Glossary · Definition
FIRE (Financial Independence Retire Early)
FIRE (Financial Independence Retire Early) is a movement built around aggressive saving (50-70% of income) and investment to reach financial independence — often by age 40-50, sometimes earlier.
Definition
FIRE (Financial Independence Retire Early) is a movement built around aggressive saving (50-70% of income) and investment to reach financial independence — often by age 40-50, sometimes earlier.
What it means
Three flavors: lean FIRE (target $25-30k/yr expenses; ~$750k-1M nest egg), regular FIRE ($40-60k/yr; ~$1-1.5M), fat FIRE ($100k+/yr; $2.5M+). The math: save 50%+ of income, invest in low-cost index funds, hit your number when 4% withdrawal sustainably covers expenses. Coast FIRE is a variant — keep working but stop saving once compounding will get you there.
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Why it matters
FIRE shifts the conversation about money from 'how much can I spend' to 'how soon can I have a choice.' Even partial-FIRE thinking (saving 30-40% instead of the 5-10% American median) compresses the decades to financial independence by half or more.
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Frequently asked questions
Is the 4% rule still valid in 2026?
Mostly. The Trinity Study used 30-yr horizons; for 50-yr early retirement, 3.5% is more conservative. Higher equity allocation (75-80%) still works historically.
How much do I need?
Annual expenses × 25 (the 4% rule inversion). $40k/yr expenses = $1M target. Adjust for healthcare in early-retirement scenarios.