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What is the FIRE Movement?
FIRE stands for Financial Independence, Retire Early. The movement is built on a simple but powerful insight: if you accumulate enough invested assets, the growth from those investments can fund your lifestyle forever — meaning you never have to work for money again unless you choose to.
FIRE Number = Annual Retirement Expenses ÷ Safe Withdrawal Rate
At 4% SWR: FIRE Number = Annual Expenses × 25
Years to FIRE: Solve FV = PV×(1+r)^n + PMT×((1+r)^n−1)/r for n
At 4% SWR: FIRE Number = Annual Expenses × 25
Years to FIRE: Solve FV = PV×(1+r)^n + PMT×((1+r)^n−1)/r for n
The Math Behind Financial Independence
The 4% rule comes from the Trinity Study — a landmark 1998 analysis showing that a portfolio of 50-75% stocks, if withdrawn at 4% per year, survived virtually every historical 30-year period, including the Great Depression and stagflation of the 1970s. Multiply your annual expenses by 25 and you have your FIRE number.
What is the 4% rule?
The 4% rule states that you can safely withdraw 4% of your investment portfolio each year in retirement without running out of money over a 30-year period. It comes from research by William Bengen (1994) and the Trinity Study (1998). At a 4% withdrawal rate, your FIRE number is exactly 25× your annual expenses. Some FIRE practitioners use 3.5% or 3% for longer retirements (40-50+ years), which increases the FIRE number to 28.5× or 33× expenses.
What is the difference between FIRE, Lean FIRE, and Fat FIRE?
Regular FIRE means having 25× your current annual expenses invested. Lean FIRE targets a more frugal lifestyle — typically under $40,000/year in expenses — resulting in a smaller FIRE number (often under $1M). Fat FIRE aims for a more comfortable or luxurious lifestyle, typically $100,000+/year in spending, requiring $2.5M or more. The right flavor depends entirely on your lifestyle goals — there is no single right answer.
What is Coast FIRE?
Coast FIRE is the amount you need invested today so that — with no additional contributions — your portfolio grows to your full FIRE number by traditional retirement age (65). Once you hit Coast FIRE, you only need to earn enough to cover living expenses, with no pressure to save aggressively. The formula is: Coast FIRE = FIRE Number ÷ (1 + annual return)^(65 − current age). It's a powerful intermediate milestone that dramatically reduces financial stress even before full FIRE.