Calculate your FIRE number for early retirement in India. Learn the 25x rule, adjust for Indian inflation, and find out how much corpus you really need to retire at 40 or 45.
FIRE—Financial Independence, Retire Early—is gaining momentum in India. But how much money do you actually need to never work again? That magic number is your FIRE Number.
Here's how to calculate it for Indian conditions.
What is Your FIRE Number?
Your FIRE Number is the total corpus you need to sustain your lifestyle indefinitely without working.
The Basic Formula:
FIRE Number = Annual Expenses × 25
This comes from the famous 4% Rule: if you withdraw only 4% of your corpus annually, it should last 30+ years.
| Monthly Expenses |
Annual Expenses |
FIRE Number (25×) |
| ₹50,000 |
₹6 lakh |
₹1.5 crore |
| ₹75,000 |
₹9 lakh |
₹2.25 crore |
| ₹1 lakh |
₹12 lakh |
₹3 crore |
| ₹1.5 lakh |
₹18 lakh |
₹4.5 crore |
| ₹2 lakh |
₹24 lakh |
₹6 crore |
Calculate your retirement corpus: Use our Retirement Calculator.
The 4% Rule: Does It Work in India?
The 4% rule was developed by William Bengen in 1994 using US market data. India has different conditions:
India-Specific Adjustments
| Factor |
US |
India |
Impact |
| Inflation |
2-3% |
5-7% |
Need larger corpus |
| Equity returns |
7-10% |
10-14% |
Helps offset inflation |
| Healthcare costs |
High (insurance) |
Lower but rising |
Factor in medical inflation |
| Social security |
Available |
Limited |
Need self-sufficiency |
Recommended Safe Withdrawal Rate for India
| Approach |
Withdrawal Rate |
Multiplier |
Risk Level |
| Aggressive |
4% |
25× |
Higher risk in volatile years |
| Moderate |
3.5% |
28-29× |
Balanced |
| Conservative |
3% |
33× |
Very safe, larger corpus needed |
For India, 3-3.5% is safer due to higher inflation.
Types of FIRE
Lean FIRE
| Aspect |
Details |
| Philosophy |
Extreme frugality, minimalist lifestyle |
| Monthly expenses |
₹30,000-50,000 |
| FIRE Number |
₹90 lakh - ₹1.5 crore |
| Best for |
Single individuals, low-cost cities |
Regular FIRE
| Aspect |
Details |
| Philosophy |
Comfortable middle-class lifestyle |
| Monthly expenses |
₹75,000-1,25,000 |
| FIRE Number |
₹2.25 - ₹3.75 crore |
| Best for |
Most Indian families |
Fat FIRE
| Aspect |
Details |
| Philosophy |
Luxury lifestyle, no compromises |
| Monthly expenses |
₹2-5 lakh |
| FIRE Number |
₹6 - ₹15 crore |
| Best for |
High earners, metro city lifestyle |
Coast FIRE
| Aspect |
Details |
| Philosophy |
Save aggressively early, then "coast" |
| How it works |
Build enough corpus that compounds to FIRE number by 60 |
| Advantage |
Can take lower-paying jobs, work part-time |
| Best for |
Those who want work flexibility, not full retirement |
Barista FIRE
| Aspect |
Details |
| Philosophy |
Partial retirement with part-time income |
| How it works |
Smaller corpus + income from enjoyable work |
| Advantage |
Lower savings requirement |
| Best for |
Those who want to work on passion projects |
Calculating Your FIRE Number (India-Adjusted)
Step 1: Calculate Current Annual Expenses
| Category |
Typical Monthly |
Annual |
| Housing (rent/EMI) |
₹25,000-50,000 |
₹3-6 lakh |
| Groceries & food |
₹15,000-25,000 |
₹1.8-3 lakh |
| Utilities |
₹5,000-10,000 |
₹60K-1.2 lakh |
| Transportation |
₹5,000-15,000 |
₹60K-1.8 lakh |
| Healthcare |
₹5,000-10,000 |
₹60K-1.2 lakh |
| Insurance |
₹3,000-10,000 |
₹36K-1.2 lakh |
| Entertainment |
₹5,000-15,000 |
₹60K-1.8 lakh |
| Misc & buffer |
₹10,000-20,000 |
₹1.2-2.4 lakh |
| Total |
₹73,000-1,55,000 |
₹8.8-18.6 lakh |
Step 2: Adjust for Inflation
Your expenses will increase over time. Factor in inflation until retirement.
| Current Expense |
Years to FIRE |
Inflation (6%) |
Future Expense |
| ₹1 lakh/month |
10 years |
6% |
₹1.79 lakh/month |
| ₹1 lakh/month |
15 years |
6% |
₹2.40 lakh/month |
| ₹1 lakh/month |
20 years |
6% |
₹3.21 lakh/month |
Step 3: Calculate Corpus Needed
Inflation-Adjusted FIRE Number = Future Annual Expenses × 28 (using 3.5% SWR)
| Current Monthly |
Years to FIRE |
Future Monthly |
FIRE Number |
| ₹75,000 |
10 |
₹1.34 lakh |
₹4.5 crore |
| ₹75,000 |
15 |
₹1.80 lakh |
₹6 crore |
| ₹1 lakh |
10 |
₹1.79 lakh |
₹6 crore |
| ₹1 lakh |
15 |
₹2.40 lakh |
₹8 crore |
| ₹1.5 lakh |
10 |
₹2.69 lakh |
₹9 crore |
FIRE Number by City
Living costs vary dramatically across India:
| City |
Lifestyle |
Monthly Expenses |
FIRE Number (28×) |
| Tier 3 city |
Comfortable |
₹40,000 |
₹1.35 crore |
| Tier 2 city |
Comfortable |
₹60,000 |
₹2 crore |
| Bangalore |
Middle-class |
₹1 lakh |
₹3.4 crore |
| Mumbai |
Middle-class |
₹1.25 lakh |
₹4.2 crore |
| Delhi NCR |
Middle-class |
₹1.1 lakh |
₹3.7 crore |
| Mumbai |
Upper middle |
₹2 lakh |
₹6.7 crore |
Geographic arbitrage: Many FIRE enthusiasts move to lower-cost cities to reduce their FIRE number.
How to Reach Your FIRE Number
The Savings Rate Matters Most
| Savings Rate |
Years to FIRE* |
| 10% |
51 years |
| 20% |
37 years |
| 30% |
28 years |
| 40% |
22 years |
| 50% |
17 years |
| 60% |
12.5 years |
| 70% |
8.5 years |
*Assuming 7% real returns (returns minus inflation)
To retire early, you need a savings rate of 50%+
Sample FIRE Journey: ₹3 Crore Target
Starting age: 30, Target FIRE age: 45 (15 years)
| Strategy |
Monthly SIP |
Expected Return |
Corpus at 45 |
| Conservative |
₹75,000 |
10% |
₹3.12 crore |
| Moderate |
₹60,000 |
12% |
₹3.02 crore |
| Aggressive |
₹50,000 |
14% |
₹3.10 crore |
See how delay affects your goal: Use our Cost of Delay Calculator.
FIRE Calculation Example
Profile: 32-Year-Old IT Professional
| Detail |
Value |
| Current age |
32 |
| Target FIRE age |
45 |
| Current monthly expenses |
₹80,000 |
| Current savings |
₹25 lakh |
| Monthly savings capacity |
₹1.2 lakh |
Step-by-Step Calculation
| Step |
Calculation |
Result |
| 1. Future expenses (13 years @ 6%) |
₹80,000 × 2.13 |
₹1.7 lakh/month |
| 2. Annual expenses at 45 |
₹1.7 lakh × 12 |
₹20.4 lakh |
| 3. FIRE Number (28×) |
₹20.4 lakh × 28 |
₹5.7 crore |
| 4. Current savings growth |
₹25 lakh @ 12% for 13 years |
₹1.1 crore |
| 5. Gap to fill |
₹5.7 crore - ₹1.1 crore |
₹4.6 crore |
| 6. Monthly SIP needed |
For ₹4.6 crore in 13 years @ 12% |
₹1.32 lakh |
Result: With ₹1.2 lakh monthly savings, they're close but may need to either:
- Extend target by 1-2 years, or
- Reduce expenses, or
- Increase savings slightly
Post-FIRE: Sustainable Withdrawal Strategy
The Bucket Strategy
| Bucket |
Allocation |
Purpose |
Instruments |
| Bucket 1 |
2 years expenses |
Immediate needs |
Savings, FD, Liquid funds |
| Bucket 2 |
5-7 years expenses |
Medium-term |
Debt funds, Bonds |
| Bucket 3 |
Remaining |
Long-term growth |
Equity, Index funds |
Sample ₹5 Crore Corpus Allocation
| Bucket |
Amount |
Instruments |
Annual Yield |
| Bucket 1 |
₹40 lakh |
FD, Liquid funds |
₹2.8 lakh (7%) |
| Bucket 2 |
₹1 crore |
Debt funds |
₹8 lakh (8%) |
| Bucket 3 |
₹3.6 crore |
Equity/Index |
Growth |
| Withdrawal |
|
|
₹18-20 lakh/year (3.6-4%) |
Tax Planning for FIRE
During Accumulation Phase
| Strategy |
Benefit |
| Max EPF/VPF |
8.25% tax-free returns |
| NPS (80CCD 1B) |
Extra ₹50K deduction |
| ELSS funds |
Tax saving + growth |
| PPF |
Guaranteed, tax-free |
Post-FIRE Income Sources
| Source |
Tax Treatment |
| Equity fund gains (LTCG) |
12.5% above ₹1.25 lakh |
| Debt fund gains |
Slab rate (no indexation benefit now) |
| FD interest |
Slab rate |
| PPF maturity |
Tax-free |
| NPS withdrawal |
60% tax-free |
Tax-Efficient Withdrawal Strategy
| Annual Need |
Strategy |
Tax |
| First ₹2.5 lakh |
Basic exemption |
₹0 |
| Next ₹1.25 lakh |
Equity LTCG (exempt) |
₹0 |
| Next ₹2-3 lakh |
More equity LTCG |
12.5% |
| Remaining |
SWP from debt funds |
Slab rate |
Common FIRE Mistakes
Mistake 1: Underestimating Healthcare Costs
| Age |
Annual Health Insurance |
Medical Expenses |
| 45 |
₹50,000 |
₹20,000 |
| 55 |
₹1 lakh |
₹50,000 |
| 65 |
₹2 lakh |
₹1 lakh |
Solution: Budget 10-15% of expenses for healthcare, increasing with age.
Mistake 2: Ignoring Lifestyle Inflation
| Expense |
At FIRE (45) |
At 55 |
At 65 |
| Travel |
₹2 lakh |
₹3 lakh |
₹1 lakh |
| Healthcare |
₹1 lakh |
₹2 lakh |
₹4 lakh |
| Hobbies |
₹1 lakh |
₹1.5 lakh |
₹1 lakh |
Mistake 3: Using 4% Rule Without Adjustment
| Rule |
Corpus for ₹1L/month |
Risk in India |
| 4% rule |
₹3 crore |
Higher (6-7% inflation) |
| 3.5% rule |
₹3.4 crore |
Moderate |
| 3% rule |
₹4 crore |
Conservative |
Mistake 4: Not Accounting for Big Expenses
| One-Time Expense |
Typical Cost |
When |
| Children's education |
₹20-50 lakh |
Before FIRE |
| Children's marriage |
₹10-30 lakh |
Often post-FIRE |
| Parents' healthcare |
₹10-30 lakh |
Ongoing |
| Home renovation |
₹5-15 lakh |
Every 10-15 years |
Solution: Add these as lump sums on top of your FIRE number.
FIRE Number Checklist
Before declaring FIRE, ensure:
| Checklist Item |
Status |
| Health insurance (₹25L+ cover) |
✓ |
| Term insurance (until kids independent) |
✓ |
| Emergency fund (1 year expenses) |
✓ |
| All loans paid off |
✓ |
| Children's education funded |
✓ |
| Parents' healthcare provision |
✓ |
| Home owned (or rent factored) |
✓ |
| Corpus = 28-33× annual expenses |
✓ |
Real-World FIRE Numbers for India
| Profile |
Monthly Expenses |
FIRE Number |
Achievable By |
| Single, Tier 2 city |
₹40,000 |
₹1.5 crore |
35-40 |
| Couple, no kids, Bangalore |
₹80,000 |
₹3 crore |
40-45 |
| Family with kids, Mumbai |
₹1.5 lakh |
₹5.5 crore |
45-50 |
| Fat FIRE, metro |
₹3 lakh |
₹10 crore |
50+ or high income |
Key Takeaways
| Point |
Details |
| Formula |
Annual Expenses × 25-33 (use 28× for India) |
| Safe withdrawal rate |
3-3.5% for Indian conditions |
| Savings rate needed |
50%+ for early retirement |
| Don't forget |
Healthcare, one-time expenses, inflation |
| Tax efficiency |
Structure withdrawals to minimize tax |
| Flexibility |
Consider Coast FIRE or Barista FIRE |
Calculate your path to FIRE: Use our Retirement Calculator to model your early retirement scenario, and SIP Calculator to plan your monthly investments.
