Two Paths to Your FIRE Corpus
- Kaushik Sarkar
- Jul 1
- 2 min read
Objective:
Goal: Build enough wealth by 45 so that you never have to work for money again
Approach: Save & invest wisely for 22 years (time in hand) → Create a self-sustaining
wealth engine
Core Concept: Live off your investments with a 3–4% Safe Withdrawal Rate (SWR)
✅ STEP 1: Estimate Future Expenses at Age 45
Formula: Estimate Future Expense (EFE) = Current Annual Expenses x (1 + Annual Rate Of Inflation)^ No. Of Years to Retire
Let’s assume current lifestyle expenses = ₹50,000/month (₹6 lakh/year)
Annual Rate Of Inflation: 6%
No. Of Years to retire/ time in hand: 22 years
Estimated Future Expense at 45 = ₹ 6,00,000 × (1+ 0.06)^22 ≈ ₹21.62 lakh per year
✅ STEP 2: Calculate FIRE Corpus at Age 45
Two Models to Calculate Your FIRE Corpus
📘 1. SWR (Safe Withdrawal Rate)-Based Model (Traditional)
This model assumes your investments continue to grow post-retirement, and you withdraw a safe % every year.
Formula: Corpus Required = Annual Expense / Safe Withdrawal Rate (SWR)
Therefore: ₹ 21.62 lakh ÷ 0.035 = ₹ 6.18 crore (Assumes 3.5% SWR and portfolio growth)
🔐2 Years-Based Corpus Model (Capital Depletion, Ultra-Conservative)
This model assumes:
You don’t depend on market returns after retirement
You simply withdraw a fixed annual amount for X years
Formula:
Corpus Required = Annual Expense × Number of Years After Retirement
Therefore: ₹ 21.62 lakh × 45 years = ₹9.73 crore (For retirement at 45, life expectancy 90)
Years-Based Model can be used If:
✅ You want zero market dependency post-retirement
✅ You value certainty over optimization
✅ You want to leave no room for failure in your plan
✅ You want a simple, “peace-of-mind” number to aim for
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