Most US workers aim to retire around age 65—but for many followers of the FIRE movement, which stands for “financial independence, retire early,” that’s not the case.
Hours of research by our editors, distilled into minutes of clarity.
FIRE followers typically prioritize high savings rates, relatively frugal living, and aggressive investing strategies in an effort to work less and enjoy life more in the long term. They range from low-income manual laborers to high-income tech workers and doctors.
“Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence” by Vicki Robin and Joseph Dominguez argued that people should prioritize consuming less and living better.
The median retirement savings for Americans was $87K as of May 2024. Some financial experts might find that number concerning, since a recent Northwestern Mutual survey found that $1.46M is the ideal retirement savings target. A graphic shows the current averages and medians broken down by age group.
The Mr. Money Mustache blog was started in 2011, and was written by a man named Peter Adeney. It gained a significant following documenting real people’s experiences trying out FIRE, and also helped popularize the concept.
Many different types of FIRE exist, and their methodologies and end goals vary drastically. “Lean FIRE” followers, for instance, are minimalists who plan to live modestly in retirement. “Barista FIRE” proponents plan to work part-time in retirement.
The Mr. Money Mustache blog, started in 2011 and written by Peter Adeney, gained a significant following documenting real people’s experiences trying out FIRE, and also helped popularize the concept.
To calculate one’s FIRE number, FIRE followers typically multiply their expected annual expenses in retirement by 25.
Many FIRE proponents also abide by the 4% rule, which says that retirees can withdraw roughly 4% (adjusted for inflation) of their retirement portfolio each year.
Amy X. Wang, the assistant managing editor of The New York Times Magazine, looked at the people behind the growing FIRE movement in a recent podcast episode.
Many FIRE proponents follow specific financial rules, like the 4% rule, in order to achieve FIRE. They also take steps to create an efficient tax strategy and take advantage of compound interest.
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