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The Magic Number: Calculate the Exact Amount to Quit Everything

The simple formula that tells you exactly how much you need

Beginner

5 min

Foundations

The Number That Defines Your FIRE

Your FIRE Number is the capital that funds your expenses for life. The formula fits on one line: annual expenses × 25. With $40,000 in expenses, you aim for $1 million. With $25,000, you aim for $625,000. Once that capital is reached and invested, you can withdraw 4% per year and last 30 years with 95% probability (Trinity Study, 1998).

Example: $30,000 in expenses → $750,000

$30,000 × 25 = $750,000. Invested in a 60/40 portfolio, this capital sustains 30 years of inflation-adjusted withdrawals in 95% of historical scenarios. For earlier FIRE (40+ years of retirement), switch to ×33 (3% withdrawal rate): $990,000.

The formula, in two versions

Mental shortcut: FIRE Number = Annual expenses × 25. General form: FIRE Number = Annual expenses ÷ Safe withdrawal rate. The 25× rule comes straight from a 4% withdrawal rate (1 ÷ 0.04 = 25). If you prefer 3% for extra safety, multiply by 33.

⚠️ The trap: treating it as fixed

Your expenses move. A child, a move, three years of 5% inflation: your target can climb 30% in just a few years. Recalibrate every year from your actual spending, not from an estimate made five years ago.

Key Takeaways

1FIRE Number = Annual expenses × 25 (equivalent to a 4% safe withdrawal rate).
2$40,000 in expenses delivers a $1,000,000 target. The rule is strictly linear.
3Cutting expenses by 25% cuts your FIRE Number by 25%: the most powerful lever, stronger than chasing a higher return.
4Prefer a corridor (Lean, Central, Comfortable) instead of a single frozen number.

Aim for a range, not a single point

Calculate three numbers: Lean (the survivable minimum), Central (your realistic target), Comfortable (with margin). At $30,000 of expenses: $625k / $750k / $1M. Leaving your job becomes a gradual decision instead of a binary leap.