Formula
Withdrawal before tax = after-tax spending ÷ (1 − effective tax rate)Fat FIRE number = withdrawal before tax ÷ withdrawal rate How it works
Fat FIRE is financial independence without belt-tightening: a retirement budget that covers a large home, frequent travel, private schooling or generous giving — commonly $100,000 a year or more. The targets are large, usually several million dollars, so it is most common among high earners and business owners.
At these spending levels taxes become a meaningful part of the plan, so this calculator starts from what you want to spend after tax and grosses it up by your effective tax rate on withdrawals. It also defaults to a 3.5% withdrawal rate, since Fat FIRE retirees often want a cushion and may be retired for 40 years or more.
The bar chart shows how your target changes with the withdrawal rate. The line chart shows your path from today, assuming you keep saving the same amount each year.
Taxes in a Fat FIRE plan
Your effective tax rate depends on where your money sits. Roth accounts and the cost basis of taxable investments come out tax-free; long-term capital gains and qualified dividends are taxed at 0%, 15% or 20% federally; traditional 401(k) and IRA withdrawals are taxed as ordinary income. A mix of all three gives you control over how much tax you pay each year.
High spenders should also consider state income tax, the 3.8% net investment income tax above certain thresholds, and how withdrawals affect health insurance subsidies (usually not available at Fat FIRE income levels).
Fat FIRE and concentrated stock
Many people pursuing Fat FIRE have a large share of their wealth in one company's stock from RSUs or a startup. A concentrated position can swing your FIRE date by years in either direction. The RSU FIRE calculator models selling shares as they vest and diversifying.
Frequently asked questions
How much do you need for Fat FIRE?
It depends on your spending. $150,000 a year after tax, with a 15% tax rate and a 3.5% withdrawal rate, needs about $5 million. At 4% with no tax it would be $3.75 million.
What is a good withdrawal rate for Fat FIRE?
Many Fat FIRE planners use 3–3.5% because they expect a long retirement and want room for market downturns. A larger portfolio also makes it easier to cut discretionary spending in bad years.
Is Fat FIRE the same as being rich?
Not quite. It is a lifestyle choice about how much you spend in retirement, not a net-worth threshold. Someone with $3 million and modest spending is regular FIRE; someone with $5 million who spends $200,000 a year may not yet be Fat FIRE.
Should I include my home in my Fat FIRE number?
No — count only investments that can fund withdrawals. Do include the running costs of your home (property tax, insurance, maintenance) in your spending.