside the US have behaved differently, and neither study counts taxes, healthcare costs or the order in which good and bad years arrive, which matters a great deal early in retirement. The 4% rule is a rough starting estimate. Many people who aim for early retirement plan on a lower withdrawal rate or on some flexibility in spending.
The arithmetic behind FIRE, a target number, a savings rate and a timeline, is useful to anyone who wonders how much is enough. The calculator below uses your current savings, monthly savings, annual expenses, expected return and withdrawal rate as a projection to reason with, not as a plan to follow blindly.
General educational information, not personal financial, tax or legal advice. It may be incomplete or out of date. Terms of use.