Early Retirement Calculator
Calculate your path to Financial Independence and Retire Early (FIRE). Factor in future pension income to reduce your target.
Your situation
Future pension income
Reduces how much you need to saveSIPP access from age 57 (from 2028). LISA accessible at 60.
NHS, Teachers, Civil Service, etc.
What is FIRE?
FIRE stands for Financial Independence, Retire Early. It's a movement focused on aggressive saving and investing to achieve financial freedom earlier than traditional retirement age.
The core idea is simple: save enough that your investment returns can cover your living expenses indefinitely, without needing to work for money.
Key Concepts
1. The 4% Rule
A widely-used guideline suggesting you can withdraw 4% of your portfolio annually (adjusted for inflation) with a high probability of not running out of money over a 30-year retirement. This means you need approximately 25× your annual expenses.
Example: £30,000/year spending × 25 = £750,000 target
2. Savings Rate
The percentage of your income that you save and invest. A higher savings rate dramatically reduces the time to FIRE. At 50% savings rate, you can retire in roughly 17 years; at 70%, in about 8.5 years.
3. Coast FIRE
The point at which your current investments will grow to cover your retirement by traditional retirement age, even if you stop adding to them. You still need to cover living expenses, but you no longer need to save for retirement.
4. Bridging Capital
If you retire before accessing pensions, you need capital to "bridge" the gap. This calculator accounts for future pension income, reducing your required FIRE target.
How Pensions Reduce Your FIRE Target
Future pension income significantly reduces how much you need to save in ISAs and GIAs. The calculator works backwards through three retirement phases:
- 1. State Pension Phase (Perpetual): From state pension age onwards, you only need to cover the gap between spending and pension income. At 4% withdrawal, £12k/year state pension saves you ~£300,000 in required capital.
- 2. SIPP/LISA Phase (Interim): From pension access age (57+) to state pension age. You draw at 6% from combined SIPP and GIA, knowing capital only needs to last until state pension starts.
- 3. Pre-Pension Phase: If retiring before 57, you need enough in accessible investments (ISAs/GIA) to bridge to your pension access age at 6% drawdown.
Example: With £30k spending and full state pension, you need ~£450k at state pension age (4% of £18k gap). Working backwards with 6% interim drawdown, you might need ~£600k at SIPP access, and ~£750k in GIA to retire at 50.
Default Assumptions
| Assumption | Default | Notes |
|---|---|---|
| Perpetual Withdrawal Rate | 4% | After state pension starts; based on Trinity Study for sustainable withdrawals |
| Interim Withdrawal Rate | 6% | Before state pension; higher rate acceptable as capital only needs to last until state pension |
| Real Growth Rate | 5% | After-inflation returns; global equities historically return 7% nominal minus ~2% inflation |
| SIPP/LISA Access Age | 57 | Rising from 55 in 2028; LISA accessible at 60 |
| State Pension | 2025/26 rates | Full new state pension ~£11,973/year; subject to triple lock |
Limitations
- • Returns are assumed constant; real markets are volatile
- • Spending is assumed constant; most people spend more early in retirement
- • Tax implications are not modelled (e.g., pension drawdown tax, CGT)
- • State pension ages and amounts may change with future legislation
- • DB pension valuations may differ from simple annual figures
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