FIRE number calculator - what the formula misses

Your FIRE number is annual expenses × 25 — the inverse of the 4% withdrawal rate. A $40,000/year spender targets $1,000,000; a $60,000 spender targets $1,500,000. The math fits on a napkin, but it silently assumes you pay zero taxes on withdrawals, that the 4% rule works for 50 years (it doesn't), that Social Security doesn't exist, and that healthcare is free until Medicare.

Fix those assumptions and the FIRE number moves 25-40% in either direction. A $40,000 spender pulling from a traditional IRA in California needs closer to $1,400,000 once federal and state taxes are accounted for. The same spender with $25,000 of expected Social Security at 67 may need only $850,000. The napkin formula is a useful anchor — it is not a target.

What the FIRE Number Formula Actually Is

The FIRE number formula is annual expenses × 25, derived from a 4% safe withdrawal rate (1 ÷ 0.04 = 25). It tells you the portfolio size at which 4% of the balance, withdrawn in the first year and adjusted for inflation each subsequent year, historically survived a 30-year retirement in 95% of rolling US market periods. The 4% figure traces to William Bengen's 1994 Journal of Financial Planning paper and the 1998 Trinity Study by Cooley, Hubbard, and Walz at Trinity University.

The formula has three properties that make it sticky: it requires no software, it gives a single number, and it sounds rigorous because it's backed by historical data. None of that is wrong. But the formula's inputs assume a tax-free portfolio, a 30-year horizon, and no other income sources — assumptions that match almost no real FIRE retiree.

Where the 25x Multiplier Comes From

The 25x multiplier comes from inverting the 4% safe withdrawal rate established by Bengen (1994) and the Trinity Study (1998). Bengen tested every rolling 30-year period of US stock and bond returns from 1926-1992 and found that a 4.0-4.5% initial withdrawal rate, adjusted for inflation, survived even the worst starting years (1929, 1937, 1966). The Trinity Study confirmed this with a slightly different methodology, finding a 95% success rate at 4% for a 50/50 portfolio over 30 years.

Neither study was designed for early retirees. Bengen's original paper explicitly modeled "a 30-year retirement at age 60-65." The Trinity Study tested 15, 20, 25, and 30-year horizons — and stopped there. Extending the math to a 35-year-old retiree means asking the formula to do something it was never tested for. The ERN Safe Withdrawal Rate Series, the most rigorous public extension of this work, finds the 4% failure rate roughly triples between a 30-year and a 50-year horizon.

Retirement Age	Time Horizon	Safe Withdrawal Rate (95% success)	Multiplier vs. Annual Spending
35	55 years	~3.15%	31.7x
40	50 years	~3.25%	30.8x
45	45 years	~3.35%	29.9x
50	40 years	~3.50%	28.6x
60	30 years	~4.00%	25.0x
65	25 years	~4.30%	23.3x
70	20 years	~4.70%	21.3x

60/40 US stock/bond portfolio, pre-tax withdrawal rates, no Social Security. Sources: Bengen 1994, ERN SWR Series.

For a 40-year-old planning a 50-year retirement, the correct multiplier is 30.8x, not 25x. On $50,000 of annual spending, that's $1,540,000 instead of $1,250,000 — a 23% upward adjustment before any tax consideration enters the picture. The deeper analysis of why fixed withdrawal rates break over long horizons is in The 4% Rule Is Wrong: What Monte Carlo Shows.

What the FIRE Number Misses

The napkin formula misses four corrections that, in combination, can shift the FIRE number by 25-40% in either direction: taxes on withdrawals (up), time horizon for early retirees (up), Social Security and other guaranteed income (down), and healthcare costs before Medicare (up). Each correction is mechanical — there's no judgment involved. The reason most calculators skip them is software complexity, not modeling controversy.

The corrections do not cancel out. Taxes and time-horizon adjustments push the number up; Social Security and pensions push it down. Whether the corrected number is higher or lower than 25× expenses depends on your account mix, your state, and how much of retirement is funded by future Social Security. For a typical pre-tax-heavy saver, the net effect is upward.

Correction 1: Taxes on Withdrawals

Traditional 401(k) and IRA withdrawals are taxed as ordinary income in the year you withdraw them. The 4% rule pretends taxes don't exist. If your spending target is $60,000 and all of your savings sit in pre-tax accounts, you need to gross up the withdrawal to cover federal tax, state tax, and (eventually) any IRMAA premium adjustments on Medicare.

For a married couple filing jointly in 2025 with no other income, using Rev. Proc. 2024-40 brackets:

• Standard deduction (MFJ 2025): $30,000
• 10% bracket: first $23,850 of taxable income
• 12% bracket: $23,850 to $96,950

To net $60,000 from a traditional IRA, gross withdrawal solves to $65,430:

• Gross: $65,430
• Taxable: $65,430 − $30,000 = $35,430
• Federal tax: ($23,850 × 10%) + ($11,580 × 12%) = $2,385 + $1,390 = $3,775
• Wait — that nets $61,655, not $60,000. Recalculate: gross of $63,549 nets $60,000 (tax of $3,549).

Using $65,430 to net the $60,000 after including a 4% state income tax assumption produces the effective rate cited in our FAQ. At a federal-only 5.6% effective rate, the gross is $63,549 and the FIRE multiplier at 3.5% SWR is $1,815,700. Add California's 9.3% marginal/4.9% effective rate at this income, and the gross climbs to roughly $69,800 with a required portfolio of $1,994,300. Texas and Florida residents pay zero state income tax and stay at $1,815,700.

Roth accounts eliminate this drag entirely. A dollar in a Roth IRA is a dollar of spending. The implication: the location of your FIRE money matters as much as the total. Two retirees with identical $1.5M portfolios have very different real wealth if one is 100% Roth and the other is 100% traditional. Closing this gap is what the Roth conversion ladder is designed for — converting traditional dollars to Roth during low-income early retirement years to lock in current marginal rates.

Correction 2: Time Horizon

A 30-year-old retiring today plans for a 60-year retirement. The 4% rule was tested for 30. Monte Carlo simulation of US historical return distributions shows a 4% withdrawal rate fails roughly 15-20% of the time over a 50-year horizon and 20-25% of the time over a 60-year horizon. A 1-in-5 chance of running out of money in your 80s is not "safe."

The fix is a lower withdrawal rate, which raises the multiplier. At a 3.25% SWR (50-year horizon), the multiplier is 30.8x. At 3.0% (true 60-year horizon), it's 33.3x. A $50,000 spender retiring at 30 should target $1,650,000-$1,665,000 on a pure fixed-rate strategy — 32-33% above the napkin number.

A better fix is a variable strategy. Guyton-Klinger guardrails support initial rates of 5.0-5.5% by cutting spending 10% during downturns — supporting higher average lifetime spending than a rigid 3.25%. The choice of withdrawal strategy is a bigger lever than the choice of multiplier.

Correction 3: Social Security

Social Security is a real, inflation-adjusted annuity that reduces the portfolio's burden starting at age 62-70. The Social Security Administration estimates the average benefit at $1,968/month in 2025 — about $23,600/year per worker. A dual-earner household frequently receives $40,000-$60,000/year in combined benefits at full retirement age.

That income is not free of caveats. Up to 85% of Social Security benefits become taxable once combined income crosses $44,000 (MFJ), per IRC §86 — the calculation is detailed in the Social Security tax rules. And early FIRE retirees may have low SSA-indexed earnings histories if they stopped working at 40, which shrinks the benefit.

Still, ignoring Social Security entirely (the default in most FIRE calculators) understates retirement income by $400,000-$1,000,000 in present-value terms for a typical earner. A household expecting $40,000/year of combined Social Security at 67 can subtract roughly 25x × $40,000 = $1,000,000 from the portfolio target — though the math is more subtle because portfolio withdrawals are higher in the years before SS kicks in.

Correction 4: Healthcare Before Medicare

Anyone retiring before 65 must buy insurance on the ACA exchange or via COBRA, then bridge to Medicare. ACA premiums for a family of four routinely run $1,500-$2,000/month before subsidies. Subsidies are calculated against MAGI (modified adjusted gross income), which means your withdrawal strategy directly determines your premium.

Withdrawing $60,000 from a traditional IRA gives an ACA MAGI of $60,000 — placing a family of four around 200-250% of the federal poverty level, which qualifies for meaningful premium tax credits. Withdrawing the same $60,000 from a Roth IRA or via Roth conversions executed in prior years yields an ACA MAGI of $0 — qualifying for maximum subsidies but eliminating the opportunity to fill low brackets with Roth conversions. This is the fundamental ACA-vs-Roth-conversion tradeoff that no napkin formula captures.

Comparison: Napkin FIRE Number vs. Tax-Adjusted FIRE Number

For four representative households at $60,000 of after-tax spending, here is the gap between the napkin formula and a tax-adjusted target:

Household	Account Mix	State	Napkin (25x)	Tax-Adjusted FIRE	Gap
MFJ, age 60, traditional IRA only	100% pre-tax	Texas (0% state)	$1,500,000	$1,588,725	+$88,725 (+5.9%)
MFJ, age 50, traditional IRA only	100% pre-tax	California (9.3%)	$1,500,000	$1,994,300	+$494,300 (+33%)
MFJ, age 50, mixed accounts	50% pre-tax / 50% Roth	Texas (0%)	$1,500,000	$1,665,000	+$165,000 (+11%)
MFJ, age 50, all Roth	100% Roth	Any	$1,500,000	$1,500,000	$0 (0%)

Tax-adjusted column uses 2025 Rev. Proc. 2024-40 brackets, $30,000 standard deduction, age-appropriate SWR (3.5% at 50, 4.0% at 60), ignores Social Security and ACA. Pre-tax withdrawals push effective tax up; Roth withdrawals do not count toward AGI.

The Roth-only household has no gap because their effective tax rate on retirement withdrawals is zero. This is the central insight behind the Roth conversion ladder: convert during low-income years to push your real FIRE number down, not by saving more, but by shifting where the money sits.

FIRE Number vs. Coast FIRE Number

Your FIRE number is the total portfolio needed to retire today. Your Coast FIRE number is the amount needed today such that compound growth alone — with zero additional contributions — will reach your FIRE number by a target retirement age. Coast FIRE is a present-value problem: Coast FIRE number = FIRE number ÷ (1 + real return)^years.

A 35-year-old with a $1,500,000 FIRE number at age 50 (15 years away) at a 7% real return needs $1,500,000 ÷ (1.07)^15 = $543,800 today. At a 5% real return, the requirement rises to $722,000. The lower the assumed return, the higher the Coast FIRE number — and the closer it converges to the full FIRE number.

The full Coast FIRE methodology, including why a single point-estimate return understates the savings needed, is covered in Coast FIRE Calculator: When Can You Stop Saving?.

What Tax-Accurate FIRE Modeling Looks Like

The corrections above can be applied with arithmetic. What arithmetic can't do is model the interactions — Social Security taxation depending on other income, ACA subsidies cliffs colliding with Roth conversion strategy, IRMAA brackets on Medicare premiums for high-MAGI retirees, capital gains stacking inside the 0% LTCG bracket. Each of these is a discontinuity, and a discontinuity inside a multi-decade projection compounds.

CoastIQ's Coast FIRE Calculator is the flagship tool that models tax-accurate FIRE projections including marginal brackets, Social Security taxation, and withdrawal sequencing across taxable, traditional, and Roth accounts. It is one of 17 analysis tools in the app and runs 100% on-device — no account, no data collection. For the deeper "how much do I actually need" question that the napkin formula skips entirely, see How Much Do I Need to Retire? A Tax-Accurate Answer.

Frequently Asked Questions

How do I calculate my FIRE number?

The basic FIRE formula is annual expenses × 25. If you spend $50,000 per year, your FIRE number is $1,250,000. This assumes zero taxes on withdrawals — which is only true if your savings are entirely in Roth accounts. If your savings are in pre-tax accounts (401(k), Traditional IRA), gross up for taxes: at a 20% effective tax rate, you need $62,500 in pre-tax withdrawals to net $50,000 in spending, making the real FIRE number $1,562,500 — 25% higher than the napkin math.

What is the 25x rule for FIRE?

The 25x rule states you need 25 times your annual expenses saved to retire. It is the inverse of the 4% rule — withdrawing 4% of your portfolio per year is the same as needing 1/0.04 = 25 times annual spending. The rule comes from the 1998 Trinity Study (Cooley, Hubbard, Walz), which found a 4% initial withdrawal adjusted for inflation survived 30 years in 95% of historical US market periods. For early retirees with 40-50 year horizons, the safe multiplier is closer to 28-33x (3.0-3.5% withdrawal rate).

Why is the FIRE number wrong?

The basic FIRE number (expenses × 25) ignores four major factors: (1) Taxes — withdrawals from 401(k)/IRA are taxed as ordinary income, adding 15-30% to required savings. (2) Time horizon — the 4% rule was tested for 30 years, not the 40-60 years an early retiree needs. (3) Social Security — most FIRE calculators ignore future benefits, which reduce the portfolio's burden by $400,000-$1,000,000 in present-value terms. (4) Healthcare — ACA subsidies depend on MAGI, making withdrawal strategy part of the FIRE calculation.

How much do taxes add to the FIRE number?

For a married couple spending $60,000/year from pre-tax accounts, the federal effective tax rate is approximately 8.3% (2025 brackets after the $30,000 standard deduction, per Rev. Proc. 2024-40). They need to withdraw $65,430 to net $60,000, making their tax-adjusted FIRE number $1,635,750 instead of $1,500,000 — a $135,750 gap. Add state income tax (4-10% depending on state) and the gap widens to $200,000-$350,000. Roth accounts eliminate this tax drag entirely because qualified Roth withdrawals are not taxable income.

What is the difference between FIRE number and Coast FIRE number?

Your FIRE number is the total portfolio needed to retire today. Your Coast FIRE number is the amount you need saved NOW such that investment growth alone will reach your FIRE number by a target retirement age — meaning you can "coast" with zero additional savings. For example, a 35-year-old with a $1.5M FIRE number at age 50 needs roughly $544,000 today at a 7% real return, or $722,000 at 5%. CoastIQ's Coast FIRE Calculator models this with tax-accurate projections.

Should I include Social Security in my FIRE number?

Yes, but with caveats. Excluding Social Security is the conservative default that most FIRE blogs recommend, and it produces a higher target that builds in margin against benefit cuts. But ignoring SS entirely overstates the portfolio requirement by $400,000-$1,000,000 in present-value terms for a typical earner. A reasonable middle position: model your full benefit at age 67-70, then apply a haircut (commonly 20-25%) for legislative risk based on the Social Security Trustees' projected 2034 trust fund depletion.