The FIRE movement helps Americans retire decades before 65. Save aggressively, invest wisely, live off portfolio returns.
The 4% Rule
Withdraw 4% in year one, adjust for inflation. FIRE number = Annual expenses x 25. $40K/year = $1M. $60K/year = $1.5M.
Types of FIRE
| Type | Spending | FIRE Number |
|---|---|---|
| Lean FIRE | Under $40K | Under $1M |
| Regular FIRE | $40K-$80K | $1M-$2M |
| Fat FIRE | $100K+ | $2.5M+ |
| Barista FIRE | Partial | Part-time work |
Savings Rate vs Time to FIRE
| Savings Rate | Years |
|---|---|
| 10% | 51 |
| 25% | 32 |
| 50% | 17 |
| 65% | 10 |
| 75% | 7 |
How to Achieve FIRE
- Calculate your number: Expenses x 25
- Maximize income
- Minimize expenses — housing is biggest lever
- Invest aggressively: Max 401k ($23,500), Roth IRA ($7,000), HSA ($4,150), index funds
- Optimize taxes: Tax loss harvesting, Roth conversion ladders
Key Takeaways
- FIRE number = expenses x 25
- 50% savings = FIRE in ~17 years
- Max tax-advantaged accounts
- Housing is biggest expense lever
- Barista FIRE most realistic
FAQ
Is FIRE realistic?
Barista FIRE: save 30-40%, semi-retire in 15-20 years with part-time work.
Healthcare in early retirement?
ACA subsidies with lower taxable income.
Is the 4% rule valid?
95%+ success for 30 years. For 40+ year retirements, use 3.5%.
