How to calculate your FIRE number
By the Fire Finance team · Updated September 25, 2026 · 6 min read
Key takeaway
FIRE number = 25 × the annual expenses you’ll have at retirement (not today’s expenses — inflate them first). At 6% inflation, expenses double roughly every 12 years, so the inflation step usually matters more than people expect.
Your FIRE number is the size of portfolio at which investment income alone can pay for your life. The calculation takes three steps — and the one most people skip (inflation) is the one that changes the answer the most.
Step 1 — Find your real annual spending
Not your income, not your budget aspiration: what you actually spend in a year, including the lumpy stuff — insurance premiums, travel, repairs, gifts. Monthly spend × 12 plus annual one-offs. For this example: ₹50,000/month → ₹6 lakh/year.
Step 2 — Inflate it to your retirement year
The 25× rule applies to expenses at retirement, and inflation compounds hard over decades:
| Years until retirement | ₹50,000/mo today becomes (6% inflation) |
|---|---|
| 10 years | ≈ ₹89,500/month |
| 15 years | ≈ ₹1.20 lakh/month |
| 20 years | ≈ ₹1.60 lakh/month |
| 25 years | ≈ ₹2.15 lakh/month |
The formula: future expense = today's expense × (1 + inflation)years.
Step 3 — Multiply by 25
Retiring in 20 years on today's ₹50,000/month lifestyle: ₹1.60 lakh/month → ₹19.2 lakh/year → FIRE number ≈ ₹4.8 crore. That sounds enormous until you remember it is tomorrow's rupees: it is roughly ₹1.5 crore in today's money, and two decades of compounding does most of the lifting. A $3,000/month lifestyle 20 years out at 3% US inflation works out to about $1.6M the same way.
Adjusting the multiple
- 25× — the standard, backed by 30-year historical success rates.
- 28–33× — safer for retirements longer than 30 years (retiring at 40, say), or if you want slack for bad market decades.
- Below 25× — only with a reliable pension, rental income, or willingness to earn part-time (Barista FIRE).
The FIRE calculator runs all three steps automatically from your age, spending, and inflation assumption — and then tells you the monthly SIP that reaches the number on schedule.
Frequently asked questions
Is the FIRE number based on income or expenses?
Expenses, always. Two people earning the same salary can have wildly different FIRE numbers. The person spending ₹40,000 a month needs roughly half the corpus of the person spending ₹80,000.
Why multiply by 25 and not some other number?
25× is the inverse of a 4% withdrawal rate, which historical data (the Trinity Study) found sustainable over 30-year retirements. Retiring very early or wanting extra safety? Use 28–33× — that is a 3–3.5% withdrawal rate.
Does the FIRE number include my house?
Your primary home is excluded from the corpus, because you cannot withdraw 4% of your kitchen. Count only investable assets — funds, stocks, deposits, rental property you would sell. Owning your home does lower your expenses, which lowers the number itself.
Run these numbers on your own life
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Educational content, not financial advice. Projections use the assumptions shown and are estimates — actual investment returns vary. Consult a registered advisor for personal decisions.