The FIRE number
Your FIRE number is the portfolio that can pay your yearly spending forever (or for a long retirement): spending Γ· withdrawal rate. At 4%, that is 25Γ your annual spending β $1.25 million for $50,000 a year.
Coast FI
You are Coast FI when your current investments, left to grow with no new savings, will reach your FIRE number by a traditional retirement age (65 here). After that you only need to cover today's expenses.
Lean and Fat FIRE
Lean FIRE targets a minimal budget; Fat FIRE allows a more comfortable lifestyle. Remember health insurance before Medicare at 65 and taxes on withdrawals when you set your spending.
FAQ
What is the 4% rule?
It suggests you can withdraw 4% of your portfolio in the first year of retirement and adjust for inflation afterwards, with a high historical chance of the money lasting 30 years.
How much do I need to retire early?
About 25 to 30 times your yearly spending. Someone spending $40,000 a year needs roughly $1.0β1.2 million.
Should I use real or nominal returns?
Use real (after-inflation) returns so your FIRE number stays in today's dollars. 5β7% is a common assumption for a stock-heavy portfolio.