Retirement Calculator Fire

FIRE Retirement Calculator

Fill in EITHER "Years Until Retirement" OR "Annual Savings" to calculate the other.

function calculateFIRE() { var currentSavings = parseFloat(document.getElementById('currentSavings').value); var annualExpenses = parseFloat(document.getElementById('annualExpenses').value); var desiredAnnualIncome = parseFloat(document.getElementById('desiredAnnualIncome').value); var expectedAnnualReturn = parseFloat(document.getElementById('expectedAnnualReturn').value); var inflationRate = parseFloat(document.getElementById('inflationRate').value); var safeWithdrawalRate = parseFloat(document.getElementById('safeWithdrawalRate').value); var yearsToRetirementInput = document.getElementById('yearsToRetirement').value; var annualSavingsInput = document.getElementById('annualSavings').value; var resultsDiv = document.getElementById('fireResults'); resultsDiv.innerHTML = "; // Clear previous results // Input validation if (isNaN(currentSavings) || currentSavings < 0) { resultsDiv.innerHTML = 'Please enter a valid Current Retirement Savings.'; return; } if (isNaN(annualExpenses) || annualExpenses < 0) { resultsDiv.innerHTML = 'Please enter valid Annual Living Expenses.'; return; } if (isNaN(desiredAnnualIncome) || desiredAnnualIncome <= 0) { resultsDiv.innerHTML = 'Please enter a valid Desired Annual Retirement Income (must be greater than 0).'; return; } if (isNaN(expectedAnnualReturn) || expectedAnnualReturn < 0) { resultsDiv.innerHTML = 'Please enter a valid Expected Annual Investment Return.'; return; } if (isNaN(inflationRate) || inflationRate < 0) { resultsDiv.innerHTML = 'Please enter a valid Inflation Rate.'; return; } if (isNaN(safeWithdrawalRate) || safeWithdrawalRate 100) { resultsDiv.innerHTML = 'Please enter a valid Safe Withdrawal Rate (between 0.1% and 100%).'; return; } var yearsToRetirement = parseFloat(yearsToRetirementInput); var annualSavings = parseFloat(annualSavingsInput); var calculateYears = !isNaN(annualSavings) && annualSavings >= 0; var calculateSavings = !isNaN(yearsToRetirement) && yearsToRetirement >= 0; if (calculateYears && calculateSavings) { resultsDiv.innerHTML = 'Both "Years Until Retirement" and "Annual Savings" are provided. Calculating "Years to FIRE" based on "Annual Savings" and ignoring "Years Until Retirement".'; calculateSavings = false; // Prioritize years calculation if both are present } else if (!calculateYears && !calculateSavings) { resultsDiv.innerHTML = 'Please enter either "Years Until Retirement" OR "Annual Savings" to get a full calculation.'; } // Convert percentages to decimals var expectedAnnualReturnDecimal = expectedAnnualReturn / 100; var inflationRateDecimal = inflationRate / 100; var safeWithdrawalRateDecimal = safeWithdrawalRate / 100; // Calculate Real Return Rate (inflation-adjusted) var realReturnRate = ((1 + expectedAnnualReturnDecimal) / (1 + inflationRateDecimal)) – 1; // Calculate FIRE Number var fireNumber = desiredAnnualIncome / safeWithdrawalRateDecimal; resultsDiv.innerHTML += '

Your FIRE Plan Summary:

'; resultsDiv.innerHTML += 'Your FIRE Number: $' + fireNumber.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "; if (realReturnRate <= 0) { resultsDiv.innerHTML += 'Warning: Your expected return is less than or equal to inflation. Reaching FIRE may be difficult or impossible with these parameters, as your money is losing purchasing power.'; if (calculateYears || calculateSavings) { resultsDiv.innerHTML += 'Cannot accurately calculate years or savings when real return rate is zero or negative.'; return; } } if (calculateYears) { // Scenario 1: Calculate Years to FIRE given Annual Savings if (annualSavings <= 0 && currentSavings = fireNumber) { years = 0; } else { var maxYears = 200; // Prevent infinite loops while (portfolioValue < fireNumber && years = maxYears) { resultsDiv.innerHTML += 'It would take more than ' + maxYears + ' years to reach your FIRE number with these savings. Consider increasing savings or adjusting other parameters.'; } else { resultsDiv.innerHTML += 'Estimated Years to FIRE: ' + years + ' years'; } } else if (calculateSavings) { // Scenario 2: Calculate Required Annual Savings given Years to FIRE var fvCurrentSavings = currentSavings * Math.pow(1 + realReturnRate, yearsToRetirement); var futureValueNeededFromSavings = fireNumber – fvCurrentSavings; if (futureValueNeededFromSavings <= 0) { resultsDiv.innerHTML += 'You already have enough or will have enough by your target retirement year without additional savings!'; resultsDiv.innerHTML += 'Required Annual Savings: $0.00′; } else { var annuityFactor; if (realReturnRate === 0) { annuityFactor = yearsToRetirement; } else { annuityFactor = (Math.pow(1 + realReturnRate, yearsToRetirement) – 1) / realReturnRate; } if (annuityFactor 0) { // Should not happen if realReturnRate > 0 and yearsToRetirement > 0 resultsDiv.innerHTML += 'Cannot calculate required annual savings with these parameters (e.g., negative real return rate over time making annuity factor non-positive).'; return; } var requiredAnnualSavings = futureValueNeededFromSavings / annuityFactor; resultsDiv.innerHTML += 'Required Annual Savings: $' + requiredAnnualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "; } } resultsDiv.innerHTML += 'Note: All calculations are in today\'s dollars, adjusted for inflation using the real return rate.'; } .calculator-container { font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif; background-color: #f9f9f9; padding: 25px; border-radius: 10px; box-shadow: 0 4px 12px rgba(0, 0, 0, 0.1); max-width: 700px; margin: 30px auto; border: 1px solid #e0e0e0; } .calculator-container h2 { color: #2c3e50; text-align: center; margin-bottom: 25px; font-size: 1.8em; } .calculator-inputs label { display: block; margin-bottom: 8px; color: #34495e; font-weight: bold; font-size: 0.95em; } .calculator-inputs input[type="number"] { width: calc(100% – 22px); padding: 12px; margin-bottom: 18px; border: 1px solid #ccc; border-radius: 6px; font-size: 1em; box-sizing: border-box; transition: border-color 0.3s ease; } .calculator-inputs input[type="number"]:focus { border-color: #007bff; outline: none; box-shadow: 0 0 5px rgba(0, 123, 255, 0.2); } .calculator-inputs p { margin-top: 15px; margin-bottom: 15px; color: #555; font-size: 0.9em; } .calculator-inputs p.warning { color: #e67e22; font-weight: bold; } .calculator-inputs button { display: block; width: 100%; padding: 14px; background-color: #28a745; color: white; border: none; border-radius: 6px; font-size: 1.1em; font-weight: bold; cursor: pointer; transition: background-color 0.3s ease, transform 0.2s ease; margin-top: 20px; } .calculator-inputs button:hover { background-color: #218838; transform: translateY(-1px); } .calculator-inputs button:active { transform: translateY(0); } .calculator-results { margin-top: 30px; padding: 20px; background-color: #e9f7ef; border: 1px solid #d4edda; border-radius: 8px; color: #155724; } .calculator-results h3 { color: #2c3e50; margin-top: 0; margin-bottom: 15px; font-size: 1.4em; border-bottom: 1px solid #d4edda; padding-bottom: 10px; } .calculator-results p { margin-bottom: 10px; line-height: 1.6; font-size: 1em; } .calculator-results p strong { color: #000; } .calculator-results p.error { color: #dc3545; font-weight: bold; } .calculator-results p.warning { color: #ffc107; font-weight: bold; } .calculator-results p.note { font-size: 0.85em; color: #6c757d; margin-top: 20px; border-top: 1px dashed #ced4da; padding-top: 10px; }

Understanding Financial Independence, Retire Early (FIRE)

The Financial Independence, Retire Early (FIRE) movement is a lifestyle movement with the goal of gaining financial independence and retiring much earlier than traditional retirement ages. The core principle is to aggressively save and invest a significant portion of your income, often 50% to 70%, to build a large enough investment portfolio that can generate passive income to cover your living expenses.

The FIRE Number: Your Magic Number

At the heart of FIRE is the concept of your "FIRE Number." This is the total amount of money you need to have invested to be considered financially independent. It's typically calculated using the "Safe Withdrawal Rate" (SWR), often referred to as the 4% rule. The formula is simple:

FIRE Number = Annual Expenses / Safe Withdrawal Rate

For example, if your annual expenses are $40,000 and you use a 4% SWR, your FIRE number would be $40,000 / 0.04 = $1,000,000. This means you'd need $1 million invested to theoretically withdraw $40,000 per year indefinitely without running out of money, based on historical market performance.

Key Components of the FIRE Calculator

  • Current Retirement Savings: This is the amount you've already accumulated towards your FIRE goal. The more you have, the less you need to save going forward.
  • Annual Living Expenses: This is how much you spend in a year. A lower expense base means a lower FIRE number and a faster path to independence. Many FIRE enthusiasts focus on reducing expenses significantly.
  • Desired Annual Retirement Income: While often the same as current expenses, you might plan to spend more or less in retirement. This is the income your portfolio needs to generate.
  • Expected Annual Investment Return (%): This is the average annual growth you anticipate from your investments. Historically, diversified stock portfolios have returned around 7-10% annually before inflation.
  • Inflation Rate (%): Inflation erodes the purchasing power of money over time. The calculator adjusts your investment returns for inflation to give you a more realistic picture of your progress in "real" (purchasing power) terms.
  • Safe Withdrawal Rate (%): This is the percentage of your portfolio you plan to withdraw each year in retirement. The 4% rule is a widely accepted guideline, based on studies like the Trinity Study, suggesting a high probability of your portfolio lasting 30+ years. Some choose 3% for more conservatism, or 3.5% for a longer horizon.
  • Years Until Retirement (Optional): If you have a specific timeline in mind, this input helps determine how much you need to save annually to reach your FIRE number by that date.
  • Annual Savings (Optional): If you know how much you can save each year, this input helps estimate how many years it will take you to reach your FIRE number.

How the Calculator Works

This calculator helps you visualize your path to FIRE by performing two main calculations:

  1. Calculating Your FIRE Number: Based on your desired annual income and safe withdrawal rate, it determines the total portfolio size you need.
  2. Estimating Time to FIRE or Required Savings:
    • If you provide your Annual Savings, the calculator iteratively projects your portfolio growth, accounting for your current savings, annual contributions, and inflation-adjusted investment returns, to estimate how many years it will take to reach your FIRE number.
    • If you provide your desired Years Until Retirement, the calculator works backward to determine the annual savings required to hit your FIRE number within that timeframe, considering your current savings and inflation-adjusted returns.

Example Scenario:

Let's say you have:

  • Current Retirement Savings: $50,000
  • Annual Living Expenses: $40,000
  • Desired Annual Retirement Income: $40,000
  • Expected Annual Investment Return: 7%
  • Inflation Rate: 3%
  • Safe Withdrawal Rate: 4%

Your FIRE Number would be $40,000 / 0.04 = $1,000,000.

Scenario A: You save $2,000 per month ($24,000 annually).

The calculator would estimate that it would take approximately 20-25 years to reach your $1,000,000 FIRE number, depending on the exact real return rate and compounding.

Scenario B: You want to retire in 15 years.

The calculator would determine that you need to save approximately $40,000 – $50,000 annually (or about $3,300 – $4,100 per month) to reach your $1,000,000 FIRE number within 15 years, given your current savings and investment assumptions.

Remember, these are estimates. Market fluctuations, unexpected expenses, and changes in your lifestyle can all impact your FIRE journey. Regular review and adjustment of your plan are crucial.

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