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FIRE Index Methodology

How we calculate and rank companies by years to Financial Independence, Retire Early (FIRE)

Overview

Our FIRE Index ranks companies by the estimated number of years it would take to achieve Financial Independence working at that company, based on their retirement benefits, headquarters location, and associated cost of living.

The calculation uses the same sophisticated financial modeling as our individual company calculators, accounting for tax-advantaged accounts, location-based income and expenses, and optimal investment allocation strategies.

Calculation Parameters

Base Assumptions

  • • Starting age: 30 years old
  • • Base annual income: $200,000
  • • Base annual expenses: $50,000
  • • Annual return: 7.0%
  • • Safe withdrawal rate: 4%
  • • Last updated: 8/4/2025

Methodology

  • • Tax-efficient net worth calculation with separate account tracking
  • • FIRE order of operations with ESPP-first allocation
  • • Company-specific ESPP discounts and contribution limits
  • • Variable 401(k) matching formulas by employer
  • • Location-adjusted income & expenses by HQ city
  • • State and federal tax optimization during accumulation and retirement
  • • Precise principal vs. gains tracking for taxable accounts

Location-Based Adjustments

Income and expenses are adjusted based on the company's headquarters location to reflect realistic cost of living and salary expectations in different markets.

High Cost Areas

Facebook (CA) $260,000 / $70,000
Google (CA) $260,000 / $70,000
Snap (CA) $260,000 / $70,000

Medium Cost Areas

Citadel (IL) $200,000 / $50,000
Microsoft (WA) $240,000 / $60,000
Amazon (WA) $240,000 / $60,000

Lower Cost Areas

Oracle (TX) $220,000 / $45,000
Two Sigma (NY) $250,000 / $67,500
Jane Street (NY) $250,000 / $67,500

Retirement Benefits Impact

We analyze each company's specific retirement benefits and automatically apply the optimal FIRE investment allocation strategy. Our system incorporates company-specific data including ESPP discount rates, contribution limits, and 401(k) matching formulas using this precise order:

1
ESPP (Employee Stock Purchase Program) - Immediate guaranteed returns from company discounts. Examples: Apple 15% discount + 10% limit, LinkedIn 10% discount + 15% limit, JPMorgan 20% limit
2
Traditional 401(k) up to Employer Match - Immediate 50-100% return from employer matching. Examples: Oracle 50% match up to 6% salary, Apple 100% match up to 6% salary
3
Roth IRA ($7,000 limit) - Tax-free growth and withdrawals, backdoor conversion if income too high
4
Traditional 401(k) Remainder - Complete pre-tax contributions up to $23,000 annual limit (combined with employer match amount)
5
Roth 401(k) - Post-tax contributions with tax-free growth, shares $23,000 limit with Traditional 401(k)
6
Mega Backdoor Roth ($43,500 limit) - After-tax 401(k) contributions converted to Roth IRA (available at Apple, Oracle, Microsoft, Amazon, etc.)
7
Taxable Brokerage - Unlimited contributions with favorable 15% long-term capital gains tax treatment
8
High Yield Savings (HYSA) - $0 when maximizing investments (taxable brokerage always better)

Current Top 5 Rankings

#1
Oracle(TX)
7.7 years$220,000
#2
Citadel(IL)
8.9 years$200,000
#3
Microsoft(WA)
9.6 years$240,000
#4
Amazon(WA)
10.3 years$240,000
#5
Capital One(VA)
10.3 years$200,000

Rankings updated 8/4/2025

Company-Specific Benefits Data

Our calculations use real company-specific benefit data extracted from each company's actual programs:

ESPP Examples (Discount + Limit):

  • • Oracle: 5% discount, 10% salary limit
  • • Apple: 15% discount, 10% salary limit
  • • LinkedIn: 10% discount, 15% salary limit
  • • JPMorgan Chase: 20% salary limit
  • • Capital One: 15% salary limit

401(k) Match Examples:

  • • Oracle: 50% match up to 6% salary
  • • Apple: 100% match up to 6% salary
  • • LinkedIn: 50% match up to $22,500
  • • Capital One: Variable match formulas
  • • Microsoft: Company matching programs

Key Insight: Benefits + Location = FIRE Speed

Oracle leads at 7.8 years due to the powerful combination of Texas having no state income tax, lower cost of living ($45k expenses vs $70k in CA), and solid benefits (Mega Backdoor Roth + ESPP + 401k match). The fastest FIRE paths combine generous company benefits with tax-advantaged locations. Notice how Washington state companies (Microsoft, Amazon) rank highly due to no state tax, while California companies with identical benefits rank lower due to high taxes and cost of living.

Tax-Efficient Net Worth Calculation

Unlike simple "25x expenses" calculations, our model precisely tracks each account type separately and accounts for their different tax treatments during retirement. We calculate the exact net worth needed based on your specific account composition:

Tax-Free Accounts (Full Value)

  • • Roth 401(k): Tracked separately from Roth IRA
  • • Roth IRA: Tax-free withdrawals after age 59½
  • • Mega Backdoor Roth: Converted after-tax contributions
  • $1 in Roth = $1 of spending power

Taxable Accounts (Reduced Value)

  • • Traditional 401(k): Taxed as ordinary income (22-35% rates)
  • • Taxable Brokerage: Principal vs. gains tracked separately
  • • Capital Gains: 15% tax on growth portion only
  • • Cash/HYSA: No additional taxes on withdrawals
  • Requires 25-40% more to equal Roth spending

Advanced Modeling: Our system simulates optimal withdrawal strategies during retirement, including Roth conversion ladders, required minimum distributions (RMDs), and tax-bracket management to minimize lifetime tax burden.

Important Limitations

  • • Rankings assume consistent employment and benefit access throughout career
  • • Individual results will vary based on personal income, expenses, tax situation, and risk tolerance
  • • Stock compensation, RSUs, and equity vesting schedules are not included in base calculations
  • • Company benefits data is sourced from public information and may not reflect recent changes
  • • Rankings reflect headquarters location tax rates, not all office locations
  • • ESPP calculations assume immediate sale at discount (not holding periods or lookback provisions)
  • • 401(k) match calculations use base salary, not total compensation including bonuses

Use these rankings as a starting point. For personalized calculations with your specific situation, use the individual company calculators.

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