fire ~3 min read
The FIRE formula (and the 25x rule)
The FIRE formula is annual expenses ÷ safe withdrawal rate — at 4%, that's 25× expenses. The equation explained, the Coast, Lean, and Barista variants, the time-to-FIRE formula, and a worked example.
The FIRE formula is one line:
FIRE Number = Annual Expenses ÷ Safe Withdrawal RateAt the standard 4% withdrawal rate, that’s the same as 25 × annual expenses. Spend $40,000 a year → $1,000,000. Spend $80,000 → $2,000,000.
The entire FIRE framework rests on one equation and a couple of variants. This page is the formula reference: the core equation, the per-variant versions (Coast, Lean, Barista), and the time-to-FIRE formula — each with the numbers worked through.
The FIRE formula
FIRE Number = Annual Expenses ÷ Safe Withdrawal RateThe safe withdrawal rate (SWR) is the share of the portfolio you withdraw in year one and then adjust for inflation. Dividing by the most-cited 4% rate is identical to multiplying by 25, which is why you’ll see the formula written as the 25× rule:
FIRE Number = Annual Expenses × 25 (at a 4% SWR)The withdrawal rate is the lever. Lower it for a longer, safer retirement:
| Safe withdrawal rate | Multiple of expenses |
|---|---|
| 5% | 20× |
| 4% | 25× |
| 3.5% | 28.6× |
| 3% | 33.3× |
Where the 4% comes from is its own topic — see what the 4% rule actually says.
The FIRE equation for each variant
The four common flavors of FIRE use the same core equation with one twist each.
Standard FIRE — full expenses, full retirement:
Standard FIRE = Annual Expenses ÷ SWRLean FIRE — the same equation on a smaller budget ($25k–40k/yr):
Lean FIRE = Lean Annual Expenses ÷ SWRCoast FIRE — what you need invested today so growth alone reaches your full number by retirement age:
Coast FIRE = FIRE Number ÷ (1 + r)^nwhere r is your real (after-inflation) return and n is years to retirement.
Barista FIRE — part-time income covers part of expenses, so the portfolio only funds the gap:
Barista FIRE = (Annual Expenses − Part-time Income) ÷ SWRA worked example
Spend $50,000 a year:
Standard FIRE = $50,000 ÷ 0.04 = $1,250,000Add $20,000/yr of part-time income and the Barista version drops sharply:
Barista FIRE = ($50,000 − $20,000) ÷ 0.04 = $750,000A 30-year-old who wants to retire at 65 on that $1.25M, assuming a 5% real return over 35 years:
Coast FIRE = $1,250,000 ÷ (1.05)^35 ≈ $226,500Reach about $226k invested by 30 and, even without another contribution, growth alone is expected to carry you to $1.25M by 65.
The time-to-FIRE formula
The equation above gives the target. This one tells you when you’ll hit it, given a starting balance and monthly contributions:
Months = log((Target + C/r) ÷ (Start + C/r)) ÷ log(1 + r)C is your monthly contribution and r is your monthly real return. It’s the future-value-of-an-annuity formula solved for time. You don’t have to compute it by hand — the Standard FIRE Calculator does it live as you change the inputs.
What the formula leaves out
The equation is deliberately simple, which means it ignores some real-world frictions: sequence-of-returns risk, taxes on pre-tax accounts, healthcare, and lifestyle creep. None of them change the formula — they change how much margin you keep on top of it. The full FIRE number guide walks through each one.
Go deeper:
- How to Calculate Your FIRE Number — the full framework and live calculators.
- What is a FIRE number? — the plain-language definition.
- Compound interest: the engine behind the formula — how contributions become a portfolio.
Run your own numbers in the Standard FIRE Calculator — it computes every formula on this page in your browser.
Educational content, not financial advice. The 4% rule is based on US historical data and 30-year horizons.