Withdrawal rate explorer

The FIRE number is one division

A FIRE number is the portfolio at which a chosen withdrawal rate covers your spending: annual spend divided by the rate. Spending $40,000 a year at a 4% withdrawal rate needs $40,000 over 0.04, which is $1,000,000, the familiar 25 times spending. Drop the rate to 3.5% and the target rises to $1,142,857, about 28.6 times spending; loosen it to 4.5% and it falls to $888,889. The whole FIRE argument is compressed into that rate choice, which is why the calculator shows all three side by side. Spending is the stronger lever: cutting $4,000 a year shrinks the 4% target by $100,000.

Where 4% comes from, and what it hides

The 4% figure traces to studies of historical US portfolios, where an inflation-adjusted 4% draw survived nearly every 30-year window. Two caveats travel with it. It was derived for roughly 30-year retirements, so an early retiree hoping for 50 years is leaning on thinner evidence. And it is a worst-case-seeking rule from one country's unusually good century; the same studies show most retirees following it die with more money than they started with, while a few unlucky start years scrape by.

Reading the scenario columns

The explorer also answers the blunter question: withdrawing your actual spending from your actual portfolio, how long does the money last if real returns are flat each year? Take $500,000 funding $40,000 a year, an 8% draw. At a 3% real return the portfolio funds 15 full years of withdrawals and runs dry during the 16th; you can verify the last step by hand, since the balance entering year 16 is about $35,000, grows to roughly $36,100, and cannot cover the $40,000 withdrawal. At 1% real it lasts 13 years, at 5% real about 20. When the columns disagree sharply, the plan is return-sensitive, which is precisely what a safe withdrawal rate exists to avoid.

Constant returns are the friendly case

Every number here assumes returns arrive smoothly, and real ones do not. Selling shares into a crash early in retirement does damage that later gains cannot fully repair, which is sequence-of-returns risk; a constant-return model quietly assumes it away. So read the scenario columns as an upper bound on comfort: if the plan barely works at a smooth 3% real, it is fragile against any realistic sequence. Spending flexibility, the ability to cut the draw in bad years, buys more safety than another decimal on the withdrawal rate.