Financial Independence Calculator
Plan your path to financial freedom with comprehensive FIRE (Financial Independence, Retire Early) calculations
Last updated: January 2025
Financial Independence (FIRE) Calculator
Calculate when you can achieve financial independence using different FIRE strategies
Choose Your FIRE Strategy
Traditional FIRE: Save 25x your annual expenses to maintain your current lifestyle in retirement using the 4% withdrawal rule.
Current Financial Situation
Investment Parameters
FIRE Strategy Parameters
Advanced Options
Financial Independence Target
Savings Analysis
Financial Independence Timeline
Key Financial Milestones
What-If Scenarios
FIRE Strategy Comparison
How Financial Independence is Calculated
Financial Independence (FI) is achieved when your investment portfolio can sustain your living expenses indefinitely through safe withdrawals.
Key Formula: FIRE Number = Annual Expenses ÷ Safe Withdrawal Rate
The 4% Rule: Based on historical market data, withdrawing 4% annually from a diversified portfolio has historically provided sustainable income for 30+ years.
Time to FI: Calculated using compound interest formulas, considering your current savings, income growth, and investment returns.
Understanding Financial Independence (FIRE)
FIRE Strategies Explained
Traditional FIRE: Save 25x annual expenses for standard lifestyle maintenance.
Lean FIRE: Achieve FI with minimal expenses, typically £15,000-£25,000 annually.
Fat FIRE: Maintain a luxurious lifestyle, requiring £75,000+ annually.
Barista FIRE: Partial FI with some income from part-time work.
Coast FIRE: Enough savings that compound growth will fund traditional retirement.
UK-Specific Considerations
- ISA allowances (£20,000 annually) for tax-free growth
- Pension contributions and employer matching
- State pension eligibility (currently age 67)
- Capital gains tax on non-ISA investments
- Higher rate tax relief on pension contributions
- SIPP vs workplace pension considerations
Investment Allocation Tips
- Diversified index funds for long-term growth
- Global equity exposure (UK, US, Emerging markets)
- Bond allocation increases with age
- Consider REITs for income and inflation protection
- Rebalance annually to maintain target allocation
- Keep 3-6 months expenses in emergency fund
Optimising Your FIRE Journey
- Increase income through skills development
- Reduce expenses without sacrificing happiness
- Maximise tax-advantaged accounts first
- Consider geographic arbitrage
- Track expenses and investment performance
- Plan for healthcare and insurance costs