Compound Interest, SIP, FIRE Number & Inflation-Adjusted Retirement Simulator (2026)

Many basic calculators approximate real return as `r_nominal - inflation` (for example, `10% - 4% = 6%`). The exact Fisher Equation is `r_real = ((1 + r_nominal) / (1 + inflation)) - 1`, which yields `5.769%` (`1.10 / 1.04 - 1`). Over a 30-year compounding horizon, ignoring that 0.231% geometric difference overstates real purchasing power by nearly 7%.

**Regular FIRE** is `25x` (4% SWR) to `28.5x` (3.5% SWR) of your current annual expenses. **Lean FIRE** covers minimalist baseline expenses (~75% of normal spend). **Fat FIRE** funds an abundant lifestyle (~150% of normal spend). **Coast FIRE** is the present-value lump sum (`FIRE_Target / (1 + r_real)^years_to_60`) where, once reached, your existing investments will compound to your full retirement number by traditional retirement age even if you never invest another dollar.

William Bengen's original 4% rule (and the 1998 Trinity Study) tested a **30-year** retirement horizon with a 50/50 to 75/25 US stock/bond portfolio. For early retirees in their 30s or 40s facing a 45-to-60-year horizon and sequence-of-returns risk, modern Monte Carlo research (such as ERN and Vanguard) recommends a **3.25% to 3.50%** Safe Withdrawal Rate (`28.5x–30.7x` annual expenses).

A fixed $1,000/month SIP at 10% annual return for 25 years grows to ~$1.33M ($300k invested). Stepping up that SIP by just 10% each year alongside salary raises grows the portfolio to **$3.27M** ($1.18M invested)—nearly 2.5x the terminal wealth.

The Compounding Crossover Point is the inflection year in which your portfolio's annual investment gain (`Balance * Return`) exceeds your total annual fresh cash contributions (`12 * Monthly_SIP`). After this year, your money works harder than your active savings rate.