FIRE number & the 4% rule
Your FIRE number is the portfolio size that lets you live off your investments instead of a salary. The simple version: annual spending divided by a safe withdrawal rate (SWR). At a 4% SWR, that is 25 times your yearly spending.
Where the 4% comes from
The 4% rule comes from historical studies of US portfolios: withdrawing 4% of your starting portfolio in year one, then adjusting for inflation, rarely ran out over a 30-year retirement. It is a rule of thumb, not a guarantee, and a lower rate (say 3-3.5%) is safer for a very long or early retirement.
Swedish caveats
Two things change the picture in Sweden. Your allmän pension and tjänstepension start later and reduce how much your own portfolio must carry for life, so you often only need to bridge the years until they begin. And sequence risk, a bad run early in retirement, matters more than the average return. Treat the FIRE number as a target to plan around, not a finish line to trust blindly.
Where it shows up
- FIRE
- Withdrawal strategy
- Dashboard
The 4% rule is a planning shortcut, not a law. Long retirements, high fees, or a rough first few years can all break it. Use the FIRE tool to stress-test your own number rather than trusting 25× blindly.