FIRE stands for Financial Independence, Retire Early. The core premise: save aggressively until your investment portfolio generates enough passive income to cover expenses indefinitely. Work becomes optional.
The math uses the 4% rule from the Trinity Study: withdrawing 4% of a portfolio annually has a high probability of lasting 30+ years. $40,000 annual expenses = $1,000,000 needed. $60,000 expenses = $1,500,000.
Savings Rate Is Everything
At 10% savings rate with 7% returns, FIRE takes ~40 years. At 50%, about 17 years. At 70%, under 10 years. Higher savings rate does double duty: increases investments while proving you can live on less.
Three Flavors
Lean FIRE: Under $40K/year expenses, smaller portfolio needed, permanently frugal. Regular FIRE: Cover your current lifestyle. Fat FIRE: $100K+ annual expenses, requires $2.5M+ portfolio but provides more cushion.
Is FIRE Realistic?
Mathematically sound but practically demanding. Easiest for dual-income households in low cost-of-living areas. Even if “retire at 35” isn’t realistic, the framework is valuable — working toward financial independence at 50 or 55 gives you options most people never have.
Calculate your path: our free FIRE Calculator shows your FIRE number, years to independence, and savings rate with projections.