Retirement
The spending multiple
Twenty-five is not a magic number — it is 1 divided by 0.04. At 3.5% the multiple is 28.57 and at 3% it is 33.33.
The Formula
Multiple = 1 / Withdrawal Rate
Twenty-five is not a magic number — it is 1 divided by 0.04. At 3.5% the multiple is 28.57 and at 3% it is 33.33.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| M | Multiple of annual spending needed | multiple | Sensitivity here is severe: moving from 4% to 3% adds more than eight multiples of annual spending. |
What Each Symbol Means
Mmultiple
Multiple of annual spending needed
Sensitivity here is severe: moving from 4% to 3% adds more than eight multiples of annual spending.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate your fire number page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Your FIRE Number, filed under Finance. Every number the guide produces comes from substituting into this one line.