How do fire practitioners save money?

FIRE practitioners aim to save 25x their annual expenses. This strategy is based on two common retirement strategies: The 25x Rule and the 4% Rule, each of which help people set up “safe” rates of withdrawal from their retirement savings. But as noted above, FIRE isn’t a one-size-fits-all goal.

How much is a fat fire number based on cost of living multipliers?

Your Fat FIRE number based on these quarterly cost of living multipliers would then be $1,562,500 instead of $3,125,000 – only an extra $312,500 from your Traditional FIRE number of $1,250,000. You may have a sense of your future spending already, knowing that an ideal post-FI lifestyle is 2 or 3 times your current spending today.

How do you calculate a fire number?

This number is meant to represent the total value of assets necessary to live on a passive income, allowing you to quit working and live off annual gains alone. Here’s the equation to calculate your FIRE number: Annual Expenses x 25 = FIRE Number. In other words, simply multiply your annual expenses by 25; some call this the 4% rule.