FIRE – Financially Independent, Retire Early
FIRE (also known as Financially Independent, Retire Early) is a…
FIRE (also known as Financially Independent, Retire Early) is a lifestyle movement that allows you to enjoy an early retirement, much earlier than the conventional age of 65 through extreme savings and investment, somewhere between 50-70% of your income. For some, it is not about retiring but about having the freedom to choose how to spend your life without having to worry about money.
This strategy is based on two common retirement strategies: the 25x Rule and the 4% Rule, each of which helps people set up “safe” rates of withdrawal from their retirement savings. FIRE practitioners aim to save 25x their annual expenses and typically withdraw 3% to 4% from their funds annually to cover their living expenses following early retirement. This requires extreme dedication in assessing, planning, and reallocating your investments from time to time to maintain the desired lifestyle.
Retiring soon but living frugally. This is for FIRE practitioners who prefer to live a comfortable, frugal, and simple lifestyle during retirement. This requires you to generate just enough passive income to fulfill your essential needs such as clothing, food, housing, and transportation.
This is for the individuals who wanted to save significantly more than a typical worker but still wanted to maintain or improve their current standard of living. This will need a higher investment income and might take you a little longer to achieve your FIRE number.
This is a combination of both Lean and Fat FIRE. After you have reached your FIRE number, you get to retire from your full-time job then get a side hustle or a part time job that you love to fund post-retirement expenses such as healthcare insurance.
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