Frequently asked questions
Common questions about these calculators, the 4% rule, and how the backtests work.
What is FIRE?+
FIRE stands for Financial Independence, Retire Early. The idea is to save and invest aggressively until your portfolio can cover your living expenses indefinitely, making paid work optional.
What is the 4% rule?+
It's a rule of thumb from research on historical US market returns: if you withdraw 4% of your portfolio in the first year of retirement and adjust that amount for inflation each year after, the portfolio historically lasted at least 30 years in most periods. It implies a target of roughly 25x your annual spending.
Is the 4% rule safe?+
It is a starting point, not a guarantee. It was derived from a specific market and period, assumes a 30-year retirement, and ignores fees and taxes. Retiring into a poor sequence of early returns — as in the mid-1960s — historically broke it. Use the backtest to see how your own plan behaves.
Is my financial data sent anywhere?+
No. Every calculation runs in your browser using JavaScript. Your figures are never transmitted to a server, and we could not see them even if we wanted to.
Where does the historical data come from?+
Annual total returns are compiled from public reference sources — academic datasets for equities and Treasuries, and index publishers for the remaining series. Each series and its range is listed on the backtest page.
Why does adding Gold shorten my backtest?+
A backtest can only cover years where every selected asset has data. Gold's series begins in 1968 and REITs in 1972, so including them truncates the window. The tool tells you which asset is limiting the range.
Why does percentage withdrawal always show ~100% success?+
Because it mathematically cannot fail. If you always withdraw a percentage of the current balance, the withdrawal shrinks as the portfolio shrinks and never fully empties it. The real risk is that your income collapses, which is why we also report worst-case income.
Is this financial advice?+
No. These are general, non-personalised educational tools. They do not know your circumstances and cannot recommend what to do. Please consult a licensed adviser before making decisions.
Related tools
FIRE Calculator
Find out when you'll reach financial independence, based on your savings rate and the 4% rule.
Historical Backtest
Test a portfolio against real historical returns, now with Monte Carlo simulation and dynamic (Guyton-Klinger) withdrawal strategies.
Historical Returns
See the annualized and year-by-year return of any asset class over any period.
Glossary