Glossary
Financial Independence (FIRE)
Having enough invested that portfolio withdrawals can cover living expenses indefinitely, making work optional.
Financial independence (FI) is the state where your invested assets can fund your living expenses indefinitely — work becomes optional. The FIRE movement (Financial Independence, Retire Early) turned it into a formula: using the 4% safe withdrawal rate, FI arrives when investments reach 25× annual spending.
The framework’s sharpest insight is that your savings rate — not your income — sets the timeline. Saving more simultaneously grows the portfolio faster and proves you live on less, which shrinks the target. The resulting math is striking: at a 10% savings rate, FI is roughly a 50-year project; at 50%, about 17 years; at 65%, closer to 10 — from a standing start, regardless of salary level.
The movement has since speciated: Lean FIRE (frugal spending, smaller target), Fat FIRE (generous spending, larger target), Coast FIRE (enough invested young that compounding alone finishes the job by traditional retirement age), and Barista FIRE (part-time work covering the gap). All are points on the same equation.
FI’s real product isn’t necessarily retirement — many at the threshold keep working by choice. It’s the removal of must from the sentence. Find your own years-to-FI in the FIRE calculator.
Related calculators
- FIRE CalculatorCalculate how many years until financial independence based on your savings rate, using the 4% rule. See how saving more moves your FIRE date.
- Retirement CalculatorProject your retirement savings with employer match, annual raises, and inflation. See your nest egg in today's dollars, year by year.