Question 1

What is the FIRE number?

Accepted Answer

Your FIRE number is the total portfolio value you need to retire and live off investment returns indefinitely. It's calculated using the 4% Safe Withdrawal Rate (SWR): FIRE Number = Annual Expenses × 25. If you spend $50,000 per year, your FIRE number is $1,250,000. At 4% SWR you can withdraw that $50k annually with a high probability the portfolio lasts 30+ years.

Question 2

How is the 4% safe withdrawal rate determined?

Accepted Answer

The 4% rule comes from the Trinity Study (1998), which analyzed historical US stock and bond market data from 1925–1995. Researchers found a 4% annual withdrawal rate sustained a 30-year retirement with a 95%+ success rate for a stock-heavy portfolio. Many FIRE followers use 3–3.5% for longer retirements (40+ years) to add extra safety margin.

Question 3

What is a good savings rate for FIRE?

Accepted Answer

The higher your savings rate, the faster you reach FI. At a 10% savings rate you need roughly 43 years. At 25% it drops to about 32 years. At 50% you hit FI in around 17 years. At 75% you can retire in just 7 years. The dramatic reduction comes from two effects: you're saving more AND you're proving you can live on less — so your FIRE number is smaller too.

Question 4

What expected return rate should I use?

Accepted Answer

The US stock market (S&P 500) has historically returned about 10% nominal and 7% real (after inflation). For conservative planning, 6–7% real return is the most commonly used assumption in the FIRE community. Bonds average 2–3% real return. A typical 80/20 stock-bond portfolio targets about 6.5–7% real return. Always plan conservatively — a lower assumed return means a safer retirement.

Question 5

What is Lean FIRE vs Fat FIRE?

Accepted Answer

Lean FIRE means retiring on a minimal budget — typically under $40,000/year — often in a low cost-of-living area. Fat FIRE is retiring with a large, comfortable budget — $100,000+/year — giving flexibility for travel, healthcare, and lifestyle. Regular FIRE sits in between, around $50,000–$80,000/year. The category you fall into depends entirely on your annual expenses, not your portfolio size.

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