How this number is made
The so-called FIRE number is 25 times annual spending, which is the portfolio that a 4% first-year withdrawal would cover. It comes from a historical study of US portfolios, not from a guarantee. Spending has to include taxes and health insurance you will actually have.
- Spending is what leaves the portfolio, not your salary.
- If you expect a pension, subtract that from spending first. This page does not know about it.
Formula
Portfolio = annual spending × 25. That is spending ÷ 0.04.
Worked example
With the figures already in the form, portfolio at 25 times spending is $1,500,000.
Questions
Is 4% safe?
It survived many historical 30-year US retirements and failed some, especially longer ones and worse markets. It is a planning multiple, not a promise. The drawdown page is where you pick a different withdrawal.
Do I subtract Social Security?
If you want the portfolio to cover only the gap, use spending minus the benefit you are willing to count. Do not count a benefit you have not checked.