What Is the FIRE Movement? Saving Principles to Retire Early

Mar 19, 2024 2 min read

Many Americans are aware that the traditional retirement age is 65, but there’s momentum behind retiring sooner than that dubbed the fire movement. So, what exactly is the fire movement and how can you be a part of it? 

What Does FIRE Mean?

In a nutshell, Financial Independence Retire Early (FIRE) is a retirement strategy to save and invest your income aggressively to retire sooner than 65, potentially in your 30s or 40s. This movement encourages putting 50-75% of your income into your retirement savings to build the account faster. While this type of extreme saving may not be for everyone, we’re here to break down the different types of FIRE lifestyles and how your can achieve a FIRE savings plan. 

Types of FIRE Lifestyles

There are different FIRE lifestyle saving strategies that you can follow to work towards early retirement. Here are the four most popular types of FIRE strategies and what they mean. 


If you’re following the lean FIRE strategy, this likely means you’re currently living a minimalist lifestyle with plans to live a modest lifestyle in retirement. 


If you’re following the fat FIRE strategy, you’re likely saving aggressively to not have a limit on your standard of living or retirement lifestyle budget. This might mean you want extra money saved to travel or support loved ones. This type of strategy will likely require more savings than the lean FIRE strategy. 

Coast FIRE

If you’re following the coast FIRE strategy, you should already have a retirement account that is saving, with the help of compound interest, to cover your traditional retirement without any further contributions. This strategy is harder to follow, as time is not on your side when trying to grow a retirement account with interest. 

Barista FIRE

If you’re following the barista FIRE strategy, you likely have aspirations for saving aggressively while working full-time to retire early and enjoy work-life balance while maintaining a part-time job. This type of lifestyle may mean that working after retirement could partially supplement your living expenses. 

How Does FIRE Work?

Thinking that one of these FIRE strategies may work for you? There are steps you can take to save for financial independence and early retirement. 

  1. Prioritize Saving and Investing

When it comes to following a fire investment strategy, there’s no question that the savings and investment into an account will likely need to be aggressive. Many FIRE strategies suggest following the 25x rule for retirement savings to keep you on track. This means that you need to save 25 times your annual expenses to retire. To figure out what that number is you’ll need to figure out your annual expenses. Multiply your monthly expenses by 12, then multiply that number by 25 to get your FIRE number. 

  1. Keep Expenses Low

As you can tell, achieving early retirement requires extreme saving. This may mean that your living expenses and overall annual expenses will have to be lower to achieve a FIRE strategy. Finding ways to cut back on your spending or expenses and lowering your means of living can help make a difference in your savings.  

  1. Max Out Your Retirement Accounts

When it comes to saving for retirement, another step you can take is to max out your retirement accounts. These plans are built to be an asset to you in the future. By taking advantage of the benefits that retirement plans offer, your accounts can help you. Putting as much money into these accounts as allowed can help you get to an early retirement. 

  1. Boost Your Income

Who doesn’t enjoy having additional money hit your bank account each month? Having a part-time job or a side hustle may be what helps you achieve a FIRE strategy.

Benefits and Disadvantages of the FIRE Method

With anything, the Fire method has benefits and disadvantages. Prioritizing your retirement, creating a clear financial goal to work towards, having a budgeting mindset to reduce your spending and creating more flexibility and time in retirement are all great reasons to adopt the Fire method lifestyle. 

Common areas of concern for this savings plan include practicality, the potential for an unhealthy work-life balance, not participating in life events that would affect retirement plans and income needs and other lifestyle tradeoffs. 

How to Retire Early

If an early retirement is a goal for you, you can follow the FIRE movement to achieve that. When you’re looking at how to save for an early retirement, consider cutting back on your expenses, getting out of debt, building an emergency fund, contributing more to your retirement accounts and taking advantage of tax-saving strategies all to maximize your savings. 

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.