FIRE Movement
Learn the paths inside Financial Independence, Retire Early - from Lean FIRE to Fat FIRE - and how milestones like Coast FIRE mark progress toward each target.
What FIRE Really Means
FIRE stands for Financial Independence, Retire Early. At its best, it is not only about quitting work early. It is about building enough financial flexibility that work becomes a choice instead of a permanent requirement.
The idea is simple: lower the gap between income and expenses, invest the surplus, and let compounding do more of the heavy lifting over time. The details are personal, but the engine is consistent: spending, savings rate, invested assets, and the kind of work you want later.
The FIRE formula in plain English
The less your life costs, the smaller the portfolio required to fund it. The more you invest, the sooner your portfolio can either fully support you or coast toward that point.
Different Types of FIRE
Most FIRE paths use the same building blocks. In the calculator, you model them by changing the annual spending target and optionally adding part-time income.
FIRE
Build enough invested assets that a sustainable withdrawal rate can cover your annual spending without paid work.
Formula
Annual spending / Withdrawal rate
Who it may appeal to
Appeals to people who want a clear full-independence target and expect investments to cover most or all future living costs.
Lean FIRE
Reach independence with a lower-spending lifestyle, usually by keeping housing, transportation, and recurring costs intentionally modest.
Formula
Lean annual spending / Withdrawal rate
Who it may appeal to
Appeals to minimalist households, low-cost-of-living plans, and people who would trade lifestyle complexity for an earlier independence date.
Fat FIRE
Target a larger portfolio so retirement can support higher spending, travel, family support, or a wider margin of comfort.
Formula
Fat annual spending / Withdrawal rate
Who it may appeal to
Appeals to people who want financial independence with higher comfort, travel, private healthcare options, family support, or a larger margin of safety.
Barista FIRE
Use investments to cover part of life while flexible, part-time, or lower-stress work covers the remaining expenses.
Formula
(Annual spending - Part-time income) / Withdrawal rate
Who it may appeal to
Appeals to people who want semi-retirement, benefits, creative work, consulting, or lower-stress income instead of a hard stop from work.
Coast FIRE as a Milestone
Coast FIRE is not a separate lifestyle target here. It is the point where today's portfolio could grow into a selected FIRE number by your target retirement age.
Coast FIRE milestone
For any FIRE type, Coast FIRE asks whether your current invested assets are large enough to compound into that future FIRE number, even if additional retirement contributions slow down.
Formula
Future FIRE number / (1 + Expected return) ^ Years until retirement
How to Read the FIRE Output Chart
The calculator chart compares your projected portfolio with the Coast FIRE threshold and the full FIRE target over time.
Example FIRE projection
Based on the sample scenario: age 35, $150k invested, $5k monthly contributions, age 60 target retirement, 7% return, 3% inflation, and $80k annual spending.
Coast FIRE threshold
When the portfolio line crosses this threshold, current assets may be large enough to coast toward the FIRE target by the retirement age.
Full FIRE target
When the portfolio line crosses this target, investments may be large enough to support the spending target under the withdrawal-rate assumption.
Drawdown start
Drawdowns begin only once the plan has reached the target retirement age and the full FIRE target is ready.
What Moves the Timeline
Small changes compound when they affect the gap between income, spending, and investing.
Expenses
Lower recurring expenses reduce the portfolio needed for independence.
Invested Assets
Existing investments can reach a Coast FIRE milestone when given enough time.
Savings Rate
A higher savings rate both adds fuel and proves you can live on less.
Optional Work
Flexible income can reduce the portfolio needed for Barista or semi-retired paths.
Tradeoffs to Respect
FIRE can be empowering, but the clean spreadsheet version is never the whole story.
- Markets can spend years below expectations, especially near retirement.
- Healthcare, taxes, insurance, and housing can change the real target.
- Inflation can quietly raise the income your future portfolio needs to provide.
- Family plans, caregiving, burnout, and career changes can reshape the timeline.
Turn FIRE milestones into your roadmap
Build a free My Money Plan that connects long-term independence with today's debt, cash reserves, savings goals, and retirement contributions.
Disclaimer
My Money Analytics is an educational service, not a licensed investment, tax, or financial advisor. This FIRE guide is for educational purposes only and should not be treated as personalized financial advice.