Fat FIRE Calculator

A $5,000,000 portfolio supports $200,000 a year of spending at a 4% withdrawal rate ($5,000,000 × 4%), about $16,667 a month. At a more conservative 3%, the same portfolio funds $150,000 a year, or $12,500 a month. Either level covers a high-cost metro mortgage, family travel, and cash-flowed college contributions without selling into a bad market in most historical sequences. The $50,000-a-year gap between the 4% and 3% figures is exactly why fat FIRE retirees debate withdrawal rates more than any other input — the same nest egg funds two visibly different lifestyles.

A $10,000,000 portfolio funds $400,000 a year at a 4% withdrawal rate ($10,000,000 × 4%) and $300,000 a year even at a very conservative 3% — roughly $25,000 a month at the cautious rate ($300,000 ÷ 12). Put the other way, a $300,000-a-year lifestyle is fully covered at 3% by exactly $10,000,000 ($300,000 ÷ 0.03). For most definitions of fat FIRE, $10 million clears the bar with wide margin; the remaining risks are specific ones — taxes on the drawdown, sequence-of-returns in the first decade, and lifestyle inflation outpacing the plan.

Two reasons: fat FIRE retirements tend to start younger and run longer than the 30-year horizon the 4% rule was tested on, and a $200,000 budget has proportionally less discretionary spending to cut in a bad market than a frugal one. That insurance isn't cheap. Funding $150,000 a year takes $3,750,000 at 4% but $4,285,714 at 3.5% ($150,000 ÷ 0.035) — about $535,714 more — and a flat $5,000,000 at 3%. Many planners split the difference: 4% on the flexible part of the budget, 3% on the non-negotiable core.

Spending $250,000 a year — about $20,833 a month ($250,000 ÷ 12) — requires $6,250,000 at a 4% withdrawal rate ($250,000 × 25), $7,142,857 at 3.5% ($250,000 ÷ 0.035), and $8,333,333 at 3%. At this level, taxes deserve their own line item: withdrawals from pre-tax retirement accounts are ordinary income, so the portfolio may need to generate meaningfully more than $250,000 gross for $250,000 of actual lifestyle. Qualified dividends and long-term capital gains in taxable accounts are usually the cheaper source of six-figure retirement income.