Our FIRE Number with Two Kids Under 3
Somewhere between diaper changes and preschool research and arguments about whether we really need that $14 bottle of organic applesauce, my wife and I sat down and tried to figure out what financial independence actually costs for us.
Not for some hypothetical minimalist couple living in a van. For a family. Two kids under three. One in diapers, one almost out. A mortgage. Two cars. Healthcare that we actually use.
The number was bigger than I wanted it to be.
What the 4% Rule Actually Means
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The 4% rule is the most-cited idea in the FIRE community. The basic version: if you withdraw 4% of your portfolio per year, historically you don’t run out of money over a 30-year period. The math flows naturally from there. Figure out your annual spending, multiply by 25, and that’s roughly your target.
For a lot of people who read FIRE blogs, the number lands somewhere between $800K and $1.5M. That’s a big range, but it makes sense — lifestyle varies wildly.
For us, with two small kids, the math gets messier fast.
Our Actual Annual Spending
Let me put real numbers down. Our household runs on roughly $90,000 a year right now. Here’s roughly where it goes:
That gets us to roughly $90K. Some months are higher. Some are lower. This is the honest average.
Now multiply by 25: $2.25 million.
That’s our FIRE number right now. And “right now” is doing a lot of work in that sentence.
The Problem: The Number Keeps Moving
Here’s what the FIRE community doesn’t always talk about clearly: your spending changes when you have kids. Not just a little. It changes in big waves.
Right now we’re in peak childcare costs. Two kids in daycare is genuinely one of the most expensive phases of American parenthood outside of college. Once Lil Spark hits kindergarten, that’s roughly $10,000-$13,000 coming off the annual budget. That alone drops our FIRE number by $250K-$325K.
But then other things go up. Activities. School supplies. Eventually sports and music and summer camps. And eventually college, which I’m actively refusing to think about in dollar terms right now because I will lose my mind.
So the spending curve doesn’t just go down when they get older. It shifts shape. Different buckets, different timing.
We’ve tried to model it out, but honestly the projections feel guesswork-y past about 5 years. Kids are chaos variables.
The Healthcare Problem
If we were still working, healthcare is someone else’s problem. Sort of. We pay our premiums, we pay our copays, but the employer subsidy is massive.
In early retirement, that goes away.
A family of four on ACA marketplace coverage, depending on your state and income, can run $1,500-$2,500 per month in premiums alone. At the low end, that’s $18,000/year just to be covered. If you’re using the 4% rule, that means you need an additional $450,000 in your portfolio just to fund healthcare.
Healthcare alone might be the most underestimated FIRE cost for families. The personal finance world talks about it, but when you actually look at your own situation with two kids and all the well-child visits and developmental screenings and the random ER trips that just happen with toddlers, the number hits differently.
We’re currently factoring in $15,000-$18,000 per year for healthcare in a post-job world. That’s probably conservative.
What “Enough” Means to Us
We’re not chasing the traditional FIRE vision — the one where you retire at 35, move somewhere cheap, and spend your days doing yoga and reading. That’s not wrong. It’s just not what we want.
What we actually want is options. The ability to say no. A financial cushion thick enough that if one of us wants to leave a job, we can. If my wife wants to scale back nursing to be home more, she can. If I find the manufacturing management grind isn’t worth it in year 15, I can walk without catastrophe.
That changes the math in an important way. We’re not necessarily aiming for full FI where neither of us works. We’re aiming for enough flexibility that we can make major life decisions without being trapped by the paycheck.
Some FIRE people call this “Coast FI” — the point where you stop actively contributing and let compounding finish the job while you work lower-stress jobs. Others call it “Barista FI” — you’ve got most of the nest egg but supplement with part-time work. Either way, the number is lower than full FI.
For a family with two incomes and specific skills, even modest supplemental income — $30,000-$40,000 a year in a lower-stress role — completely changes the equation.
We’ve run versions of the math where our target drops from $2.25M to somewhere in the $1.4M-$1.6M range, as long as at least one of us is doing something that generates income.
Where We Actually Are
We’re nowhere near any of those numbers yet. That’s the honest answer.
We’re at a 15% savings rate on a $110K-$120K primary income, with supplemental nursing income from my wife on top of that. We’re building. We’re behind where I wish we were given our ages, and we’re ahead of most American households statistically, which is a depressing data point about where the average American household is.
The trajectory is what matters. And the trajectory is improving.
We’ve got specific moves we’re trying — the 3D printing side hustle, the potential house-to-RV transition that could dramatically cut housing costs, pushing toward 25-30% savings rate as the kids age out of peak childcare costs.
The FIRE number is a target on a map. Knowing where you’re going matters. But right now, the actual work is closing the gap between where we are and where we need to be.
The Honest Bottom Line
Our FIRE number is roughly $2.25M at current spending, or closer to $1.5M if we plan around some ongoing supplemental income. It changes every time we adjust our spending assumptions. It moves when childcare shifts, when healthcare models change, when we decide whether the RV life is real or just a plan we talk about.
The math isn’t the hard part. The hard part is accepting that the number is big, the timeline is long, and the answer to “are we on track?” is always more complicated than yes or no.
We’re on track enough. We’re working it.
That’s about as honest as I can get.