Retirement Example
FIRE Retirement — Early Retirement at 45 Example
How the FIRE movement works: accumulate 25× expenses and retire early.
Scenario
FIRE at 45. Monthly expenses: $4,000. FIRE number = 25× annual expenses.
Inputs
Monthly Expenses$4,000 ($48k/year)
FIRE Multiple25× (4% rule)
Target$1,200,000
Results
FIRE Number$1,200,000
Savings needed at $2k/month (7%)~22 years (retire at ~47)
Savings needed at $3k/month (7%)~16 years (retire at ~41)
Explanation
FIRE = save 25× your annual expenses. At $48k/year, you need $1.2M. Saving $3k/month at 7% gets you there in ~16 years. The key levers: reduce expenses (lower the target) and increase savings rate (reach the target faster).
Key Takeaways
- "Lean FIRE" ($30k/year) needs only $750k. "Fat FIRE" ($100k/year) needs $2.5M.
- Health insurance before Medicare (age 65) is the biggest FIRE planning wildcard.