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What is a FIRE number?
A FIRE number is not a vibes-based net worth goal. It is an estimate of the invested portfolio that could cover your spending when work becomes optional.
The short definition
Apogee also calls this a Freedom Number. Same idea: a target invested balance sized to your spending—not a guarantee that markets or your life will cooperate.
Where the “×25” idea comes from
The popular rule of thumb sits on decades of retirement research about safe withdrawal rates—how much you might take from a portfolio each year without running out too early:
- William Bengen (1994) — In Determining Withdrawal Rates Using Historical Data (Journal of Financial Planning), Bengen studied U.S. historical returns and popularized the idea that a withdrawal rate near 4% of the initial portfolio (adjusted for inflation in later years) was a useful starting point for many 30-year retirements. The inverse of 4% is 25× spending.
- The Trinity Study (Cooley, Hubbard, Walz) — Later academic work often called the “Trinity study” stress-tested withdrawal rates across portfolios and time horizons. It reinforced that success depends on asset mix, horizon, and sequence of returns—not a single magic percentage for every person.
- Newer planning research — Withdrawal guidance is still updated as valuations and expected returns change. Morningstar’s State of Retirement Income research has used a base-case starting withdrawal rate around 3.9% for a 30-year horizon in recent editions (planning context, not a promise). See Morningstar’s write-ups such as What’s a Safe Retirement Withdrawal Rate for 2026? and the State of Retirement Income 2025 PDF.
Takeaway: ×25 is a common educational shortcut, not a law of physics. Longer early-retirement horizons often imply a lower withdrawal rate—and therefore a higher FIRE number.
How to calculate yours
- Estimate annual spending you would need when work is optional (today’s dollars). Prefer spending over “income you wish you earned.”
- Pick a planning withdrawal rate (many people start with 4%; some use ~3.5–3.9% for longer horizons).
- Divide: annual spending ÷ withdrawal rate, or multiply: annual spending × (1 ÷ rate). At 4%, that factor is 25.
Worked example (illustrative only)
Assumptions are labeled so they are not mistaken for predictions:
- Monthly spending
- $5,000 → annual $60,000
- Planning rate
- 4%
- FIRE number
- $60,000 × 25 = $1,500,000
- Current invested assets
- $300,000 → about 20% of the way there
- If you planned at ~3.9%
- $60,000 ÷ 0.039 ≈ $1.54 million
Taxes, healthcare, housing changes, Social Security, part-time work, and sequence risk can all move the real answer. Treat this as a map, not a contract.
Spending levels vs FIRE number at 4%
At a 4% planning rate, every extra dollar of annual spending needs $25 of invested assets behind it. The chart uses the same monthly spend levels as the table below.
| Monthly spend | Annual spend | FIRE number at 4% |
|---|---|---|
| $3,000 | $36,000 | $900,000 |
| $4,000 | $48,000 | $1,200,000 |
| $5,000 | $60,000 | $1,500,000 |
| $6,000 | $72,000 | $1,800,000 |
| $8,000 | $96,000 | $2,400,000 |
| $10,000 | $120,000 | $3,000,000 |
Same $60,000 of annual spending, three planning rates
A slightly lower withdrawal rate raises the Number. That is why early-retirement plans often look larger than a 30-year 4% snapshot.
| Planning rate | How to compute | FIRE number |
|---|---|---|
| 4% | $60,000 × 25 | $1,500,000 |
| ~3.9% | $60,000 ÷ 0.039 | ≈ $1.54 million |
| 3.5% | $60,000 ÷ 0.035 | ≈ $1.71 million |
Common mistakes
- Using salary instead of spending. A raise that becomes permanent lifestyle spend can raise your FIRE number even as income rises.
- Ignoring that early retirement lasts longer than 30 years. Many FIRE plans use a more conservative rate (and a larger Number).
- Treating returns as guaranteed. Historical studies are not forecasts; future returns, inflation, and withdrawal flexibility matter.
- Forgetting “invested” vs “net worth.” A house you live in is not the same as a portfolio you can withdraw from.
- One snapshot forever. Spending and markets change; the useful habit is updating the Number and the plan.
FIRE number vs Freedom Date
- FIRE number / Freedom Number: the target portfolio sized to spending.
- Freedom Date: when a live tracker might reach that Number under your real accounts and contributions—not the same as a one-time web estimate.
Use a calculator for the plan snapshot; use a connected tracker when you want a live date.
How Apogee fits
Apogee’s FIRE number calculator / Freedom Plan is built around this idea: spending → Number (often ×25 at 4%), then an estimated monthly investment and timeline under shown assumptions. Educational estimate only—not a buy/sell recommendation.
If you want to vary assumptions, see the simulator. For the product overview, start on the homepage.
About seven questions. Spending becomes a Number, a monthly move, and a timeline — still an educational estimate.
Product See how Apogee tracks a Freedom DateThe homepage is the overview: a live date once accounts are connected, not a one-time snapshot.
Assumptions Open the retirement calculatorChange return, contribution, and spending assumptions when you want to test the math yourself.
Sources
- William P. Bengen, “Determining Withdrawal Rates Using Historical Data,” Journal of Financial Planning (1994). Classic origin of the ~4% / ×25 shorthand.
- Cooley, Hubbard, and Walz — commonly cited “Trinity” retirement withdrawal research (portfolio success rates across horizons and stock/bond mixes).
- Morningstar — What’s a Safe Retirement Withdrawal Rate for 2026? (discusses recent base-case rates including ~3.9% for a 30-year planning horizon).
- Morningstar — The State of Retirement Income 2025 (PDF).
- Apogee Freedom Plan page (product method & assumptions): apogeemoney.app/freedom-plan/.
Educational only. This page is not financial, tax, or investment advice. Historical withdrawal studies and planning research are not forecasts, and they do not recommend any product or strategy. Meridian Studio LLC / Apogee.