How to Calculate Your FIRE Number as a European in 2026 (With EUR Examples)

“FIRE” (Financial Independence, Retire Early) is a movement that’s gained huge traction among Europeans seeking freedom from traditional work. But how much money do you actually need to achieve FIRE in Europe? The answer is your personal “FIRE number.”

This step-by-step tutorial will show you exactly how to calculate your FIRE number in Europe for 2026, using realistic EUR-based examples and accounting for unique European factors like healthcare, social benefits, and taxes. If you want the big picture first, see our Ultimate 2026 Guide to FIRE in Europe; here, we’ll dive deep into the calculation process.

Step 1: Estimate Your Annual Retirement Expenses (in EUR)

What to do: List every expense you expect to have per year in retirement, in today’s euros. This should include:

• Housing: rent or mortgage, property taxes, utilities
• Food & groceries
• Transport: car, public transport, insurance
• Healthcare: insurance premiums (especially if you’ll lose state coverage), out-of-pocket costs
• Leisure & travel
• Other: clothing, gifts, emergencies

Why it matters: Your FIRE number is only as accurate as your expense estimate. Underestimating leads to running out of money; overestimating may delay your freedom unnecessarily.

What can go wrong: Forgetting to account for healthcare costs (especially if moving countries), underestimating inflation, or missing irregular expenses (e.g. car replacement, home repairs).

Example:

• Rent: €9,600/year (€800/month, big city Spain)
• Utilities: €1,200/year
• Food: €3,600/year
• Healthcare: €1,500/year (private insurance in Portugal)
• Transport: €1,200/year
• Leisure & travel: €2,000/year
• Miscellaneous: €1,000/year

Total annual expenses: €20,100

Step 2: Adjust for Inflation (Project to Your Target Year)

What to do: Use a realistic annual inflation rate to project your expenses into the year you expect to retire. In Europe, 2–3% is a common planning assumption for 2026 and beyond.

Why it matters: If you plan to retire 10+ years from now, your spending power will erode unless you adjust for inflation.

What can go wrong: Using an unrealistically low inflation rate, or forgetting to adjust at all. Some expenses (like rent) may rise faster than others.

• Current annual expenses: €20,100
• Years until retirement: 10
• Assumed inflation rate: 2.5%

Future expenses: €20,100 × (1.025)10 ≈ €25,750 per year

Step 3: Choose a Safe Withdrawal Rate (SWR)

What to do: Decide what percentage of your investments you’ll withdraw each year to fund your expenses—this is your Safe Withdrawal Rate (SWR). The classic “4% rule” is often cited, but many European experts recommend 3.5% or even 3% for extra safety, especially considering taxes and lower expected returns.

Why it matters: A higher SWR lets you retire sooner, but increases your risk of running out of money. A lower SWR means you need a larger portfolio, but offers more security.

What can go wrong: Ignoring taxes, using US-centric numbers, or not considering your actual asset allocation.

European context: In countries with robust public pensions (e.g., Germany, France), you might use a higher SWR for the pre-pension years, then adjust later. In countries with less generous state support (e.g., Ireland, Portugal), a lower SWR is safer.

Example Decision: You decide on a 3.5% SWR due to expected taxes and conservative planning.

Step 4: Account for Taxes and Social Benefits

What to do: Estimate taxes you’ll pay on investment withdrawals and consider any social benefits (like universal healthcare or state pensions) that will reduce your required withdrawals.

Why it matters: Net income is what funds your lifestyle. Europe’s tax systems vary widely: in some countries, capital gains and dividends are taxed heavily; in others, there are tax-free allowances.

What can go wrong: Ignoring future tax changes, double taxation (especially if moving countries), or overestimating state support.

• You plan to live in Spain, where investment income is taxed between 19% and 28% (2026 rates may differ).
• You expect €2,000/year in state pension after age 67, but you’re retiring at 50, so you’ll need to fund 17 years entirely on your portfolio.

Tax-adjusted expenses: If you need €25,750 after tax and expect an average tax rate of 20%, you’ll need to withdraw:
€25,750 / (1 - 0.20) ≈ €32,187 per year before tax.

Step 5: Calculate Your FIRE Number

What to do: Divide your (inflation- and tax-adjusted) annual expenses by your chosen Safe Withdrawal Rate.

Formula:

FIRE Number = (Annual Expenses after inflation and tax) / SWR

Example:

• Annual expenses (after inflation, before tax): €25,750
• Annual withdrawals needed (before tax): €32,187
• SWR: 3.5% (0.035)

FIRE Number: €32,187 / 0.035 = €919,629

This is the portfolio you’d need to cover your lifestyle before state pension kicks in. After you start receiving a pension, you can reduce your withdrawal needs (and required portfolio size).

Step 6: Refine for Your Country’s Quirks

What to do: Adjust your calculation for country-specific factors:

• Healthcare: Will you need private insurance? (e.g., expats in Portugal or Spain often do)
• Wealth taxes: Countries like Spain and Norway levy annual wealth taxes over certain thresholds.
• Access to ISAs/PEAs: In the UK (ISA) or France (PEA), some investment accounts are tax-advantaged.
• Residency rules: If you move, you may lose social benefits or face new taxes.

Why it matters: These can significantly increase or decrease your FIRE number.

What can go wrong: Assuming state healthcare or pension applies to expats, or missing hidden taxes.

Example: If you move from Germany (high social security, limited wealth tax) to Portugal (NHR tax regime, private healthcare), your FIRE number and withdrawal strategy may change significantly. Always check official government guidance when planning a move.

Step 7: Track Progress with a FIRE Calculator (Template Included)

What to do: Use a spreadsheet to track your FIRE number, update assumptions, and see how your investments stack up. Here’s a simple template you can copy:

Item	Value (€)	Notes
Current annual expenses (today)	€20,100	Sum from Step 1
Years until retirement	10	Adjust as needed
Inflation rate (%)	2.5	Conservative European average
Annual expenses at retirement	=B2*(1+B4/100)^B3	Formula for inflation adjustment
Tax-adjusted expenses	=B5/(1-0.20)	Assuming 20% effective tax rate
Safe withdrawal rate (%)	3.5	Input your SWR
FIRE Number	=B6/(B8/100)	Portfolio needed

Download a ready-to-use FIRE calculator template (Google Sheets)

Common Mistakes When You Calculate FIRE Number Europe

• Forgetting to adjust for inflation—leads to underestimating future costs.
• Ignoring taxes on investment withdrawals—can leave you with less income than expected.
• Using a US-centric SWR—Europe’s tax and return landscape is different.
• Overlooking healthcare costs—especially when moving countries or losing employer coverage.
• Assuming state pension or benefits without checking eligibility—rules vary for expats and early retirees.
• Not updating your number—life changes, and so do expenses and tax laws.

Next Steps

• Review your personal savings rate and see how fast you can reach your FIRE number. Our guide to optimizing your savings rate is a great next read.
• Explore tax-efficient withdrawal strategies for Europeans to keep more of your returns.
• For a broader view, see our complete guide to FIRE in Europe.
• Test your plan against different scenarios (market crashes, health emergencies, moving countries).
• Update your FIRE calculator each year and revisit your assumptions regularly.

For more on adjusting your plan as projections change, see Can You Achieve FIRE in Europe by 2035?

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always do your own research and consider consulting a qualified financial advisor before making investment decisions.