Fat FIRE calculator
Fat FIRE means retiring early on a genuinely comfortable income, £60,000 a year or more, and at that level the standard formula breaks: pension withdrawals are taxed as income, so funding your spending takes a bigger gross draw than the spending itself. This calculator solves the tax properly, using 2026/27 rates, and shows the pot that actually delivers the lifestyle.
The lifestyle
Gross to net, line by line
Why Fat FIRE is the flavour the formula shortchanges
True Fat FIRE number = gross drawdown ÷ withdrawal rate, where gross is solved so that after income tax you keep exactly your planned spending. On modest budgets the distinction barely registers, because the Personal Allowance and the tax-free quarter of pension withdrawals soak up most of the draw. At £60,000 of net spending it registers hard: drawn entirely from pensions, you need £67,760 gross, £7,760 a year goes to income tax, and the pot behind it must be £1,936,000 at 3.5% rather than the £1,714,286 the untaxed formula promises. The richer the target lifestyle, the wider that gap grows, which is precisely backwards from how most people budget for it.
The mix is a lever worth six figures
ISA withdrawals are invisible to the tax system, so where your wealth sits changes the target as much as how much you spend. Meet a quarter of the £60,000 from ISAs and the required pot falls by around £80,000; meet half of it that way and the annual tax leak drops from £7,760 to about £2,336. Push the other way, into very large pension draws, and a second problem appears at £100,000 of taxable income: the Personal Allowance taper, which this calculator applies just as it does to salaries. A £120,000 all-pension lifestyle needs £158,967 of gross drawdown, which is the taper working at full force on a retiree. The practical Fat FIRE strategy falls out naturally: fill ISAs alongside pensions during the accumulation years, then draw from both so neither the higher bands nor the taper get a clean shot.
The small print at this altitude
Three things soften or sharpen the picture. Softener: pension income pays no National Insurance, so £67,760 drawn beats a £67,760 salary comfortably. Sharpener: the tax-free element of pension withdrawals is capped, £268,275 across your lifetime, and pots at Fat scale can exhaust it, after which withdrawals are fully taxable and the numbers here are optimistic. And a planning note: these figures assume rest-of-UK bands, while Scottish rates would tax the same drawdown more heavily. When you know your true number, the FIRE calculator turns it into an age, and the retirement age calculator stress-tests the whole journey year by year.
Common questions
How much do I need for Fat FIRE in the UK?
More than the standard formula says. Spending ÷ withdrawal rate prices the spending but ignores tax: £60,000 a year drawn entirely from pensions needs £67,760 gross, so the pot at 3.5% is £1,936,000 rather than the £1,714,286 the untaxed formula gives. Meeting part of the spending from ISAs shrinks the gap, which is why the pension/ISA mix matters as much as the total.
How is pension drawdown taxed?
Usually 25% arrives tax-free (capped at £268,275 of lump sums over your lifetime) and the rest is taxed as ordinary income through the same bands as a salary — though with no National Insurance to pay. Big drawdowns behave exactly like big salaries: above £100,000 of taxable income the Personal Allowance tapers away, so a £120,000-a-year all-pension lifestyle needs £158,967 of gross drawdown.
Why does the pension/ISA mix change my Fat FIRE number?
ISA withdrawals are tax-free, so every pound of spending met from ISAs needs exactly £1 of draw, while pension pounds need grossing up. Funding a quarter of a £60,000 lifestyle from ISAs cuts the required pot by around £80,000; funding half that way cuts the annual tax bill from £7,760 to about £2,336. Building both wrappers during accumulation is the practical Fat FIRE strategy.
These results are estimates for general information only and are not financial advice. Pension tax rules and allowances change — at this scale, paid advice usually earns its fee. Read the full disclaimer.