My number: How much do I need to fatfire?
Determining my fatFIRE number to retire by 50
My goals are pretty simple. I love my job, but at the end of the day I don’t want to be “working” forever and at some point I’d like to stop my day job and -as I love to say- start “managing my own affairs”. Invest in real estate, work on the blog, have some hobbies, volunteer, see the sights and travel and enjoy life while I am still young enough to enjoy it.
But, like many on the personal finance interwebs these days, I’d like to retire in style, or FatFIRE. I don’t want to be pinching pennies and worrying about whether or not social security is going to be there when I retire. In short, I want to have my cake and eat it too.
How much will my net worth need to be at 50 to support me?
My goal is to have at least $150,000 in income on an inflation adjusted basis by the time I am 50, which means at a 4% withdrawal rate I will need to have around $4,000,000 by 50. Ouch.
The problem with having your cake and eating it too is that you need to sacrifice something to get there in the form of savings. And, as you will see below, it requires a super high income as well. I truthfully believe these numbers are attainable if you choose your career right and invest in yourself so you get promoted. But, to be honest most people will also need some sort of side hustle to meet the upper end of the income range toward the bottom of the chart. If not, then it is still possible to FatFIRE if you are able to save more than what you see below.
Fatfire number calculator: See how much you need to retire
Here are the assumptions that I used to make the chart below. I am expecting a 7% rate of return, which is relatively high especially considering that it doesn’t include inflation. But, historically an aggressive portfolio could reach that number. The savings rates I used here are relatively conservative and could be boosted by those who are more aggressive than myself. It starts at 10%, assuming that it is hard to save when you are young and poor, but quickly ratchets up to 20% by 35. That 20% number DOES NOT include a full 401(k) contribution, which I have broken out separately. Keep in mind that number will increase over time, but I am lazy so I didn’t include those increases here.
Average Liquid Net Worth Needed to FatFire by 50
I know everyone will be mad about the income numbers. I think they are more than reachable and plan on exceeding them myself. I am not that smart, so I am reasonably confident anyone with a bachelors or more who is willing to work in tech or medicine or law will be able to hit those numbers. If not, then there are always side hustles, entrepreneurship, consulting, whatever.
If you still don’t feel those income numbers are possible, it’s actually ok. Just save more. If you can’t save more, and you’re not willing to start a side hustle or work to get a raise and advance your career, or start your own business, that’s fine too! FatFIRE just isn’t for you.
But, if you are willing to put in the effort and feel the goal is worth the trouble, then it isn’t too hard to get started.
What’s the best way to get started on your own FatFire journey?
Although it may seem daunting, it’s actually quite easy to get started on your own FatFire journey. There are tons of free tools like Personal Capital that you can use to understand what you have currently, plan your saving for the future, and model your retirement plans to maximize your potential future income. You can see the Personal Capital retirement planner below - give it a try today to see your own!