Calculate your FIRE amount

by fireninja

How much money do you need to become a FIRE? In other words, how much money do you need to be financially independent or to be able to retire early? The general consensus on this is that you should have about 25 times your annual expenditure on invested capital. This enables you to withdraw 4% of your passive income (or your annual expenditure) every year without reducing your capital. This is also called the Safe Withdrawal Rate (SWR).

Multiplying your annual expenses sounds pretty easy, but you need to have insight into your annual expenses. How do you do that? We have researched how to do this easily, by experimenting with different sites and apps, but have come to the conclusion that simply making an Excel export from the past year via your bank site is now the most practical for us. There are probably much nicer, easier and better solutions for this, but we have not yet come across this solution. Do you have tips? Let us know!

We have made an export (transactions) from the bank site and then filtered on expenses. In order to be able to categorize the expenses properly, we used the Nibud Annual Budget Excel, where we entered our expenses per month. We did change this file because it missed some things that we found useful.

After you have completed the Excel, you will have a good idea of your current annual expenditure. This is a good starting point and gives an indication of the target amount. It is important to know that no one can predict the future and your expenses will probably look different in, say, 15 years. For example, when calculating our FIRE amount we assumed that the children will no longer go to childcare by then and we no longer have to take the high childcare costs into account. It is important to keep measuring your goals and progress and make adjustments where necessary.

As soon as you have insight into your annual expenses, you can also calculate after how many years you can be FIRE. There are several useful sites and tools for this. One example of this is the site: After filling in the necessary information, you will see an indication of how many years you have to go until you have reached your goal.

Our course has been set and we are busy increasing our income, reducing our expenses and investing what remains. The better we do this, the shorter the journey!

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