How to know if you're on track for FIRE
You are on track for FIRE if what you have invested today would, growing on its own at your expected real return, reach your FIRE number by your target date. That threshold is called your Coast FIRE number, and comparing your balance against it is the single most useful check available — everything else is refinement.
If you are below it, the gap is closed by your savings rate, not by picking better funds: the share of your take-home pay you invest sets your timeline more than your returns do.
The three numbers that decide it
Every "am I on track?" question reduces to three inputs. Get these right and the arithmetic is short.
1. Your FIRE number — what you are aiming at
Your FIRE number is your expected annual spending in retirement divided by your withdrawal rate. At the widely used 4% rate that is 25× your annual spending:
FIRE number = annual retirement spending ÷ 0.04
= annual retirement spending × 25
Spending, not income, is the input — which is why two people earning the same amount can have targets that differ by hundreds of thousands. A household spending $40,000 a year needs $1,000,000; one spending $70,000 needs $1,750,000.
The 4% figure comes from research on historical US portfolio survival and is a planning convention, not a guarantee; more recent analyses often argue for something nearer 3.5%. A lower rate raises the target proportionally — at 3.5%, that $40,000 household needs about $1,143,000 instead.
2. Your savings rate — what sets the timeline
Savings rate is the share of take-home pay you invest. It moves your date twice over: it fills the pot faster and it lowers the target, because spending less now usually means needing less later.
Starting from zero, at a 5% real return and a 4% withdrawal rate, the arithmetic runs like this:
| Savings rate | Years to FI | Target (on $100k take-home) |
|---|---|---|
| 10% | 51.3 | $2,250,000 |
| 15% | 42.8 | $2,125,000 |
| 20% | 36.7 | $2,000,000 |
| 25% | 31.9 | $1,875,000 |
| 30% | 28.0 | $1,750,000 |
| 35% | 24.6 | $1,625,000 |
| 40% | 21.6 | $1,500,000 |
| 50% | 16.6 | $1,250,000 |
| 60% | 12.4 | $1,000,000 |
| 70% | 8.8 | $750,000 |
Notice the shape: the first increases buy the most. Going from 10% to 20% removes about fifteen years; going from 60% to 70% removes about four. If you are early in this, small rises in savings rate are worth far more than they feel.
3. Your real return — what you may assume
Only real (after-inflation) returns matter for a plan denominated in today's money. If you assume 7% nominal and 3% inflation, your real return is not 4% but about 3.9%, because the two compound rather than subtract:
real return = (1 + nominal) ÷ (1 + inflation) − 1
= (1.07 ÷ 1.03) − 1 ≈ 0.0388
The difference sounds pedantic and is not: over thirty years it moves the finish line by roughly a year.
The check itself: are you above your Coast number?
Your Coast FIRE number is what you would need invested today for compounding alone to carry you to your FIRE number by your target age:
Coast number = FIRE number ÷ (1 + real return) ^ (years remaining)
A 30-year-old aiming at $1,000,000 by 65, at 5% real, needs about $181,000 invested today — roughly 18% of the target. Cross that line and you could stop investing for retirement entirely and still arrive on time, provided the assumptions hold.
This is the most honest single-number answer to "am I on track", because it is the only one that compares your actual balance to a threshold rather than comparing you to other people.
What "on track" does not mean
Reaching the number is an accumulation test. Staying retired is a different test. Two portfolios with identical average returns can end very differently depending on when the bad years arrive: a poor first decade, while you are withdrawing, does damage that later good years cannot undo. This is sequence-of-returns risk, and no single number detects it — it takes a simulation that runs many possible orderings and reports how often the money lasts.
Two other things a single number hides:
- Your spending will not be flat. A mortgage ending, a child starting or finishing school, one large health year — each moves the target, sometimes by more than a market swing does.
- Tax treatment differs by account and country. A million in a taxable account is not a million in a tax-sheltered one, and withdrawal order changes what you actually get to spend.
A five-minute version
- Add up everything invested for retirement. One number.
- Estimate annual spending in retirement, in today's money. Multiply by 25.
- Divide (2) by
1.05 ^ years to your target age. That is your Coast number. - Compare (1) against (3). Above it: on track without saving another cent. Below it: the shortfall is what your savings rate is for.
- Then check survival, not just arrival — run the plan against many market orderings.
Run it on your own numbers
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