What savings rate do I need to retire early?
At a 50% savings rate, you can retire in roughly 17 years. At 65%, about 10 years. At 75%, about 7 years. The relationship is logarithmic — your savings rate matters far more than your income or investment returns for determining time to financial independence.
Formula
Years to FI ≈ log(1 + return × (1/savings_rate − 1)) / log(1 + return) — simplified: 50% SR ≈ 17 years, 60% ≈ 12, 70% ≈ 8.5, 80% ≈ 5.5
Example
Income $120k, spending $60k (50% SR): FIRE number = $1.5M. Investing $60k/year at 7% → reach $1.5M in ~14 years (less than 17 due to starting savings). Income $120k, spending $36k (70% SR): FIRE number = $900k. Investing $84k/year → reach $900k in ~8 years.
How it works in detail
The math works because your savings rate simultaneously increases what you invest AND decreases what you need (your FIRE number is based on spending, not income). Someone earning $200k but spending $180k (10% savings rate) needs $4.5M and will take 50+ years. Someone earning $100k but spending $40k (60% savings rate) needs only $1M and will reach it in ~12 years. Investment returns matter but are secondary: at 50% savings rate, the difference between 5% and 9% returns is only 3 years (20 vs 17). The MMM (Mr. Money Mustache) 'shockingly simple math' table shows this relationship clearly.
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What is a FIRE number and how do I calculate mine?
Your FIRE number is 25× your annual spending — the portfolio size where a 4% withdrawal covers your expenses indefinitely. If you spend $50,000/year, your FIRE number is $1,250,000. It's the threshold for financial independence.
What is Coast FIRE and how much do I need?
Coast FIRE is the invested balance today that will compound to your FIRE number by retirement age without any additional contributions. If your FIRE number is $1.5M and you're 30 with a 7% real return, you need $194,000 today to coast — meaning you only need to earn enough to cover current expenses.
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