What is the recommended Safe Withdrawal Rate for FIRE in India?

A 3% SWR is recommended for conservative planning in India, meaning you need approximately 33.3× your annual expenses. This accounts for higher inflation (5%–7%) and variable market returns compared to US assumptions.

How does the FIRE Calculator handle EPF, PPF, and NPS contributions?

The calculator accepts an optional annual EPF/PPF/NPS contribution input and projects its future value using compound growth with the expected return rate, adding it to the total projected corpus.

What tax considerations does the FIRE Calculator account for?

The calculator uses post-tax returns so users should input net expected returns. Key Indian tax considerations include LTCG on equity at 12.5% above ₹1.25 lakh, LTCG on debt at 20% with indexation, and STCG as per income tax slab.

FIRE Calculator Implementation Guide

A comprehensive guide to understanding FIRE calculations and achieving financial independence in India

Overview

The FIRE (Financial Independence, Retire Early) Calculator is a comprehensive retirement planning tool designed specifically for Indian users. It helps users determine when they can achieve financial independence based on their income, savings, expenses, and investment returns.

📖 For a comprehensive guide on achieving FIRE in India, see the FIRE in India article for detailed strategies.

Core Assumptions

Inflation Impact: Both income and expenses grow with inflation over time
Real Returns: Investment returns are post-tax and adjusted for inflation
Safe Withdrawal Rate (SWR): Default 3% (adjustable for conservative planning in India), meaning you need approximately 33.3× your annual expenses
Indian Tax Considerations: Returns account for LTCG (Long Term Capital Gains) and other tax implications
Compound Growth: All investments grow with compound interest

Updated Parameters for Indian Context

Parameter	US Typical	India Realistic
SWR	4%	2.5%–3.5%
Returns (Equity)	7%–8% real	4%–6% real (after tax)
Inflation	2%–3%	5%–7%
Rainy-day Buffer	Lower	Higher (due to family)

Note: A 3% SWR is recommended for conservative planning in India. Carefully model after-tax and inflation-adjusted returns, and regularly revisit assumptions on expenses and inflation based on personal circumstances.

Required Inputs

Basic Inputs

• Current Age (years): User's current age
• Desired Retirement Age (years): Target age for achieving FIRE
• Monthly Income (₹): Current gross monthly income
• Monthly Expenses (₹): Current average monthly expenses
• Savings Rate (%): Percentage of income saved (auto-calculated: savings/income × 100)
• Expected Return on Investment (%): Annual post-tax returns expected from investments
• Inflation Rate (%): Expected annual inflation (default: 6% for India)
• Current Portfolio Value (₹): Existing investment corpus

Advanced Inputs (Optional)

• EPF/PPF/NPS Annual Contribution (₹/year): Combined annual contributions to Employee Provident Fund, Public Provident Fund, or National Pension System
• Safe Withdrawal Rate (%): Percentage of corpus to withdraw annually post-retirement (default: 3%)

Output Metrics

1. Years to FIRE: Number of years until financial independence is achieved
2. FIRE Corpus Required: Total amount needed at retirement (inflation-adjusted annual expenses ÷ withdrawal rate)
3. Projected Corpus: Expected corpus at target retirement age based on current savings and contributions
4. Corpus Shortfall: Gap between required and projected corpus (if any)
5. Sustainable Monthly Withdrawal: Monthly amount that can be withdrawn indefinitely at the specified withdrawal rate
6. Inflation-Adjusted Withdrawal: Monthly withdrawal amount in today's purchasing power
7. Year-by-Year Projection: Corpus growth vs FIRE target for each year

Financial Calculations

1. Monthly Savings Calculation

Monthly Savings = Monthly Income × (Savings Rate / 100)

2. FIRE Corpus Required

Annual Expense at Retirement = Monthly Expense × 12 × (1 + Inflation Rate)^Years to RetirementFIRE Corpus Required = Annual Expense at Retirement × (100 / Withdrawal Rate)

Example: With a 3% withdrawal rate, you need approximately 33.3× annual expenses.

3. Future Value of Current Portfolio

Portfolio FV = Current Portfolio × (1 + Expected Return)^Years to Retirement

4. Future Value of Monthly Savings (SIP-style)

If Expected Return = 0:Savings FV = Monthly Savings × MonthsElse:Monthly Rate = Expected Return / 12 / 100Months = Years to Retirement × 12Savings FV = Monthly Savings × [((1 + Monthly Rate)^Months - 1) / Monthly Rate] × (1 + Monthly Rate)

5. Future Value of EPF/PPF/NPS (Annual Contributions)

If Expected Return = 0:EPF FV = Annual Contribution × YearsElse:Annual Rate = Expected Return / 100EPF FV = Annual Contribution × [((1 + Annual Rate)^Years - 1) / Annual Rate] × (1 + Annual Rate)

6. Total Projected Corpus

Projected Corpus = Portfolio FV + Savings FV + EPF FV

7. Years to FIRE (Iterative Calculation)

For each year from 0 to Years to Retirement:

1. Calculate corpus at that year2. Calculate inflation-adjusted expenses at that year3. Calculate FIRE target at that year = Expenses × (100 / Withdrawal Rate)4. If corpus ≥ FIRE target, that year is "Years to FIRE"

8. Sustainable Withdrawal

Sustainable Monthly Withdrawal = (Projected Corpus × Withdrawal Rate / 100) / 12

9. Real Withdrawal (Inflation-Adjusted)

Real Monthly Withdrawal = Sustainable Monthly Withdrawal / (1 + Inflation Rate)^Years to Retirement

India-Specific Considerations

EPF (Employee Provident Fund)

• Mandatory for salaried employees
• 12% employee + 12% employer contribution (3.67% goes to EPS)
• Tax-free returns (currently ~8.15% p.a.)
• Withdrawable after 5 years of continuous service

PPF (Public Provident Fund)

• Government-backed long-term savings
• 15-year lock-in period
• Tax-free returns (currently ~7.1% p.a.)
• Section 80C deduction (up to ₹1.5 lakh)

NPS (National Pension System)

• Market-linked pension scheme
• Additional tax benefit under Section 80CCD(1B) (₹50,000)
• Partial withdrawal at retirement (60% tax-free, 40% must be annuitized)

Taxation Adjustments

• LTCG on Equity: 12.5% on gains above ₹1.25 lakh per year
• LTCG on Debt: 20% with indexation benefit
• STCG: As per income tax slab
• The calculator uses post-tax returns, so users should input net expected returns

Important Disclaimer

This calculator is for educational and planning purposes only
Past performance does not guarantee future returns
Market conditions, inflation rates, and tax laws can change significantly
Individual circumstances vary greatly - consider your personal risk tolerance and goals
Regularly review and adjust your assumptions based on changing life circumstances
Consult with a qualified financial advisor or Certified Financial Planner (CFP) for personalized advice
This tool does not account for major life events, healthcare costs, or emergency expenses