Scenario Planning & Logistics

Early Retirement (FIRE) "Drawdown Strategy" Simulator (Roth/Traditional Logic)

Model your path to Financial Independence, Retire Early (FIRE) by simulating your savings rate, investment growth, and safe withdrawal rate.

Retirement Simulation
Success (Survived 40 years)
Ending Portfolio Balance$2,442,168
Initial Withdrawal Rate4%
Final Year Expenses (Inflated)$126,681

Calculated locally in your browser. Fast, secure, and private.

Simulating the FIRE Movement

The Financial Independence, Retire Early (FIRE) movement relies heavily on the famous "4% Rule"—the idea that you can withdraw 4% of your total investment portfolio in year one, adjust that withdrawal for inflation annually, and never run out of money over a 30-year period.

However, retiring in your 30s or 40s means your portfolio doesn't just need to survive 30 years; it needs to survive 40 to 50 years of market volatility.

The Drawdown Simulation Mechanics

This simulator tests the absolute durability of your starting portfolio against your expected annual lifestyle expenses. It runs a rigorous year-over-year simulation that:

  1. Deducts your annual expenses from your balance.
  2. Compounds the remaining balance by your expected market return.
  3. Inflates your required expenses for the following year based on your projected inflation rate.

It determines exactly which year your portfolio hits zero, letting you know if your money will successfully outlive you.

The Mathematical Formula

To calculate this scenario accurately, the following formula is applied:

Bt=(Bt−1−Et−1)(1+r)whereEt=Et−1(1+i)\begin{aligned} B_t = (B_{t-1} - E_{t-1})(1 + r) \quad \text{where} \quad E_t = E_{t-1}(1 + i) \end{aligned}

Where:
BtB_t=
Portfolio Balance at Year t
EtE_t=
Expenses at Year t
r=
Portfolio Growth Rate
i=
Inflation Rate

Frequently Asked Questions

A financial rule of thumb originating from the Trinity Study. It found that a retirement portfolio composed of 50% stocks and 50% bonds could sustain a 4% inflation-adjusted withdrawal rate for 30 years without running out of money in almost every historical market scenario.

It is highly debated. Because early retirees need their money to last 40-50 years rather than 30, many conservative FIRE practitioners aim for a 3.25% or 3.5% initial withdrawal rate to insulate against prolonged market downturns.

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