FIRE
Kalkylator

FIRE stands for Financial Independence, Retire Early. It is a movement and financial strategy focused on aggressive saving and investing so that your portfolio can sustain your living expenses indefinitely – or at least until traditional retirement age. The core idea is to accumulate enough assets that passive income (dividends, capital gains, interest) covers your spending.

FIRE does not necessarily mean stopping work entirely. Many practitioners use it to gain the freedom to choose how they spend their time – whether that means part-time work, passion projects, or full retirement. The key milestone is reaching the point where work becomes optional.

The 4% rule originates from the 1998 Trinity Study, which analysed historical US stock and bond returns to determine a sustainable withdrawal rate. The conclusion: withdrawing 4% of your portfolio in the first year of retirement, then adjusting for inflation each subsequent year, gave a high probability of your money lasting at least 30 years.

To calculate your FIRE number, divide your annual expenses by 0.04. For example, if you need 360 000 kr/year (30 000 kr/month), your target is 9 000 000 kr. The rule assumes a diversified portfolio (typically 50–75% equities) and accounts for sequence-of-returns risk – the danger that poor returns early in retirement can deplete your portfolio faster than average returns would suggest.

Critics note that the Trinity Study was based on US markets, which historically outperformed global averages. A more conservative rate of 3–3.5% may be appropriate for longer retirement periods or international portfolios. For this safe-withdrawal-rate logic to hold, the return you enter in the calculator should be a real (inflation-adjusted) return – subtract expected inflation from your nominal return expectation.

Public pension supplements your FIRE portfolio. Sweden's allmän pension (income pension + premium pension) provides a base income from age 64 (earliest withdrawal age 2026). This means your private savings only need to bridge the gap between early retirement and when the public pension kicks in – potentially reducing your FIRE target significantly.

ISK taxation is favourable for FIRE. The investeringssparkonto (ISK) applies a flat schablon tax instead of capital gains tax: for 2026 the schablonintäkt is 3.55% of the capital base (statslåneränta 2.55% + 1 percentage point), taxed at 30% – an effective drag of about 1.07% per year. From 1 January 2026 the first 300 000 kr is tax-free (shared across all your ISK and kapitalförsäkring accounts), so smaller portfolios pay no ISK tax at all. For long-term growth investing this is typically cheaper than capital gains tax on a traditional account, making ISK the preferred vehicle for FIRE savings in Sweden.

Pension age rules matter. You can start drawing tjänstepension (ITP) from age 55 (though reduced), and allmän pension from 64. The guaranteed pension (garantipension) starts at riktåldern (67). The year after reaching riktåldern the förhöjt grundavdrag kicks in (from age 68), significantly reducing tax on pension income. Planning your FIRE strategy around these ages lets you optimise withdrawals: deplete taxable accounts first, then transition to pension income as it becomes available.

During accumulation, ISK almost always wins. You pay about 1.07% of your total portfolio value per year regardless of performance. With a traditional depåkonto (aktie- och fondkonto), you pay 30% on every realised gain when you sell or rebalance, plus 30% on dividends. Over decades of compounding, ISK's flat drag is cheaper.

During drawdown, depå can win. ISK's schablon is charged on your entire portfolio value. If you have 10 million kr and withdraw 360 000 kr/year, you still pay 1.07% on the full 10M = ~107 000 kr/year in ISK tax. With depå, you only pay 30% on the gain portion of each withdrawal. If half your withdrawal is gains, that's 30% × 180 000 = 54 000 kr – roughly half. The crossover point depends on your portfolio size, gain fraction, and withdrawal amount.

Optimal strategy for Swedish FIRE: accumulate in ISK (lower drag), then consider moving to depå before retirement for drawdown (lower withdrawal taxes). Note: transferring from ISK to depå is a disposal event for ISK purposes (no tax), but you set a new cost basis in the depå. Use the tax modelling toggle above to compare.

Coast FIRE is the point where your existing savings, with zero additional contributions, will grow to your FIRE number by your target retirement age. Once you've reached Coast FIRE, you can "coast" – earn just enough to cover current expenses without needing to save anything further.

For example: if your FIRE number is 9M kr and you want to retire at 55 with a 7% return, the Coast FIRE number at age 30 is 9M ÷ 1.07^25 ≈ 1.66M kr. Once your portfolio hits 1.66M, compound growth does the rest. This unlocks career flexibility years before full FIRE – you could take a lower-paying job you love, go part-time, or start a business without risking your long-term plan.

The order you draw from different accounts matters enormously for tax efficiency. The optimal sequence for Swedish FIRE:

1. ISK up to the tax-free threshold (300 000 kr/person). Withdrawals themselves aren't taxed, and the schablon on amounts under the threshold is zero.

2. Depå for small withdrawals. When the gain fraction is modest, depå taxes are low. Ideal for the early drawdown years when you want to keep the ISK growing tax-efficiently.

3. ISK/Kapitalförsäkring above threshold. Once the tax-free limit is exhausted, the schablon kicks in. Still often cheaper than income tax.

4. The year after riktåldern (from 68): switch to pension accounts. The grundavdrag (basic deduction) increases significantly once you have reached riktåldern at the start of the tax year, making income tax on tjänstepension and privat pension withdrawals much cheaper. Before that, pension withdrawals face full income tax – 30–50% depending on the amount.

5. Allmän pension as baseline. Starts from 64. Delaying to riktåldern means higher monthly payments and lower tax. Every month you delay past your earliest start age increases the payment permanently.

Sequence risk is the danger that poor returns early in retirement can permanently damage your portfolio, even if long-term average returns are fine. Two retirees with identical average returns over 30 years can have wildly different outcomes depending on when the bad years hit.

Example: Retiree A gets -20% in year 1, then +10%/year for 29 years. Retiree B gets +10%/year for 29 years, then -20% in year 30. Same average. But Retiree A's portfolio never recovers because withdrawals ate into a depleted base. Retiree B barely notices because the loss hit a much larger portfolio.

Mitigation strategies: a conservative withdrawal rate (3–3.5%), a cash buffer covering 2–3 years of expenses (to avoid selling during crashes), flexible spending rules (reduce withdrawals after bad years), and the Swedish pension bridge (pension income reduces how much you need to withdraw during vulnerable early years).