FIRE calculator

FIRE stands for Financial Independence Retire Early. Our calculator will help you work out an investment and savings strategy that could help you join the growing movement of people who aim to retire years earlier than expected.

Your situation

Current savings
Saving monthly

Your retirement

Projection mode
Annual spending
Withdrawal Rate
Withdrawal rate is the percentage of your savings than you plan to spend each year of retirement. 4% is a common target for a 30 year retirement. Alternatively, you can determine your FIRE target based on how old you plan to live until!
The plan

Your investing strategy

Stocks / ETFs
Expected growth
Savings Account / Bonds
Expected growth
Effective overall rate of return: 5%
Returns may vary. You are responsible for the rate you enter - we make no assessment on how likely you are to secure your chosen rate. Calculations do not take into account the effect of costs, inflation or tax. For simplicity, this calculator assumes your chosen rates remain stable throughout the selected duration, and that all present and future savings follow your chosen allocation.
Your FIRE target


Retirement age
Annual savings
The journey ahead

Your FIRE projection

Initial £20,000
Contributions £1,000 p/m
Growth 5.00% p/a

The calculator excludes any current pension arrangements. Future income available to you may increase if you have a pension, once you reach the age at which you are able to access these investments.

The calculation assumes you invest savings monthly, that the rate of return remains constant, and that interest compounds monthly. Forecasts are not a reliable indicator of future performance.

FIRE stands for Financial Independence Retire Early 🔥 The basic principle of FIRE is to think carefully about how you earn, save and invest while working, to bring forward the point that you’re financially independent and able to retire if you choose to.
It’s not a new idea - it came to the fore way back in 1992 in the popular financial planning book Your Money or Your Life. Over the years, FIRE as a financial management approach has become more well known, particularly since blogs, vlogs, social media and the internet as a whole have allowed proponents to share ideas and form common interest groups.
If you’re considering exploring FIRE, our FIRE calculator can help. Join us as we walk through how FIRE works, how smart investing with tools like Lightyear can help, and how our early retirement calculator can make your planning that bit easier.
Table of contents:

FIRE principles: Financial Independence, Retire Early

At the heart of FIRE lies financial independence. Once you reach financial independence you’ll no longer be reliant on a job for income. For many people, FIRE is about retiring early - but for others it may simply be about having the option to slow the pace of life and drop to a less demanding job before reaching normal retirement age.
To achieve FIRE, you’ll generally find people taking some or all of the following actions:
  • Working out a FIRE target based on how much you want to spend in retirement, how long your retirement will be, and therefore how much you need to save before retiring. Our early retirement calculator is here to help with this!  
  • Saving as much of income as possible, by cutting down on day to day living costs and making budgeting a central part of life
  • Increasing income with side hustles, additional jobs, investments and similar
  • Taking all unused income and investing it for long term growth, to achieve a FIRE target more quickly

Seeking financial freedom: FIRE variations

FIRE has made headlines in recent years, and there’s a huge FIRE community around the world, often connected through popular websites, social media and offline meetups. However, as with any financial decision, one person’s view of FIRE may not be the same as another’s. For that reason several different versions of FIRE are commonly talked about - and in reality, of course, there are as many types of FIRE as there are individuals interested in the topic.
Here are some FIRE variants you may come across:
  • Lean FIRE: Lean FIRE is best for people with relatively low anticipated outgoings - the guiding principle is to keep your post-retirement expenses as low as possible, meaning a lower FIRE target, allowing for a faster route to financial independence
  • Fat FIRE: As you may expect, this is the opposite of lean FIRE - for people looking for a more lavish retirement, willing to max out savings while working, often including adding in extra income streams, to make for a more luxury packed post-work life
  • Barista FIRE: This version of FIRE might suit those who aren’t looking to completely stop working, but are saving to supplement their income later while still taking on part time hours (as a barista for example), or moving to a less stressful, lower paid job 
  • Coast FIRE: Coast FIRE refers to people who may not be hurrying to retire, but still want to max out their saving and investments so they can more comfortably slip into retirement at whatever age suits them

What is a sensible withdrawal rate? Challenges and considerations

When setting a FIRE target, you’ll have a few decisions to make. One important consideration is the withdrawal rate (also known as a safe withdrawal rate - SWR) you use for your retirement calculations.
As you might expect, the withdrawal rate is the rate at which you intend to withdraw funds from your savings once you’re retired. Picking the right rate is essential to make sure you don’t run out of money or face financial hardship once you’ve stopped or reduced your work. This means that FIRE proponents often suggest picking a withdrawal rate which is likely to sit around the same rate as you might expect your investments to earn income or interest. That means you can mainly spend the income from your investments, without depleting the principal too early.
So - what is the best SWR for your FIRE calculations? There’s no absolute right answer here, but generally it’s suggested that investing conservatively during your retirement years, and setting a withdrawal rate of about 3% or 4% of your starting balance should mean you can continue to draw on your funds for many years to come. Not only that, a 4% annual withdrawal rate means that with careful management, your total savings could last for a 25-30 year retirement.

An alternative approach: How long do you want to plan for?

Naturally, there are drawbacks to using the SWR method of FIRE planning. This approach is based on average growth expectations in your portfolio - but investment growth tends not to be linear. There may be good years and bad years in terms of your investment performance - and other factors also apply, such as your own changing financial needs and changes in the costs of living. Playing around with different withdrawal rates can help you model different retirement outcomes - which is where our FIRE calculator can be a huge help.
Rather than setting a percentage-based withdrawal rate, you can instead work around your planned retirement length. If you plan to retire at age 60, for example, a 4% withdrawal rate may work well for you. But if you’re hoping to retire at a younger age - say at 50, or earlier - and you intend to enjoy a lengthy retirement, then you’ll need to adjust your plans and save more.
Thankfully, our calculator has an experimental ‘Life Expectancy’ mode! While this isn’t a topic that many people enjoy contemplating too often, it can help to give a clearer idea of how long you need to plan for.

When can I retire? How to use our FIRE calculator

Ready to get started? Here’s how to use our FIRE calculator to model possible scenarios for your financial independence goals:
Add some information about yourself today:
  1. Enter your age and the value of your current savings 
  2. Determine how much of your income you can set aside every month
Enter information about your retirement goals:
  1. Choose between setting a withdrawal rate, or a planned life expectancy
  2. Enter how much you plan to spend every year of your retirement
Configure your investment strategy:
  1. Enter the split of your investments across stocks, fixed interest / savings and cash
  2. Add the rate of return you’re expecting on each different investment type
Based on this information, the FIRE calculator will give you:
  • your FIRE target (annual retirement spending divided by your withdrawal rate - or, in life expectancy mode, annual spending multiplied by the number of years you’ll spend in retirement)
  • projected annual savings (monthly savings multiplied by 12)
  • retirement age (the rate at which you could reach your FIRE target based on your annual savings and investment strategy)
You’ll also be able to explore your projections in a chart and a table, based on the assumptions and estimates you’ve entered into the calculator. You can then play with different rates of savings, investment return and withdrawal, to see how your potential retirement age might change in different circumstances.

Feeding the FIRE: saving for early retirement 

Using a financial independence calculator is a good start on your FIRE journey - but the more you learn, the more you’ll see other options which can also help move you forward, fast.
There’s no single FIRE method, but common approaches include structuring your investment portfolio optimally to improve returns, while keeping an acceptable balance of risk. In broad terms, you’ll be able to build a balanced investment portfolio by splitting your savings across stocks, fixed income savings or bonds, and cash. It’s generally considered that the potential returns of stock based investment are the highest - but so is the risk. Fixed income options have a more stable return, which could be lower than you may achieve from stocks. Holding cash is important to cover any immediate and unexpected expenses - but this can have a lower return still.
The balance of splitting your savings across these three categories is a personal decision, and may also vary depending on your planned timescales. Having a higher proportion of your money in riskier investments could be a more attractive option if you’re many years off retirement, as you’d have time to regain any losses incurred due to market fluctuations. Closer to retirement, you may prefer stability, shifting more of your money into more stable investments, even if the potential returns are lower - a process known as lifestyling.
The good news is that building a balanced investment portfolio is made easier with tools like Lightyear which allow you to build a diverse investment portfolio of global stocks, ETFs, and money market funds. Whatever tools you use to build your investment portfolio, be aware of your broker’s fees - if you’re aiming for an early retirement, you definitely don’t want hidden fees eating into your returns. Take a look at Lightyear’s pricing, or sign up for free today.
Lightyear does not currently offer any tax-efficient wrappers in the UK, such as personal pensions or ISAs.

Wrapping up: early retirement

Being financially secure is a dream for most people - and it can be easier to achieve financial independence if you plan carefully using popular FIRE methods and tools. Our early retirement calculator can help you figure out your possible savings over time, your potential investment returns, and how much you’ll need to have saved to safely withdraw enough to live on in retirement. Use our calculator to model a few different scenarios - and then check out Lightyear for ways to best invest your funds for optimal growth across a balanced portfolio.