FIRE, financial independence and early retirement, comes down to one number: the size of portfolio that can cover your living costs from investment returns alone. This calculator works out that number for a European investor and shows how many years of investing it takes to reach it, including an adjustment for the tax you’ll pay on withdrawals here, which US calculators ignore.
FIRE Calculator
How to Use This Calculator
Enter what you’ve already invested, what you add each month, and the annual spending you want your portfolio to cover in retirement. Then set your assumptions:
- Expected annual return: 5% to 8% is a sensible long-run range for a diversified stock portfolio. Lower is safer planning.
- Safe withdrawal rate: the classic figure is 4%, based on US research. Many European FIRE planners use 3% to 3.5% to be more conservative, given lower expected returns and longer potential retirements.
- Tax on withdrawals: this is the European adjustment. If your gains are taxed when you sell, you need a bigger portfolio to net your target spending. Enter your effective rate to see the realistic FIRE number.
Your FIRE Number
The FIRE number is your annual expenses divided by your withdrawal rate, then grossed up for tax. At a 4% withdrawal rate, €40,000 of annual spending needs a €1,000,000 portfolio before tax. If withdrawals are taxed at 20%, you need closer to €1,250,000 to keep €40,000 in your pocket. That tax gap is exactly what generic calculators miss.
The 4% Rule, and Why Europeans Often Use Less
The 4% rule comes from the Trinity study of US market history: withdrawing 4% of a stock-and-bond portfolio, adjusted for inflation, survived almost every 30-year period. Two things make many European investors more cautious: expected returns on European-accessible portfolios have often been lower than the US historical record, and early retirees need their money to last 40 or 50 years, not 30. Dropping to a 3% to 3.5% rate raises your FIRE number but buys a wide margin of safety.
FIRE Has Variants
Full FIRE is the version above. There’s also Coast FIRE, where you front-load enough that compounding alone carries you to retirement with no further saving, plus Lean FIRE (a frugal target), Fat FIRE (a generous one), and Barista FIRE (part-time work covering part of expenses). The Coast FIRE calculator is worth a look if you want to know whether you can ease off contributions.
What This Calculator Doesn’t Model
- Inflation between now and retirement (use a real return, roughly 2% below nominal, to think in today’s money).
- Sequence-of-returns risk, which matters most in the first years of withdrawals.
- State pensions or other income that reduce how much your portfolio must cover.
- Changing contributions, one-off windfalls, or career breaks.
Next Steps
Once you know your number, the question is how to invest toward it efficiently as a European. My guide to investing covers brokers and portfolios, and the compound interest calculator lets you stress-test different contribution levels. If you’re building toward income rather than a lump sum, try the dividend calculator.
