Decisions

FIRE Reality Check

When you can actually retire, simulated month by month — and how far one point of inflation moves the date

About the FIRE Reality Check calculator

Not 25x expenses. A month-by-month simulation that accumulates to a candidate age, then draws down to life expectancy with expenses inflating the whole way, and reports the earliest age the money lasts - plus how far one point of inflation moves it.

How the maths works

Simulated, not multiplied

Accumulate to age X, then draw down to life expectancy. The earliest X where the money survives is the answer

Why not 25x

That multiple comes from a 30-year American retirement at 4% withdrawal in a 2-3% inflation regime. At 6% inflation over a possible 40 years it is answering a different question

Inflation runs through retirement

The year-30 withdrawal is priced in year-30 money. Stopping the inflation at the retirement date is the commonest way a plan comes out years too optimistic

Two returns

A higher one while saving and a lower one after retiring, because a retired portfolio is not invested the way an accumulating one is

Sensitivity

Every what-if row is the whole simulation run again, because the sensitivity itself changes with the size of the corpus

A worked example

32 years old, ₹25 lakh invested, ₹60,000 a month

The money first lasts to 85 if you stop in your early fifties. One extra point of inflation pushes that back by around three years; investing half as much again pulls it forward by about four. The honest output is that range, not the middle of it.

How to use it

1. Enter your age, what you have invested and what you invest each month
2. Enter what you spend each month, in today's money
3. Set the returns before and after retiring, and your inflation assumption
4. Read the earliest age - then read how far each disturbance moves it

What it accounts for

• Month-by-month simulation of both the saving years and the spending years
• Reports the corpus needed as a multiple of first-year spending, which is rarely 25
• Eight what-if scenarios, each a full re-run: inflation up one and two points, returns down, invest more, step up faster, spend less, spend more, live ten years longer
• Says what retiring five years earlier would cost you each month
• Tells you whether the age you had in mind actually works, and when the money runs out if it does not

Why it is worth working out

• Replaces a rule of thumb built for a different country and a different decade
• Makes the fragility of the date visible instead of hiding it behind a single number
• Prices the trade-off between retiring earlier and investing more
• Shows whether the plan survives living longer than you expected

Questions people ask

Why not just use 25 times annual expenses?

Because that multiple comes from a study of a thirty-year American retirement at 4% withdrawal in a 2% to 3% inflation regime. Transplanted to 6% inflation and a retirement that might run forty years, it is not conservative or aggressive — it is answering a different question. On most Indian inputs the multiple the simulation actually requires is well above 25.

How is the retirement age worked out?

By simulating, not by dividing. For a candidate age the model accumulates month by month to that age, then draws down month by month to life expectancy with expenses inflating the whole way, and asks whether the money lasted. The earliest age where it did is the answer.

Why does one point of inflation move the date by years?

Because it compounds on both sides: it raises every year of spending you have to fund, and it raises them for the whole of a retirement that could be forty years long. That sensitivity is the finding, not a flaw in the model — and it is why the honest output of this page is a range with a middle rather than a date.

Why are the returns before and after retirement different?

A retired portfolio is not invested the way an accumulating one is. Sequence-of-returns risk matters far more when you are selling units to eat rather than buying them, so most people shift towards debt as they approach retirement, and the expected return falls with it. Setting both to the same figure quietly assumes you will hold equity through your seventies.

What should I use for life expectancy?

Plan past the average, not to it. Half of everyone lives longer than the average, and for a couple the relevant figure is the survival of the longer-lived of the two. Running out of money at 84 with ten years left is not a rounding error, and the "live ten years longer" scenario exists to show what it would take.

The date it gives me is later than I hoped. What moves it most?

Read the what-if table — every row is the full simulation re-run, so the ranking is real rather than assumed. Spending less usually beats investing more, because it works at both ends: it cuts what you need each year and it cuts the corpus behind it. Raising the amount you invest each year by a few more points is often easier than finding the cash today.

This calculator is for information and education. It is not financial advice — see the disclaimer.