Calculate your path to Financial Independence and Early Retirement
FIRE (Financial Independence, Retire Early) is a movement focused on extreme savings and investment to retire decades earlier than traditional retirement age. The core principle is the 4% safe withdrawal rule from the Trinity Study.
The 4% rule suggests you can withdraw 4% of your portfolio in year 1 of retirement, then adjust for inflation each year, with a 95%+ success rate over 30 years. This means you need 25 times your annual expenses to retire.
Example: £30,000/year expenses × 25 = £750,000 FIRE number
Standard 4% withdrawal rule with 25× annual expenses.
Target: £40,000 expenses = £1M portfolio
Pros: Balanced lifestyle, proven success rate, sustainable long-term
Cons: Takes longer than Lean FIRE, requires significant savings
Minimal expenses (£20k-£30k/year), frugal lifestyle.
Target: £25,000 expenses = £625,000 portfolio
Pros: Faster retirement, lower savings needed, simple living
Cons: Requires significant lifestyle sacrifices, less financial buffer
Ideal for: Minimalists, location-independent workers, frugal enthusiasts
Luxurious retirement (£80k+ expenses), maintain high standard of living.
Target: £100,000 expenses = £2.5M portfolio
Pros: No lifestyle compromise, travel/luxury budget, larger safety buffer
Cons: Requires very high income or long savings period
Ideal for: High earners, those unwilling to sacrifice lifestyle
Save aggressively NOW, then coast to FIRE with no more contributions.
Example: £98,500 at age 30 → £750,000 at age 60 (7% growth)
Pros: Flexibility to pursue passions, less pressure mid-career, compound growth does the work
Cons: Requires early aggressive saving, vulnerable to market downturns
Ideal for: Young savers, those wanting career flexibility
Semi-retire early, portfolio covers base expenses, part-time work covers the gap.
Example: £500,000 portfolio covers £20k/year, part-time work adds £10k-£15k
Pros: Retire earlier, flexible work schedule, social engagement, health benefits
Cons: Still need to work, part-time income not guaranteed
Ideal for: Those who enjoy work but want less stress, need employer healthcare (less relevant in UK with NHS)
Higher savings rate = faster FIRE
| Savings Rate | Years to FIRE* |
|---|---|
| 25% | 32 years |
| 50% | 17 years |
| 65% | 11 years |
| 75% | 7 years |
*Assumes 5% real returns, starting from zero
Your FIRE number is the amount you need to retire early based on the 4% safe withdrawal rule. It is calculated as: Annual Expenses × 25. For example, if you spend £30,000/year, your FIRE number is £750,000. The 4% rule suggests you can safely withdraw 4% annually (adjusted for inflation) without running out of money.
The 4% rule (from the Trinity Study) suggests you can safely withdraw 4% of your portfolio in the first year of retirement, then adjust for inflation each year, with a high probability your money will last 30+ years. It is based on historical stock and bond market returns. Your FIRE number = Annual expenses ÷ 0.04.
Time to FIRE depends on your savings rate and investment returns. With a 50% savings rate and 7% annual returns, you could reach FIRE in 12-15 years. Higher savings rates dramatically reduce the timeline. The key is maximising the gap between income and expenses, then investing the difference in diversified index funds (FTSE All-Share, S&P 500) within ISAs and SIPPs.
Coast FIRE means saving aggressively early, then stopping contributions and letting compound growth carry you to FIRE by your target retirement age. For example, if you need £750,000 at age 60 and expect 7% returns, you need about £98,500 at age 30 to coast. After reaching your Coast FIRE number, you can work part-time or pursue lower-paying passions.
Regular FIRE is standard 4% rule with 25× expenses. Lean FIRE targets minimal expenses (£20k-£30k/year) for faster retirement. Fat FIRE means luxurious retirement (£80k+ expenses) requiring £2M+. Coast FIRE saves early then stops contributing. Barista FIRE semi-retires early with part-time income covering the gap. Each suits different lifestyles and goals.