It is the first question anyone pursuing FIRE asks: how much do I actually need to retire early? The internet will give you a single magic number, usually from a US-centric calculator that ignores super, Age Pension, and our tax rules. This guide walks you through the maths properly, Australian edition.
The short answer
The 25× rule, explained without jargon
The most widely used shortcut for calculating your FIRE number is the 25× rule. It comes from the Trinity Study (Cooley, Hubbard & Walz, 1998) and later updates, which tested whether a retiree could sustainably draw a set percentage of their portfolio each year without running out of money.
Their headline finding was that withdrawing 4% of your starting portfolio, then adjusting that dollar amount for inflation each year, had a very high chance of lasting 30 years across historical market sequences. Flip that 4% upside down and you get 25. So:
FIRE number = your annual retirement spending × 25
If you want $60,000 a year in retirement, you need roughly $60,000 × 25 = $1,500,000.
Step 1: Pick a realistic spending number
This is the input that matters most, and the one most people skip or fudge. A $20,000 change in annual spending moves your FIRE number by half a million dollars. Be honest here.
The Association of Super Funds of Australia (ASFA) publishes quarterly retirement standards that are a useful reality check. Recent ASFA Retirement Standard figures (for home-owning retirees aged 65–84):
| Lifestyle | Singles (per year) | Couples (per year) |
|---|---|---|
| Modest | ~$35,503 | ~$51,299 |
| Comfortable | ~$53,289 | ~$75,506 |
These numbers assume you own your home outright. If you rent in retirement, add rent on top of whichever lifestyle you pick. That is a very common reason people underestimate the number they need.
Step 2: Apply the multiplier
Multiplying by 25 gives you a ballpark target before considering super and the Age Pension. For a couple aiming for the Comfortable standard:
- $75,500 × 25 = $1,887,500 total portfolio
- $90,000 × 25 = $2,250,000 for a little more breathing room
- $120,000 × 25 = $3,000,000 for Fat FIRE territory
Step 3: Don't forget super
This is where Australian FIRE diverges from the US playbook. Super is locked until your preservation age, which is 60 for anyone born on or after 1 July 1964 (i.e. everyone currently under 62). That means if you want to retire at 45, you need enough non-super assets to bridge the 15-year gap until super unlocks.
Once super unlocks, though, the maths gets friendlier. Withdrawals from a taxed super fund are tax-free after age 60, and your super keeps growing under a concessional tax regime all the way through. Two practical implications:
- Split your FIRE number in two: a bridge portfolio (non-super) for the years between early retirement and age 60, and a super balance that only needs to carry you from 60 onwards.
- The later you retire, the more of your FIRE number super can do for you. Many couples retiring in their late 50s can aim lower on non-super because super covers the bulk of their post-60 life.
Step 4: The Age Pension is part of your plan
If your assets at age 67 fall inside the Centrelink assets-test thresholds, you may qualify for a full or partial Age Pension. For a homeowner couple the full pension assets limit is around $481,500 (combined) and the part pension cuts off near $1,085,000. Even a part pension of $15,000–$25,000 a year dramatically changes the size of portfolio you need.
Most generic calculators ignore this, which inflates the FIRE number for people whose plan is genuinely modest. If you are aiming for Lean or Regular FIRE, model the pension properly before assuming you need another $400k.
Step 5: Add a safety buffer for sequence risk
The 25× rule assumes a 30-year retirement. Early retirees often need 40, 50, or even 60 years of portfolio life. Over longer horizons, two things matter more:
- Sequence-of-returns risk: a big downturn in your first five retirement years hurts far more than the same downturn a decade in. The 4% rule works on average, but the average includes some scary paths.
- Inflation drift: small over-estimates of long-run inflation compound. Model 2.5%–3% and see how your plan holds up if it runs at 3.5%.
A common defensive move is to target a 3.25–3.5% withdrawal rate rather than the full 4%, which pushes your FIRE number up to roughly 28×–30× spending. Another is to run Monte Carlo simulations, which is exactly what ProjectFi does for every plan.
Try it yourself
Your FIRE number takes about two minutes
Plug in your income, spending, and current balances and ProjectFi will calculate your exact FIRE number, separate the super and non-super pieces, and run 1,000 Monte Carlo simulations so you can see the range of outcomes.
Run the numbersRules of thumb by FIRE style
Once you know your annual retirement spending, these are the ballpark numbers by FIRE style for an Australian couple that owns their home:
| FIRE style | Annual spend | Target portfolio |
|---|---|---|
| Lean | $45k – $55k | ~$1.1M – $1.4M |
| Regular | $75k – $95k | ~$1.9M – $2.4M |
| Fat | $120k – $200k | ~$3M – $5M+ |
| Coast | matches Regular at age 60+ | "enough now that compounding gets you there" — usually $350k–$700k depending on age |
Putting it together
The honest answer to “how much do I need?” is almost never a single number. It is a plan: a non-super bridge balance to cover the gap between your retirement age and 60, a super balance that unlocks at preservation, and an Age Pension projection that kicks in at 67 if you qualify. Get all three right and your FIRE number is usually far more reachable than the internet suggests.
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