The idea in one line
Spend much less than you earn, invest the difference, and stop when the investments can pay for your life. That is the whole of it. Everything else, the number, the withdrawal rate, the flavours with names, is arithmetic on that one decision. The arithmetic is worth doing because it answers the question most people never ask: how many years of work does my spending actually cost?
The number
A portfolio can pay out roughly 4% of its value a year, rising with inflation, and last at least 30 years in nearly every historical case. Turn that round and a life that costs $40,000 a year needs $1,000,000; one that costs $80,000 needs $2,000,000. That is the FIRE number: 25 times spending at 4%, or more at a lower rate. It is in today’s money, and it moves one for one with your spending, which is why cutting spending works twice: less to save, and less to save for.
The savings rate
The time it takes depends almost entirely on the share of your pay you save. Save 10% and financial independence is about 51 years away; 25% and it is about 32 years; 50% and about 17 years; 75% and about 7 years. Income barely enters, because a bigger income with the same rate means a bigger target and bigger saving in the same proportion. The curve is steep at the low end, which is why the first ten points of savings rate matter more than any later ten.
The flavours
Lean FIRE: a frugal budget, so a small number, often quoted around $25,000 to $40,000 a year. Fat FIRE: a generous budget, often six figures, and the number to match. Coast FIRE: enough invested early that it grows to the number by a normal retirement age with nothing more added; work only has to cover today’s bills. Barista FIRE: leave full-time work before the full number and cover the gap with part-time work. The Coast vs Barista guide works both through with one family’s figures.
What the maths leaves out
Taxes on withdrawals, fund fees, health cover, and the order of good and bad years. A steady 5% real return is a planning assumption; real markets deliver it as an average of years that swing from −30% to +30%, and a bad first decade hurts a retiree far more than a bad last one. That is why the 4% rule exists, why early retirees often use 3.5%, and why every calculator on this site says “arithmetic, not advice”. Run the plan at 3% as well as 5% and at 3.5% withdrawal as well as 4%; if it survives all of them, it has room.
Where to start
Work out your spending, put it into the FIRE calculator with what you have and what you save, and read the year. If it is further away than you would like, the savings rate calculator shows what each extra ten points of saving does, and the Coast FIRE calculator shows the earliest point at which the pressure comes off.