FIRE stands for Financial Independence, Retire Early. It's a movement of people who save and invest aggressively — often 50% or more of their income — to retire decades before the traditional age of 65.
At the core of FIRE is the 4% rule: if you withdraw 4% of your investment portfolio in the first year of retirement, then adjust for inflation, your money has a 95% chance of lasting 30+ years.
Reverse-engineered, this means you need to save 25× your annual spending. If you spend $40,000 per year, you need $1,000,000 invested. Spend $60,000? You need $1.5 million.
Your savings rate — the percentage of your income you don't spend — is the single biggest lever. According to the FIRE calculator at Networthify, here's how long it takes to retire:
| Savings Rate | Years to Retirement |
|---|---|
| 10% | 51 years |
| 20% | 37 years |
| 30% | 28 years |
| 40% | 22 years |
| 50% | 17 years |
| 60% | 14 years |
| 70% | 10 years |
Going from a 20% savings rate to 50% cuts your working years from 37 to 17. That's the power of FIRE.
Lean FIRE: Retiring on a very modest budget ($25,000–$35,000/year). Minimalist lifestyle, low cost of living areas.
Fat FIRE: Retiring with a high budget ($100,000+/year). Usually requires a high income or dual-income household.
Barista FIRE: Not fully retired — working a low-stress, part-time job for enjoyment and healthcare, while the portfolio covers the rest.
Coast FIRE: You've saved enough that you can stop contributing to retirement accounts and coast to traditional retirement age, because your existing investments will grow enough.
1. Track your spending. You can't optimize what you don't measure. Know exactly where your money goes for 1–3 months.
2. Build a starter emergency fund. $1,000–$2,000 in a high-yield savings account prevents a flat tire from derailing your plan.
3. Pay off high-interest debt. Credit cards at 20%+ interest are a guaranteed negative return. Pay these off before investing.
4. Get the full employer 401(k) match. It's an instant 50–100% return. Free money.
5. Invest in low-cost index funds. A three-fund portfolio (US total stock market, international total stock market, bonds) beats 90% of active fund managers over 20 years.
Find out exactly when you can retire based on your current savings and rate:
Retirement Age Calculator → · Savings Rate Calculator → · Net Worth Calculator →
Critics point out that FIRE assumes 7% real returns, which may not hold. It also requires extreme frugality that many people find unsustainable. And health insurance before Medicare age (65) is a real cost that many calculators ignore.
That said, even if you don't pursue full FIRE, the principles — saving aggressively, living below your means, investing consistently — will make you financially secure regardless.