Early Retirement Readiness Calculator

FIRE stands for Financially Independent, Retire Early. The movement focuses on building a portfolio large enough to sustain withdrawals indefinitely, typically using the 4% safe withdrawal rate from the Trinity Study (Cooley, Hubbard, and Walz, 1998). This calculator applies FIRE principles to assess whether your current trajectory will reach your target retirement date.

Early retirement (before age 59.5) means you cannot access traditional tax-deferred accounts (401k, IRA) without a 10% early withdrawal penalty until age 59.5, unless you use IRS Rule 72(t) substantially equal periodic payments (SEPP). You also cannot access Social Security until age 62 at the earliest. Early retirees must fund a longer period from taxable and Roth accounts.

IRS Rule 72(t) allows early retirement account withdrawals without the 10% penalty if you take substantially equal periodic payments (SEPP) over your life expectancy, calculated using one of three IRS-approved methods. Once started, SEPP must continue for at least 5 years or until age 59.5, whichever is later. See IRS Publication 590-B for full details.

At a 4% withdrawal rate, you need 25 times your annual expenses. For $50,000/year in expenses: $1,250,000 is needed. Retiring at 45 means funding roughly 50 years of expenses, which pushes many FIRE planners to use a more conservative 3 to 3.5% withdrawal rate. At 3.5%, the target for $50,000 in expenses rises to $1,428,571.

Significantly. Before Medicare eligibility at age 65, early retirees must self-fund health insurance. ACA marketplace premiums for a 50-year-old average $700 to $1,200 per month (2024 KFF data) before subsidies. If your MAGI is below 400% of the federal poverty line, ACA subsidies can reduce costs substantially. Include healthcare as a separate line in your annual expense estimate.