Financial Independence, Retire Early sounds like it is only for Silicon Valley engineers. It is not. With a median US household income of $74,580, retiring by 45 is achievable — but requires a specific, mathematical approach.
The FIRE formula
FIRE Number = Annual Expenses x 25
If you spend $45,000/year, you need $1,125,000 invested. At a 4% safe withdrawal rate, that portfolio supports your lifestyle indefinitely.
The savings rate is everything
| Savings rate | Years to FIRE (from zero) |
|---|---|
| 10% | 51 years |
| 25% | 32 years |
| 40% | 22 years |
| 50% | 17 years |
| 60% | 12 years |
| 70% | 8 years |
To retire at 45 starting at 25, you need roughly 20 years — meaning a savings rate of around 40-45% consistently, assuming a 7% annual return.
The realistic path on median income
Starting at 25 with $0 saved, earning $74,580: Save and invest 40% = $29,832/year. Annual expenses = $44,748. FIRE number = $1,118,700. At 7% average market return: retire at approximately age 46.
How to achieve 40% savings on median income
Housing under 20% of gross income via house-hacking, lower cost-of-living areas, or multi-year savings sprints.
No car payments — buy reliable used vehicles with cash. Transport under 10% of income.
Low-cost index funds — Vanguard, Fidelity ZERO funds. Expense ratios compound over 20 years.
Plug your numbers into our FIRE Calculator to get your personal FIRE number and target retirement date.
Test a withdrawal rate against your own savings with the Retirement Withdrawal Calculator. Try it free →