Lean FIRE Calculator

What Lean FIRE Means

Lean FIRE (Financial Independence, Retire Early) focuses on a minimalist lifestyle with intentionally low spending. Instead of targeting a large retirement fund that supports a high level of consumption, lean FIRE aims for a smaller financial independence (FI) number that covers essentials and a modest buffer. Because the required portfolio is smaller, the timeline to reach independence can be shorter, but the plan is more sensitive to expenses, investment returns, and lifestyle surprises.

The core concept is the safe withdrawal rate (SWR). A common starting point is 4%, which suggests you can withdraw about 4% of your portfolio each year and have a high probability of lasting 30 years or more. The FI number is therefore spending divided by SWR. If annual spending is $25,000 and your SWR is 4%, the FI number is $25,000 / 0.04 = $625,000. Lean FIRE typically uses lower spending, not necessarily a higher SWR, so expenses are the main lever.

Core Formula

The FI number follows a simple ratio. Let $S$ be annual spending and $w$ be the safe withdrawal rate expressed as a decimal. The target portfolio $F$ is:

To estimate time to FI, this calculator uses a simple accumulation model with real (inflation-adjusted) returns. If your annual nominal return is $r$ and inflation is $i$, the real return is approximately:

The balance grows annually by the real return and your annual contributions. This approach produces a practical timeline without requiring a detailed month-by-month simulation.

How the Calculator Works

First, the calculator computes your FI number from spending and SWR. Next, it estimates the time to FI by iterating year-by-year: your current savings grow by the real return, then you add your yearly contributions. The model stops once the balance exceeds the FI number. This produces a rough timeline that is easy to interpret and compare across scenarios.

Lean FIRE emphasizes controllable inputs. Spending has the strongest effect: cutting expenses reduces the target portfolio directly and often increases your savings rate. Contributions also matter, especially early on when the portfolio is small. Returns matter too, but they are less controllable; the calculator assumes a steady real return for simplicity.

Lean FIRE Comparison Table

Different SWRs translate into different FI numbers. The table below shows how your FI target changes across three common SWR choices. A lower SWR is more conservative, requiring a bigger portfolio for the same spending.

Assumptions and Limitations

Every FIRE model relies on assumptions. This calculator assumes a constant real return, stable spending, and consistent annual contributions. Real markets fluctuate, inflation varies, and spending can rise due to healthcare, housing, or family changes. Lean FIRE plans are especially exposed to unexpected costs because the budget is tight and the margin for error is smaller.

It also assumes that your chosen SWR is appropriate for your time horizon and asset allocation. The classic 4% guideline is based on historical U.S. data and a 30-year retirement. Lean FIRE often implies retiring earlier than 60, which may require a more conservative withdrawal rate. Consider stress-testing with lower SWRs and holding a larger cash buffer.

The model does not include taxes, healthcare premiums, or portfolio fees. Those costs can materially change the required spending and the target. If your portfolio is mostly tax-deferred, you may also face withdrawal constraints. Use this calculator as a planning baseline, then refine with more detailed modeling before making irreversible decisions.

Practical Lean FIRE Strategy

Lean FIRE is less about a single number and more about aligning values, spending, and risk tolerance. Start by tracking your core monthly expenses: housing, food, utilities, transportation, healthcare, and basic insurance. This list reveals the minimum viable budget that keeps your quality of life acceptable. Many lean FIRE households target spending between $20,000 and $35,000 a year, but local cost of living and personal constraints vary widely.

Next, focus on your savings rate. A higher savings rate accelerates your timeline in two ways: it increases contributions and it lowers your spending. Saving 50% of income can dramatically reduce the years needed to reach FI. If you earn $50,000 and spend $25,000, you save $25,000 and your FI number is $625,000 at a 4% SWR. In contrast, spending $40,000 on the same income yields an FI number of $1,000,000 and only $10,000 in annual savings, extending the timeline significantly.

Lean FIRE also benefits from flexibility. Many people plan for partial income in early retirement: seasonal work, freelancing, or small business revenue. Even a modest $5,000 to $10,000 a year can lower withdrawal pressure and improve sustainability. If you plan to include side income, reduce your target spending by that amount in the calculator to see the impact on your FI number.

Asset allocation matters because the plan depends on investment growth. A diversified portfolio with a mix of equities and bonds aims to balance growth and volatility. Lean FIRE households often keep a larger cash reserve to protect against market downturns, which can lower returns but increase resilience. Consider running the calculator with different return assumptions to see how sensitive your timeline is.

Sequence of returns risk is another consideration. Retiring into a bear market can reduce portfolio longevity. A conservative SWR, a flexible spending plan, and a buffer of cash or bonds can help mitigate this risk. This is a key limitation of simple accumulation models: they assume steady returns and do not capture bad early years.

Healthcare is frequently the biggest uncertainty. If you plan to retire before qualifying for government healthcare, your premiums and out-of-pocket costs may be high. Include a realistic estimate in your annual spending. Lean FIRE can still work with higher expenses, but the FI number increases accordingly, and the timeline may lengthen.

Finally, lean FIRE should preserve joy, not just reduce costs. Many successful lean FIRE plans prioritize low-cost, high-satisfaction activities like community involvement, slow travel, and creative work. The calculator helps you quantify the path, but the qualitative side of happiness and sustainability matters just as much.