Question 1

What is the FIRE movement?

Accepted Answer

FIRE stands for Financial Independence, Retire Early. It's a lifestyle movement focused on extreme savings and investment to accumulate enough wealth that you can retire much earlier than the traditional age of 60-65. The core idea is to save 50-70% of your income and invest it wisely so that passive income from your investments covers all your living expenses.

Question 2

How is the FIRE number calculated?

Accepted Answer

Your FIRE number is the total corpus you need at retirement to sustain your lifestyle indefinitely. It's calculated using the present value of an annuity formula, taking into account your annual expenses at retirement (adjusted for inflation), expected post-retirement returns, and the number of years in retirement. A simplified rule of thumb is 25x your annual expenses (based on the 4% rule).

Question 3

What are the different types of FIRE?

Accepted Answer

There are several variations: Lean FIRE involves retiring with minimal expenses and a frugal lifestyle. Fat FIRE means having enough to maintain or exceed your current lifestyle. Barista FIRE is semi-retirement where you work part-time to cover some expenses while your investments grow. Coast FIRE means you have saved enough that compound growth will cover retirement without additional contributions.

Question 4

What rate of return should I assume?

Accepted Answer

For Indian equity markets, a long-term return of 10-12% CAGR is reasonable based on historical data. For a diversified portfolio mixing equity, debt, and gold, 8-10% is more conservative. Post-retirement, when your portfolio shifts towards debt-heavy instruments, 6-8% is realistic. Always account for inflation (typically 5-7% in India) to understand real returns.

Question 5

How does inflation affect my FIRE plan?

Accepted Answer

Inflation is the silent killer of retirement plans. At 6% inflation, your expenses double every 12 years. If you spend ₹50,000/month today, you'll need ₹1.6 lakh/month in 20 years. Our calculator accounts for this by using real returns (nominal returns minus inflation) to ensure your corpus sustains your purchasing power throughout retirement.

Question 6

What is the 4% rule and does it apply in India?

Accepted Answer

The 4% rule, from the Trinity Study, suggests you can withdraw 4% of your retirement corpus annually without running out of money over 30 years. In India, higher inflation (6% vs 2-3% in the US) means you may need a lower withdrawal rate of 2.5-3%, or equivalently a larger corpus (33-40x annual expenses instead of 25x). Our calculator uses actual Indian inflation and return assumptions for accuracy.

Question 7

How does SIP step-up accelerate FIRE?

Accepted Answer

SIP step-up means increasing your monthly investment by a fixed percentage each year, typically aligned with salary increments. A 10% annual step-up can dramatically reduce your time to FIRE. For example, starting with ₹30,000/month SIP with 10% step-up, you'll be investing ₹77,000/month in 10 years. This compounding of contributions, combined with investment returns, can cut your FIRE timeline by 5-8 years.

Question 8

When should I start planning for FIRE?

Accepted Answer

The best time to start is now. Thanks to compounding, every year of delay significantly increases the corpus you need or the SIP amount required. Starting at 25 versus 35 can mean the difference between needing ₹15,000/month vs ₹45,000/month in SIP for the same FIRE target. Even if you can't save aggressively right away, starting early with whatever you can builds the habit and gives compounding more time to work.

Your path to Financial Freedom

Your path to Financial Freedom

Plan Your Path to Financial Freedom

Calculate Your FIRE Number

Wealth Trajectory

Suggested Asset Allocation

FIRE Milestones

Understanding FIRE

Ready to plan your financial freedom?

Your path to Financial Freedom

Your path to Financial Freedom

Plan Your Path to Financial Freedom

Calculate Your FIRE Number

Wealth Trajectory

Suggested Asset Allocation

FIRE Milestones

Understanding FIRE

Ready to plan your financial freedom?