FIRE Calculator India – Full Guide + Early Retirement Calculator 2020

What is Financial Independence, Retire Early (FIRE)? How to use the FIRE calculator India?

FIRE is a movement started that has been gaining a lot of popularity among millennials. The basic idea pushes the concept of savings extreme proportions of your salary and investing the same in order to retire earlier than traditional budgeting retirement saving plans would allow.

Most people participating in the movement preach dedicating up to 70% of your income to savings in the hopes of eventually being able to quit your full-time job to live off the interest or small withdrawals on the corpus you manage to collect.

Note that FIRE is not a plan that is guaranteed to work. One should always consider the amount of discomfort he/she is willing to endure as a result of putting away such extreme amounts of money every month. 

This plan is not at all suitable for people who don’t like being frugal and thrifty with their money. However, there have been many cases in which millennials were able to quit their jobs in their 40s in order to live a life of financial freedom off of their investments.

How does it work?

FIRE is believed to have originated from the book, “Your money or your life” written by Vicki Robin. The core concept in the book is to weigh the time spent at work and expenses against hours left in your life. The idea is that if you start comparing every expense to the time spent at work to earn that purchase, you would look at expenses with an entirely new perspective.

Smart, right?

In order to apply FIRE, you essentially need to work in the workforce for several years and try to save up to 70% of your income every year, year after year. The goal is to reach a saving that is 30x your annual expenses. Once you’ve reached this much in savings, you could, theoretically, quit your full-time job completely and take early retirement if you wish.

One interesting point to note is that the movement puts more emphasis on being financially free rather than living a lavish life after retirement. (Pro tip: use the fire calculator india above if you haven’t already)

Once you’ve quit your job, you could (on paper), cover your living expenses by taking small amounts of money from your nest egg. This amount may be as low as 3% yearly to as high as 5%. It all depends on the kind of lifestyle you want to pursue after taking early retirement.

You’ve probably guessed it by now, but not only does this require extreme obedience to monitor and control expenses but also continued maintenance of your invested nest egg. In case your corpus is heavy on stocks and the stock market crashes, the entire plan may fail altogether.

Different types of FIRE

There are multiple variations of the main FIRE movement. We discuss a few in detail below:


Lean FIRE is an even more extreme version of the FIRE movement that allows you to retire before the traditional age of 60+ albeit with significant sacrifices.

Unlike Fat FIRE and the traditional FIRE in which you can live a relatively luxurious post-retirement life by producing a higher passive income, Lean FIRE requires you to make a lot of sacrifices in order to live a super minimalist lifestyle.

Lean FIRE is a good option for people who:

  • Don’t like living in big, luxurious houses and prefer minimalist, small homes.
  • Never want to have kids.
  • Are okay with living in a city that has a very low cost of living and sub-par opportunities for leisure, entertainment, food etc as opposed to living in a metropolitan/cosmopolitan.
  • Are okay with sending their kids to govt. Schools and public colleges.
  • Open to working a side job post retirement for supplemental income

There’s nothing wrong with LEAN fire as such. However, it’s very difficult to pursue for people who aren’t comfortable with a minimalist lifestyle and/or have bigger ambitions for their future and their kids’ lives.


The concept of Fat FIRE allows you to live a much more lavish lifestyle post-retirement as compared to that of Lean FIRE. This is largely possible because your invested amount is much higher which directly results in a higher income post-retirement.

Fat FIRE is suitable for people who:

  • Would like to live in cities with a high cost of living such as metropolitan and cosmopolitan cities.
  • Retire in comfortably large houses with one or more kids
  • Would like to have enough money to put their kids through good colleges and schools
  • Want to own a reliable car that’s not older than five years
  • Want to be able to afford excellent healthcare
  • Want to be able to provide their parents with financial assistance
  • Would never want to work again after taking an early retirement

As you can see, Fat FIRE is the opposite of Lean FIRE and is not a good fit for minimalists.

FAT fire is one of the most enjoyable yet the hardest to achieve ways to retire early!

The whole idea is that if you have decided you’ll never work for money again, it pays to have as much money stowed away as possible. The more the better since you won’t have to stress about any unforeseen obstacles that pop up in your future.

If you want to build great wealth with super aggressive savings and investing, then FAT fire is the movement for you!

Barista FIRE

A Barista FIRE is a mix between Fat and Lean FIRE. In this movement, you retire early by taking up a part-time job that will provide you with supplemental income in your post-retirement days.

For families, Barista FIRE is the concept of letting your spouse work while you take early retirement. Many men have claimed to have taken up an early retirement only to stay at home while their wives go and work at jobs they hate. 

A Barista FIRE plan would be suitable for a couple who would:

  • Live in a mid-to-low tier city in terms of cost of living
  • Has at least one working spouse (full-time)
  • Be okay with not sending their kids to the costliest schools
  • Prefers to not have any kids
  • Be comfortable with doing freelance/part time work

Barista FIRE is a smart way for couples to dip their toes into early retirement to check if it’s really meant for them or not. If the couple feels like early retirement is not their cup of tea, the spouse that quit his/her work can always go back and join the workforce without jeopardizing the entire family’s financial future.

Alternatively, once you’ve experienced Barista FIRE for a few years, you can then make a much more informed decision of letting the other spouse quit his/her work and live off your passive income streams.

Coast FIRE

Coast FIRE is essentially having enough money invested at an early age such that your nest egg would grow to the required amount to retire early after a few years. 

This means that if your nest egg is set to grow at 7% per annum and will reach your target retirement amount (25-30X your annual expenses) in the next 5 years, you can take a Coast FIRE retirement to sit back and watch your money grow to your target amount.

This gives you room to breathe as you no longer have to save and invest up to 70% of your income. In fact, even if you don’t invest any of your income in the remaining time period, you would probably still achieve your retirement target amount.

Note that you’d still have to earn a primary income in order to support your expenses while your nest egg hasn’t reached the size you want it to.

This is why Coast FIRE is so popular among FIRE enthusiasts as you no longer have to wait a long time in order to become financially independent.

The secret to achieving Coast FIRE is to exploit the magic of compound interest.

Also, Coast FIRE is especially effective in your 20s &30s. As it turns out, the sooner you can build a sizeable amount of savings, the lesser you actually have to cumulatively save in the long run.

Benefits of Coast FIRE approach

The major benefit of this approach is that you can quite from your stressful, high paying job earlier and work at a less stressful job with a lower pay while your investment grows over time.

This is great for people who value work-life balance a lot. These people don’t have to work for a decade or two in their stressful jobs and can switch jobs as soon as they have enough money invested to reach their retirement goal sometime in the future.

5 myths about FIRE

Here are a few commonly held misconceptions about the FIRE movement:

Myth 1: Early retirees never have to work again

This is one of the most common myths you’ll hear when reading about FIRE. It’s important to note that the idea of retirement that someone born in the 1970s has and the view that someone born in 1990s has couldn’t be more different from each other.

Back in 1970, retirement meant that after working for more than 40 years, you quite working forever. However, that’s not the definition of retirement today. Nowadays, early retirement is simply a means of quitting a job that you hate to have enough freedom to spend time doing work you love, without having to worry about finances. Most early retirees nowadays draw an income from their passion.

Myth 2: Save 50% or more to retire early or quit the movement

Everyone who claims this number to be a minimum threshold has obviously not done the math. While it’s true that the higher percentage of income you save the sooner you’ll be able to reach financial independence, savings half of your salary is not necessary.

Using smart tools such as PPF and NPS can shorten your path to early retirement by a few years and reduce the percentage of salary you need to save.

Myth 3: FIRE is only people in their 20s/30s

This is again a very common myth. Even though the earlier you start saving money the faster the effect of compounding will kick in, don’t forget that even if you start late, you would have a much higher income that you can use to catch-up. Not to forget any other sources of income that you may have built once your student loans have been paid out.

Myth 4: The next stock market crash will kill the FIRE movement

The key assumption that precedes this myth is the lack of diversification in your investments. If you’re 100% invested in the stock market and it does crash, then your portfolio will follow suit too. However, diversification of your assets across gold, stocks, bonds, real estate is the key to maintaining a stable growth rate over time as well as minimize losses during bearish periods.

How to Achieve FIRE

Start with your expenses post-retirement:

Instead of starting with retirement age, try to calculate how much money you’ll need to retire. You can use the rule of 25 to calculate this amount. Simply estimate your annual spending in your retirement years and multiply that by 25 to arrive at the amount you need to save over time. The more attention you pay to details at this step the higher will be your chances of success.

Account for your healthcare costs:

As you grow older, your healthcare costs will rise significantly. Don’t forget to account for this in your calculations to avoid being surprised in the future. Account for the prices of health insurance at this step too.


Once you’ve successfully calculated how much money you need to retire early, the only thing that’s left is to start saving as your life depends on it! For some of you, this could mean saving north of 50% of your salary!

Cut down on expenses:

One surefire way to save more money is to spend less. Go through your bank statement and see where you’re burning money. Try your best to cut down on useless spending. You can also try to search for offers and deals on your recurring purchases to bring down the costs over time. For eg, shift to an annual plan on your subscription services instead of a monthly plan.

Know your taxes:

The more you can protect your savings from taxes, the quicker you’ll reach your target. You can minimize your taxes by smartly picking your investment vehicles and the duration of these investments.

Increase your primary income:

As the amount you can save at the end of the month is capped by the amount you earn, try to increase that amount as much as you can. You can look into creating an extra source of income or even pushing for promotions at your workplace. Having a small business on the side also helps to fast track your FIRE plan.

4 Things you can learn from the FIRE movement

  1. Humans Value Control

As you would’ve noticed in the world of personal finance, there are many things that you simply cannot control. The markets, interest rates, prices and to some degree, the jobs that you end up doing, etc. The FIRE movement, for a change, focuses on things that you can actually control. Your daily expenses. The amount you save every month. Which city you choose to live in, so on and so forth. Doing so gives you control over the other important resource, time. Having greater control over our time makes us happy.

2. Compound interest is your friend

The amount you need to retire may seem like a really large number, especially if you’re currently working paycheck to paycheck. But if you’re saving 1% of your income, it’ll take you 99 years to replace one year of expenses. However, if you’re saving 25% of your income, you essentially replace one year of expenses with every 3 years of work. Take this up a notch and save 50% of your income, a year of savings gives you 1 year of freedom at its most basic level.

The magic of compounding really kicks in when you keep this up for 10-15 years. If done correctly, you’ve managed to make your money work for you and can do so for the rest of your life. Think of it as if compounding helps you build perpetual money making machine.

3. Your spending rate is much more important than your income

If you compare two people, one of which is earning twice as much as the other person, and notice that the person earning less is saving more every month, then guess who is on a better path to financial freedom?

Yes, it’s the second person, in spite of his lower income.

The meaning of retirement has changed

Nowadays, just because you’re retired doesn’t mean you will never work or earn in life. A large majority of people who have taken up a FIRE retirement are still making money off their blogs, books, speaking events, consultations and more. They’re retired only from their corporate jobs and are free to do as they please.

How Practical is FIRE

The very first problem that people who are pursuing FIRE will face is property. Most millennials these days would struggle to save 20% of their income, given that they’re paying more than 50% in rent. All metropolitans in India have sky high property prices. And unfortunately, these cities have the highest concentration of jobs. Others that manage to save try to save up for a down payment for their home loan.

The second problem is having children. Children are expensive, especially once you take their higher level education into account.

The third problem is the oversimplified math in the FIRE calculation. Catchy ideas such as the ‘25x rule’ and ‘4% rule’ are oversimplified and don’t take into account the possibility of global recessions, negative bond yields, stock market, and property crashes, etc. If you’re expecting your portfolio to appreciate in value, you should also be aware that it can depreciate by the same amount or more too.

The last and final problem is the extreme levels of frugality involved. There’s a tradeoff between time, effort and money that you should be aware of when thinking of cutting down your expenses. Taking the Uber instead of the cheaper public transport may be saving money by allowing you to reach the office earlier and get more work done.

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