What Is Your FIRE Number? How to Calculate Finan

I remember the evening I first sat down and calculated my FIRE number. Kitchen table, laptop open, spreadsheet running. I plugged in my annual expenses (roughly £30,000 at the time), multiplied by 25, and stared at the result.

£750,000.

My stomach dropped. I had maybe £40,000 invested. The gap between where I was and where I needed to be felt absurd. I genuinely considered closing the laptop and forgetting the whole thing.

I didn’t. And that number, the one that terrified me, became the most useful financial tool I’ve ever had. Every investment decision, every spending choice, every career move: I measured it against that target. It turned a vague idea of “being comfortable one day” into a concrete finish line.

Here’s how to calculate yours.

The formula

Your FIRE number comes down to one calculation:

Annual expenses x 25 = your FIRE number

If you spend £30,000 a year, you need £750,000 invested. If you spend £40,000, you need £1,000,000. If you spend £20,000, you need £500,000.

The multiplier of 25 comes from the 4% safe withdrawal rate. The idea: if you withdraw 4% of your portfolio each year, your money should last at least 30 years (and in most historical scenarios, indefinitely). 100 divided by 4 equals 25. That’s where the number comes from.

This originates from the Trinity Study, which analysed US stock and bond returns going back to 1926. A 4% withdrawal rate, adjusted for inflation, survived the vast majority of 30-year periods, including wars, recessions, and crashes.

Quick reference

Annual expenses	FIRE number (x25)
£20,000	£500,000
£25,000	£625,000
£30,000	£750,000
£35,000	£875,000
£40,000	£1,000,000
£50,000	£1,250,000

The UK has two big advantages

If you’re pursuing FIRE in the UK, you’ve got a couple of genuine edges over Americans chasing the same goal.

The State Pension. The full new State Pension is £11,502 per year (2025/26). If you plan to spend £30,000 a year, the State Pension covers over a third of that from age 67. For a couple, that’s potentially £23,000 a year from the state alone. This dramatically reduces how much your portfolio needs to generate long-term.

The NHS. American early retirees budget £10,000-£20,000 a year for health insurance. We don’t. Healthcare costs are negligible in our FIRE calculations. This is a genuine, often underappreciated advantage.

Lean, Fat, and Barista FIRE

Not all FIRE numbers are equal. The community has a few variations based on lifestyle:

Lean FIRE means financial independence on a stripped-back budget, typically under £20,000-£25,000 a year for one person. Smaller portfolio, but little room for surprises.

Fat FIRE is the opposite: £50,000-£80,000+ a year in spending. A significantly larger portfolio, but no compromises.

Barista FIRE (sometimes called Coast FIRE) is the middle ground. You’ve saved enough that your investments will grow to fund a traditional retirement, but you work part-time or in a low-stress role to cover current expenses. The pressure of needing a high salary disappears, even if you haven’t fully stopped.

Most people end up somewhere between lean and fat. The sweet spot is usually an honest assessment of what you actually spend today, with a buffer for the unexpected.

Does your house count?

No. Unless you plan to sell and downsize, your primary residence shouldn’t count towards your FIRE number. Your FIRE number represents investable assets: money that generates returns you can withdraw.

Your house is an asset on paper, but it doesn’t produce income while you’re living in it. If you own your home outright by the time you FIRE, brilliant. Your annual expenses drop (no mortgage, no rent) and your target shrinks. But the equity in your house isn’t part of the 25x calculation.

How to calculate your number: step by step

Track your spending for 3 months. Use a spreadsheet, an app, or your bank statements. You need an honest picture of what you actually spend, not what you think you spend.
Annualise it. Average monthly spend multiplied by 12. Don’t forget annual costs like car insurance, holidays, and Christmas.
Adjust for retirement. Some costs drop (commuting, work clothes, lunches out). Others rise (hobbies, travel, heating if you’re home all day). Be honest.
Decide on your mortgage. If it’ll be paid off, remove it from your annual expenses. If not, keep it in.
Multiply by 25. That’s your FIRE number.
Factor in the State Pension (optional). If you’re confident you’ll qualify, you can reduce your target. Annual expenses minus State Pension, then multiply by 25, gives a lower figure. But you still need enough to bridge the gap between early retirement and age 67.

How long does it take?

Your savings rate is the biggest factor. Here’s a rough guide assuming 7% real (inflation-adjusted) investment returns:

Savings rate	Years to FIRE
10%	51 years
20%	37 years
30%	28 years
40%	22 years
50%	17 years
60%	12.5 years
70%	8.5 years

The relationship isn’t linear. Going from 10% to 20% saves you 14 years. Going from 50% to 60% saves 4.5. The early improvements in savings rate have the most dramatic impact.

Be honest about the 4% rule

The 4% rule is based primarily on US market data, which has historically delivered stronger returns than most global markets. For UK investors, particularly those with a heavy UK equity allocation, a 3.5% withdrawal rate (multiplying expenses by 28.6 instead of 25) is more prudent.

The difference matters. A £30,000 annual spend at 4% needs £750,000. At 3.5%, you need £857,000. That’s an extra £107,000 to accumulate, but it buys significant peace of mind.

I planned conservatively. My FIRE number was based on a withdrawal rate closer to 3.5%, and I built in a buffer on top. Knowing my numbers had slack in them let me sleep at night. That peace of mind was worth the extra time it took.

What my number actually was

My annual expenses when I left employment were around £30,000-£35,000. Using a 3.5% withdrawal rate, my target was roughly £850,000-£1,000,000 in investable assets. I hit the upper end before I pulled the trigger, partly because I wanted the buffer and partly because the final years of accumulation, when compound growth really accelerates, added more than I expected.

The whole thing took about 15 years. There were years where progress felt agonisingly slow. I made mistakes too: I started too late (I wish I’d begun investing at 20 instead of my late twenties), and in the early years I paid too much in active fund fees before discovering index funds. Those errors cost me time and money.

But having a concrete number to aim for, rather than some vague notion of “enough”, made every pound I invested feel meaningful. Every spending decision had context.

Start with your number

Calculate your FIRE number today. Even if retirement feels decades away, knowing your target transforms how you think about money. It gives every financial decision a framework.

Your number might feel enormous. That’s normal. Mine did too. But compound growth is remarkably powerful when you give it time.

Work out what you spend. Multiply by 25 (or 28.6 if you want to be conservative). Write it down. That’s your finish line.

Now start moving towards it.

What Is Your FIRE Number? How to Calculate Financial Independence