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Glossary

Every term this tool uses, in plain English. If something in your plan isn't here, it shouldn't be in your plan.

Freedom number (FIRE number)

The amount you need invested so withdrawals cover your yearly spending forever. Annual spending ÷ your safe withdrawal rate.

Safe withdrawal rate (SWR)

The share of your portfolio you take out each year in retirement. 4% is the common starting point; lower is more cautious, higher is more aggressive.

Investable net worth

The money that can actually fund retirement: retirement accounts, brokerage, cash and HSA. Your primary home and unvested equity are left out on purpose.

Savings rate

The share of your take-home pay that goes into investments. It moves your date more than your investment returns do, and you control it directly.

Coast FIRE

The point where what you've already invested will grow into your full number by traditional retirement age with no new contributions.

Barista FIRE

Close enough to your number that a lighter, lower-paid job covers the remaining gap — often for the health insurance as much as the income.

The 59½ bridge

401(k)s and IRAs generally can't be tapped penalty-free until 59½. If you stop working before then, you need taxable, Roth or rental money to cover the years in between.

Roth conversion ladder

Moving money from a traditional IRA to a Roth IRA in low-income years, then withdrawing each converted amount five years later without penalty. One way to build the bridge.

Rule of 55

If you leave your job in or after the year you turn 55, you can take penalty-free withdrawals from that employer's 401(k) — not from IRAs.

Employer match

Money your employer adds to your 401(k) when you contribute. Not capturing all of it is the only guaranteed 100% return in investing.

Backdoor Roth

A non-deductible traditional IRA contribution converted to Roth. Used when your income is over the direct Roth IRA limit. Watch the pro-rata rule.

Mega backdoor Roth

After-tax 401(k) contributions converted to Roth inside the plan. Only some plans allow it, and it can move tens of thousands more into tax-free growth each year.

HSA

Health Savings Account — the only triple-tax-free account: deductible going in, tax-free growth, tax-free out for medical costs. Requires a high-deductible health plan.

Real return

Investment return after inflation. Using real returns means every future dollar in your projection is in today's money, so the numbers stay comparable.

Cash flow (rental)

Rent minus operating expenses minus the mortgage payment. Positive cash flow lowers the portfolio you need; negative cash flow pushes your date out.

House hacking

Living in one unit of a property and renting out the rest, so tenants cover part or all of your housing cost.

FIRE meter

The gauge on your dashboard: the share of your freedom number you've already got invested.

Educational content only — not financial, tax, or legal advice.