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Budgeting doesn’t have to be complicated or restrictive. A Simple Budget Calculator gives you a quick and clear overview of your income, expenses, debt payments and savings in just a few minutes. It’s the perfect budgeting tool before moving on to more advanced tools, apps, or annual budget templates — which I’m fully diving into myself at the start of 2026.

In this guide, you’ll discover where a Simple Budget Calculator belongs in your Semi FIRE (Financial Independence Retire Early) journey, how to use it effectively, and how it works alongside advanced budgeting tools or annual planning to help you move closer to financial independence.

💡 Before we start. Try It Yourself – Simple Budget Calculator
Before diving deeper into budgeting try designing your budget yourself using our Simple Budget Calculator. 👉 Launch the Calculator .

What Is a Simple Budget Calculator?

What Is a Budget?

A budget is a simple plan for how you use your money. It shows how much you earn, how much you spend, and what’s left at the end of the month, helping you make informed decisions with confidence.

How Can a Simple Budget Calculator Help With Budgeting?

A Simple Budget Calculator helps you quickly compare your monthly income with your expenses. Instead of complex features, it focuses on clarity, making it ideal for fast, realistic budget planning.

What Are the Limitations of a Simple Budget Calculator?

This free Simple Budget Calculator isn’t meant to do everything. It doesn’t track daily expenses like YNAB, and it doesn’t show your full financial picture the way a Net Worth Calculator does. It’s designed as a simple starting point or a lightweight companion to more advanced tools.

When a Simple Budget Calculator Is Better Than Complex Budget Apps

Many budgeting apps overwhelm users with rules and setup steps. A Simple Budget Calculator lets you get started in minutes and focus on the one number that really matters: are you in the green or in the red at the end of the month — and if you’re in the green, how much money is actually left.

That said, detailed budget apps like YNAB absolutely have their place. We’ve used YNAB ourselves for more than 10 years, and I often stress how important it is to track expenses — even if it’s just for one month. Real numbers beat estimates every time, especially because most people (myself included) tend to underestimate their monthly spending.

Still, a Simple Budget Calculator is an excellent starting point for your budgeting journey.

Who Should Use the Simple Budget Calculator?

Our Simple Budget Calculator works especially well for people who prefer a fast approach. It is perfect for beginners, families, and anyone who wants clarity before using advanced tools.

We built it primarily for monthly budgeting, but it works just as well if you budget by paycheck. For instance, if you’re paid on the 3rd and the 15th, you can enter your income after each paycheck and add the expenses you expect until the next one — bills, groceries, or things like birthday gifts. When the next paycheck arrives, you simply repeat the process. If you’re paid monthly, you do the same once per month.

Using the Simple Budget Calculator for Financial Independence

Living Below Your Means

Living below your means is one of the hardest financial habits to build — but also one of the most rewarding. It means creating enough breathing room in your budget to intentionally save for what truly matters to you.

In our Simple Budget Calculator, the key number is that breathing room. It appears as a red or green result — and as a savings rate — showing how much of your income is already going toward future goals. For us, that’s semi-retirement and financial independence, which requires a solid margin in the green so we can consistently invest toward our family’s long-term vision.

In contrast, spending more than you earn — or even just as much — relying on credit, or comparing yourself to others can quietly push finances off track. A personal budget helps bring awareness back to what’s sustainable long-term. Our Simple Budget Calculator helps you do exactly that.

Planning Your Financial Future

Planning ahead matters just as much. Budgeting helps you prepare for unexpected expenses, build emergency savings, handle high-cost or low-income phases, and work toward long-term goals like buying a home or planning for early retirement.

Our Simple Budget Calculator highlights where adjustments matter most, making it easier to spot opportunities for the future.

If you’re looking for thoughtful insights on estimating your budget for financial independence, I recommend this post from The Mad Fientist, a well-respected voice in the FIRE community.

How Our Simple Budget Calculator Works Online

What Do You Need to Fill Out the Budget Planner?

Before you open the budget planner, grab your latest payslips, bank statements, and your regular bills. Having your banking app open helps too. That’s more than enough to get started.

How Our Free Budget Planner Actually Works

You enter your income, your monthly expenses, and the budget planner does the rest. You’ll immediately see what’s left at the end of the month, with a simple pie chart showing where your money is going. You’ll also see an “overspending alert” if you spend more than you earn.

Save and Share Your Budget

After filling out your budget, click the “Save & Share” button to generate a shareable URL. You can bookmark the link in your browser to return to your budget anytime, or share it with your spouse or anyone else involved in your financial planning.

Print and Track Your Budget on Paper

By clicking the“Track on Paper” button, you’ll receive a printable version of your budget to track on paper. It includes pre-filled sheets with your budget data.

You can choose the “Category Tracker” version for a line-by-line overview of your budget, along with individual tracking sheets for each category — so you can write down exactly what you’ve spent. You also get a separate page for weekly checkpoints, allowing you to compare what you’ve already spent with what you’ve budgeted. At the end, there’s a savings rate calculation section with the formula and space for notes and insights for the next month, helping you review and improve your budget over time.

If you choose the “50/30/20 Rule” version, you can predefine and categorize your expenses as Needs (50%), Wants (30%), or Savings (20%). The printable then provides a detailed overview of your personal needs, wants, and savings, including totals and percentage breakdowns. You’ll also receive a Daily Expense Log, where you can record each purchase and mark it as N = Need, W = Want, or S = Savings — or simply color-code it for clarity. Last, there’s a weekly progress check-in, a savings rate calculation section (including the formula), and space for notes for the next month — helping you stay intentional and move forward with your budget.

What Is Unique About Our Simple Budget Calculator

Setting Up Expense Goals

Our Simple Budget Calculator allows you to set expense goals for each budget category and compare them with your actual spending. That’s where it becomes powerful.

Here’s how I use it: First, I enter the same numbers for both planned and actual expenses to get a quick overview. Then I track my expenses for one month. After that, I return to the calculator and replace the estimates with real numbers. Based on those actual expenses, I adjust my goals and repeat the process the following month. This way, the budget evolves with real data instead of assumptions.

If you prefer a simpler approach, you can skip the goal-setting feature and just use it for a quick overview.

What Your Savings Could Grow Into

Another unique element appears on the right side under “Income minus current expenses.” It clearly shows whether you’re in the green or in the red. If you’re in the green, the tool even illustrates what your savings could grow into if invested at 7% over 20 years — turning today’s breathing room into tomorrow’s opportunity.

How the Simple Budget Calculator and Traditional Spreadsheets Work Together

Spreadsheets offer flexibility and long-term financial planning, but they require time, setup, and ongoing maintenance. A Simple Budget Calculator removes that barrier. It helps you get started quickly and revisit your budget whenever your financial situation changes.

I recently used it to get a quick overview of our numbers because our finances are about to shift — we’re sending our oldest daughter to a private Montessori school, which means higher school expenses. With our Simple Budget Calculator, I could immediately see that we’re still in the green, and even have enough breathing room left to continue investing.

After that quick check, I moved to our Bare Bones Budget Calculator, which I use for annual planning (and wrote about in a previous post). Filling out the detailed spreadsheets gave me a broader picture — not just for this year, but for the next three years — including how our cash reserves are expected to evolve.

If you’re looking for another perspective, you can also explore the Financial Independence Budget Template from Financial Independence Budget Template by OurRichJourney, a well-known voice in the FIRE community. Their approach emphasizes monthly budgeting and paying yourself first.

Common Budgeting Mistakes a Simple Budget Calculator Helps Avoid

Overestimating savings and forgetting irregular expenses are common mistakes.

Our Simple Budget Calculator highlights potential issues early by showing real totals and organizing your finances into nearly 10 main budget categories with over 30 detailed subcategories. You can fully customize it to fit your needs — rename categories, add new ones, or remove those you don’t use.

Start Using the Simple Budget Calculator

You don’t need a perfect budget to get started. Use a Simple Budget Calculator to gain clarity, build awareness, and improve your financial decisions step by step.

👉 Try the Simple Budget Calculator now.

Frequently Asked Questions: Simple Budget Calculator

A simple budget only works if you actually use it. Our Simple Budget Calculator helps you turn everything you’ve read here into clear numbers — income, expenses, and savings — in just a few minutes.

If you want to put this into practice, open the calculator and build your own monthly budget. And if you have feedback or ideas on how the calculator could be improved, feel free to share them in the comments — I’d love to hear from you.

We used to believe the 4% rule was the golden formula for early retirement. But once we started planning for semi-retirement and looked beyond U.S. market data, the picture began to change.

Recent research shows that the real FIRE withdrawal rate looks very different once you factor in (semi) retirement periods of 40, 50, or even 60 years.

Let’s take a closer look at what the data really says — and how you can make your money last 40+ years with confidence.

What Is the Real FIRE Withdrawal Rate?

What Is a Safe Withdrawal Rate in Retirement in General? 

A safe withdrawal rate is the maximum amount you can take out — or withdraw — each year from your retirement savings invested in the stock market without running out of money before you run out of life.

A Simple Definition on the “Real” FIRE Withdrawal Rate

The term “real” refers to a data-backed percentage of your investment portfolio that you can withdraw each year during decades of early retirement—and later in traditional retirement—to ensure your nest egg lasts your entire life.

So, your real FIRE withdrawal rate — FIRE, short for Financial Independence Retire Early — tells you how much of your portfolio you can safely live on each year without running out of money in early retirement, backed by data.

Finding your ideal rate depends on your time horizon, asset allocation mix, and flexibility in spending.

How FIRE Differs from Traditional Retirement Horizons

Traditional retirement planning assumes 25–30 years of withdrawals starting in your 60s. FIRE, however, often spans 40–60 years, which adds decades of market uncertainty and inflation exposure.

But when you look at Semi FIRE or Semi FI (Semi Financial Independence), the picture changes.
In semi-retirement, you still work — but fewer hours, often in a less stressful or part-time job — which provides valuable financial flexibility.
And that flexibility is golden when it comes to designing your withdrawal strategy. Let’s see how.

The 4% Rule

Where It All Began

The 4% rule was first introduced by financial planner William P. Bengen (known as “Bill” Bengen) in 1994 and later confirmed by the prominent Trinity Study in 1998. This research, based on U.S. market data, showed that retirees could safely withdraw 4% annually from their investment portfolio for about 30 years with a very high probability of not running out of money. This 4% withdrawal rate quickly became the go-to rule for retirement planning.

Explore all the details on the 4 % rule in our previous in-depth post on what a safe withdrawal rate in retirement really means and how it’s calculated. You may be surprised by what we found.

Does the Classic 4% Rule Really Fit FIRE?

The 4% rule was built for traditional retirees in the U.S., hoping to enjoy up to 30 retirement years, not for those planning decades longer (semi) retirements. When you extend the time horizon to 40+ retirement years, even small variations in returns or inflation can drastically affect portfolio survival, often making it wise to lower your withdrawal rate. Or does it?

The Impact of Inflation on Your FIRE Withdrawal Strategy

General retirement advice assumes you’ll adjust all your withdrawals for inflation each year. But you may not need to adjust all of your spending for inflation during (semi) retirement.
For example, we know people on a FIRE journey who plan to keep their 30-year fixed-rate mortgage throughout retirement — an expense that doesn’t need inflation adjustments.
Other examples include lifetime subscriptions, public library or museum memberships, and insurance policies with guaranteed rates, such as life insurance.

In a Money with Katie episode featuring Bill Bengen, he explained that the 4% rule is already conservative because it assumes you’ll adjust every expense for inflation each year in retirement — which, as mentioned earlier, may not always be necessary.
Bengen clarified that his original rate was actually 4.15%, not 4%, which he later updated in his latest book to 4.7% — the “SAFEMAX” — after adding more asset classes to the benchmark portfolio.
This 4.7% withdrawal rate, like the original rule, held up even under worst-case scenarios of low stock market returns and high inflation across a significant portion of the 30-year retirement period.

Note that we still talk about a 30-year retirement in the U.S.

Semi-Retirement and the Real FIRE Withdrawal Rate

How Semi-Retirement Affects Your FIRE Withdrawal Rate

Semi-retirement gives you valuable financial flexibility — you’re still earning some income, which means you don’t have to rely entirely on your portfolio and the passive income it provides. That extra breathing room is incredibly powerful when it comes to shaping a sustainable withdrawal strategy.

Explore all the different Semi-FI approaches in our dedicated post on all types of FIRE.

Not every semi-retirement strategy involves making withdrawals. In fact, one of the most popular Semi FI options, Coast FIRE, requires no withdrawals at all until full retirement. You can be semi-retired without touching your investments, allowing those to keep growing while you cover expenses with part-time or alternative income.

On the other hand, another popular Semi FIRE strategy — Barista FIRE — is built around earning passive income from your investments for decades, typically involving withdrawals over 30–40+ years.

So, if you’re following one of these paths that lets you enjoy passive income for 30–40+ years, how does that affect your safe withdrawal rate?

Should You Always Lower Your Withdrawal Rate During Semi-Retirement?

Yes and no — opinions on this vary widely.

Some FIRE withdrawal rate advice suggests lowering your safe withdrawal rate (SWR) to account for longer retirement horizons and market uncertainty — especially if you can’t skip inflation-adjusted withdrawals because you rely on them for living expenses.

If you start making withdrawals early and expect your retirement to last far beyond 30 years, your safe withdrawal rate may be slightly lower than the classic 4% (see table below for details).

A smaller initial withdrawal helps reduce sequence-of-returns risk, as Michael Kitces explained (as introduced in our previous withdrawal rate post — see reference at the end).
Kitces is a highly respected financial planner, best known for his in-depth analysis of retirement planning and safe withdrawal rates. He also runs the popular blog Nerd’s Eye View, where he shares data-driven insights on retirement income strategies.

That smaller initial withdrawal gives your portfolio more time to grow and recover from market swings, since you cannot pause or skip inflation-adjusted withdrawals during downturns.

Over time, as your work income decreases, you can gradually increase withdrawals — particularly after the first decade of retirement has passed.

How Low Your FIRE Withdrawal Rate Should Be

Here’s Michael Kitces’ advice in short — based on U.S. market data:
If you add 10–15 years to a standard retirement, you should lower your initial withdrawal rate by roughly 0.6%.

What’s most surprising is that a portfolio lasting 40–45 years, with the withdrawal rate reduced by just 0.6%, is also likely to survive 50 or even 60 years without needing to lower the withdrawal rate any further.
In a Mad Fientist episode (a respected voice in the FIRE community) and his related post on the safe FIRE withdrawal rate, Kitces explains why the SWR doesn’t need to keep declining as the time horizon extends.

Kitces found that 3.5% forms a practical floor for a safe withdrawal rate, even for very long retirements — though this is still based on U.S. market data alone.

When to Raise Your FIRE Withdrawal Rate

However, Brandon Ganch (The Mad Fientist) and Nick Maggiulli found that you can actually raise your withdrawal rate to 4.25–4.75% if you cut back on non-essentials like dining out (about 10–20% of most budgets) during market downturns — see reference here.
If your discretionary spending is already under 10%, sticking with the 4% rule remains the safer choice.

A Lower SWR Means a Higher FIRE Number — or Does It?

Not necessarily. A lower safe withdrawal rate usually increases your FIRE number, but the full picture depends on factors like side income, taxes, and how long your money needs to last.

Michael Kitces highlights what many consider the essence of semi-retirement: Work a few hours a week on something you genuinely enjoy during (semi) retirement for as long as possible.

Even earning around 10,000 per year reduces the need to withdraw an additional ≈ 833 per month, ultimately requiring ≈ 262,000 less in invested capital, based on the 4% rule that can define your FIRE number. Or, in other words, your earned income can offset the need to increase your FIRE number.

Want to explore your FIRE number based on your withdrawal rate of choice? Discover the basics in our free FIRE Calculator and find out your personal safe withdrawal rate and path to financial independence.

The FIRE Withdrawal Rate for Retirement Periods of 40-60 years

_{* For 40+ years choose between a 4.25 – 4.75 % rate if you could cut down on discretionary spending during downturns, assuming a 80/20 stock/bond US portfolio allocation — see Brandon Ganch’s & Nick Maggiulli’s simulations.}

_{** For 40+ years calculate with an initial 3.5 % withdrawal rate to reduce the sequence of return risk (as Michael Kitces suggests — mentioned above)}

_{*** For 40 years use an initial 3.5 to 3.7 % SWR and then adjust upwards for inflation if you want to have a success rate of (almost) 100 % and your portfolio has an allocation of 75/25 US stock/bond (or 100 % US stocks). For 50 years use a 3.4 to 3.5 % SWR for a success rate of almost 100 % for the same portfolio — see Baptiste Wicht.}

_{**** For 50 years an initial 3% rate adjusted for inflation seems safe — portfolio 50 % US stocks / 50 % US bonds, as Bengen’s original paper showed}

_{***** For up to 60 years, a portfolio with 75–100% US stocks and the remainder in bonds achieved a 97–100% success rate with a 3.5% withdrawal rate, adjusted for inflation. If you plan for 40 years, the same portfolio and a 3.5% SWR show a 100% success rate, while increasing the rate to 3.75% still maintains a success rate of at least 97%.}

In short: Early retirees in their 30s or 40s should plan on a 3–3.5% FIRE withdrawal rate to stay safe over longer retirement spans and U.S.-based portfolios of 75–100% stocks with the remainder in bonds.

Baptiste Wicht reminds us that while stocks can boost your portfolio’s long-term success, they are also more exposed to sequence-of-returns risk — a point also emphasized by Michael Kitces, as mentioned above.
He talked about the concept of the “worst duration” — the point at which the first portfolio failure can occur — and discovered that 100% stock portfolios perform the worst under this measure.
His recommendation: aim for a balanced allocation, such as a 75/25 U.S. stock-to-bond portfolio.

Karsten Jeske’s results confirm the same pattern: the more bonds, the worse for longer retirement periods. 75 to 100% stocks give the highest success rates among all portfolio types for all retirement periods but only at a lower withdrawal rate than 4%, ideally 3.5%. With the 4% rule success rates drop to 85-93%.

Interestingly, Karsten Jeske’s research supports Michael Kitces’ findings — as explained above — showing that the 3.5% SWR doesn’t need to keep declining as the retirement horizon extends. It represents the practical floor for a SWR, no matter how long the retirement period, just as Kitces described.

Our FIRE Withdrawal Rate Example and Semi-Retirement Plans

Our Semi-FIRE Number & FIRE Number

Right now, we happily live on around 3,300 Euro per month — or roughly 40,000 Euro a year — not including our 1,800 Euro mortgage. We shared our full 5K Monthly Budget Breakdown For Our Family Of 5 in another post. However, we expect our living expenses to rise again once we reach semi-retirement due to inflation, and even slightly before, to around 4,000 per month — or roughly 48,000 a year.

That’s why we currently plan to build a stock market portfolio of about 500,000–600,000 Euro, representing roughly 50% of our full FIRE number (estimated at 1,000,000–1,200,000 Euro) before entering semi-retirement.

To calculate our FIRE number, we multiply our total annual spending of 40,000-48,000 by 25 — that’s how we calculate our FIRE number if using the 4% rule (more below).

In other words:
40,000 × 25 = 1,000,000 → FIRE number / 48,000 × 25 = 1,200,000 → FIRE number

This approach of accumulating 50% of our full FIRE number before stopping investing, aligns perfectly with the Flamingo FIRE strategy — a semi-retirement concept I explained in a separate post that also includes a free Flamingo FIRE Calculator.

In another post, I shared how we chose to pursue semi-retirement without pushing our dream of true early retirement too far into the future — or at least to keep the option of full FIRE open.

Will We Start Withdrawing Money When We Hit Semi-Retirement?

I’ve also mentioned in previous posts that I still feel like there’s a missing piece in our semi-retirement puzzle, and I hope to figure it out soon. So far, we’re huge fans of the Flamingo FIRE approach to semi-retirement.

However, for now, our plan looks like this:
We don’t plan to start withdrawing money when we hit semi-retirement. We might begin once we reach our full FIRE number of 1,000,000–1,200,000 Euro — but maybe we won’t.

You see, our full FIRE age is still about a decade away, or even more. It’s hard to predict where we’ll be professionally or personally by then. Maybe our earned income will still be enough to support our family. Maybe we’ll be doing work we love so much that we won’t want to quit. That’s my ideal scenario. And if that’s the case — why start withdrawing?

Our FIRE Withdrawal Rate

To be honest, Marc and I haven’t agreed on a set withdrawal rate yet, but we both know we prefer flexible withdrawal strategies. Our portfolio is currently focused on the U.S. market, though we’re gradually increasing exposure to global stocks. We don’t hold bonds, bills, gold, or other commodities, but I especially value having cash reserves before entering FIRE.

Another uncertainty is whether we’ll be able to keep and rent out our house during FIRE — and what our exact state pension will look like. You see, there’s just too much uncertainty to commit to a fixed withdrawal rate a decade ahead. But I’m very relaxed about it — we’ll see how things evolve.

Taxes, Fees, and Real-World Friction

We personally need to pay taxes once we start withdrawing money from our stock market portfolio. Do you? It’s important to remember that even a 1% annual fee or tax drag can shorten your portfolio’s longevity by several years.

Accounting for management costs, fund expenses, and capital gains taxes gives you a more realistic view of your true FIRE withdrawal rate. Always plan withdrawals based on net returns, not just nominal averages.

For instance, you can use our free Flamingo FIRE Calculator for example to account for taxes and fees, offering a more realistic view of your compounding rate after drag — typically still 0.5–1.5% for low-cost portfolios.

Dr. Wade Pfau (a US professor from Princeton University currently teaching in Tokyo, Japan) explained that a 50/50 U.S. stock-bond portfolio over a 30-year retirement had an 84% success rate with 1% fees, 65% with 2% fees, and 96% when no fees were applied. The takeaway is simple — the lower your investment fees, the longer your portfolio can last if using the 4% rule.

Flexibility Is Key: Beyond Static Rules

Static withdrawal rates like 4% or 3.5% work on paper but ignore real-life changes. That’s why we wrote about dynamic strategies — such as Guyton-Klinger guardrails or variable-percentage withdrawals — which all adjust spending based on market performance. Flexibility protects your portfolio during downturns and allows you to enjoy higher spending in strong years.

FREE Withdrawal Calculator

Use our free Retirement Withdrawal Strategy Calculator to explore multiple withdrawal strategies using historical market data.

Conclusion: The Future of Real FIRE Withdrawal Rates

The 4% rule was a great starting point, but the future of real FIRE withdrawal rates lies in adaptive and flexible withdrawal strategies. By blending data-driven planning with real-world flexibility, you can enjoy financial independence without fear of running out of money. Test your numbers with our free FIRE Calculator to see how your plan holds up over decades.

Further Resources to Study Your Ideal FIRE Withdrawal Rate

• William Bengen’s original 1994 article “Determining Withdrawal Rates Using Historical Data” (Journal of Financial Planning 7, 4 (October): 171-180)
• Bengen’s 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More,” he introduces the 4.7% “SAFEMAX“
• Michael Kitces papers
• Brandon Ganch (The Mad Fientist) withdrawal strategy research
• Money with Katie episode Bill Bengen
• Baptiste Wicht’s Updated Trinity Study with more withdrawal rates
• Karsten Jeske’s paper “Safe Withdrawal Rates: A Guide for Early Retirees”

Your path to financial independence starts with one key number — your safe withdrawal rate. Begin your journey toward financial freedom today with our free Retirement Withdrawal Strategy Calculator.

If this post sparked new ideas for your own FIRE journey, subscribe to our newsletter below to stay connected — and share your thoughts in the comments. I’d love to hear from you!

If you’ve ever wondered what is a safe withdrawal rate in retirement and how much you can spend from your investment portfolio without running out of money, you’re not alone. We asked ourselves the same question when planning for semi-retirement and began rethinking the traditional 4% rule.

In this post, I’ll explain what a safe withdrawal rate in retirement really means, how the 4% rule works for different ages, what experts like William P. Bengen (known as Bill Bengen), Michael Kitces, Dr. Wade Pfau, and Prof. Scott Cederburg recommend, and how to find your own personalized number.

At the end, you’ll find all research papers and studies we reviewed to make this guide as accurate and practical as possible.

💡 Before we start. Try It Yourself – Retirement Withdrawal Strategy Calculator
Before diving into the research behind the 4% rule, expert guidelines, and international comparisons, try the math on your own portfolio. Enter your portfolio size, expected retirement horizon, and spending needs — and instantly see how different withdrawal rates perform across historical market conditions.
👉 Launch the Calculator or checkout our hands-on step-by-step guide.

What Is a Safe Withdrawal Rate in Retirement? (Definition)

So, what is a safe withdrawal rate in retirement, exactly?
Or put another way: What is the maximum income you can withdraw from your retirement savings — invested in the stock market — without running out of money before you run out of life?

A safe withdrawal rate (SWR) is the percentage of your investment portfolio you can withdraw each year in retirement without depleting your savings too soon — giving your portfolio the best chance to last your entire lifetime.

A safe withdrawal rate is always a guideline, not a guarantee — because no one can foresee how markets will evolve.

The 4% Rule Explained — the Classic Safe Withdrawal Rate

The most widely known benchmark for a safe withdrawal rate is the 4% rule, first introduced by Bill Bengen in 1994 and later confirmed by the Trinity Study in 1998 (more below).

Even today, the 4% rule remains the most common answer to the question: “What is a safe withdrawal rate in retirement?”

It assumes that retirees can withdraw 4% in the first year of retirement and then increase that amount each year by inflation to maintain spending power, and expect their savings to last roughly 30 years.

The 4% rule became famous through the prominent blog post The 4% Rule: The Easy Answer to “How Much Do I Need for Retirement?”, and it remains the foundation for most retirement planning strategies today.

Where Did the 4% Rule Come From? (Bengen and the Trinity Study)

Bengen’s Research

William P. Bengen, known as Bill Bengen, is a financial planner. In the early 1990s, he set out to answer a question that few could clearly define at the time: What is a safe withdrawal rate in retirement for my investment portfolio? With little expert guidance available, he began running his own calculations, analyzing historical returns of U.S. stocks and bonds across multiple 30-year retirement periods.

He based his analysis on data from Ibbotson Associates’ Stocks, Bonds, Bills, and Inflation (SBBI) dataset, which provides detailed historical returns for U.S. stocks, bonds, short-term treasury bills, and inflation.

Bengen discovered that a 4.15% withdrawal rate was the highest historically sustainable spending rate for 30-year retirements, based on a 50/50 mix of U.S. stocks and U.S. bonds, annual rebalancing to maintain that ratio, and funds held in a tax-advantaged account ending with a zero balance — ensuring retirees wouldn’t outlive their money.

In 1994, he published his findings in the Journal of Financial Planning (see reference at the end), concluding: “Assuming a minimum requirement of 30 years of portfolio longevity, a first-year withdrawal of 4 percent, followed by inflation-adjusted withdrawals in subsequent years, should be safe.”

The Trinity Study

The prominent Trinity Study is a 1998 research paper by Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz, all professors at Trinity University in Texas. It validated Bill Bengen’s findings on sustainable withdrawal rates (see reference at the end).

The Trinity Study also referred exclusively to the U.S. market, analyzing historical stock and bond returns based on American market data.

Although no one originally coined the term “4% rule,” it became the perfect marketing phrase to make the concept easy to remember and share.

It’s important to note that in the study, a portfolio was considered successful if it completed the entire payout period with a terminal value greater than zero — even if that meant ending with just a single dime. In general, more bonds seemed to reduce growth potential but increase stability, while more stocks raise volatility but improve long-term returns.

Many in the FIRE (Financial Independence, Retire Early) community still rely on the 4% rule because it provides a simple, time-tested framework with a high probability of long-term success.

What Is a Safe Withdrawal Rate in Retirement by Age? (Expert Guidelines)

Answering what is a safe withdrawal rate in retirement depends largely on your retirement age.
Financial planners such as Michael Kitces and professors like Dr. Wade Pfau refine the classic 4% rule among others based on both retirement length and country-specific factors.
(You can find links to their original research papers and many more at the end of this post.)

The Expert Guidelines

How Fees Can Screw Up the 4% Rule — and Lower Your Safe Withdrawal Rate

“The 50-50 portfolio over 30 years with 4% withdrawals had a 96% success rate without fees, 84% success rate with 1% fees, and 65% success rate with 2% fees. This, in and of itself, is a reason to be cautious about using 4%.”, as Dr. Wade Pfau explained in his research. Pfau is a US professor currently teaching in Tokyo, Japan, who holds a Ph.D. in economics from Princeton University.

We’ve also discussed how taxes and investment fees can impact your Semi-FIRE journey inside our free Flamingo FIRE Calculator among others.

How Inflation Affects the 4% Rule & the 4.7% “SAFEMAX” — Bengen’s Findings

What is a safe withdrawal rate in retirement under today’s economic conditions?

William Bengen, often called “the inventor of the 4% rule”, considers inflation the greatest enemy of retirees. He developed his original rule during a period of mostly low and stable inflation.

Bengen points out that high inflation early in retirement or a bear market — when stocks drop more than 20% — can seriously shorten the life of a retirement portfolio.

So, what is a safe withdrawal rate in retirement when inflation runs high or markets tumble?

In Bengen’s 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, he introduces the 4.7% “SAFEMAX” — a historically safe withdrawal rate that held up even during long stretches of elevated inflation across a 30-year retirement. His book provides data-driven guidance on when, why, and how to adjust withdrawals to ensure your savings truly last a lifetime.

If you’d like a quick overview, I recommend reading the Investor’s Business Daily article on the updated 4% rule — where you’ll also find the ideal portfolio allocation (spoiler: it’s 55% in stocks, with only 11% international exposure) — and listening to the podcast featuring Bengen himself.

What if My Portfolio Is International?

In short: diversifying your portfolio internationally — by holding stocks and bonds from markets outside the U.S. — lowers your safe withdrawal rate, since the U.S. market has historically delivered unusually strong returns compared to others. (Remember, the original 4% rule is based solely on U.S. market data.)

We start with Scott Cederburg’s findings and then take a closer look at Wade Pfau’s research — both of which are among the widely recognized studies on this topic.

If you want to look up a sample of global SWRs, you may want to look at these portfolio charts, that use long-term real return data covering multiple developed markets and portfolio types.

Scott Cederburg’s Research (& Ben Felix Suggestions)

The 2022 study was conducted by four U.S. university professors, including Scott Cederburg, a respected expert in withdrawal-rate research. The study analyzed 38 developed countries including markets which underperformed or failed. Retirement periods were modeled flexibly, typically ranging at around 25-30 years, based on mortality tables. It compiles monthly real returns for domestic stocks, international stocks, bonds and bills across those 38 countries dating back to 1890 — domestic refers to one of 38 developed markets. Constant‑percentage withdrawal strategies were simulated.

Their simulations show that, for a 60%/40% domestic stock/bond portfolio, the safe withdrawal rate (that limits the chance of running out of money during retirement to 5%) is just 2.26% per year on average (the median across all 38 developed markets). When the 4% rule was tested, it carried about a 17% risk of depleting assets, meaning about one in six retirements would have exhausted the portfolio too soon.

Note that the 2.26% SWR on average does not refer to an international portfolio. It is the median SWR across domestic 60/40 stock/bond portfolios of 38 developed countries — not to any globally diversified or international allocation!

The SWR varies by asset mix on average: it’s about 1 % for an all‑bond portfolio, 1.64% for a 20/80 domestic stock‑bond split, 2.06% for an 40/60 domestic stock‑bond mix, 2.26% for the 60/40 domestic stock‑bond split, 2.21 % for an 80/20 domestic stock‑bond mix, and 1.85 % for an all‑stock portfolio.

Internationally diversified portfolios (domestic + international stocks and/or bonds) show modestly lower ruin risk. However, the resulting SWR uplift was typically less than 0.2–0.3%, insufficient to approach a SWR of 3%, let alone 4%.

Although not reported in the paper, adding a specific international diversification to the portfolio improves these outcomes, as respected financial planner Benjamin Felix suggests in this article. When 40% of the total portfolio is allocated to international stocks, the safe withdrawal rate increases to 2.85%. Expanding that share to 90% international stocks raises the SWR further to 3.02%.

Here’s the link to the full study for reference:
Scott Cederburg et al. (2022) –”The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets”

Wade Pfau’s Findings

In his 2010 study, Pfau analyzed annual stock, bond, bill, and inflation data from 1900 to 2008 for 17 developed countries. He evaluated each 30-year retirement window and explored various portfolio mixes to determine the maximum sustainable withdrawal rate, known as SAFEMAX. Strategies with a constant percentage withdrawal amount were also simulated here.

His results showed that the median “SAFEMAX” was 3.36 %, and the average SWR across all 17 countries was 3.22 % (median means the middle value in a sorted list of numbers — half the values are higher, and half are lower). Only a small minority of developed markets support the 4 % guideline (see below).

A simple 50/50 stock–bond portfolio failed in all countries, and the optimal portfolio mix involved higher stock exposure. The exact ideal allocation for each country can be found in the study, linked below.

For instance, here are the SWRs: Canada (4.42 %), Sweden (4.23 %), Denmark (4.08 %), the United States (4.02 %), South Africa (3.84 %), the United Kingdom (3.77 %), Australia (3.68 %), Switzerland (3.59 %), the Netherlands (3.36 %), Ireland (3.28 %), Norway (3.13 %), Spain (2.56 %), Italy (1.56 %), Belgium (1.46 %), France (1.25 %), Germany (1.14 %) and Japan (0.47 %).

Note that we are not talking about internationally diversified portfolios. No cross-border diversification was allowed (no “global portfolio”). Each of the 17 countries was analyzed individually, with retirees investing only in their own domestic stock, bond, and bill markets — for example, U.S. retirees invested purely in U.S. assets; Germans in German assets; and so on.

Pfau also noted that when realistic costs (e.g., 1% annual fees) are included, the SAFEMAX decreases by roughly the same amount, for example from about 3.59 % to 2.59 %.

Here’s the link to the full study for reference:
Wade Pfau’s 2010 paper “An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?” (Journal of Financial Planning 23, 12 (December): 52-61)

What if My Portfolio Is 100% Stocks? — Cederburg’s Controversial Findings

Equally important when determining your safe withdrawal rate is finding the right balance between stocks and bonds.

In worst-case market scenarios, portfolios that hold more bonds than a 50/50 ratio and use an initial 4% withdrawal rate (adjusted for inflation) could deplete too early — because the more bonds you hold, the lower your growth potential and the slower your recovery after downturns.

In 2025, three U.S. university professors, including Scott Cederburg, published a controversial paper on the ideal lifetime portfolio allocation.
According to the study’s findings, the optimal allocation over an entire lifetime — including retirement — is 100% stocks, divided as follows: 67% international stocks and 33% domestic stocks.
(See the referenced paper by Cederburg et al. at the end for full details.)

If you’d like a more detailed walkthrough of the study’s results, I highly recommend watching Ben Felix’s video on the paper — as mentioned above, he’s a respected financial planner from Canada who explains the findings clearly and concisely.

Key Risks That Can Reduce Your Safe Withdrawal Rate

Longevity Risk

Plan to live 5–10 years longer than you expect. Your portfolio should outlast you, not the other way around.

Sequence of Returns Risk

The sequence of returns risk means that the order of returns matters more than the average return. If markets fall early in retirement — especially during your first 10 years — you could deplete your portfolio too soon, even if long-term averages look good.

To prevent that, Michael Kitces suggests starting with a 3–3.5% withdrawal rate for the first decade and maintaining cash reserves covering 6–24 months of expenses. This buffer helps you avoid selling stocks during market downturns.
Kitces is a highly respected financial planner, best known for his in-depth analysis of retirement planning and safe withdrawal rates. He also runs the popular blog Nerd’s Eye View, where he shares data-driven insights on retirement income strategies.

So, when times are bad, withdraw less and sell only bonds, bills, or gold so you don’t reduce the stock portion of your portfolio even further.
If possible, pause withdrawals and use your cash reserves instead — and consider buying stocks at lower prices to strengthen your long-term recovery.

Lack of Diversification

Diversification plays a key role in protecting your portfolio. We already talked about a controversial paper. A more common guideline is to hold around 75% stocks and 25% bonds, while adding gold, silver, or cash reserves for extra stability.
However, Bengen stated in his original 1994 paper that having too few stocks in a portfolio can shorten its minimum lifespan. He advised investors to maintain a stock allocation close to 75%, and never below 50%.

We’ve also seen that it’s also smart to diversify internationally — for example, through broad global funds like the MSCI World Index. (more down below)

If you’d like to explore which funds offer the best balance between safety and growth, check out our detailed guide on the Safest Index Funds for Financial Independence.

How to Adjust the Safe Withdrawal Rate in Retirement

Even the 4% rule — the classic answer to what is a safe withdrawal rate in retirement — can be made smarter with a few flexible strategies.

During bull markets:
Consider a one-time withdrawal of 5–10% to top up your cash reserves while portfolio values are high.

During downturns:
Cut discretionary spending or pause inflation adjustments to preserve capital.

How to Calculate Your Own Safe Withdrawal Rate (FREE Withdrawal Calculator)

Use our free, ultimate Retirement Withdrawal Calculator to test your own scenarios and find out what a safe withdrawal rate in retirement is for your situation.

You can stress-test your numbers with historical market data and explore multiple proven withdrawal strategies to find the optimal approach for your financial goals in retirement — and discover what is a safe withdrawal rate in retirement that truly fits your plan.

Run your numbers today using the free Retirement Withdrawal Calculator and see how long your savings could last.

Common Myths about the Safe Withdrawal Rate

Myth 1: The 4% rule only works in the US.

Reality: Global research shows that safe withdrawal rates typically range between 2.3-4.5%, depending on the local market and inflation conditions.

Myth 2: You can’t change your withdrawal rate during retirement.

Reality: Flexibility is key and frequently applied. Cutting or pausing withdrawals in bad market years can dramatically extend your portfolio’s life and improve long-term sustainability.

Myth 3: The 4% rule guarantees success.

Reality: It’s a useful guideline, not a guarantee. Market returns, inflation trends, and your individual fees (as mentioned above) all influence what a safe withdrawal rate in retirement is for you.

FAQs About Safe Withdrawal Rates

Final Thoughts

Historical U.S. returns were extraordinary compared to most markets and countries — but relying on them to determine your personal safe withdrawal rate, especially if your portfolio is internationally diversified, doesn’t reflect what the next few decades may bring.

The nature of safe withdrawal rates is straightforward: they’re built to survive the worst-case scenarios, not the easy ones. They won’t adapt to the world you’ll actually retire in — but you can adjust your rate.

Test flexible withdrawal strategies with our free Retirement Withdrawal Calculator today and see how your plan holds up.

Further Resources to Answer: What Is a Safe Withdrawal Rate in Retirement?

To help you dig deeper and answer this post’s question “What Is a Safe Withdrawal Rate in Retirement?”, here are the most credible research papers, expert analyses, and FIRE community insights that shaped this guide:

• William Bengen’s original 1994 article “Determining Withdrawal Rates Using Historical Data” (Journal of Financial Planning 7, 4 (October): 171-180)
• Bengen’s 2004 paper
• Bengen’s 2020 article
• Bengen’s 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More,” he introduces the 4.7% “SAFEMAX
• “The Trinity Study”: Philip Cooley, Carl Hubbard, Daniel Walz 1998 article “Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable” AAII Journal. 10 (3): 16–21.
• Trinity study update discussions
• Michael Kitces papers
• Wade Pfau’s 2010 paper “An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?” (Journal of Financial Planning 23, 12 (December): 52-61)
• Pfau’s 2011 paper “Retirement Withdrawal Rates and Portfolio Success Rates: What Can the Historical Record Teach Us?”
• Stanford University 2008 paper
• Scott Cederburg et al. (2022) –”The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets”
• Scott Cederburg et al. (2025) –”Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice”
• Benjamin Felix–”The 2.7% Rule: Rethinking Safe Retirement Spending”
• Todd Tresidder’s article “Are Safe Withdrawal Rates Really Safe?”
  

Your path to financial independence starts with one number — your safe withdrawal rate. Start your journey to financial freedom with our free Retirement Withdrawal Strategy Calculator today.

If today’s post gave you a new idea for your financial journey, stay connected by subscribing to our newsletter below, and share your thoughts in the comments — I’d love to hear from you!

What is Coast FI really about? — it’s the point where financial freedom starts to feel real. Imagine front-loading your investments so your retirement account is already funded early. From that moment on, you could stop contributing, work less, and simply coast toward financial independence with a job you truly enjoy — one that gives you real work-life balance.

My husband and I are just months away from reaching our own Coast FI milestone. No matter what happens next, I know our retirement is secure.

And that feeling? It’s incredible. It gives me the freedom to make career and life decisions based on what truly matters — without financial fear — and the peace of mind that our future is taken care of.

You can experience that same freedom too. Let’s see how.

Before We Start – Try It Yourself – Coast FIRE Calculator

Ready to see when you can stop saving and simply let your money grow? Use our FREE Coast FIRE Calculator to find out exactly when your investments can coast toward full financial independence—no extra contributions required.

👉 LAUNCH THE CALCULATOR and discover how close you are to your Coast FI milestone.

The FIRE movement and Coast FI / Coast FIRE

I like to think of Coast FI as one of the most important milestones for anyone pursuing financial independence. But also for everyone who wants to retire at all. Because once you’re there, you will be okay in retirement — financially secure and future-ready. You already took care of closing your personal retirement gap.

If you want to calculate your personal retirement gap, get a copy of our Retirement Gap Calculator to properly run your numbers and avoid overlooking a hole in your retirement plan.

Learning what Coast FI is, early in your journey helps you set realistic expectations for how much you need to save before letting your investments grow on their own.

What Is Coast FI?

So, what is Coast FI really about? It’s the fastest way to a semi-retired lifestyle — but the longest path to full financial independence and retirement (typically at the official retirement age in your 60s). 

Coast FI It highlights the FI part (Financial Independence) while downplaying the RE (Retire Early) aspect of FIRE. Rather than aiming to stop working entirely in your 30s or 40s, you choose to “coast” toward retirement with a fulfilling, low-stress job that supports real work-life balance.

If you understand what is Coast FI, you can better decide whether to focus on early retirement or long-term financial stability.

If you want to learn more about how the semi-retired concept works in general, you can read the post about semi retirement and the secret how to semi retire fast.

How Coast FI Works

Phase 1 – Building Your Coast FI Foundation

In the first phase of your Coast FI journey, the focus is on earning more, saving more, and investing a large share of your income quickly. Yes — this will require some sacrifices. You’ll need to cut back on certain expenses, but only for a few years.

The goal? Reach the point where you have enough in your retirement accounts so that, if left untouched, your investments can grow on their own through compound interest until you hit full financial independence — typically around your 60s.

Truly understanding what Coast FI is really about helps you recognize this first important milestone on your financial independence journey: when your portfolio can coast without additional contributions.

Our free Coast FIRE Calculator (below) shows you exactly when you’ll reach this “enough” point based on your numbers.

Phase 2 – Letting Compound Interest Do the Work

Once you’ve reached your Coast FI number, you don’t start withdrawing from your investments yet. Instead, your portfolio continues to grow in the background — compounding steadily toward your full FIRE number.

I explain more about how to calculate this in the post on the fastest way to retire early with kids.

At this stage, you can truly “coast” into retirement: stop saving, work fewer hours, or switch to a part-time job you enjoy. The pressure to earn more is gone, and you can design a work-life balance that fits your family.

If you’ve been wondering what Coast FI is, this phase is where you’ll start experiencing it — financial freedom without complete retirement.

Benefits Of Coasting To FI

You need to hustle, work full-time (or even two jobs), and pare down only for a couple of years. Then you’ve already self-funded your retirement account and can afford to “coast” toward traditional retirement.

Afterward, the lifestyle benefits are huge. As your savings rate can drop to 0%, you can afford to earn less while maintaining your financial security. You can change your work life without risking your future. From that point on, you only need to earn money to cover living expenses or work toward other financial goals such as paying off debt faster.

As most FIRE followers save 50% or more of their income, they already live on half their earnings — which allows them to “retire” from high-pressure jobs and switch careers earlier. That’s the power of Coast FI — and the freedom that comes with front-loading your savings.

When people understand what Coast FI is, they realize it’s not just about money — it’s about designing a calmer, more intentional lifestyle fast.

Downsides Of Coasting To FI

The biggest risk with Coast FI is that the stock market doesn’t always behave as expected. If returns or inflation differ from your assumptions, your plan might fall behind. That’s why it’s important to check your progress often and adjust your savings when markets change.

You also won’t retire early — work won’t become fully optional. You’ll never reach the same level of time freedom as someone who pursues full FIRE. But that’s not necessarily bad. If you can choose meaningful, low-stress work that fits your life, that’s a privilege in itself.

I took a two-year parental leave and realized how much I missed working, even part-time. Personally, I can’t imagine stopping work entirely in my 40s — at least not now. Understanding what Coast FI is, helped me make peace with this balance.

What Is Coast FI Type 1? (Coast-to-Target FI)

Coast-to-Target FI is a version of Coast FI where you set a specific retirement age, like 55 or 60, instead of waiting for your traditional retirement age. For Coast-to-Target FI, your portfolio needs to be larger to support an earlier retirement date. So you’ll have to save and invest more aggressively upfront and a bit longer — usually for 5–10 years — before you can start coasting to your goal.

When comparing Coast FI to Coast-to-Target FI, the main difference is timing: Coast FI aims for flexibility early on, while Coast-to-Target FI aims for an exact and earlier retirement date.

There’s also Barista-Coast FIRE, which combines Coast FI with the Barista FIRE approach. You can read more in the post about the 13 types of financial independence.

What Is Coast FI Type 2? (Flamingo FIRE)

With Flamingo FIRE, you aim to accumulate 50% of your FIRE number before stopping new investments. You’ll reach semi-FI later than with Coast-to-Target FI, but it shortens your semi-retirement phase to 10 years or less.

After hitting 50% of your goal, you let your portfolio compound until it doubles into your full FIRE number — assuming an average return rate between 7–10%.

We modeled how Flamingo FI could work for us in this blog post, in the section “Semi-FI through Coast FIRE / Flamingo FIRE”. To learn more about its origins, check out the Flamingo FI post written by its creator, Money Flamingo.

Understanding what Coast FI is also helps you see where Flamingo FIRE fits in as another version of coasting that trades a bit more work now for more freedom later.

Is Coast FI The Right (Early) Retirement Strategy For You?

Figuring out if Coast FI is right for you comes down to one simple question: do you want to take the stress out of work as soon as possible without worrying about your financial future? If your answer is yes, Coast FI might be exactly what you need.

If you’d like to explore more after reading this post on what is Coast FI, check out the following content:

• How to Calculate Your Coast FIRE Number (+ Free Coast FI Calculator)
• General FAQs (about semi-retirement)
• How Early Retirement Works vs Semi Retirement
• Semi Retirement: How To Semi Retire In 5-10 Years

Final Thoughts on What Is Coast FI & Why It Matters

Learning what Coast FI is completely changed how I feel about our financial independence journey. It’s not about retiring tomorrow — it’s about creating the freedom to slow down today, knowing my family’s future is already in motion.

If there’s one thing I’ve learned, it’s that peace of mind doesn’t come from constant hustle, but from building a plan that works for you — and letting your money do the heavy lifting.

If today’s post gave you a new idea for your financial journey, stay connected by subscribing to our newsletter below.

What do you find most appealing about Coast FI? Share your thoughts in the comments — I’d love to hear from you!

I don’t just want financial independence someday — I want freedom now. Flamingo FIRE is the turning point that makes it possible. It’s a lifestyle shift that helps our family work less today, enjoy semi-retirement soon, and still stay on track toward full financial independence with only a small delay eventually.

I came to that realization recently using our brand-new Flamingo FIRE Calculator, which Marc just released. Less hustle and more time as a family and for ourselves is exactly what I’m striving for after welcoming our third baby girl a couple of weeks ago.

Here’s how Flamingo FIRE changed everything for us — and how it might change your journey too.

💡 Try It Yourself – Flamingo FIRE Calculator
Before we dive in: are you ready to find out how close you are to reaching 50% of your FIRE goal?
Run your numbers in our FREE Flamingo FIRE Calculator to see when your portfolio can double on its own and carry you to full financial independence.

👉 LAUNCH THE CALCULATOR and visualize your path to Flamingo FIRE.

How Flamingo FIRE Works

50 % of FIRE Number

Flamingo FIRE explained (in simple terms): It’s a variation of Coast FIRE and a semi-retirement strategy that lets you enjoy more freedom long before full FIRE. I cover all 13 types of Financial Independence Retire Early (FIRE) in a full guide on the blog.

Flamingo FIRE encourages you to save 50 % of your FIRE number, then let compounding do the rest. It’s that simple — you work less, live more, and coast to full FIRE within about 5–15 years. The higher your investment returns, the faster you’ll get there. The 5–15 year time frame feels so much more attractive than waiting until age 65+ to eventually achieve full FI.

The Rule of 72 (to Double Your Investments)

This plan follows a simple rule of thumb — the Rule of 72. It shows how long it takes for your investments to double: just divide 72 by your annual return rate.

At a 7% return, that’s about 10 years (72/7 = 10.28 years). So, our investments double in 10 years if the average return is around 7%, and in 5 years if it’s 15% (72/15 = 4.8 years) or in over 14 years if it’s a more conservative 5% rate of return.

If you’d like to explore more variations, check out the post The Shockingly Simple Math Behind Flamingo FI.

The 4 Flamingo FIRE Phases (& Our Family’s Example)

Here’s Flamingo FIRE explained step-by-step, sharing our family’s example as a simple financial independence roadmap.

Accumulation Phase (Inflation-Adjusted)

Save and invest until you’ve reached 50 % of your FIRE number — roughly 12.5× your annual expenses, following the 4 % rule. I talk more about the 4 % Rule (behind your FIRE number) in this post.

👉 Our example: We expect our yearly expenses to be around 48,000 once we achieve full FIRE, inflation-adjusted. That means our Flamingo FIRE point is 600,000, which we hope to reach between age 45–50 (depending on stock market performance). We’ll re-evaluate our numbers as we get closer to reaching our Flamingo FIRE goal.

👉 Inflation-adjusted expenses: Our current 40,000-a-year lifestyle (excluding mortgage payments) is expected to rise to about 48,000 a year by the time we reach full FIRE, based on projected inflation.

Semi-Retirement Phase

Stop saving for investments and start working less while your portfolio continues to grow. We plan to reduce our workload after hitting 50 % of our FIRE number around age 45–50. Meanwhile, our nest egg will hopefully keep compounding quietly in the background while we cover daily costs through part-time income or passion projects or both. In short, we get the freedom to take more risks with our careers.

For us, the full FIRE number is about 1,200,000, meaning we need 600,000 (our Flamingo FIRE number) before we can stop investing based on our expected yearly expenses of 48,000 in FIRE. With a 15 % average return, those investments could double in around 5 years (see above the Rule of 72).

I’m sharing our semi-retirement plan here — one we’ll happily adjust if it ever stops serving our family. But for now, this is where we stand on our journey. (So far, our returns have averaged 20–30 % with these safest index funds.)

Financial Independence

When investments have doubled naturally, we’ll reach financial independence — around age 50 at the earliest (with a 15 % average return and a nest egg of 600,000 at age 45) or age 60 at the latest (with a 5 % average return and/or a smaller nest egg at age 45). In other words, about 5–15 years after we semi-retire, we expect to reach full FIRE.

At that point (age 50-60), work becomes optional. We could start living off our portfolio using one of the Top 4 Early Retirement Withdrawal Strategies, or we could let our investments grow further and continue working.

Traditional Retirement

Once officially retired, it’s possible to enjoy a higher withdrawal rate and greater passive income for comfort if we haven’t started withdrawing yet. Flamingo FIRE gives us the freedom to choose.

FREE Flamingo FIRE Calculator

How to Calculate Your Flamingo FIRE Number

Here’s the basic formula to calculate your Flamingo FIRE number:
FIRE number ÷ 2

If you want to know exactly how to calculate Flamingo FIRE for your family, we offer a free FIRE Calculator (to find your full FIRE number) and a free Flamingo FIRE Calculator (to determine your Flamingo FIRE number, inflation-adjusted, and map out your freedom journey).

Both numbers — your FIRE number and Flamingo FIRE number — depend heavily on your chosen withdrawal rate and the inflation rate.
If you’d like to explore different scenarios and test various withdrawal rate strategies, try our free Retirement Withdrawal Strategy Calculator.

Using Inflation-Adjusted Returns

Instead of using inflation-adjusted expenses, you can also apply inflation-adjusted returns for a quick overview of your numbers. Assuming an average 7 % return after inflation (based on 10 % annual returns and 3 % inflation) gives you roughly the same result.

In simple terms, your FI number is a moving target. Whether you plan with inflation-adjusted returns or expenses, always track your real results in nominal terms.

The Benefits of Flamingo FIRE: A Lifestyle of Freedom and Balance

Earlier Freedom

Reaching semi-retirement once you’ve hit 50 % of your FIRE number means you can stop aggressive saving and investing years earlier compared to traditional FIRE, which requires reaching 100 % of your FIRE number.

Early Retirement Still Possible

By letting your investments compound into your full FIRE number within 5–15 years, you can still enjoy early retirement — depending on your age, savings rate, and overall market performance.

Full Financial Independence

Since Flamingo FIRE is a variation of Coast FIRE, the end goal of both semi-retirement strategies is the same: to achieve full financial independence one day. That’s incredibly important to me, and I believe many others on the FIRE journey feel the same way.

Smooth Transition

You’re not jumping from 100 % work to 0 %. Flamingo FIRE gives you time to adjust. Many early retirees keep working or earning some income — yet almost no one actually plans for it. With Flamingo FIRE and its semi-retirement phase, you do.

Reasonable Savings Rate

Saving around 50 % of your income can help you reach your Flamingo FIRE number in roughly a decade — a far more achievable target for many families than traditional FIRE’s steep requirements.

Our Flamingo FIRE Story

The Freedom to Choose

Flamingo FIRE is a simple FIRE strategy that fits my ideal: achieving full financial independence one day (unlike Barista FIRE, where it’s not the primary goal) but not as late as with Coast FIRE, which targets traditional retirement age.

I don’t want to be semi-retired (working part-time) for decades, as with Coast FIRE, and I don’t feel comfortable withdrawing from my portfolio early, as in Barista FIRE. Also, when you hit Coast FI — as we did — and realize how much smaller that number is compared to your full FI number, it can feel scary to stop saving and investing. Flamingo FIRE just feels a bit more secure when it comes to achieving full FI.

Still, I sense that something is missing in the Flamingo FIRE approach — I can’t quite define what it is yet, but it feels like there’s a missing piece. We’ll see. However, Flamingo FIRE comes very close to what I was searching for.

Before learning about Flamingo FIRE, I was already convinced that I wanted to stop saving and investing once we hit 50 % of our FIRE number — I just didn’t know it was a thing. I assumed both of us would need to work full-time again to achieve it. But we never did, even after starting our financial freedom journey.

And with three little kids at home now, I don’t want full-time work (and daycare) to be part of our early retirement story. It wasn’t until I used Marc’s free Flamingo FIRE Calculator that I realized: part-time work until we reach 50 % of our FIRE number is enough.

What a relief — that insight changed everything. It showed us that we can live the daily life we want, spend more time as a family, and still become a financial freedom family while always working part-time. Marc’s Flamingo FIRE Calculator truly gave us choice, time, and peace.

Our Financial Situation

We’re a couple turned 40 with three little bundles of joy and a home mortgage of just over 400,000. Over the past five years of our family FIRE journey, we’ve paid off more than 160,000 of that mortgage and built a stock portfolio worth over 150,000 — all while working part-time, taking parental leave, and making memories as a family.

That was possible because we’ve managed to always save 40–60 % of our income, depending on the season of life. Our semi-retirement strategy is to continue working part-time until age 45–50, reaching 50 % of our full FIRE number by then, becoming debt-free and entering semi-retirement. What will we do then? We have plenty of ideas — but we’ll see when we get there.

Realizing that we only need to work part-time to save half of our FIRE number has made financial freedom feel much closer, and we’re grateful to enjoy more time with our kids while building the life we want today.

Why Flamingo FIRE Works (for Families)

Flamingo FIRE is a simple FIRE plan that works especially well for families who value time together over chasing higher income.

It’s about creating family financial independence step by step — balancing flexibility and financial stability. This semi-retirement family approach allows parents to spend more time with their kids, reduce stress, and still build long-term wealth.

By working part-time and letting investments grow in the background, you gain freedom now and the security of full independence later — without the burnout.

FAQs on Flamingo FIRE

Flamingo FIRE taught us that financial freedom is about choosing how to spend your time. It doesn’t have to wait until retirement — it can start right now. By living intentionally and letting investments grow in the background, we found more balance and joy along the way.

👉Discover how our free Flamingo FIRE Calculator can help you find your own Flamingo FIRE number and ideal path so your family can enjoy a balanced, semi-retired life sooner.

🚀 Now it’s your turn: What would your life look like if you reached Flamingo FIRE? Drop it in the comments to inspire others!

👉 Subscribe if you’ve found inspiration and don’t want to miss any more resources, or content we’re about to share. Join the community via the green footer below.

Title image source: Vicko Mozara on Unsplash