What's your FIRE number?

If you add health costs or tax, we first work out what you'd need to withdraw to have your budget left:

This treats the health cost you enter as part of your spending every year, including after 65. In reality, pre-Medicare premiums usually fall once Medicare starts, but Medicare has its own costs (Medicare.gov: costs (opens in a new tab)). It's a cautious simplification.

There's no official line between them. They're just names for the size of the budget you plan to live on:

• Lean FIRE means reaching independence on a bare-bones budget. You get there sooner, with less room for surprises.
• FIRE means living roughly as you do now, without the paycheck.
• Fat FIRE means a more comfortable budget, with more travel, more giving and a bigger cushion. It takes longer, but leaves more room for bad years.

Many people pick a number between two of them, or plan to start lean and add part-time income. The Barista FIRE calculator shows how that changes things.

Real return, default 5%. “Real” means after inflation. Working in real terms keeps every result in today's dollars, so a FIRE number 15 years away still means what it means today, and we don't need a separate inflation guess. 5% after inflation is a middle-of-the-road planning assumption for a portfolio that holds mostly stocks. It is not a forecast, and markets don't deliver a steady return. Try 3% or 4% to see a more cautious picture.

Safe withdrawal rate, default 4%. This is the “4% rule.” It comes from William Bengen's 1994 paper (opens in a new tab), which used historical U.S. stock and bond returns to test how much a retiree could take out in the first year, then raise each year with inflation, without running out. A later study, often called the Trinity study (1998) (opens in a new tab), tested withdrawal rates over payout periods of 15 to 30 years; Bengen tracked how long portfolios lasted out to 50 years, but framed his 4% around a minimum of 30. If you stop work at 40, your money may need to last 50 years or more, so it's worth testing a lower rate such as 3.5% or 3%.

Taxes. Withdrawals from traditional (pre-tax) retirement accounts are generally taxed as income, and taking money out before 59½ can add a 10% additional tax unless an exception applies (IRS: exceptions to tax on early distributions (opens in a new tab)). Roth accounts and ordinary investment accounts are taxed differently. Your real tax bill depends on your mix of accounts, your state, and the law in the years you withdraw, so treat the tax box as a rough allowance.

Health care before 65. Medicare generally starts at 65 (Medicare.gov (opens in a new tab)). Before then, people who leave a job-based plan can buy coverage on the Health Insurance Marketplace, and may qualify for help with the cost based on income (HealthCare.gov (opens in a new tab)). For 2026, that help (the premium tax credit) is generally limited to households with income between 100% and 400% of the federal poverty level, now that the temporary removal of the 400% limit for 2021 through 2025 has ended (IRS (opens in a new tab)). Premiums vary a lot by age, place and income, so get real quotes before you put a number in.