How does the FIRE Calculator – Financial Independence Retire Early work?
The FIRE concept (Financial Independence, Retire Early) is built on the 4% rule (Safe Withdrawal Rate): if you withdraw at most 4% of your portfolio per year, it statistically lasts 30+ years. Your FIRE number is therefore: annual expenses ÷ withdrawal rate. The real return accounts for inflation: real return = (1 + return/100) ÷ (1 + inflation/100) − 1. Years to FIRE are calculated iteratively: every month your portfolio grows through compounding and your savings contribution until it reaches the FIRE number. The monthly passive income shows how much you can withdraw each month at FIRE (FIRE number × withdrawal rate ÷ 12).