Early Retirement Calculator

## What is the Early Retirement Calculator? The Early Retirement (FIRE) Calculator helps you determine if you can achieve financial independence and retire early — typically before age 50 or even 40. FIRE requires accumulating a corpus typically 25 to 30 times your annual expenses, invested in a way that generates 4% or higher withdrawal rate. ## Formula Used FIRE Number = Annual Expenses x 25 / Safe Withdrawal Rate Years to FIRE = log((Annual Expenses x 25 / SWR - Current Corpus x (1+r)^n) / Annual Savings + 1) / log(1+r) Indian FIRE adjustments: - Healthcare loading: add 20 to 30% to corpus for higher medical costs - Children education: add Rs 20 to 50 lakh per child (if applicable) - Parents care: add Rs 5,000 to Rs 20,000/month if applicable ## Worked Example Age: 30, Corpus: Rs 20 lakh, Monthly expenses: Rs 40,000 (Rs 4.8 lakh/year), Monthly savings: Rs 40,000, Return: 12% p.a., Additional liabilities: Rs 20 lakh FIRE Number = Rs 4,80,000 x 25 / 0.04 + Rs 20 lakh = Rs 30 lakh + Rs 20 lakh = Rs 50 lakh At 12% return with Rs 40,000/month savings: Corpus reaches Rs 50 lakh in approximately 6 years at age 36. FIRE Age = 36 years (6 years from now) ## Frequently Asked Questions 1. What is the 4% rule for FIRE? The 4% rule (Trinity Study) says you can withdraw 4% of your portfolio annually in retirement without running out of money over 30 years. So, if your annual expenses are Rs 6 lakh (Rs 50,000/month), your FIRE number = Rs 6 lakh / 4% = Rs 1.5 crore. 2. What expenses should I count for FIRE in India? Include: all living expenses, groceries, utilities, healthcare (with 5% inflation loading), insurance premiums, education costs for children, parents care (if applicable), leisure and travel, and a buffer for unexpected costs. 3. Is FIRE realistic for middle-class Indians? FIRE is most realistic for high-income earners (Rs 2 lakh+/month) who can save 50%+ of income from their late 20s. For a Rs 50,000/month household with Rs 30,000 in expenses, achieving Rs 1 crore at 12% p.a. from age 30 takes 12 years. FIRE in your 40s is achievable for mid-income earners with disciplined saving. 4. What should I do after reaching FIRE? After FIRE, you have several options: (1) Traditional retirement; (2) Barista FIRE — work part-time for discretionary spending; (3) Coast FIRE — stop aggressive saving, let corpus grow; (4) Portfolio FIRE — switch to lower-risk investments. 5. How does inflation affect early retirement? At 5% inflation, your Rs 50,000/month expenses become Rs 1.25 lakh/month in 18 years. When planning for a 40+ year retirement (retiring at 40, living to 80), you need either a growing corpus (with continued equity exposure) or to plan for lower real expenses.