FIRE calculator: would your savings plan have made you financially independent?
Set your savings rate, how long you save and your withdrawals afterwards. Paperball runs both phases in one go over 10,000 paths from real monthly returns and shows how often your plan would have worked.
In short
FIRE means saving and investing so much that the portfolio covers your living costs — often decades before the state pension. Whether a plan would have worked out depends on the savings rate, the saving period, the withdrawals and the order of the years. In the worked example below, withdrawals from age 55 would have lasted until age 95 after German tax in 85 % of the 10,000 paths.
- Free account with starter credits
- Amounts in today's money
- Hosted in the EU · GDPR
What you find out
How often your target wealth would have been reached
The simulation counts in how many of the 10,000 paths your target wealth would have been there at the end of the saving phase — and what would have been saved at the lower bound, in the median path and at the upper bound.
The savings rate it would have taken
Paperball works out the savings rate with which your plan would have worked in 90 % of paths.
A long withdrawal phase afterwards
If you stop early, you often withdraw for 40 years and longer. Saving and withdrawing run on the same paths, and the amounts are in today's money.
Worked example: start at 30, stop at 55
Say you are 30, have invested €50,000 — 60% in German equities, 40% in German government bonds — and save €2,000 a month for 25 years. From age 55 you withdraw €2,500 a month in today's purchasing power until you are 95. Your target: €1,000,000 when withdrawals begin. This is how it would have turned out in 10,000 paths, after German tax:
- Wealth at 55, median€1,099,028today's purchasing power; lower bound €537,027
- Target reached97 %of paths would have had €1,000,000
- Withdrawals until 9585 %of paths would have lasted
- Savings rate needed€2,384a month, for 9 out of 10 paths
You would have paid in €600,000. For the saving phase and withdrawals to work out in 9 out of 10 paths, it would have taken €2,384 instead of €2,000 a month.
The target is in euros of the year in which withdrawals begin; all other amounts are in today's purchasing power.
Withdrawal rate for 40 years and longer
If you stop at 50 or 55, you don't withdraw for 30 years but often for 40 years and longer. The longer withdrawals last, the less the portfolio supports each year. The same allocation, after tax, €500,000 at the start, 4 % withdrawn in the first year and raised with inflation after that:
| Length of withdrawals | 4 % in the first year would have lasted in | Rate that would have lasted in 9 out of 10 paths |
|---|---|---|
| 30 years | 88 % of paths | 3.9 % |
| 45 years | 73 % of paths | 3.1 % |
| 60 years | 64 % of paths | 2.8 % |
The rate is the first-year withdrawal divided by the wealth at the start; after that the amount rises with inflation. The rule of thumb “25 times your annual expenses” is the inverse of 4% — the table shows how far that rate would have carried over a longer period.
More in the guide to the 4% ruleHow to calculate your FIRE plan
Choose a source of returns
Put together an asset mix from building blocks such as world equities, bonds and gold, or take a portfolio you saved in the backtest.
More about the portfolio backtesterSet the saving phase
Starting capital, savings rate (monthly to yearly, rising every year if you like), how long you save and your target wealth. Try different saving periods and see from when it would have been enough.
More about the Monte Carlo simulationSet the withdrawals afterwards
A fixed amount adjusted for inflation or a percentage of the portfolio, with a liquidity buffer and a later pension as income if you like.
More about the withdrawal plan
How to read the result of the FIRE calculator
Wealth when withdrawals begin
The range shows what would have been there at the end of the saving phase: in the median path, at the lower bound — only 5 % would fall below — and at the upper bound, in today's purchasing power.
Target reached
In how many paths your target wealth would have been reached by the time withdrawals begin.
Would have lasted
In how many paths the portfolio would have covered every withdrawal to the end. A path in which it runs empty earlier counts as not having lasted — even if something is missing only in the last year.
Savings rate needed
The amount with which the saving phase and withdrawals together would have worked out in 9 out of 10 paths — it can be higher or lower than yours.
A financial independence calculator with a fixed return names a year from which you can stop. Paperball instead shows how often your plan would have worked out across many possible sequences — and what saving one year longer or withdrawing a little less would have changed.
Sources
- William P. Bengen: “Determining Withdrawal Rates Using Historical Data”. Journal of Financial Planning, October 1994.
- Philip L. Cooley, Carl M. Hubbard, Daniel T. Walz: “Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable”. AAII Journal, February 1998 — the so-called Trinity study.
- Tax rules (German law): Section 32d EStG (flat-rate withholding tax), Section 20(9) EStG (saver's allowance), Section 18 InvStG (advance lump sum), Section 20 InvStG (partial exemption).
- Price history and consumer prices: a research series of German equities, German government bond yields from a central bank's yield curve and official consumer prices.
Questions about the FIRE calculator
What does FIRE mean?
Financial Independence, Retire Early: saving and investing enough for the portfolio to cover your living costs — often long before the statutory retirement age. Paperball checks whether such a plan would have worked with historical returns.
How much wealth do I need for financial independence?
A common rule of thumb in the FIRE movement is 25 times your annual expenses — the inverse of the 4% rule. It comes from studies over 30 years; if you stop earlier, you withdraw for longer. Paperball calculates which savings rate your plan would have needed over your time span.
How far ahead can I plan?
The saving phase can last up to 50 years, saving and withdrawing together up to 70 years.
How do I include a later pension?
As income from a year of your choice: until then the portfolio carries the withdrawals alone, after that the pension covers part of them and only the rest comes from the portfolio.
Is tax included in the FIRE calculator?
Yes, if you switch it on. In the saving phase the advance lump sum is due every year, and during withdrawals the flat-rate withholding tax on the gain portion of every sale — after the saver's allowance and the partial exemption. The worked example on this page uses German tax in an ordinary taxable account.
And the 4% rule?
In the simulation it is a fixed amount adjusted for inflation that comes to 4% of the wealth at the start of withdrawals in the first year. Where it comes from and which rates would have lasted over longer periods is explained in the guide to the 4% rule.
What does the FIRE calculator cost?
Every Monte Carlo simulation costs credits, whether it runs on an asset mix from building blocks, a portfolio from the Community-Backtests or your own saved portfolio. With the starter credits you get when you sign up, your first simulations are free; after that you buy more credits or take a subscription — see all prices.
Run the numbers on your own plan
Starting capital, savings rate, saving period, withdrawals — enter your numbers and see in how many paths your plan would have worked.