How the FIRE number is calculated
FIRE means Financial Independence, Retire Early — building enough capital that work becomes optional. The calculator runs four steps:
- Inflate today's expenses to your retirement year:
future expense = today × (1 + inflation)^years - Divide by the safe withdrawal rate to find the corpus:
corpus = future annual expense ÷ withdrawal rate - Project existing investments forward at the pre-retirement return.
- Solve for the SIP that closes any remaining gap.
Choosing a safe withdrawal rate
The famous 4% rule implies a corpus of 25× your annual expenses. In India, higher inflation argues for caution (3.5%), while higher long-term equity returns support 4–4.5%. Whichever number you pick, remember that a real retirement involves variable spending — many people spend more in the first decade and less later.
Lean FIRE, Fat FIRE, Coast FIRE
- Lean FIRE — a modest lifestyle, smaller corpus.
- Fat FIRE — the same freedom with a comfortable budget; run the numbers with higher monthly expenses.
- Coast FIRE — existing savings will grow into the target on their own. After that age you only need to cover current expenses, which opens the door to lower-paying work you actually enjoy.
What the results do not include
Taxes, one-off goals (children's education, a home), healthcare inflation and legacy planning are not modelled. Treat these as add-ons: many planners recommend a 15–25% buffer on top of the calculated corpus for exactly these reasons.
This is a planning estimate, not a guarantee. Market returns vary, and sequence-of-returns risk in the first years of retirement matters more than anything else.