FIRE Number Calculator (Financial Independence)
Frequently Asked Questions
What is the FIRE number?
Your FIRE (Financial Independence, Retire Early) number is the total investment portfolio size that allows you to live off investment returns indefinitely. The classic formula: Annual spending ÷ Safe Withdrawal Rate (SWR). At 4% SWR: spend £30,000/yr → need £750,000.
What is the 4% rule?
The 4% rule comes from the Trinity Study (1998) — a portfolio of 50%+ stocks historically lasted 30+ years with 4% annual withdrawals, inflation-adjusted. Many UK FIRE advocates use 3-3.5% for greater safety, especially for early retirement (40+ year horizon).
What counts as a FIRE portfolio?
FIRE portfolios typically include: ISA/SIPP investments (index funds, ETFs), property (rental income), dividend stocks. Exclude: your main home, pension you can't access yet, illiquid assets.
Can I access my pension early for FIRE?
Standard UK pension minimum access age is 57 from 2028. For FIRE before 57, you need a bridge portfolio (ISA/GIA investments) to cover the gap until pension access. Many use ISA Bridge + SIPP strategy.
How does the UK State Pension affect FIRE?
The full UK State Pension (2025/26: £11,502/year) significantly reduces how much portfolio income you need from ~67 onwards. A FIRE calculator should factor in State Pension as income from pension age.
What investment return should I assume?
Global equity index funds have historically returned 7-10% nominal (4-7% real/inflation-adjusted). Using 7% nominal is reasonable for long-term projections. Apply 3% inflation adjustment for real terms.
Do I need to pay tax on FIRE withdrawals?
Tax depends on your withdrawal strategy. ISA withdrawals are tax-free. SIPP withdrawals have 25% tax-free lump sum (or 25% tax-free of each drawdown). Capital gains on GIA sales may trigger CGT above the £3,000 annual exempt amount (2025/26).
What is Lean FIRE vs Fat FIRE?
Lean FIRE: very frugal lifestyle, low spending (e.g., £15,000-£20,000/year), achievable with smaller portfolio (~£375,000-£500,000). Fat FIRE: comfortable spending (£50,000+/year), needs portfolio of £1.25m+. CoastFIRE: stop contributing and let compound growth do the work.