FIRE stands for Financial Independence, Retire Early. Followers aim to save aggressively, often 40% to 70% of income, so work becomes optional decades earlier than usual.
The core math
Your FIRE number is annual expenses divided by a withdrawal rate, often 4%, which means 25 times annual expenses. Spending $50,000 per year implies a target of about $1.25 million. Your savings rate drives how quickly you get there more than your income level does.
Variations
Lean FIRE covers a frugal lifestyle. Fat FIRE supports higher spending. Coast FIRE means you have already saved enough that compound growth will reach your target by traditional retirement age, so you only need to cover current expenses. Barista FIRE blends part-time work with partial portfolio support.
Risks to consider
Early retirees face longer horizons, sequence-of-returns risk, healthcare costs before Medicare and the need to access funds before 59½ without penalty through taxable accounts, Roth contributions or the Rule of 55 and 72(t) strategies.
Try the numbers
Use our FIRE Calculator to see this in practice. With its default example (Annual expenses in retirement: $55,000; Current invested assets: $150,000; Annual savings: $40,000), it shows fire number: $1,375,000. Adjust the inputs to match your situation.
Key takeaways
- Savings rate matters more than income.
- FIRE number = 25× annual expenses at a 4% rate.
- Plan for healthcare and early-withdrawal rules.
This article is for general education and is not personalized financial, tax or legal advice. Rules and limits change; confirm current figures with official sources such as IRS.gov, SSA.gov and StudentAid.gov, or consult a qualified professional. © 2026 FinanzCalc.