What this calculator does
Takes current portfolio value, monthly contributions, expected annual return, annual expenses in retirement, and safe withdrawal rate. Returns the FIRE number (target portfolio), the projected time to reach it, and a year-by-year portfolio projection.
The formula
FIRE number = Annual retirement expenses / Safe Withdrawal Rate (SWR) Default SWR: 4% (the "4% rule", Bengen 1994 / Trinity Study 1998) e.g. £30,000/year expenses ÷ 4% = £750,000 FIRE number Portfolio growth each month: V(t+1) = V(t) × (1 + r/12) + monthly_contribution Where r = annual return rate (decimal) FIRE is reached when V(t) ≥ FIRE number
Assumptions
- Constant real return (inflation-adjusted or nominal, as selected by the user).
- Monthly contributions remain constant throughout the accumulation period.
- No investment fees or tax drag are modelled.
- Uses simple compound growth, not Monte Carlo simulation.
- The default SWR of 4% is a long-run historical starting point, not a guarantee of success for any individual.
Data sources
No external regulatory data is used. The 4% rule is derived from Bengen (1994) and the Trinity Study (Cooley, Hubbard & Walz, 1998), based on US equity and bond historical returns. UK investors may wish to use a more conservative SWR of 3–3.5%.
Limitations
- Does not run Monte Carlo simulations — a single constant return rate is used throughout.
- Does not model sequence-of-returns risk, which is the principal danger in early retirement.
- The 4% rule was derived from US historical data; UK investors face different market conditions and currency risk.
- Does not model state pension or other income sources in retirement, which would reduce the FIRE number required.
- Does not account for changing expenses in retirement (for example, higher spending in early retirement and lower spending in later years).
- Does not model fees, tax, or inflation unless the user manually adjusts the return rate to a real (inflation-adjusted) figure.
Worked example
Inputs: £50,000 current portfolio, £1,000/month contributions, 7% annual return, £2,500/month (£30,000/year) retirement expenses, 4% SWR.
FIRE number = £2,500 × 12 / 0.04 = £750,000 Monthly growth rate = 7% / 12 = 0.583% Month-by-month until portfolio ≥ £750,000: Year 1 start: £50,000 Year 5 end: approx £130,000 Year 10 end: approx £278,000 Year 15 end: approx £500,000 Year 18 end: approx £680,000 Year 19 end: approx £760,000 → FIRE reached at approximately 19 years
Changelog
| Date | Change |
|---|---|
| May 2026 | Initial publication |