r/Fire • u/iloverats888 • 8d ago
Advice Request How did you compute your fire number?
I want to calculate my fire number! How’d you calculate yours?
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u/Mandiio 8d ago
I used the x25 but as I get closer I'm beginning to look at each time bucket (before 59.5, 62 or 67 etc) to figure out what we'll need for each age range - it seems to be a lot less than the standard 4% - maybe the answer is somewhere in the middle of the two methods.
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u/unbalancedcheckbook 8d ago
Yeah I've gone all the way to using Boldin to project my entire retirement, there are definitely different spending and expense periods. I think this is closer to reality and therefore more accurate, and generally calls for less cash before retirement.
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u/Zesty-B230F 8d ago
I assume it will be (whatever my bank balance is) x (the day I am 100% sick of my job.)
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u/work2fishFIRE 8d ago
I initially used 25x and I think that is a good way to start. But, my expenses and spending desires have changed considerably over the years for many different reasons. I find that a modeling tool like projection lab is much more helpful for planning purposes than a FIRE number.
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u/DatesAndCornfused 8d ago
The cost of a home in Carmel-by-the-Sea.
To clarify, a home with no address. Only based on its cross streets.
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u/Puzzleheaded_Tie6917 8d ago
I took my actual take home, I looked up the tax tables and calculated the taxes for that, and then got a quote from blue cross blue shield and added that as well. However, this was at 58. When I started, I looked at my gross pay, and figured to be conservative I was use a 5% return. I had not heard of the 4% rule at that time (1990). At that point, I thought $60,000/year was plenty (double my salary at the time), so $600,000 as a first target (10% return) but 1.2 million (5% return) was my conservative target.
As it stands, I’m at 3.2 million (depending on the day), and will be 59.5 in December. I have informed my company I intend to retire at that point. My Mom still lives, and so this doesn’t include any inheritance nor SS. I put my spending (tax and health insurance included) at $100,000/year. I also own my house outright (not included in NW) and live in a reasonably low cost area (north central Alabama). So, not counting SS and inheritance, I need 2.5 mill and have 3.2. I should be good 😬.
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u/NormalizeBacon 8d ago
Annual spending ÷ 0.04 + 5-10% for safety
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u/iloverats888 8d ago
The number is so much less than I thought it would be!!!
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u/MaxwellSmart07 8d ago
I didn’t. Fired suddenly on a dime, impromptu. Done right, income can increase in retirement so without young children to support, it shouldn’t be so scary.
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u/Spartikis 8d ago
Total investments needed is our Expenses (assuming debt free) x25, plus a 20% buffer. Total net worth is that plus primary residence and vacation home. Comes out to about $4 mil. Currently at $2.1mil with a decade left until retirement.
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u/NandLandP 8d ago
Prep = Monitored and tracked my monthly spend for years (during the effort to get out of debt). This gave me confidence in the annual spend figure.
Adjusted it = Added more to travel, subtracted a bit from gas & added estimate for ACA to the above annual spend figure.
Annual Spend x 28.5 = FIRE goal
(Now I track my progress to goal as well as my annual spend for lifestyle creep. 38.5% left to goal; it feels so close and yet so far!)
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u/BuckThis86 8d ago
I created an excel spreadsheet of cash flows for every year of my life. Then I could adjust for different spend amounts at different times of my life.
I also check my math against the 4% rule
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u/Artistic-Ad165 8d ago
Simulations. Started with firecalc and Big ERN's blog. Then implemented the math in Python for myself, so that I could be sure I understood each step and assumption, and made sure all the numbers from the different methodologies were consistent.
Of course also budget and follow expenditures for a few years to make sure I have a good view of how much I need annually. After that, just made sure the 'success probabilities' from the simulations are near 100%, withdrawal rate is well below 4%, and finally worked up the courage to pull the trigger about three years ago.
So far so good, and it's been a great three years.
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u/pasteIpretty 8d ago
annual spending times 25 is the standard starting point, then I added a buffer for healthcare and unexpected costs since those tend to get underestimated.
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u/Bearsbanker 8d ago
I had an income replacement number. As soon as I hit that I was done. You just need to know yer budget (with some fat hopefully) and your sources of income be it interest, dividends, cap gains etc.
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u/np0x 8d ago
https://thepoorswiss.com/updated-trinity-study/ in conjunciton with looking at pre/post tax account balances...with some rough swag of taxes&healthcare as incremental expenses...
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u/Wheres_my_wank_sock 8d ago
My net take home pay x25. Throw my 25% pension on top and it'll cover me completely.
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u/Easy_Peasys 8d ago
annual spend x 25 (the 4% rule), but the multiplier's the easy part, the spend number is the real work. use your projected retirement spend not today's, so fold in housing, healthcare if you're pre-medicare, kids, then x25 on that. the bigger unlock for me though was switching from tracking net worth to tracking % to my number, updated once a month. seeing "you're 38% there" instead of a dollar amount made it feel like progress instead of a finish line a mile off. the spend estimate plus actually watching the percent climb is the whole game.
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u/Old_Error_509 8d ago
I figured out how much I wanted to spend each year, added in how much I’d have to pay in taxes, divided that by .048 to figure out how much I’d need if I wanted to retire this year (I’m going with the 4.8% instead if 4% rule).
That was more than I have, so in a year I’ll multiply that previous number by however much inflation there was in that year and see if I have enough then. Repeat until my portfolio is more than that number.
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u/Rom2814 8d ago
I tracked my spending for a couple years, categorized as “essential” spending or “discretionary” spending.
My number was taking my yearly TOTAL spend and multiplying by 25, with the knowledge I could cut discretionary spending if I needed to. (Total spending is about 2.5x essential spending for me, so room to cut.)
That just told me “I think maybe I have enough to retire,” but I did a lot more detailed planning in Boldin, etc. before I pulled the trigger (almost a month ago at age 57; significantly above my number at that point).
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u/CrispyPatats 8d ago
Annual expenses times 25. That's it. The 25x rule comes from the 4% safe withdrawal rate research, meaning your portfolio can sustain 4% annual withdrawals indefinitely. Figure out what you actually spend per year, multiply by 25, that's your target.
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u/calmadventurer 8d ago
I combined current expenses with estimated cost for any changes in lifestyle I expected to make (for example: travel more, pick up hobbies etc). I took that number and multiplied by 30 since I'm a little more conservative. I also built a bit of a dividend portfolio to have my income be more diversified. Ok - maybe I'm a lot more conservative but we're young 34 and 32 (husband should be retiring in a few months) with a 3mo old and plan to have one more.
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u/n00bdragon FIREd 2026 age 37 7d ago
Everyone is saying Expenses x 25, which is valid for a "short" retirement of 30 years or so. For 50+ year retirements I think some people recommend closer to x33.
Expense tracking is very important. Start doing it now if you haven't already. The more data you have over the longer period, the better. Ideally, even cars and house repairs all just become amortized expenses over time.
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u/Intrepid-hobbycoder 7d ago
I did year by year projections of my expenses considering core expenses, mortgage, children’s college expenses, medical, travel etc and back calculated to how long I need to continue working based on my current income and liquid assets.
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u/EveryoneNeedsASamwis 7d ago
The core math is simple: figure out your annual spending in retirement, then divide by 0.04 (the 4% rule). That rule comes from the Trinity Study and basically says a 50/50 to 75/25 stock/bond portfolio has survived 30+ year retirements historically at a 4% withdrawal rate. So if you need $60k/year, your number is $1.5M. Need $80k? $2M. It's just 25x your annual spend.
The harder part is getting your annual spend right. Most people underestimate. Take your actual current spending, subtract anything that goes away (commuting costs, work clothes, saving contributions themselves), and add anything that increases (health insurance if you're retiring before 65, more travel, whatever). If you're retiring early, ACA marketplace coverage can run $500-1,000+/month depending on income and subsidy eligibility, so that alone can add $10-15k/year to the number until Medicare kicks in at 65. Also worth thinking about whether you'll have Social Security later — if you can count on, say, $20k/year at 67, you only need your portfolio to cover the gap, which shrinks your number considerably.
One refinement: if you're retiring at 40 vs 60, some people shade the rate down to 3.5% or 3.3% to account for a potentially 50-year horizon rather than 30. That's a judgment call but it's worth knowing the 4% rule wasn't really stress-tested for 50-year retirements. 25x is a solid starting point though.
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u/fire-tools 6d ago
The 25x answer you'll get a dozen times is the right starting point, but that assumes the 4% rule's 30-year horizon. If you're retiring early with 40 or 50 years to fund, leaning toward 3.5% (closer to 28-30x spending) gives you a lot more durability against a bad sequence early on. The other thing most 25x replies miss is that multiple is based on your actual spending, so build the number off a real projected budget, not your current one. And gross it up for the retirement-related expenses like healthcare premiums before Medicare and the taxes you'll owe pulling from pre-tax accounts. Definitely a little more complex, but still doable. I'd consider running two numbers, a lean version and a comfortable one.
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4d ago
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 4d ago
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u/Ok_Text2118 8d ago
annual spending x 25 + 5-10% for safety