The capital you need for financial independence (FIRE) is your annual expenses divided by your safe withdrawal rate — under the 4% rule, simply annual spending times 25 (the rule of 25). Example: spending 12,000 ₪ a month (144,000 ₪ a year) means a target of 3,600,000 ₪; starting from 100,000 ₪ and saving 5,000 ₪ a month at a 7% annual return, you reach it in about 22.1 years.
How is it calculated?
The calculator works in two steps. Step one — capital needed: monthly expenses are multiplied by 12 and divided by the safe withdrawal rate (default 4%, i.e. annual spending times 25). Step two — time: it runs your portfolio month by month — current assets grow at the annual return divided by 12, and the monthly savings are added each month — counting the months until the portfolio crosses the required capital.
In the example: 12,000 ₪ a month is 144,000 ₪ a year, and at 4% the capital needed is 3,600,000 ₪. Starting from 100,000 ₪, saving 5,000 ₪ a month and assuming a 7% annual return, you get there in about 22.1 years. Keep in mind: the 4% rule comes from the Trinity study, built on historical US market data, which is why many prefer a more conservative 3–3.5%; all assumptions are illustrative, and past returns do not guarantee future returns.
Frequently asked questions
What is FIRE?
FIRE stands for Financial Independence, Retire Early. The idea: save and invest until your portfolio is large enough to fund your expenses from an annual withdrawal, with no salary needed. Under the 4% rule the target is annual expenses times 25 — for example 3,600,000 ₪ if you spend 12,000 ₪ a month.
Where does the 4% rule come from?
From the US Trinity study, which examined historical stock and bond portfolios and found that an initial withdrawal of 4% a year survived most scenarios over a 30-year retirement. Because the data is American and the past is no guarantee, many prefer a conservative 3–3.5%.
How much money do I need to retire on 12,000 ₪ a month?
12,000 ₪ a month is 144,000 ₪ a year. Under the 4% rule (times 25) the capital needed is 3,600,000 ₪; at a conservative 3.5% withdrawal rate it rises to about 4,100,000 ₪. How long it takes depends on your monthly savings and return — about 22.1 years in the calculator's example.
This calculation is a general estimate for illustration only. It does not constitute tax, pension, or investment advice, nor a substitute for personal advice from a licensed professional, and should not be relied on for decisions.
