FIRE Retirement Calculator: Learn How to Retire Early

11.03.2025 | Category: Retirement Planning

Professionally Reviewed by: Mark Zagurski, CLU®, ChFC®, CMFC® and CRPC®

Summary: A FIRE retirement calculator helps you determine exactly how much money you need to achieve financial independence and retire early. This article will help guide you toward your early retirement dreams by explaining the key inputs, strategies and steps required to use a retirement calculator.

The FIRE movement (Financial Independence, Retire Early) is making it a reality for a growing number of individuals to take control of their finances.

The movement traces its origins to the bestselling finance book Your Money or Your Life, written by Joe Dominguez and Vicki Robin. First published in 1992, the book encourages people to rethink their relationship with money. While Dominguez and Robin didn’t coin the term FIRE, their book inspired the movement’s goals.¹

This guide will take you through why you may need a FIRE retirement calculator, different FIRE strategies, and the mistakes to avoid.

Why use a FIRE retirement calculator?

A FIRE retirement calculator is an essential tool that helps you with early retirement planning. By inputting key financial information into the calculator, you can determine how much you need to save and how long it would take to achieve financial independence.

The FIRE calculators have features that show you different investment scenarios, how your money might last and essential graphs to visualize it all.

The calculator is based on solid financial principles, like the 4%-rule. Basically, you can withdraw 4% of your retirement savings each year for 30 years without running out of money, assuming you adjust the original 4% withdrawal each year based on inflation.

Key inputs for the FIRE retirement calculator

To get accurate results from the calculator, you’ll need to input specific information:

Age and investments: Your age is where you begin, and your current investments give you a head start.
Income and spending: Enter your after-tax income and annual spending. The difference determines your savings rate, one of the most critical factors in FIRE planning.
Retirement expenses and withdrawal rate: This determines your target amount. While most calculators default to the 4%-rule, you can adjust based on your risk tolerance and customize expected returns for different asset classes. Additionally, the 25x rule, which multiplies your annual expenses in retirement by 25, helps determine your target amount needed for retirement. So for example, if your expenses in retirement will be $50,000 per year, multiplied by 25, then you’ll need $1 million to accommodate a 4% withdrawal rate.

Understanding the 4%-rule and safe withdrawal rates

The 4%-rule, developed from the Trinity Study², suggests that you can withdraw 4% of your retirement portfolio in the first year of retirement, then adjust that amount for inflation each subsequent year, with a high probability that your money will last at least 30 years.

Here’s how it works:

If you need $50,000 per year in retirement, you’d need $1.25 million saved ($50,000 ÷ 0.04)
If you need $80,000 per year, you’d need $2 million saved
If you need $100,000 per year, you’d need $2.5 million saved

However, early retirement planning may require modifications since you might need your money to last 40-50 years, instead of 30 years. Many FIRE practitioners plan for a more conservative 3.25%-3.5% withdrawal rate.

Once you figure out your finances, you can decide whether you need to grow your savings by increasing revenue and/or cutting expenses. FIRE practitioners often invest 80-90% in stocks, use 401(k)s and IRAs to save on taxes and regularly tweak their plan with a financial professional.

Different FIRE strategies and their requirements

The FIRE movement is not a one-size-fits-all strategy. There are different approaches for different expected lifestyles:

Lean FIRE focuses on retiring early with a modest lifestyle, typically aiming for $500,000 to $1.25 million to support $25,000 to $50,000 annually.
Regular FIRE represents a middle-ground approach, targeting $1.25 million to $2.5 million to support annual expenses of $50,000 to $100,000.
Fat FIRE allows for a more luxurious retirement lifestyle, typically requiring $2.5 million or more to support annual expenses of $100,000 or higher.
Barista FIRE involves saving enough to cover basic expenses through investments while earning additional income through part-time work.
Coast FIRE, which stands for “Cost of Autonomous Sustained Time” is a strategy where you want to reach a point where you no longer need to aggressively save for retirement because you’ve already invested enough early on.

Common mistakes to avoid in FIRE planning

It’s easy to make mistakes when planning for retirement. Here are some common errors to avoid:

Underestimating expenses: Many people underestimate their retirement expenses, particularly healthcare, home maintenance and inflation’s long-term impact.
Ignoring taxes: Different account types have different tax implications. Plan for the tax impact of your retirement withdrawals, especially if you’re retiring before age 59½.
Lacking flexibility: Build flexibility into your plan to accommodate market downturns, unexpected expenses or changes in goals.
Neglecting insurance needs: While many people, including government, military and union retirees may have healthcare options available, other early retirees need to secure their own health insurance and may need additional life insurance to protect their financial independence plan.

Taking action on your FIRE journey

A FIRE retirement calculator may provide the framework for your early retirement plan, but achieving financial independence requires nuanced planning with a financial professional who understands your individual circumstances. First, figure out your finances, then save and invest wisely. Remember that early retirement planning is a sprint compared to traditional retirement planning, which is more like a marathon. Small, consistent actions compound over time to help create significant results.

At Mutual of Omaha, we understand that everyone’s path to financial independence is different.

Our financial professionals can be your ultimate FIRE calculator. They consider all of your unique information, including your goals, current savings, current budget, planned expenses/FIRE lifestyle and more into a personalized roadmap to pursue your FIRE dreams.

Find out how long your savings may last in retirement when you take regular withdrawals with this Mutual of Omaha calculator or learn more about the pros and cons of early retirement on the Make It Personal Podcast from Mutual of Omaha Advisors.

Frequently asked questions (FAQs)

How accurate are FIRE retirement calculators?

FIRE retirement calculators provide estimates based on the information you provide and historical market data. While they’re valuable planning tools, actual results will vary based on market performance, inflation and changes in your personal circumstances. It’s important to update your calculations regularly and maintain some flexibility in your plan.

What’s the minimum amount needed to retire early?

The minimum amount you’ll need to retire early depends on your planned annual expenses and withdrawal rate. Using the 4%-rule, if you need $30,000 annually, you’d need $750,000 saved. However, many early retirement experts recommend having extra saved to provide additional security and flexibility.

Can I retire early with just a 401(k) and IRA?

While 401(k)s and IRAs are important for early retirement, you’ll likely need additional taxable investment accounts since retirement accounts may have penalties for withdrawals before age 59½. A comprehensive early retirement strategy typically includes both tax-advantaged and taxable accounts.

What if the market crashes after I retire early?

Market volatility is one of the biggest risks early retirees face. A major downturn shortly after retiring — known as sequence of return risk — can significantly impact how long your savings last.

To help mitigate this, many FIRE practitioners take a more conservative approach, planning for a lower withdrawal rate, such as 3.25% to 3.5%, to create extra flexibility. Others may keep a larger cash cushion, so they can cover expenses without selling investments when the market is down.

Some also build in the ability to temporarily reduce discretionary spending during periods of market turbulence, which helps protect their long-term plan while riding out the volatility.

About Mark Zagurski, CLU^®, ChFC^®, CMFC^® and CRPC^®

Mark is a director of strategy and communications at Mutual of Omaha. With more than 30 years of experience, he has worked extensively in advisor development, strategy, and communications, focusing on helping advisors and their clients make informed financial decisions. He is also the host of the Mutual of Omaha Advisors podcast, “Make it Personal,” which explores personal finance and strategies to help you take control of your money and future.

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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