TL;DR
Real returns = nominal minus inflation. Over a 30-year retirement, a 3% inflation differential turns £1m of nominal terminal wealth into ~£400k of purchasing power. Plan in real, always.
In short
Every figure in our simulator is real (inflation-adjusted). Your stated expenses are today's pounds; the projected portfolio is in today's pounds; the FI date is when your real wealth crosses your real FIRE number. Nominal numbers are useful only for HMRC.
We're working on a full deep-dive for this article — including historical data, charts, and worked examples. In the meantime, you can run a free simulation to explore the underlying numbers yourself.
Frequently asked questions
- Should I assume 2% or 3% inflation?
- The BoE/Fed target 2%, the historical average is ~3%. Conservative planners use 3%. Within the simulator, we use realised historical inflation from each cohort's actual sequence.
- Why does the displayed FIRE number stay flat across years?
- Because it's in real terms — today's pounds. The nominal number rises with inflation, but its real value (what it actually buys) is the constant.
Stress-test your own FIRE plan
FIRE Wealth OS runs your savings rate and expenses against every historical market starting point since 1871. Free to use, no card required.