Your FIRE number is the portfolio size at which you can live off investment returns indefinitely — the point of financial independence. Calculating it is straightforward; reaching it takes time, discipline, and appropriate investment strategy. This guide covers how to calculate your FIRE number for an Australian context, including super access rules and the Age Pension.
What Is the FIRE Number?
The FIRE number is calculated using the 4% rule:
$$\text{FIRE number} = \frac{\text{Annual living expenses}}{4%} = \text{Annual expenses} \times 25$$
The 4% rule (Bengen, 1994) states that withdrawing 4% of a portfolio annually has historically sustained a 30-year retirement across most historical market scenarios. For FIRE investors planning 40–50-year retirements, many use a more conservative 3–3.5% withdrawal rate:
| Withdrawal rate | Multiplier | Annual expenses $50,000 |
|---|---|---|
| 4.0% | × 25 | $1,250,000 |
| 3.5% | × 28.6 | $1,428,571 |
| 3.0% | × 33.3 | $1,666,667 |
| 2.5% | × 40 | $2,000,000 |
Australian FIRE Number Examples
| Annual expenses | FIRE number (25×) | FIRE number (33×) |
|---|---|---|
| $30,000 (LeanFIRE) | $750,000 | $990,000 |
| $40,000 | $1,000,000 | $1,320,000 |
| $50,000 | $1,250,000 | $1,650,000 |
| $60,000 (typical comfortable) | $1,500,000 | $1,980,000 |
| $80,000 (FatFIRE modest) | $2,000,000 | $2,640,000 |
| $120,000 (FatFIRE) | $3,000,000 | $3,960,000 |
Australian FIRE Variations
LeanFIRE: Living frugally — $30,000–$40,000/year for an individual. FIRE number: $750,000–$1,000,000. Requires significant lifestyle constraints.
Regular FIRE: $45,000–$65,000/year — comfortable but not extravagant. FIRE number: $1.1M–$1.6M. Achievable for high earners or dual-income households.
FatFIRE: $80,000–$150,000+/year — comfortable lifestyle with travel, dining, and discretionary spending. FIRE number: $2M–$3.75M+.
BaristaFIRE: A hybrid — build a smaller portfolio ($600,000–$800,000), then work part-time to cover gap expenses. Reduces the FIRE number needed while maintaining social connection and healthcare benefits (important in Australia where Medicare provides universal cover).
CoastFIRE: Invest enough early that compound growth will reach your FIRE number at retirement age without further contributions. Then “coast” — spending income without investing more.
How Long to Reach FIRE?
The key variable is your savings rate — the percentage of take-home income you save and invest.
| Savings rate | Years to FIRE (assuming 7% return, starting from zero) |
|---|---|
| 10% | ~40 years |
| 20% | ~31 years |
| 30% | ~25 years |
| 40% | ~20 years |
| 50% | ~16 years |
| 60% | ~12 years |
| 70% | ~9 years |
| 80% | ~6 years |
This assumes expenses = 100% minus savings rate, and the FIRE number is 25× annual expenses.
The Australian Super Complication
A critical FIRE consideration in Australia: super is locked up until preservation age (currently 60 — rising to 60 remains, but conditions of release apply). Retiring at 40 means 20 years without super access.
Two-portfolio FIRE strategy for early retirees:
- Accessible portfolio (brokerage account): Funds living expenses from FIRE date to age 60
- Super portfolio: Left to compound — accessed at 60 as a tax-free income source
This means your FIRE number has two components:
- Bridge portfolio: Annual expenses × years until age 60 (inflated) — held outside super
- Super portfolio: Projected super balance sufficient at age 60 to sustain remaining retirement
Example — retiring at 45, annual expenses $60,000:
- Bridge needed: 15 years × $60,000 ≈ $1,100,000 (inflation-adjusted; invested for returns)
- Super needed at 60: $1,500,000 (25× $60,000)
- Total FIRE number: ~$2,600,000 split across super and accessible portfolio
See FIRE Australia for detailed FIRE strategy articles.
Australian FIRE and the Age Pension
Unlike the US, Australian FIRE investors who do retire early may eventually qualify for the Age Pension (currently age 67). This provides a meaningful income floor later in life — potentially $27,000–$40,000/year depending on assets and partner status.
For FIRE modelling purposes, including a partial Age Pension from age 67 reduces the portfolio required for later-life expenses — a factor that improves the FIRE feasibility calculation for many Australians.
Tools for FIRE Calculation
- ASIC MoneySmart Retirement Planner: moneysmart.gov.au — Australian super and Age Pension assumptions
- FIRECalc (firecalc.com): US-based historical simulation tool — adjust for AUD returns
- cFIREsim (cfiresim.com): Historical scenario modelling with customisable parameters
- Personal spreadsheet: Most flexible — build your own two-portfolio model with super access dates
Related Calculators
- Retirement Calculator Australia
- Savings vs Investing Calculator Australia
- How Much to Invest Australia
- Investment Calculators hub
Frequently Asked Questions
What is the FIRE number for Australia? Your FIRE number = annual living expenses × 25 (4% withdrawal rate). For a single Australian spending $50,000/year, the FIRE number is $1.25M. For a couple spending $70,000/year, it is $1.75M. Early retirees often use 3–3.5% withdrawal (multiply by 28–33) for longer runways.
How long does it take to reach FIRE in Australia? With a 50% savings rate and 7% return, research and models suggest approximately 16–17 years from zero. High earners with household incomes of $200,000+ and 40–50% savings rates can potentially reach FIRE in 15–20 years. Lower savings rates extend the timeline significantly.
Can I access my super if I retire early in Australia? Superannuation cannot generally be accessed before age 60 (preservation age for most Australians). Early retirees must self-fund from accessible (non-super) investments until age 60, when they can access super under a condition of release. This is why two-portfolio FIRE planning is essential in Australia.
This article provides general financial information only. FIRE projections are illustrative — actual returns will vary. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.