FIRE Calculator Setup in SavePoint

SavePoint includes a FIRE Planning module designed to help you calculate your financial independence number and track progress toward it. Setting it up correctly ensures you get meaningful projections you can actually use for planning.

Here is how to configure the FIRE calculator to match your specific situation.

Accessing FIRE Planning

Navigate to the FIRE Planning section from the main sidebar in SavePoint. The module is organized into sections for inputting your assumptions, running scenarios, and tracking your progress over time.

Before diving into the calculator, spend a few minutes thinking about your assumptions. The quality of your projections depends entirely on the quality of your inputs.

Setting Your Annual Spending Target

The most important input is how much you plan to spend annually in retirement. This drives your entire FIRE number calculation.

Start with your current spending and adjust. If you have been tracking expenses in SavePoint, review your actual spending patterns. Consider what will change in retirement: will you spend more on travel and less on commuting? Will your housing costs change? Will healthcare costs increase?

Be honest rather than optimistic. Underestimating expenses leads to underestimating your FIRE number, which can mean running out of money later.

Entering Your Current Portfolio Value

Input your current investable assets. This includes retirement accounts like 401k plans and IRAs, taxable brokerage accounts, and any other investments you plan to use for retirement income.

Do not include your primary residence unless you plan to sell it and use the proceeds for retirement income. Do not include cash reserves you maintain for emergencies. The FIRE portfolio is money that will generate your retirement income.

SavePoint can pull this information from your account balances if you have already set up account tracking. Make sure your balances are current.

Configuring Return Assumptions

Expected investment returns significantly impact projections. Conservative estimates use lower returns, perhaps 5-6% nominal or 2-3% real (after inflation). Aggressive estimates might assume 7-8% or higher.

Historical stock market returns have averaged around 7% after inflation over very long periods, but individual decades have varied wildly. Using conservative assumptions builds in margin for error.

SavePoint allows you to set return assumptions and run scenarios with different assumptions to see how sensitive your projections are to this variable.

Adding Social Security and Other Income

If you expect Social Security benefits, pension income, or other sources in retirement, input these as separate income streams with their expected start dates and amounts.

Be conservative with Social Security estimates given policy uncertainty. Input the amount and the age you plan to start receiving benefits. SavePoint will factor this into your overall projection.

Running Projections

Once your assumptions are entered, SavePoint calculates your FIRE number and projects when you might reach it based on your current savings rate and expected returns.

The Monte Carlo simulation feature runs thousands of scenarios with varying market returns to give you probability-based projections rather than single-point estimates. A 90% success rate means your money lasted 30 years in 90% of simulated scenarios.

Test different scenarios. What if you spend 10% less? What if you retire two years later? What if returns are lower than expected? Understanding these trade-offs helps you make informed decisions.

Tracking Progress Over Time

As you save and invest, your actual portfolio value changes. Update your balances regularly in SavePoint, and the FIRE module will automatically recalculate your progress.

Watching your progress accelerate as compound growth kicks in can be motivating. Seeing how market fluctuations affect your timeline helps you maintain perspective during volatile periods.

Projections are based on assumptions and do not guarantee future results. Consider consulting a financial advisor for personalized guidance.