1. What is the Fat FIRE Pension Calculator?

The Fat FIRE Pension Calculator helps estimate the total pension needed to achieve Financial Independence, Retire Early (FIRE) with a luxurious lifestyle. It calculates the required nest egg based on your annual spending and safe withdrawal rate.

2. How Does the Calculator Work?

The calculator uses the Fat FIRE formula:

Where:

• \( FP \) — Required pension amount ($)
• \( AR \) — Annual requirement or spending ($)
• \( WR \) — Withdrawal rate (decimal)

Explanation: This formula calculates the total investment portfolio needed to support your desired annual spending at your chosen safe withdrawal rate.

3. Importance of Fat FIRE Planning

Details: Proper Fat FIRE planning ensures you can maintain a luxurious lifestyle in retirement without worrying about running out of money. It helps set realistic savings goals and investment targets.

4. Using the Calculator

Tips: Enter your desired annual spending in dollars and your planned withdrawal rate as a decimal (e.g., 0.04 for 4%). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical withdrawal rate for FIRE?
A: The traditional safe withdrawal rate is 4%, but many Fat FIRE proponents use 3-3.5% for added safety with a luxurious lifestyle.

Q2: How does Fat FIRE differ from regular FIRE?
A: Fat FIRE aims for a more luxurious retirement with higher annual spending, while regular FIRE focuses on minimalistic living.

Q3: Should I include inflation in my calculations?
A: Yes, your annual requirement should account for future inflation. Many calculators use real returns (after inflation) for more accurate results.

Q4: What investment return assumptions are built into this?
A: This calculator doesn't make specific return assumptions. The withdrawal rate should be based on your expected portfolio returns after inflation.

Q5: How often should I recalculate my Fat FIRE number?
A: Recalculate annually or whenever your spending goals or financial situation changes significantly.