FIRE number: the 25x rule for how much you need to retire
A "FIRE number" sounds like a mysterious target, but it's one multiplication: your annual spending times 25. Once you know your yearly spend, you already know the number — no spreadsheet required.
The formula
FIRE number = annual spending × 25. That 25 isn't arbitrary — it's the inverse of the 4% rule, the idea that withdrawing 4% of a portfolio a year has historically had a low risk of running out. 1 ÷ 0.04 = 25, so a portfolio of 25× your annual spending is exactly the size that a 4% withdrawal would cover that spending.
A real example: a household spending $48,000 a year
- FIRE number:
48,000 × 25 = $1,200,000. - Monthly need:
48,000 ÷ 12 = $4,000.
Check it the other way: 4% of the target is 1,200,000 × 0.04 = $48,000 — exactly the annual spending it's meant to cover. The multiplication and the withdrawal rule are two sides of the same math.
A real example: lean vs. fat FIRE
Two households with very different lifestyles: one spends $30,000 a year, the other $90,000.
- Lean spender:
30,000 × 25 = $750,000. - Fat spender:
90,000 × 25 = $2,250,000.
That's 2,250,000 − 750,000 = $1,500,000 apart, from a 3× difference in yearly spending. The FIRE number scales directly with spending — there's no discount for wanting less, and no way around paying for more.
A real example: what trimming spending is actually worth
Take a household spending $60,000 a year that finds $500 a month of recurring spending to cut — a subscription audit, a cheaper car payment, whatever it is.
- Annual savings:
500 × 12 = $6,000. - Reduction in FIRE number:
6,000 × 25 = $150,000.
Cutting $500 a month doesn't just save $6,000 a year — because the target is spending times 25, it permanently lowers the number needed to retire by $150,000. That leverage is the real argument for trimming a recurring expense over a one-time windfall of the same size.
What this doesn't capture
The 4% rule is a historical rule of thumb, not a guarantee — it comes from past U.S. market returns over rolling 30-year periods, and future returns, sequence of bad years early in retirement, taxes, healthcare costs and how long you actually live can all move the real safe number. Treat 25× spending as a planning baseline to start from, not a promise.
Run your own numbers
The free FIRE Number calculator runs this instantly from your own annual spending — entirely on your device.