Hitting my Work Optional Date!

I discovered accidentally that we had hit our  FIRE number in May 2022.  FIRE stands for Financial Independence, Retire Early, and it has a considerable following, especially among millennials and GenXers. The main idea is to save aggressively when you’re young (usually 50% or more of your income), so you can retire early.  

At the time, I was still working, and whenever I was frustrated with work (which was fairly often), I started fantasizing about quitting, or at least not needing to collect a paycheque from affording my lifestyle. I found an online FIRE calculator, plugged in our numbers, and sat in shock, realizing that we were already ‘work optional’. 

I should mention that while I knew we were getting close to financial independence, I had underestimated the growth in our real estate and investment portfolios, both of which boosted our net worth quite a bit. 

So, how can you calculate your FIRE number?

In very simplistic terms, many people can aim for $1M as a starting FIRE target. There are a bunch of caveats related to lifestyle and spending habits, but if you can imagine a future where you consume less, then $1M is a decent place to start.  

Like many people, you’re likely thinking, BUT I DON’T HAVE A MILLION DOLLARS! 

Here’s where your net worth comes into play. 

Your net worth is your assets minus your liabilities. There are a ton of online calculators, but here’s one that I like as it also provides you a comparison against your province and your age group. 

The important thing to note here is that even if you’re not there yet, you have a ton of agency to get on track toward a much better future.

So net worth is one calculation that’s helpful, but it’s only part of the equation for your FIRE target. Technically, your FIRE target is different from your net worth because you should be able to fund your lifestyle based on your various (ideally passive) income streams. Some ways to do this would be drawing down your savings, living off of rental income, or earning income via passion projects/side hustle income.

A key consideration with the calculations below is that even if you can’t imagine ever being able to hit your FIRE number, there are a number of life hacks that can help you attain financial independence in just a few years. These range from extreme saving, flipping, supplementing your income with side jobs, or working remotely in a country that has a low cost of living.

Getting started with your FIRE number: 3 quick calculations

Here are a couple of ways to calculate your FIRE target: 

  1. 25 X or 4% Safe Withdrawal Rate: Think of this as a quick and easy method if you plan to wait until you’re 55 or over. Multiply your target retirement salary by 25. As a rule of thumb, many people use 70% of their current income as a baseline for retirement. However, you can actually live on much less if you choose a cheaper country to live in where your money will go further. The 4% safe withdrawal rate (SWR) is research-based and shows that you’re very unlikely to run out of money, assuming you’re mostly invested in stocks. This means that $1M will generate $40K in retirement earnings per year. If your annual income expectations are higher than that, you might want to consider strategies to make your money stretch either by reducing costs (downsizing or even living abroad in a cheaper country ) or supplementing your income (through rental income or part-time work). 

40,000 X 25 = $1,000,000

40,000 / .04 = $1,000,000

  1. If you are thinking about retiring earlier than 55, you’ll likely need to look at a withdrawal rate below 4%. Variables like inflation, lower portfolio performance, higher-than-expected living costs, and longer living longer can erode your savings faster than expected. Some additional safe withdrawal rates are 3% and 3.5%, both of which should ensure you don’t run out of money. 

Sample SWR for $40K 

3% SWR: $40,000 / .03 = $1.3 M

3.5% SWR: $40,000 / .035 = $1.14 M 

Sample SWR for $30K 

3% SWR: $30,000 / 0.3 = $1 M

3.5% SWR: $30,000 / .035 = $857 K 

If these numbers still seem out of reach, simple shifts like supplementing your income with a side hustle, part-time work, or real estate income can dramatically reduce your FIRE target. 

For example, let’s say you will rent out your principal residence for 50% of the year generating $1200 / month which equates to $14,400 per year.   In this example, you can either rent out part of your home and continue living in it OR rent out the entire home and use the income to offset travel for half the year. If this doesn’t make sense to you for some reason, substitute the idea of part-time work or a side hustle. 

  1. $40,000 Annual Income Scenario

$40,000- $14,400 = $25,600 

This means that instead of needing to fund $40K, you only need to fund $25,600.

3.5% SWR: $25,600 / .035 = $731 K. You need just over $750K to retire.

  1. $30,000 Annual Income Scenario  

$30,000 – $14,400 = $15,600 

Instead of needing to fund $30K, you only need to fund $15,600.

3.5% SWR: $15,600 / .035 = $445,714. You need $450K to retire.  

So, while I mentioned above that a general rule of thumb is to have 1 million dollars, you can easily bring that down to $400K with simple life hacks. 

  1. Interactive calculators: What I can tell you is that the above two calculations work pretty well. Personally, I like to err on the side of the conservative and use a 3.5% SWR. But I also really like to geek out with numbers and see the impact of different scenarios on my money. Here is my favourite interactive calculator which I like because it allows you to play with the numbers like your retirement spending and asset allocation. 

Well folks, there you have it. I’ve shared three ways to calculate your FIRE target. Hit me up below if you’ve got any questions or comments! 


  1. Where were you when I was in my 40’s? Oh ya…just a kid. My dad, your grandpa was very financially wise as experience from the depression taught them. He always said pay yourself first and only pay cash for items you really need not just want. Since neither Rob or I had significant pension plans ( mine was a bit from college and some from 4 years in long term care) we always had a savings account that we faithfully contributed to. It did not mean we could retire early but could semi retire yes..or I could not worry if I worked part time.
    I love your passion for travel and know David and Christine share this as well. My one regret is not to have travelled more…need to when you are young and healthy. So go girl!

    Decided to start reading your great blog information. Had friends in for dinner last night and Holly is interested in mindfulness so wanted your website info. I’m so proud of you and Steve.

    • Hey, Donna. Thanks for the great words. Keep checking the site as we continue to add new and interesting posts, Make sure to check out our Youtube page to see how our journey is going.

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