Fat FIRE Calculator

Fat FIRE is financial independence without lowering your standard of living to get there. Instead of trimming expenses until the FI number becomes reachable, you set the spending you actually want and size the portfolio to it. In practice that usually means a target somewhere above $100,000 a year of spending, though the label is about the approach rather than a specific threshold.

A larger spending target usually requires more savings or more years of investing under the same return assumptions. You can change those inputs to see how they affect the projected time to reach your target.

The 25x rule is usually quoted against spending, but withdrawals from tax-deferred accounts are taxable income, and the portfolio has to fund the tax as well as the spending. Applying 25x to after-tax spending therefore understates the target for anyone whose savings are mostly pre-tax.

The gross-up divides your target spending by one minus your effective rate, so an 18% rate on $150,000 of spending requires $182,900 of withdrawals. At higher spending levels this correction is worth hundreds of thousands of dollars in the final number.

The 4% rate comes from studies of a 30-year retirement. A Fat FIRE retirement that starts in your forties may need to last fifty years or more, and the longer the horizon the more a poor sequence of early returns matters, because early withdrawals from a falling portfolio permanently remove the shares that would have recovered.

Lowering the rate to 3.25% or 3.5% is the standard adjustment, and it raises the target substantially: at 3.5% the multiple is roughly 28.6x rather than 25x.

They are the same arithmetic pointed at opposite ends of the spending range. Lean FIRE minimizes the target by minimizing expenses, which makes the number reachable quickly but leaves little margin if costs rise. Fat FIRE fixes the lifestyle first and accepts a longer accumulation, which buys margin.

The practical difference is what happens when something goes wrong: a Fat FIRE portfolio can absorb an unplanned expense by spending less for a year, while a Lean FIRE portfolio sized to a spending floor has nothing left to cut.