Frequently Asked Questions

FIRE stands for Financial Independence, Retire Early. It's a financial strategy to achieve financial freedom through high savings rates and investing, with the goal of accumulating enough assets before traditional retirement age to no longer depend on work income.

The 4% rule is a classic principle in the FIRE community, stating that when your investment assets reach 25 times your annual expenses, you can safely withdraw 4% annually to maintain your lifestyle while preserving principal long-term. For example, if annual expenses are $120,000, you need $3 million in investment assets.

Inflation reduces currency purchasing power. Without considering inflation, $1 million today might only have the purchasing power of $600,000-700,000 in 20 years. Our calculator adjusts target assets and real purchasing power to ensure you can maintain current lifestyle when achieving FIRE.

Expected return depends on your investment portfolio. Historically, stock markets have long-term annual returns of about 7-10%, bonds about 3-5%. We recommend setting based on your risk tolerance and asset allocation. Conservative investors can choose 4-6%, aggressive investors 8-12%, but remember higher returns often come with higher risks.

Higher savings rates lead to shorter time to FIRE. Generally: 20% savings rate needs about 37 years, 50% needs about 17 years, 70% needs about 8.5 years. Most FIRE practitioners have savings rates above 50%, requiring balance between income and expenses.

This usually means expenses equal or exceed income, or savings rate is too low. Solutions include: 1) Increase income (skill improvement, side business, investment income); 2) Reduce expenses (optimize budget, lower living costs); 3) Improve investment returns (optimize portfolio but mind risks); 4) Extend investment time; 5) Adjust lifestyle appropriately.

The classic 4% rule corresponds to 4% withdrawal rate, but this can be adjusted based on personal circumstances. Conservative investors can choose 3-3.5% for higher safety margin; aggressive investors can choose 4.5-5% but bear higher risk. Lower withdrawal rates require more accumulated assets.

This is an important consideration in FIRE planning. Recommendations: 1) Include health insurance costs in expense budget; 2) Establish dedicated medical emergency fund; 3) Consider purchasing long-term health insurance; 4) If possible, ensure healthcare continuity before completely leaving the workforce.

Market volatility is normal in investing and affects FIRE achievement time. Coping strategies include: 1) Maintain investment discipline, don't change long-term plans due to short-term volatility; 2) Build emergency fund buffers; 3) Use asset allocation to diversify risks; 4) Regularly reassess and adjust plans; 5) Increase investment during market downturns (if capable).

Not necessarily. FIRE's core is gaining freedom of choice. After achieving financial independence, you can: 1) Completely retire and enjoy life; 2) Pursue passionate but lower-paying work; 3) Start a business or volunteer; 4) Continue working without financial anxiety. FIRE gives you choice, not forced retirement.

Young people have time advantages. Recommendations: 1) Start investing early to leverage compound effects; 2) Improve earning capacity (education, skill development); 3) Control living costs, avoid lifestyle inflation; 4) Build investment habits with regular investing; 5) Learn financial knowledge; 6) Set clear financial goals and review regularly.

Recommendations: 1) Try different parameter combinations and observe result changes; 2) Compare with other FIRE calculators; 3) Consider performance under pessimistic scenarios; 4) Regularly update parameters based on actual conditions; 5) Consult professional financial advisors; 6) Follow FIRE community experience sharing. Remember, this is just a planning tool - actual execution is more important.