The insight that starts every FIRE journey
The most important insight in personal finance is that your savings rate — not your income — determines when you can retire. Someone earning $60,000 and saving 50% reaches financial independence in the same number of years as someone earning $250,000 and saving 50%, because their expenses (and therefore FIRE number) are proportionally smaller.
This means the path to FIRE is available to almost everyone who can control their expenses — not just high earners. Increasing your savings rate from 20% to 30% doesn't just add a bit of runway; it moves your FIRE date forward by years, because you're saving more AND your FIRE target is smaller.
Frequently asked questions
Why does savings rate determine years to FIRE, not income?
Your savings rate captures both sides of the equation simultaneously. A higher savings rate means: (1) you invest more money each year, growing your portfolio faster; and (2) your annual expenses are lower, so your FIRE number is smaller. A person earning $50,000 and saving 50% reaches FIRE in the same number of years as someone earning $200,000 and saving 50% — because their expenses (and therefore FIRE number) are proportionally smaller too.
What savings rate does the famous table use?
The original savings rate table, popularised by Mr Money Mustache, uses a 5% real return (7% nominal minus ~2% inflation) and a 4% safe withdrawal rate. Starting from $0 invested. At a 50% savings rate, FIRE takes approximately 17 years. At 25%, it's 32 years. At 75%, it's 7 years. The calculator above adds your personalised calculation using your actual return rate and existing investments.
What counts as savings in the savings rate?
For FIRE purposes, savings = income that goes toward investments and wealth building. This includes: regular ETF/share purchases, extra mortgage principal payments (above minimum), super contributions beyond mandatory SGC, and cash savings building toward investment. It excludes mandatory minimum mortgage repayments and mandatory SGC (though you can include super contributions if you're counting those toward FIRE). The key is consistency in what you include.
How can I increase my savings rate?
There are two levers: increase income or decrease expenses. Research consistently shows that reducing expenses has a double benefit for FIRE — it both increases savings AND reduces the FIRE number (you need less to retire). Common high-impact strategies: housing (share, move, downsize), transport (car vs public transit), food (cooking vs eating out), and subscription audits. On the income side: salary negotiation, side income, rental income.
Does this include superannuation in the savings rate?
The personalised calculation in this tool uses your non-super take-home income and expenses, since super has separate contribution rules and access restrictions. Your employer's SGC contributions (12%) and any salary sacrifice effectively boost your real savings rate beyond what's shown here. The FIRE Timeline Calculator models super separately as part of the complete plan.