FIRE Number Calculator - Financial Independence Retire Early

FIRE (Financial Independence Retire Early) is a movement focused on aggressive saving and investing to retire decades earlier than traditional retirement. The FIRE calculator determines your "FIRE number" - the corpus needed to sustain your lifestyle indefinitely using the 4% safe withdrawal rule. Formula: FIRE Number = (Annual Expenses × 25) or (Annual Expenses ÷ 0.04). For ₹50,000 monthly expenses (₹6 lakhs yearly), your FIRE number is ₹1.5 Crore. At 4% withdrawal, you get ₹6 lakhs annually while the corpus continues growing through investments.

Absolutely! FIRE is about savings rate, not absolute income. Key strategies: 1) Increase savings rate to 50%+ of income through frugality, 2) Optimize expenses - housing, food, transport, 3) Build multiple income streams - side hustles, freelancing, 4) Invest aggressively in equity mutual funds/stocks (12-15% returns), 5) Consider "Lean FIRE" with ₹25,000-30,000 monthly expenses in Tier 2/3 cities. Real example: ₹60,000 monthly income, save ₹30,000 (50%), need ₹90 lakhs for Lean FIRE, achievable in 15-18 years with disciplined SIP investing. Start early, live below means, invest the difference!

4% rule needs adjustment for India's context: 1) Higher inflation (6-7% vs US 3%): Consider 3-3.5% withdrawal rate for extra safety buffer, 2) Portfolio allocation: 60% equity (inflation hedge) + 30% debt + 10% gold/real estate, 3) Dynamic withdrawal: Reduce spending 10-15% during market crashes, increase during booms, 4) Healthcare buffer: Keep ₹10-15 lakhs separate for medical emergencies. Safer approach: Build corpus for 3% withdrawal (FIRE Number × 1.33). Example: ₹1.5 Cr at 4% becomes ₹2 Cr at 3% withdrawal, but provides 33% extra safety margin for India's uncertainties.

FIRE variants for different lifestyles: 1) Lean FIRE: Minimal expenses (₹25-30K/month), small corpus (₹75L-1Cr), frugal living in Tier 2/3 cities, 2) Regular FIRE: Moderate lifestyle (₹50-60K/month), corpus ₹1.5-2Cr, comfortable living, 3) Fat FIRE: Luxury lifestyle (₹1.5-2L/month), corpus ₹4.5-6Cr+, no compromises, 4) Barista FIRE: Partial retirement, part-time work covers expenses while investments grow, 5) Coast FIRE: Enough invested to reach FIRE by retirement age, no new contributions needed. Choose based on lifestyle preferences, family situation, and risk tolerance. Most Indians aim for Regular or Lean FIRE.

Optimal FIRE portfolio for India: Accumulation Phase (pre-FIRE): 70% equity (Nifty 50, Nifty Next 50, flexicap funds), 20% debt (PPF, EPF, debt funds), 10% gold/alternate assets. Post-FIRE Withdrawal Phase: 50-60% equity (dividend-paying stocks, balanced funds) for growth, 30-40% debt (FDs, debt funds, bonds) for stability, 10% emergency + healthcare buffer. Withdraw from debt first, let equity grow. Rebalance annually. Tax-efficient: Use LTCG exemption ₹1.25L/year, harvest gains strategically. Diversify across market caps, sectors. Avoid high-fee products. Keep 2 years' expenses in liquid funds for market downturns.

Real estate considerations for FIRE: Primary residence: DON'T count if living in it (not liquid), but it reduces monthly expenses (no rent = lower FIRE number). Investment properties: YES, count rental income as passive income stream, reduces FIRE corpus needed. Example: ₹20K monthly rent = ₹2.4L yearly = reduces FIRE corpus by ₹60 lakhs (at 4% rule). Best FIRE strategy: 1) Own debt-free primary home = eliminate ₹15-25K monthly rent, 2) 1-2 rental properties generating ₹30-40K/month, 3) Rest in liquid investments (equity/debt) for flexibility. Avoid: Over-allocation to real estate (illiquid, maintenance issues). Ideal: 30-40% net worth in real estate max.