FIRE stands for Financial Independence, Retire Early. The core idea: accumulate enough invested assets that your annual investment returns (assuming ~4% withdrawal rate) cover your living expenses indefinitely. You don't need to retire early — financial independence means you could stop working, which gives you options whether or not you use them.

The Three Main FIRE Variants

Lean FIRE: Retire on a minimal budget, often $40,000–$60,000/year. Requires a smaller portfolio (~$1M–$1.5M) but involves significant lifestyle constraints — often no luxuries, geographic arbitrage to lower-cost areas, and little margin for unexpected expenses.

Fat FIRE: Retire on a comfortable, above-average budget, often $80,000–$150,000+/year. Requires a larger portfolio ($2M–$4M+) but doesn't require lifestyle sacrifice. Most people pursuing FIRE are targeting this range.

Coast FIRE: Save enough early that you can stop contributing and coast to a traditional retirement age on compound growth alone. You still work — but only enough to cover current expenses, not to build savings. The least disruptive variant.

The 4% Rule Foundation

All FIRE calculations depend on the 4% rule: withdraw 4% of your portfolio in year one, adjust for inflation each year, and the portfolio historically sustains for 30 years. Your FIRE number = annual expenses ÷ 0.04. Spending $60,000/year requires $1.5M; spending $100,000/year requires $2.5M.

For early retirees with 40–50 year horizons, some researchers suggest a 3.5% withdrawal rate is more conservative. This pushes the required portfolio higher but reduces sequence-of-returns risk.

Coast FIRE: The Most Achievable First Milestone

Coast FIRE is particularly compelling because it's achievable much earlier than full FIRE. The Coast FIRE number is the amount you need invested today, at your expected return rate, to reach your full FIRE number by traditional retirement age (65) without contributing another dollar.

Example: A 35-year-old targeting $2M at 65 (30 years away) with 7% average annual returns needs $263,000 invested today to coast to $2M. If they have $263,000 saved at 35, they have achieved Coast FIRE — they only need to cover current expenses, not save for retirement.

Is FIRE Right for You?

FIRE requires an unusually high savings rate (often 40–60% of income) for 10–20 years. For most people on average incomes, this means dramatic lifestyle constraints. The question isn't whether FIRE is mathematically achievable — it's whether the trade-off (spending less now to retire earlier) aligns with how you want to live. Many people find that pursuing partial FIRE — building financial independence to have options, rather than racing to exit work at 40 — is more sustainable.