How to calculate your FI number

Your FI number is the portfolio size at which your investments can cover your living expenses indefinitely. The standard formula is annual spending × 25. Spend $40,000 a year and your FI number is $1,000,000; spend $70,000 and it's $1,750,000.

Where "25 times" comes from

The multiplier is the inverse of the 4% rule: if 4% of your portfolio covers a year of spending, the portfolio must be 25 times that spending (1 ÷ 0.04 = 25). Choose a more conservative withdrawal rate and the multiple rises:

Step 1: find your real annual spending

This is where most estimates go wrong. Use what you actually spend, from bank and card statements over the past 12 months, not a budget you hope to follow. Then adjust for retirement:

• Remove costs that disappear: retirement contributions, commuting, payroll taxes, a mortgage you'll have paid off.
• Add costs that appear: health insurance before Medicare (often $500 to $1,500+ a month for a family), more travel, home repairs you used to put off.
• Add taxes on withdrawals. Money from traditional 401(k)s and IRAs is taxed as income. Long-term capital gains and qualified dividends are taxed at 0% for a married couple with taxable income up to about $98,900 in 2026, so many early retirees pay little.
• Include lumpy expenses averaged per year: a car every 10 years, a roof every 25.

Step 2: subtract other income

The portfolio only has to cover what other income doesn't. If you'll have a $15,000 pension or rental income, a $60,000 lifestyle needs just $45,000 from investments: an FI number of $1.125 million instead of $1.5 million.

Social Security is trickier for early retirees because it starts decades later. A common approach is to plan without it, then treat it as a safety margin that lets you spend a little more once it arrives.

Step 3: choose your multiple

• 25× (4%) for a roughly 30-year retirement, or if you're flexible about spending.
• 28–30× (3.3–3.5%) if you're retiring before 50, have little flexibility, or want a margin of safety.

Which accounts count?

Count invested assets you can draw on: brokerage accounts, 401(k)s and IRAs, HSAs and cash beyond your emergency fund. Don't count your home's equity unless you plan to sell or downsize; you still need somewhere to live.

Get your number, and the age you'll hit it, with the FIRE calculator.