What is FIRE?
Financial Independence, Retire Early (FIRE) means saving and investing enough that the returns can pay your expenses for the rest of your life. Your FIRE number is that corpus.
How It Is Calculated
FIRE number = yearly expenses at retirement ÷ safe withdrawal rate
Today’s expenses are first grown by inflation to the year you plan to retire. Many Indian planners use a withdrawal rate of 3 to 3.5% rather than the American 4%, because inflation in India runs higher.
Example: expenses of ₹60,000 a month at age 32, retiring at 50, with 6% inflation and a 3.5% withdrawal rate.
Expenses grow to about ₹1,71,260 a month by 50, so the FIRE number is about ₹5.87 crore.