Last checked 3 September 2026
A FIRE number is the size of invested portfolio at which its expected withdrawals would cover a person's annual spending indefinitely, most commonly estimated as annual spending multiplied by 25.
FIRE stands for Financial Independence, Retire Early. The multiplier of 25 is the reciprocal of a 4% withdrawal rate: if you withdraw 4% of a portfolio each year, you need 25 times your annual spending to fund it. Multiply by 33 for a 3% rate, by 20 for 5%.
The number is driven by spending, not income. Someone spending $40,000 a year needs $1,000,000 at a 4% rate regardless of whether they earn $60,000 or $600,000. This is why cutting recurring spending has a double effect: it raises the savings rate and lowers the target at the same time.
Treat the result as an order of magnitude, not a threshold. It assumes a stable withdrawal rate, a particular asset mix, and a spending level that holds for decades — assumptions that are useful for planning and unsafe as a promise. It also usually ignores state pensions, future inheritance, part-time income and healthcare costs, all of which can move the real figure substantially.
annual spending ÷ safe withdrawal rate
At a 4% withdrawal rate this is the familiar annual spending × 25.
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