🧭 The lifecycle in three phases
The calculator maps your full path from today to the end of life in three sections. During the accumulation phase, monthly savings and compound growth build your wealth. At the FIRE date, you have reached your target capital and stop working. During the withdrawal phase, you live from the portfolio until life expectancy.
Changes to sliders and input fields update the charts, table, tax burden and probabilities immediately. You can also click values and enter them directly.
📈 Accumulation and compound growth
Your capital grows month by month. Each month, the savings amount is added and the whole portfolio earns one twelfth of the annual return. This monthly return on a growing balance is the compound-growth effect that creates a large part of the final wealth.
The expected return is a gross assumption. The ETF cost (TER) is deducted because every fee reduces the return. Inflation is handled separately so you can see real purchasing power: the value of your wealth in today’s euros.
🎯 FIRE target and the 4% rule
You enter your desired withdrawal in today’s purchasing power. To preserve that purchasing power in retirement, the amount is adjusted for inflation up to the FIRE date. At 2% inflation over 25 years, €2,500 today becomes roughly €4,100 per month at retirement. Your target capital is derived from this inflation-adjusted annual withdrawal and your withdrawal rate.
FIRE target = annual withdrawal (at FIRE) ÷ withdrawal rate
Under the classic 4% rule, that is 25 times your annual spending. It comes from the Trinity study and was examined over historical periods of roughly 30 years. You can adjust the rate yourself. A higher rate reduces the required capital; a lower rate is more conservative but takes longer to build. The risk of running out of money depends on your desired withdrawal, not on the rate alone.
🚀 Progress and target marker
The ring and target bar show projected capital relative to the target. If capital exceeds the target, the flag moves inward to show where the target sits relative to the amount reached.
The wealth multiplier shows how many times your contributions have grown. It is ending capital divided by total contributions and shows the effect of compound growth.
Multiplier = ending capital ÷ contributions
A value of three means that every euro contributed has become three euros. The difference is the return gain.
🏖️ The withdrawal phase
From the FIRE date, you withdraw the desired amount in today’s purchasing power and adjust it for inflation. This keeps your real purchasing power constant throughout retirement. The withdrawal rate is used to set your target capital; it does not determine the amount you actually withdraw.
The chart shows three return scenarios at once: Optimistic is two percentage points above your assumption, Realistic uses your assumption and Pessimistic is two points below it. The axis is logarithmic so amounts across several orders of magnitude remain comparable. When a portfolio is empty, the line ends there.
🏛️ German taxation in detail
In Germany, investment income is subject to 25% capital gains tax. A 5.5% solidarity surcharge and, depending on region and denomination, 8% or 9% church tax may be added. Together, that is roughly 26.4% to 27.8% on the taxable gain.
Exemptions by fund type
Depending on the fund type, part of the income is exempt. In Expert mode, you mix several types and the calculator taxes them by weighted allocation.
- Equity funds with at least 51% equities: 30% exempt
- Mixed funds with at least 25% equities: 15% exempt
- Domestic property funds: 60% exempt
- Foreign property funds: 80% exempt
Saver’s allowance
Before applying tax, the calculator deducts the annual saver’s allowance: €1,000 for individuals and €2,000 for jointly assessed couples. It taxes the realised gain as if you sold everything at the FIRE date. Net capital is ending capital after this tax burden.
🎲 The Monte Carlo simulation
The deterministic charts show a smooth average path, but returns vary. The calculator therefore simulates hundreds of possible paths. In each simulation, every year receives a random return centred on your expected return µ with the selected volatility σ.
The scenario fan shows these paths across all phases in today’s real purchasing power. Every value is adjusted for inflation so you can compare it with today’s amounts. The thick lines are percentiles: P10 is the pessimistic edge, with only one in ten paths worse; P50 is the median and P90 the optimistic edge. The vertical line marks your FIRE transition. The real view does not change the risk of running out of money: an empty account remains zero in nominal and real terms.
The same seed produces the same result, so other sliders do not change the existing paths. Click the chart to reroll. More simulations stabilise the result; higher volatility spreads the fan.
🔥 Interpreting the risk of running out of money
A path counts as a failure if the money runs out before the end of life. The percentage rises with a higher desired withdrawal, more volatility and a longer retirement. It falls with higher returns, higher savings and a shorter period.
The default values produce a comparatively high risk. Seven percent is a gross assumption. After inflation, costs and so-called volatility drag, only about 3.6% geometric return remains in real terms. That is barely above the 4% withdrawal. Many paths therefore fail because returns arrive in an unfavourable order.
This is the sequence-of-returns effect. Poor years immediately after retirement are especially damaging because you are withdrawing money while leaving less capital to recover. The 4% rule was studied for 30 years and historically higher real returns, not for 40 years at 3.6% real return.
Ways to reduce the risk
- a more realistic or higher return assumption
- a lower withdrawal rate, such as 3.5% instead of 4%
- a shorter retirement through a later FIRE date
- lower volatility through broader diversification
Note: This calculator is an educational tool, not tax or investment advice. All values are model assumptions. Real returns, taxes and laws change. Past performance is not a guarantee of future results.