Level 6 · Financial independence
FIRE calculator: when are you financially free?
How much wealth do you need for your investment income to carry you — and when will you get there? Enter your expenses, your savings rate and what you have today.
A new subscription, a bigger car, a pricier flat – what does it cost in months to freedom?
FIRE number = annual expenses × 25 (the 4% rule). The return is after inflation, because the target is in today’s money. Return and tax are assumptions, not a promise. Every permanent expense costs twice: a lower savings rate and a higher target.
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How to go about it
- Enter your expenses. Enter your monthly expenses. They set your FIRE number: annual expenses × 25 (the 4% rule).
- Add savings and portfolio. Add how much you put aside each month and what is already invested today.
- Choose a return. Set the expected return after inflation. The default is 5 percent — roughly the long-term stock-market return of about 7 percent minus inflation.
- Account for German tax. Switch on the tax uplift to include German capital-gains tax and a buffer — the US Trinity study knows neither.
Frequently asked questions
How is the FIRE number calculated?
FIRE number = annual expenses × 25. That is the 4% rule turned around: withdrawing 4 percent a year requires 25 times your annual expenses. With the tax uplift on, the calculator adds roughly 22 percent.
What return should I assume?
Because the calculator works out your target in today’s money, the return belongs in after inflation. For a broadly diversified equity portfolio, around 5 percent is a common assumption: roughly 7 percent before inflation over the long term, minus about 2 percent inflation. Past returns are no guarantee of future ones.
Why the uplift for Germany?
German investment income is subject to capital-gains tax, the solidarity surcharge and possibly church tax. To withdraw 4 percent net, you need more capital than the US figure suggests. For equity ETFs, 30 percent of the gains are tax-free thanks to partial exemption; the calculator cautiously assumes your withdrawal consists entirely of gains.
What does an extra expense cost me?
Twice: it lowers your savings rate and raises your FIRE number at the same time, because your annual expenses go up. The “extra expense” field does both sums and shows by how many months your path gets longer.
Related
Your FIRE number is only as good as your expense number
The calculator is a snapshot built on estimates. You only know the real figure once you know what you actually spend. That is what we are building sum for: accounts, portfolios, property and debt in one place, automatically categorised spending and your net worth over time. Today you bring your transactions in via CSV import; the automatic bank connection (PSD2) is in the works.
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The first step toward your financial goals is the overview — that's exactly what we're building sum for. Secure your access early.