2026-02-13 • Updated 2026-02-14 • 11 min read
FIRE Number Planning With Realistic Assumptions (Savings Rate, SWR, and Timeline)
Learn how to calculate a realistic FIRE number using savings rate, safe withdrawal rate assumptions, inflation, and return uncertainty. Includes practical scenario-planning steps and links to FIRE calculators.
By InterestCal Editorial
What a FIRE Number Really Means
Your FIRE number is the portfolio value required to support long-term living expenses with a sustainable withdrawal plan. The popular shortcut (annual expenses multiplied by 25) is a useful starting framework, but it is not a guaranteed retirement rule.
If you want a faster estimate, start with the FIRE Number Calculator. Then refine your assumptions for inflation, fees, taxes, and spending flexibility so the target reflects your real life rather than a generic formula.
Why 25x Spending Is a Baseline, Not a Promise
The 25x guideline is tied to a 4% withdrawal concept, but real retirement outcomes depend on sequence of returns, inflation shocks, and spending behavior in weak markets. Two households with identical portfolio size can still face different sustainability outcomes because of withdrawal timing and lifestyle rigidity.
A stronger approach is to model multiple withdrawal assumptions (for example 3.25%, 3.5%, and 4.0%) and compare the trade-offs. You can test sustainability mechanics with the SWR Retirement Drawdown Calculator.
Savings Rate and Income Growth Are Your Most Reliable Levers
Market returns are uncertain, but contribution discipline is controllable. In the accumulation phase, increasing your annual savings rate and maintaining consistency through volatility often has more impact than trying to optimize short-term entry points.
After every income increase, allocate part of the raise to investing before lifestyle inflation absorbs it. You can project this contribution effect with the Investment Growth Calculator and compare faster versus slower FIRE timelines.
Model Inflation and Real Spending Power Explicitly
Many FIRE plans fail on paper because they assume nominal returns without validating real purchasing power. A portfolio that appears large in nominal terms may still underdeliver future lifestyle needs if inflation remains elevated for several years.
Always run a separate inflation stress test and update your spending target in real terms. Use the Inflation Impact Calculator to estimate how much income your portfolio may need to maintain the same standard of living.
Build a Scenario Framework Instead of a Single Forecast
A robust FIRE plan usually includes at least three scenarios: conservative, base case, and optimistic. Each scenario should vary return assumptions, inflation, and expected contributions. If your plan works only in the optimistic path, it is too fragile.
For an extended risk discussion, review Sequence of Returns Risk for New Retirees. Early weak returns can materially change sustainability, especially during the first retirement decade.
Annual FIRE Plan Review Checklist
Review your FIRE model annually: update contributions, portfolio balance, expected expenses, and withdrawal assumptions. Recalculate timeline and compare it with prior-year projections so drift is visible before it becomes a major gap.
FIRE planning works best as a dynamic system, not a one-time spreadsheet. Repeated small adjustments usually beat dramatic late-stage corrections and help you stay aligned with both lifestyle goals and risk tolerance.
Frequently Asked Questions
Is the 25x annual expenses rule accurate for every FIRE plan?
No. It is a useful baseline, but your sustainable target depends on withdrawal rate, inflation, taxes, spending flexibility, and market sequence risk.
What withdrawal rate should I use when estimating my FIRE number?
Many people test a range such as 3.25% to 4.0% instead of one fixed rate, then choose a target that still works in conservative scenarios.
How often should I recalculate my FIRE number?
At least once per year or after major changes in income, expenses, family size, asset allocation, or expected retirement lifestyle.
Should I model inflation separately from portfolio growth?
Yes. Modeling inflation separately helps you track real purchasing power and avoid overestimating what your future portfolio can fund.
Can higher savings rate matter more than chasing higher returns?
Usually yes in the accumulation phase. A consistent increase in contributions is often a more reliable FIRE accelerator than attempting to time markets.
