Software Engineer FIRE Calculator
Early retirement and financial independence calculator tailored for tech workers modeling RSUs, high savings rates, and aggressive compounding.
The Mathematical Formula
Variable & Parameter Definitions
- Target FIRE Net Worth Total invested wealth required to retire early and live off withdrawals indefinitely.
- SWR (3.25%-3.5%) Safe Withdrawal Rate adjusted for 40 to 50-year early retirement horizons (conservative Trinity Study benchmark).
- Net Vested RSUs Gross Restricted Stock Units vesting annually minus statutory supplemental tax withholding (federal 22%/37% + state + FICA).
- Concentration Risk Factor The risk of holding concentrated company stock; diversified index compounding preserves wealth.
Real-World Worked Scenario: Senior Software Engineer L6 Targeting $100,000 FIRE Budget at Age 38
A 28-year-old tech worker earns $180,000 base salary + $120,000/year vesting RSUs ($300k total comp). With $250k starting capital, they save $110,000/year targeting a $100,000 early retirement budget.
- Target FIRE Capital Needed (at 3.5% SWR for 50-year early retirement): $100,000 ÷ 0.035 = $2,857,143.
- Starting Capital: $250,000 ; Annual Savings: $110,000 (after maxing 401k, mega-backdoor Roth, and taxable brokerage).
- Assumed Diversified Index Return: 7.5% nominal annual return.
- Portfolio Value at Year 10 (Age 38): $250,000 × (1.075)¹⁰ + $110,000 × [ ((1.075)¹⁰ - 1) ÷ 0.075 ] = $515,258 + $1,559,620 = $2,074,878.
- Portfolio Value at Year 13 (Age 41): Reaches $2,950,000 (Surpassing the $2.85M FIRE target).
- Result: Achieves full financial independence and voluntary work optionality in 13 years.
Strategic Insights & Pitfalls to Avoid
- ✓ The RSU Concentration Trap: Never hold more than 10% to 15% of your total net worth in your employer stock. If your company falters, both your paycheck and stock portfolio crash simultaneously.
- ✓ Mega-Backdoor Roth: Take advantage of after-tax 401(k) contributions and in-plan Roth conversions to shelter up to $71,000/year (2026 415(c) limit) into tax-free Roth growth.
- ✓ ACA Healthcare Subsidies: Early retirees can intentionally manage taxable MAGI in early retirement to qualify for generous Affordable Care Act (ACA) health insurance subsidies.
Frequently Asked Questions
How are RSUs taxed when they vest?
RSUs are taxed as ordinary W-2 income based on the fair market value on the exact day they vest, subject to standard federal and state supplemental wage withholding.
Why is a 3.25% to 3.5% withdrawal rate recommended for tech FIRE instead of 4%?
Because early retirees will spend 40 to 55 years in retirement rather than 30 years, lowering the withdrawal rate shields the portfolio from long-term secular bear markets.
How do I access 401(k) funds before age 59½ without penalties?
Tech FIRE retirees use Roth conversion ladders (withdrawing converted principal after 5 years tax-free) or IRS Rule 72(t) Substantially Equal Periodic Payments (SEPP).