How Big Should Your FIRE Corpus Be?

"FIRE" — Financial Independence, Retire Early — has a seductive simplicity: save enough, hit your number, stop working. The trouble is that most people pick their number from a Reddit thread, not their own numbers. Let's build yours properly.

The starting formula: 25X

The popular rule says: corpus = 25 × your annual expenses. It comes from the "4% safe withdrawal rate" — the idea that you can withdraw 4% of your corpus each year, adjusted for inflation, and (historically, in US markets) not run out of money over a 30-year retirement.

Why India needs a bigger multiple

The 4% rule was tested on US market and inflation data. India is a different animal:

• Higher long-term inflation — India has historically run 5-7% vs the US's 2-3%, which erodes a fixed withdrawal faster.
• No universal healthcare safety net — once you leave a job, employer health insurance disappears, and healthcare inflation in India runs well above general inflation.
• Longer retirement horizon — if you retire at 45 instead of 60, your corpus needs to last 40-50 years, not 25-30.

For these reasons, many Indian planners use a 3-3.5% withdrawal rate instead of 4%, which works out to a 28X-33X corpus — meaningfully bigger than the popular internet number.

The mistake: calculating in today's rupees

If you're 30 now and plan to retire at 45, your expenses 15 years from now will be much higher in rupee terms even if your lifestyle doesn't change. ₹12 lakh a year today becomes roughly ₹25 lakh a year at 6% inflation over 15 years. Your FIRE number must be calculated on future expenses, not current ones — otherwise you'll hit your "number" and discover it buys far less than you planned.

Building your real number: a 4-step approach

1. List your actual expected retirement expenses — not current expenses. Some costs disappear (commute, EMIs if paid off, work clothes); others appear (more healthcare, more travel, more leisure).
2. Inflate to your retirement year — use 6-7% inflation to project today's number forward to the year you plan to stop working.
3. Apply a 28-33X multiple (or run a year-by-year withdrawal simulation instead of a flat multiple, which is more accurate for early retirees with long horizons).
4. Add a healthcare and buffer layer — a separate health corpus or high cover mediclaim, plus 10-15% extra for one-off costs like weddings, home repairs, or helping children.

A quick illustration

Suppose you're 32, want to retire at 47, and your expenses today are ₹10 lakh/year. At 6.5% inflation, that becomes roughly ₹25.5 lakh/year by the time you retire. At a 30X multiple, your corpus target is close to ₹7.6 crore — quite different from the ₹2.5 crore a naive 25X-on-today's-expenses calculation would suggest.

Corpus size isn't the whole plan

Two more things matter as much as the number itself:

• Asset allocation after FIRE — a corpus sitting entirely in equity is volatile right when you need to withdraw; a corpus entirely in debt won't outpace inflation over a 40-year retirement. Most FIRE portfolios need a deliberate equity-debt split that shifts over time.
• Withdrawal sequencing — the order in which you draw from equity vs debt in a bad market year matters more than most people realise. This is where a written, tested withdrawal plan beats a spreadsheet number.

For how withdrawals actually play out once you stop earning, see our piece on SWP vs dividend income, and for the accumulation side, our note on step-up SIPs is a useful companion.

The honest verdict

25X is a fine napkin-math starting point, but treat it as a floor, not a target. Build your number from your actual future expenses, use a slightly more conservative withdrawal rate for India, and add a healthcare buffer. The goal isn't to hit a round number — it's to never have to go back to work because you retired one crore short.