Javascript is not enabled.

Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.

Skip to content
Content starts here


Leaving Website

You are now leaving and going to a website that is not operated by AARP. A different privacy policy and terms of service will apply.

The FIRE movement: Financial Independence, Retire Early

If you can be extremely frugal, you can retire early – but is it worth it?

spinner image desktop display of a stack of money next to a calculator with the words 'early retirement' in the calculation screen
iStock / Getty Images

Jim White is an engineer who loved his work — until he was promoted to middle management, when he began to hate getting up in the morning and going to the office​

So White began to save. A lot. He and his wife squirreled away 60 percent of their earnings. They stopped buying new cars or the latest clothes, ate out at restaurants less often and held onto additional income from rental properties. And in 2018, he retired — at 43.​

spinner image Image Alt Attribute

AARP Membership— $12 for your first year when you sign up for Automatic Renewal

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Join Now

“We’ve seen so many things and been to so many cool places together that we never could have done otherwise,” says White, who moved with his family for a year to Panama and got to spend more time with his daughter.

White is part of a grassroots but fast-growing movement called “financial independence, retire early,” or FIRE, which preaches frugal living and extreme savings.

Although it’s been around for three decades, FIRE has been propelled by some of the same factors that fueled the great resignation: a realization by many people that they consider their work unfulfilling.​

Rather than walk away for different jobs, however, FIRE calls for patiently creating nest eggs and getting a head start on their retirements, or freeing up time to follow paths they find more meaningful.​

​It isn’t only widespread job dissatisfaction that has quietly fueled FIRE. It was the bull market of the last few years, which turbo-charged retirement savings. But the ensuing downturn, and high inflation, both also serve as stark reminders of the risks of the early retirement trend.​

Even enthusiasts such as White, who now produces a blog about FIRE called Route to Retire, wonders: “Although we saved a good amount of money to cover our expenses for the rest of our lives, was it enough?"​

That doesn’t mean financial experts discourage the thinking behind FIRE. On the contrary; They say that at a time when half of Americans are storing away too little of their incomes for after they stop working, according to the Center for Retirement Research — the National Institute on Retirement Security puts the proportion who are under-prepared at an even higher 92 percent — it provides a great example.

“If it gets people to save more for retirement, that’s great,” says Andrew Biggs, a former principal deputy commissioner of the Social Security Administration who now is a senior fellow of the conservative American Enterprise Institute.​

A few caveats

Typically thought to have originated with the 1992 book Your Money or Your Life, which preached slowing down and valuing time over the pursuit of material things, the idea that would become FIRE (the name and its acronym came later) isn’t promoted by national associations or financial firms, but by an underground of influencers, bloggers and devotees who proselytize through YouTube videos, self-help books, meetup groups and weekend retreats.​

It generally calls for saving at least 25 times annual expenses, at which point a person will presumably have enough money to quit full-time work, retire or pursue some other passion. After that, FIRE says, he or she should spend no more than 4 percent of those savings per year.​

This demands extraordinary thrift.

​When Nicole Gosz and her husband started following FIRE, “we focused on living on as little as we could,” she says. She spent $12 in one year on makeup, for example — beauty e-tailer SkinStore reports the average woman spends $8 per day on makeup — “and I coupon and layer that on top of sales.” She says she and her husband eat 90 percent of their meals at home.​

And that’s not even the hard part. Retiring early from a full-time job means having to buy health insurance, the cost of which goes up with age, and living without the safety net of Social Security, which can’t be claimed until age 62.

Shopping & Groceries

Coupons for Local Stores

Save on clothing, gifts, beauty and other everyday shopping needs

See more Shopping & Groceries offers >

​It can be isolating, since most other people of the same age still work. “You’ll be the youngest person on the golf course,” jokes Andy LaPointe, a former investment advisor who retired himself at 43 and is author of the book Personal Finance Strategies for a Secure Retirement. ​

Saving enough to retire early is also obviously much harder for people with low incomes or student loans and other debts. Many people in the FIRE movement work in higher-paying jobs, often — like Jim White — in technology.​

​“The idea that this is going to be a mass movement … well, a mass movement among young people making $200,000 right out of college,” says Biggs of AEI.​

Unforeseen expenses or such things as the high inflation and bear market of the last year can upset carefully made financial calculations. And if that requires going back to work full time, prospective employers may question gaps in a career.​

Great if you can do it

FIRE “is a great strategy, but it’s not for everyone,” says Levon Galstyan, an accountant in Glendale, California, who tried FIRE for a few months but found it isolating to forgo social activities as part of his savings strategy. “It requires you to sacrifice your today for the future.”​

On the up side, however, FIRE builds good financial habits, Galstyan says, making people more careful about how they spend, more conscious about how they invest their money and more resistant to the temptations of America’s consumer economy.

Kevin Hines, who retired last year at 60 from his job as an optical engineer, says he’s learned to do such simple things as looking away from commercials.​

“You do really have to be meticulous in your planning. You can’t just wing it,” says Sam Dogen, creator of the Financial Samurai blog and author of Buy This, Not That: How to Spend Your Way to Wealth and Freedom.

Dogen started following the precepts of FIRE when he was 22, hoping to retire from his job in finance by 40. A negotiated severance package moved that timetable up to 34.​

“No more meetings, no more commute. And that was priceless, in my opinion,” says Dogen, 45, of San Francisco. “It’s about being beholden to nobody.”​

spinner image membership-card-w-shadow-192x134


Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Not just retirement

Not everyone is focused on the retirement part of FIRE. Many FIRE followers concentrate on the “financial independence” piece, using it to free them up for work they consider more rewarding.

“There’s a saying in the FIRE community that holds true: People come for the early retirement and stay for the financial independence,” says Brian Davis, a real estate investor and founder of SparkRental, which helps people leverage real estate income to retire early. He himself banks all of his income while he and his wife live off her teacher’s salary.​

“Every single person I know who reached financial independence at a young age went on to do some other type of work, whether starting their own small business, working for nonprofits or a passion project,” Davis says. “The big difference? They work on their own terms.”​

Gosz, for instance, who previously worked in retail management, quit to start her own marketing firm, Rooted Marketing. “That is certainly not something that I could have done without taking the steps we did financially,” she says.​

She and her husband use a portion of their newfound time to make meals for a homeless shelter. And she finds another benefit to FIRE: less worry about the economy. “It reduces your stress about those sort of things, when you learn to live off of significantly less than what you make.”​

Hines, who heard about FIRE when he was in his mid 50s from a younger coworker, volunteers to teach technology and referees high school robotics competitions.​

For Tim Huebsch, too, FIRE “is not about getting faster to a point where I can retire. It’s more about having the independence to make your own choices.”​

Huebsch, of the Minneapolis suburb of Maple Grove, paid off his mortgage early, when he was 27, leaving him debt free. Now 43, he endows university scholarships, for 32 students so far. ​

“A lot of people who are drawn to this,” Huebsch, who also works in tech, says of FIRE, “are on that search to find meaning in their lives.”​

Discover AARP Members Only Access

Join AARP to Continue

Already a Member?