Can I Go into Retirement Early With FIRE?


Have you ever dreamed about regularly sleeping in on a weekday? Do you dream of spontaneously traveling to a new place for a few months? Or perhaps you just want to be in charge of your time every day without answering to an employer? If any of these scenarios sound ideal, you may be dreaming of a FIRE retirement lifestyle.

FIRE stands for Financial Independence, Retire Early. It’s a movement that helps people take control of their financial independence by making trade-offs, such as extreme saving and budgeting early in their careers, to retire earlier in life—often decades ahead of a conventional retirement plan.

What is the FIRE retirement movement?

The primary goals behind the FIRE movement are to reach financial independence and retire early, often in your 30s and 40s. To achieve this, people use extreme saving techniques, sometimes living on 50% or less of their annual income for years and investing the remaining amount. 

Many people see FIRE as “an alternate path to traditional retirement that’s based on financial freedom and pursuing your passions, rather than just accumulating wealth for the sake of accumulating wealth,” according to hosts Kiersten and Julien Saunders in an episode of their rich & REGULAR podcast.

Although the movement feels relatively new, the ideas of the FIRE approach were originally outlined in a book first published in 1992 called Your Money or Your Life, written by Vicki Robin and Joe Dominguez. Many blogs shared the ideas of FIRE retirement in the mid-2000s, and the movement gained mainstream attention in the 2010s when major news sources and publishing houses released articles and books about how to achieve early retirement through different methods.

How does FIRE retirement work?

Reaching financial independence and early retirement is usually achieved by people who are willing to go to extreme lengths to cut their expenses. Many looking for an early retirement with FIRE often forgo driving newer cars, living in bigger houses or taking expensive trips. 


All the extra funds are invested, usually aggressively, in a mix of savings accounts, tax-advantaged retirement plans and brokerage accounts.

Members of this retirement movement will often talk about their “FIRE number,” which is the total dollar amount they want to have invested before they feel safe quitting their jobs and retiring early. While the definition of “enough” is unique to each individual, many set a goal of at least $1 million before seriously considering leaving the workforce or changing to a lower-paying career. 

FIRE retirement calculator

There are a variety of rules or best practices that FIRE participants use to ensure their money lasts well into the future. 

One popular method is the rule of 25x, which multiplies your annual expenses by 25 to reach your FIRE retirement number. If your yearly expenses are $75,000, multiply that by 25. You’ll see that you need roughly $1.875 million saved to achieve financial independence safely.

Another popular idea is the rule of 4%. It says that retirees can safely withdraw 4% of their savings balance in the first year of retirement and adjust their withdrawal rate based on future inflation.

While these are relatively popular rules in the FIRE retirement movement, it’s important to note that both were developed for more conventional retirements designed to last up to 30 years (from age 65 to 95, for example). They don’t factor in unexpected costs like rising health care, periods of high inflation or other factors that can impact a retirement account balance. 

If you’re trying to reach your FIRE number as quickly as possible, it’s a good idea to work with a certified financial planner, preferably one familiar with the FIRE retirement movement. That way you can ensure you’re on the right path and have accounted for all potential significant expenses.

Who is a good candidate for FIRE?

Most people can benefit from using some of FIRE’s financial independence, retire early principles. However, the ideal candidate is someone relatively young, with a high salary, who prioritizes saving for the future over spending money on non-essential items. 

However, people from different backgrounds and income levels can successfully use FIRE principles. Reducing your spending, maximizing your tax-efficient retirement savings and investing for the long term are all principles of the movement that nearly everyone can take advantage of without taking extreme measures or having to earn an outrageous salary. 

Are there different types of FIRE retirement?

Many of the original FIRE advocates may have been rigid about ruthlessly cutting expenses. However, the movement has evolved into different philosophies, each with varying degrees of rigid cost cutting and extreme saving. 


The Lean FIRE movement is for those who plan to live frugal lives in retirement and save enough to cover only their basic needs. These individuals may even embrace a minimalist lifestyle in general. While they still save aggressively during their working years, people planning on Lean FIRE are often more focused on retiring early. They’re willing to live on less in retirement so they can leave a standard job sooner. 


People who plan for Fat FIRE retirement want to save a lot of money so they can enjoy themselves in retirement. Depending on their interests, these people may want to travel or enjoy some luxury without worrying about every penny. Fat FIRE generally requires a more significant savings goal, so a higher income or potentially delaying your retirement to reach your FIRE number may be required. 

Barista FIRE

If you don’t mind working but don’t necessarily want to spend all your time at a job, Barista FIRE might be a good option. With this version of FIRE, the goal isn’t to stop working altogether in retirement. Instead, people save only enough money to cover part of their living expenses. They make up the rest with a side hustle or part-time job, like being a coffee barista. 

Coast FIRE

Those who choose Coast FIRE have reached the point where they’ve contributed enough to their retirement plans that their portfolio will grow and compound into a healthy balance without additional contributions. These individuals may still work, but can “coast” into retirement, letting time and compound interest work for them. They’ll use their paycheck to cover living expenses but typically not contribute further to their retirement accounts. 


This version of FIRE retirement is about enjoying the process of reaching financial independence. Slow FIRE, or Slow FI, aligns more with a traditional path to retirement. These individuals embrace living the life they want right now rather than focusing solely on retiring as soon as possible. 

What should I keep in mind with FIRE retirement?

Early retirement sounds like a great idea, especially when the alarm goes off on a Monday morning. However, there are a lot of factors to consider before you take the leap into FIRE retirement. As you think about leaving the workforce, no matter your age, consider the following do’s and don’ts:

Know your numbers

Even if you don’t plan to retire in your 30s or 40s, calculating how much it would take to retire comfortably, whatever your definition is, can be a great way to ensure you’re on the right path. Be sure to account for costs like rising health care, inflation and unexpected expenses when calculating your projected retirement costs. 

Use a FIRE retirement calculator to help you find your specific number. Be sure to rerun the numbers periodically to ensure your financial goals are still accurate.

Create a plan

Since saving for retirement is a decades-long process, staying on track and maintaining focus can be challenging. Create a budget to ensure you’re saving enough and develop milestones to help you break a large number into manageable chunks. Although it can be tempting to leap into extreme savings, temper that with some planned fun to keep you motivated. 

Invest wisely

Use any tax-advantaged retirement accounts offered through your work, and consistently save up to the yearly contribution limits. It’s also a good idea to diversify your retirement savings accounts with a Roth IRA or other type of after-tax retirement plan to help ensure you have a good mix of taxable and non-taxable income in retirement. Although everyone’s risk tolerance is different, research the available retirement plan options, so you understand the pros and cons of each, along with any transaction or account fees on any investments you consider.

Don’t go overboard

You might be ready to jump into a FIRE retirement lifestyle with both feet. But remember that part of life is about living along the way. Saving for a retirement date years or decades in the future is smart but so is enjoying the time you have right now. 

Find a balance between saving enough to help you meet your goals and enjoying a few treats or luxuries. Not only will you find a better balance, but you’ll likely make it easier to stick to your savings and investment goals if you give yourself a little splurge now and again.

Bottom line

It can be easy for some people to get caught up in the extreme methods of FIRE’s financial independence, retire early. Even if you have no plans to retire early, adopting some of the principles of the FIRE retirement movement, like frugality, prioritizing saving for the future and long-term investing, can help ensure you’re on the path to achieving financial independence—no matter when you plan to retire. 

Want to learn more about FIRE retirement? Listen to our podcast, rich & REGULAR, hosted by Kiersten and Julien Saunders, below or on Apple Podcasts:

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