Lean FIRE Calculator

How the calculator works

Lean FIRE means retiring early on a small budget. The math is exactly the same as regular FIRE. Only the spending figure changes, so this calculator starts at $40,000 a year. Change it to what you actually spend.

Lean FIRE number = yearly spending ÷ withdrawal rate
real return      = (1 + expected return) ÷ (1 + inflation) − 1

Every month, starting from what you have invested today:
balance  = balance × (1 + real return)^(1/12) + monthly contribution
FIRE age = your age in the first month the balance reaches the lean FIRE number

The calculator grows your balance one month at a time at the real return, adds your contribution, and stops the first month you reach the target. That month gives you the age, the years to go and the chart. All amounts are in today’s dollars, so $40,000 means $40,000 of today’s buying power, whatever prices look like when you get there.

What counts as “lean” is a convention, not a rule. Most people use it for spending under roughly $40,000 a year for an individual in the US. There’s no official cutoff, and a budget that’s lean in San Francisco can be comfortable somewhere else.

A worked example

Marcus is 28, has $60,000 invested and saves $2,000 a month. He lives on about $40,000 a year now and doesn’t expect that to change.

At the default 4% withdrawal rate his lean FIRE number is $1,000,000, and with 7% returns and 3% inflation he reaches it at 51. If he lives into his 90s, that’s a retirement of 40-plus years, which is longer than the research behind the 4% rule was built for. Here’s what a more cautious rate costs him:

Going from 4% to 3.5% pushes his date back about 2 years. For someone retiring in his early 50s on a tight budget, I’d pay that.

Why does the withdrawal rate matter more on a lean budget?

The 4% figure comes from William Bengen’s 1994 research and the Trinity Study. Both modeled a retiree who takes the same inflation-adjusted amount every year, no matter what the market does, and both built their conclusions around retirements of about 30 years.

Real retirees usually don’t. When markets fall, someone spending $120,000 a year can skip a trip or delay a car purchase and take out noticeably less. That flexibility is a big part of what keeps a portfolio alive through a bad stretch. A $40,000 budget is mostly rent or property taxes, groceries, insurance and utilities. There isn’t much to trim.

So a lean FIRE plan has less room to adjust later, and the safety margin needs to be in the number from the start. A lower withdrawal rate is the simplest way to put it there. Some part-time income in the early years works too, and the Barista FIRE calculator shows how much it lowers your target.

How do I pick a spending number?

Use what you’ve actually spent over a full year, not a budget you’ve never lived on. Then add the costs that show up irregularly: replacing a car, a new roof, dental work, a flight home for a family emergency. Those don’t appear in a typical month, and on a lean budget one of them can wreck a year.

Health insurance is the other big one. If you retire before 65, you’ll be buying your own coverage until Medicare, and the premium can be a large share of a $40,000 budget. This post covers the options.

A small miss here moves your date a lot. If Marcus forgets $6,000 a year of costs, his real number is $1,150,000 at 4%, and he doesn’t get there until 53. That’s about the same delay as switching to a 3.5% withdrawal rate, except he gets none of the safety.

What are the tradeoffs?

Lean FIRE is the fastest route to not needing a job, and for people who genuinely like a simple life it can be a great deal. The cost is a thin cushion. Rising healthcare costs, a bad sequence of returns in your first few years or a change in what you want out of life all hit harder when there’s nothing extra to absorb them.

Two things help later. Social Security usually starts covering part of your spending in your 60s, which takes pressure off the portfolio; the Social Security version of the Coast FIRE calculator shows how to count it. And a lean plan can turn into a regular one if you pick up some income along the way.

What this calculator leaves out

It assumes steady returns, ignores taxes and doesn’t model Social Security. It also doesn’t know whether your money is in accounts you can reach before 59½ without a 10% additional tax. If you’re retiring in your 40s, work out which accounts will pay for the first 15 years before you commit to a date.