Calculation Methodology

01FIRE Target

The FIRE target is the total portfolio value needed at retirement to sustainably fund your spending using the safe withdrawal rate. It is the first number we compute.

Example: $40,000 spending ÷ 4% SWR = $1,000,000 FIRE target. Income that begins at or before retirement can reduce annual spending before applying the SWR. Income that begins later is handled as a bridge period.

02Real Return (Fisher Equation)

All calculations are performed in real (inflation-adjusted) terms using today's dollars. The Fisher equation converts nominal return and inflation into an inflation-adjusted, fee-adjusted real return:

Example: 7% nominal return, 3% inflation, 0.1% fees → ((1 + 0.07 − 0.001) ÷ (1 + 0.03)) − 1 ≈ 3.79% real return.

03Coast FIRE Number

The Coast FIRE number is the present value of the FIRE target — the amount you need invested today so that compound growth alone (with no additional contributions) will grow it to your FIRE target by retirement:

Example: $1,000,000 target, the full-precision fee-adjusted real return above, and 35 years →$272,322. This value is produced by the same calculation engine used by the site.

04Monthly Compounding & Contributions

Portfolio growth is calculated month-by-month using monthly compounding with regular contributions. The monthly rate is derived from the annual real return:

The projection runs month-by-month from your current age to retirement age, tracking portfolio value, cumulative contributions, and cumulative growth at each year.

05Coast FIRE Age Finder

The Coast FIRE age is found iteratively month-by-month. At each point in time, we compute both the portfolio value (with contributions) and the Coast FIRE number required at that age (the remaining present value of FIRE target):

The first month where Portfolio Value ≥ Coast # is the Coast FIRE date. If already met at start, the Coast date is the current age. If the threshold is not met by retirement, the result is reported as “not reached by retirement”; retirement age is only the projection boundary.

06Income Offsets (Pension, Social Security, Other)

Income streams that begin at or before retirement age reduce the annual spending that must come from the portfolio. Income streams that start after retirement age create a "bridge period" requiring extra portfolio withdrawals.

For income that starts after retirement, v1.0.0 adds an undiscounted bridge cost to the retirement target before discounting that target back into a Coast FIRE number.

07Rounding Rules

All dollar values are rounded to the nearest whole dollar for display. Internal calculations use full floating-point precision. Age values in projections are rounded to the nearest year.

08Calculation checks

The calculator code is checked with automated tests for formula behavior and important result states, including already reached, projected to reach, and not reached by retirement. Published worked examples should call the production engine rather than duplicate the formula with hardcoded values. A passing test confirms implementation behavior; it does not validate assumptions or predict future returns.