The 4% rule — how much do you need for FIRE?

The 4% rule says that if you withdraw 4% of your portfolio in the first year of retirement, and the same amount raised with inflation in every year after, then in historical US data the money lasted 30 years. For FIRE — living off your investments — you therefore need 25 times your yearly spending: PLN 1,200,000 if you spend PLN 4,000 a month, and PLN 1,800,000 at PLN 6,000. How many years it takes depends above all on how much of your income you save: earning PLN 10,000 net and saving 50%, you build the PLN 1,500,000 you need (in today's money) in 22 years and 8 months, with a 7% return and 3.5% inflation a year.

How much do you need for FIRE?

FIRE (Financial Independence, Retire Early) is a plan where you save and invest a large part of your income so that one day you can live off your portfolio instead of a salary. The amount that makes this possible is your FIRE number:

FIRE number = yearly spending in retirement ÷ withdrawal rate

The withdrawal rate is the share of the portfolio you take out in the first year of retirement. At 4% you divide your yearly spending by 0.04, which is the same as multiplying it by 25.

What counts is what you'll spend in retirement, not what you spend today: with no mortgage and no commute it may fall, and with travel or helping your children it may rise. Add what your employer pays for today, such as private healthcare, and irregular costs such as a new car or repairs.

The amounts in the table are in today's money, as in the FIRE calculator: you enter your retirement spending in today's złoty, and in the simulation the FIRE number grows with inflation every month. With inflation at 3.5% a year, what PLN 1,200,000 buys today will cost PLN 2,387,747 in 20 years.

Where does the 4% rule come from, and what does it assume?

Two American studies made the 4% rule popular. In 1994 William Bengen used historical data to test how much of a portfolio you could withdraw each year for the money to last 30 years of retirement. In 1998 Cooley, Hubbard and Walz published a similar study, now known as the Trinity study. The 4% rule that came out of them assumes:

• a portfolio of US stocks and bonds;
• a retirement lasting 30 years;
• in the first year you withdraw 4% of the portfolio, and in every later year the same amount raised with inflation.

So the 4% rule doesn't mean taking 4% of whatever the portfolio happens to be worth each year. You set the amount once, at the start: on PLN 1,200,000 that's PLN 48,000 in the first year, or PLN 4,000 a month. After that you raise it with inflation every year, whether the stock market had a good year or a bad one.

The rule describes the past of one market, the American one. It's a starting point for a plan, not a guarantee for the future.

How many years do you need to save?

It depends most on your savings rate: the share of your net income you put away and invest. It works twice over — the more you save, the faster the portfolio grows, and the less you spend, the less capital you need.

The table shows the FIRE calculator's results for someone who:

• earns PLN 10,000 net a month and starts from zero;
• spends the rest of their income and wants to spend the same in retirement;
• puts away the same number of złoty every month (more in the box below the table);
• is 30 and uses the calculator's default assumptions: a 7% return a year, 3.5% inflation, a 4% withdrawal rate and a life expectancy of 90.

The amounts are in today's money.

Saving 50% of your income, you reach FIRE in 22 years and 8 months, at 52. The calculator will show capital of PLN 3,312,816 at that point — the same PLN 1,500,000 grown by 22 years and 8 months of inflation. At 70% it takes 10 years and 7 months. At 10% and 20% the calculator finds no FIRE within 50 years — it looks no further than age 80. The calculator keeps the monthly savings fixed in złoty while the target grows with inflation, so at these savings rates the payments fall further and further behind it. In every case that reaches FIRE, the money lasts until age 90 in the calculator.

Starting from zero, the time to FIRE depends only on the savings rate here, not on the size of the income: at PLN 5,000 and PLN 20,000 net the calculator shows the same results. A higher income means bigger savings, but also bigger spending, and so a bigger target.

The compound interest calculator shows how a portfolio grows at different returns, and our guide to compound interest explains the mechanism.

How do you adapt the 4% rule for Poland?

Bringing the 4% rule to Poland, keep four things in mind.

A longer retirement needs a lower withdrawal rate

If you stop working at 45 and plan to live to 90, the portfolio has to last 45 years, not 30. The longer you live off the portfolio, the more bad years it has to survive and the less room there is for error. So with an early retirement it's safer to use a lower withdrawal rate, such as 3–3.5%. The calculator can't show bad years, because it assumes the same return every year — more on that below, under sequence-of-returns risk. The table shows what that costs the person from the example above, saving 50% of PLN 10,000:

At a 50% savings rate, lowering the withdrawal rate from 4% to 3% adds 5 years and 11 months of saving: 28 years and 7 months instead of 22 years and 8 months. The last column is a simple safety check: if the portfolio earned exactly as much as inflation, it would last 25 years with 4% withdrawals a year, and 33 years and 4 months with 3%. Any return above inflation makes it last longer.

The Belka tax on your gains

In an ordinary brokerage account you pay 19% podatek Belki — the Belka tax, Poland's capital gains tax — on the gain when you sell shares or fund units, ETFs included, and you report it on a PIT-38 return by 30 April of the following year. The tax is due only on the gain, not on the whole amount you sell, but it still cuts what you have left to spend. If the gain is 50% of the amount you sell, the tax takes 9.5% of the withdrawal: to have PLN 5,000 to spend, you sell about PLN 5,525 of investments.

The FIRE calculator shows results before tax. So include the tax in your retirement spending, or use a lower withdrawal rate. Our guide to the Belka tax explains how it works.

IKE, IKZE, PPK and OKI

An IKE (indywidualne konto emerytalne, an individual retirement account) frees your gains from the Belka tax, but only if you withdraw the money after age 60 (or 55 if you have early pension rights). On top of that, you need to pay in during at least 5 calendar years, or make more than half of the contributions at least 5 years before the withdrawal. An earlier withdrawal, a so-called zwrot, means 19% tax on the gain — just as in an ordinary account.

If you stop working before you turn 60, an IKE can't fund the first years of retirement tax-free, only the later ones. The IKE contribution limit for 2026 is PLN 28,260. If you save PLN 5,000 a month, or PLN 60,000 a year, only 47% of your savings fit in it, and the rest goes into an ordinary account. You can take money out of an IKZE (indywidualne konto zabezpieczenia emerytalnego, an individual retirement security account whose contributions lower your income tax) from age 65 (after contributions in at least 5 calendar years), paying 10% tax on the whole amount, so it's an account for an even later stage. PPK, the workplace pension scheme, works like an IKE here: you can withdraw tax-free from age 60 (25% at once, 75% in at least 120 installments).

Work out what an IKE and an IKZE give you in the IKE, IKZE and PPK calculator; our guide “IKE or IKZE — which one to choose?” explains the differences. From 1 January 2027 the law also provides for the OKI (osobiste konto inwestycyjne, a personal investment account): instead of the Belka tax it carries a yearly tax on the value of its assets, with part of the assets exempt.

The ZUS state pension

Poland's statutory retirement age is 60 for women and 65 for men. From that age a pension from ZUS, the state social insurance, covers part of your spending, so the portfolio has less to cover. For example, if you spend PLN 5,000 a month and your ZUS pension after tax is PLN 2,000, from retirement age you need only PLN 3,000 from the portfolio — at a 4% withdrawal rate that's PLN 900,000 of capital instead of PLN 1,500,000.

That doesn't mean a smaller capital is enough from the start: until retirement age the portfolio has to cover all your spending. Working fewer years also means paying fewer contributions, and so a lower pension than if you worked until retirement age. The FIRE calculator doesn't include a ZUS pension yet: it assumes the portfolio covers all your spending to the end, so its result is the more cautious one.

What is sequence-of-returns risk?

The FIRE calculator assumes the same return every year. Markets don't work like that: good years alternate with bad ones. When you withdraw money from a portfolio every year, what matters is not only the average return but also the order of the years. That's sequence-of-returns risk.

Picture two people with the same portfolio, the same withdrawals and the same average return over 30 years. The first hits a fall early in retirement, the second near the end. To cover living costs, the first sells investments cheaply, which leaves fewer units to gain from the later rises. With the same average, the first may run out of money while the second has some left.

With an early retirement this risk weighs more, because the portfolio has to last more years. You can limit it with:

• a lower withdrawal rate, as a margin for bad years;
• a reserve of a year or two of spending in cash, a deposit or treasury bonds, so you don't have to sell shares after a fall;
• flexible spending: in a bad year you withdraw less;
• even a small income in the first years of retirement.

What's the difference between Lean FIRE and Fat FIRE?

The FIRE calculator shows three variants. Lean FIRE is a frugal retirement: 75% of your planned spending, which means the least capital but also the smallest margin for unplanned costs. Standard FIRE is exactly what you plan to spend. Fat FIRE gives you a cushion: 150% of your spending, with room for travel and weaker years on the market.

Here's how it looks in the calculator's default example. You're 30, with PLN 50,000 saved; you earn PLN 8,000 net and spend PLN 4,000, so you save 50% of your income. In retirement you want to spend PLN 3,000 a month. The other assumptions are the same as above.

Fat FIRE needs twice the capital of Lean FIRE, and in this example you save for 11 years and 2 months longer: 23 years and 4 months instead of 12 years and 2 months.