Financial Independence, Retire Early (FIRE) starts with a number: the amount of invested assets that can generate your annual spending indefinitely. Everything else is math between now and that number.

The 4% Rule

The Trinity Study and subsequent research found that a portfolio of 50–75% stocks, 25–50% bonds historically survived a 30-year retirement with a 95% success rate when drawing 4% of the initial portfolio annually (adjusted for inflation). So: annual spending ÷ 0.04 = FIRE number. If you spend $50,000/year, your number is $1,250,000.

What Savings Rate Produces FIRE

The time to FIRE depends primarily on savings rate — what percentage of your income you're saving and investing:

  • 10% savings rate → ~51 years to FIRE
  • 20% savings rate → ~37 years to FIRE
  • 30% savings rate → ~28 years to FIRE
  • 50% savings rate → ~17 years to FIRE
  • 75% savings rate → ~7 years to FIRE

The math assumes 7% nominal returns (5% after inflation) and a 4% withdrawal rate.

The Side Hustle Factor

Increasing income has a disproportionate effect on FIRE timeline. A person earning $60,000 saving $18,000/year (30%) takes 28 years. Increasing income to $80,000 while saving $24,000 (still 30%) cuts that to 23 years. High-income earners who maintain lifestyle inflation reduction can hit FIRE in 10–15 years instead of 30+. For a practical guide to the FIRE framework, including savings rates, withdrawal strategies, and healthcare considerations, Your Money or Your Life or similar FIRE-focused books cover the full roadmap.

The Realistic Critique

FIRE math assumes consistent returns and static spending. Healthcare before Medicare eligibility (age 65) is expensive. Sequence-of-returns risk (bad returns in the first years of retirement) is real. Most people should build a buffer — plan for 3.5% withdrawal rate or have part-time income in early retirement to reduce sequence risk.

Bottom Line

Find your FIRE number: annual spending ÷ 0.04. Run a compound interest calculator with your current savings rate and see how long it takes. If it's more than 20 years, look hard at either increasing your savings rate (side income, negotiate a raise) or reducing lifestyle costs. The math is unforgiving but clear — and the sooner you see the number, the sooner you can start moving the needle on it.