FIRE number
An estimate of the capital needed to fund annual spending at a chosen withdrawal rate.
Definition
An estimate of the capital needed to fund annual spending at a chosen withdrawal rate.
Why this concept matters
It turns an abstract financial-independence goal into a measurable estimate.
What to watch
The result is highly sensitive to future spending, withdrawal rate, duration, tax and inflation.
Simple example
With €30,000 of spending and a hypothetical 3% withdrawal rate, the indicative capital would be €1,000,000.
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