By Ken McCormick
Vice President, Relationship Management

How to Join the FIRE Movement and Retire Early

Aug 08, 2023

  • Savings Accounts

Most Americans think they can’t retire until they are 65. You can retire at any age, but you won’t receive benefits if you retire before you reach 62. While most people will decide to wait for benefits, the FIRE movement believes you can retire much earlier.

FIRE stands for Financial Independence, Retire Early. The movement grew from concepts outlined in Vicki Robin and Joe Dominquez's 1992 best-selling book Your Money or Your Life. FIRE practitioners want to accumulate enough assets to create income covering living expenses throughout retirement. They suggest saving up to 70% of their annual income and living frugally, intending to retire in their 40s or earlier.

The FIRE movement gained traction among millennials in the 2010s through online communities such as blogs, podcasts, and discussion forums. Many people who adhere to FIRE principles don't plan to retire early; they just want to make choices without being tied to a traditional job.

Reaching FIRE goals depends on many personal circumstances, such as income level, spending habits, lifestyle preferences, investment returns, and unforeseen expenses.

Here are some tips for being part of the FIRE movement and retiring early:

  • Save aggressively, putting aside 50-75% of your income.
  • Work multiple jobs or freelance in your spare time.
  • Invest in low-cost index funds and open high-yield savings accounts and certificates of deposit.
  • Cut expenses, create a budget, and stick to it.
  • Maximize employer matching in retirement plans like a 401(k).
  • Use tax-advantaged accounts like an IRA to reduce taxes on retirement income.

The FIRE movement is not for everyone; it requires financial discipline over a long period, but the benefits of retiring early can be worth the sacrifice. If you want information on investing in a high-yield savings account, a certificate of deposit, or an IRA, call the experts at NASB at 800-677-6272.