• The FIRE movement is for people who are motivated to save up enough to retire early.
  • The movement started in the 1990s but has drastically grown in popularity in recent years.
  • There are many types of FIRE based on your individual spending and needs to choose from.

For those who have dreamed of retiring early — and having their days freed from the obligations and pressures of a 9-to-5 job — there’s a rapidly-growing movement where everyday people prioritize this theme of enjoying their best years at a younger age. The Financial Independence; Retire Early (FIRE) movement is all about actually achieving that dream through extreme frugality, super saving, and investing early. 

The origins of the FIRE movement can be traced back to the 1992 book Your Money or Your Life by Joseph Dominguez and Vicki Robin. 

Vicki Robin was an aspiring actress who inherited about $20,000 in 1968 (equivalent to about $160,000 in 2022 dollars) from her grandmother and decided to take a road trip through the United States and Mexico. During her travels, she met Dominquez, who was a technical stock analyst on Wall Street, who retired in 1969 at the age of 31 after accumulating about $80,000 in wealth (equivalent to almost $650,000 in today’s dollars).

Together, they bonded over ideas of simple living, and adopted a philosophy of living frugally in order to avoid getting sucked into unfulfilling corporate careers. The book became a bestseller, and has sold over a million copies since its initial publication. 

Dominquez and Robin were seemingly ahead of their time, and the book that they wrote when most millennials were children became very popular with younger audiences and still reverberates with people who seek and prioritize a financially secure future at an earlier point in their lives. 

One reason for this could be that for many younger workers, retirement feels more out of reach than ever. The majority of millennials and Gen Z workers do not expect to receive much from social security, and lush pension checks are a thing largely of the past. With those barriers in mind, some younger workers have decided to completely flip the script on their relationships with careers, money, and retirement planning as a result.

There are many various forums dedicated to the FIRE movement online, and adherents can often be found on Reddit, in places like r/Financialindependence.

In these forums, aspiring early retirees will discuss various tips and tactics for achieving FIRE, like identifying your financial independence (FI) number, paying off debts, avoiding new debt, super saving, conscious spending, and investing well. Those who have "FIRE'd" also share cautionary tales and help dispel the myths from the reality of retiring early. 

However, as the movement has grown in popularity, it has splintered into several categories, based on the specific visions of individual FIRE adherents and their needs and budgets. There are four main subcategories of FIRE.

1. LeanFIRE

LeanFIRE is characterized by its adherence to frugality in retirement, anti-consumerism, and a minimalist approach. This particular offshoot is called leanFIRE because its adherents plan to live a lean, simple lifestyle where only basic needs are met. 

Most people who are attempting to achieve leanFIRE are hoping to have a nest egg that allows for a $50K a year (or less) lifestyle for households, or $25K per year for individuals. Because leanFIRE is characterized by minimalism, it's much easier to save up for, because you don't need as large of a portfolio to achieve it. 

For example, if you were to aim to achieve leanFIRE with an expected withdrawal rate of $40,000 per year and wanted to use the "x25 rule" to determine your retirement number, one would need a $1 million portfolio to pull the trigger, instead of needing several million dollars in investments. If you wanted to live an even leaner life — like on $25,000 per year or less — one would only need to save up $625,000. 

2. FatFIRE

FatFIRE is the opposite of leanFIRE and is characterized by the desire to retire with plenty of extra income and live a life of comfort with luxuries not common of leanFIRE adherents. Typically, this equates to savings that equal $100,000 per year or more in retirement. In order to reach this number keeping in mind the x25 rule, one would need to save at least $2.5 million to get there. 

Reasons for pursuing fatFIRE can vary, with some potential reasons including a desire to live in a high cost of living area or to retire with multiple residences, to be able to cover the costs of raising children or dependent elderly parents, or even just wanting to spend a lot of time traveling and purchasing luxury goods.

Due to the fact that this type of FIRE requires the early retiree to save such a high amount, fatFIRE adherents spend less time worrying about budgeting and saving — although that is a part of most FIRE strategies — and spend more time focusing on increasing their incomes in order to drastically increase their savings rates. Those who aim for a fatFIRE lifestyle may also have other streams of passive income and revenue such as owning rental properties or being a silent partner in a business.

3. CoastFIRE

CoastFIRE is a little bit different because it's not necessarily about retiring early, and many adherents of CoastFIRE plan on working until their 60s, which is a more typical retirement age. 

What coastFIRE is meant to accomplish is having all of your retirement savings front-loaded during a short period of time, usually about 10 or 20 years, and then capitalizing on compound interest to get your retirement numbers up to where they would need to be in order to retire comfortably when the time has come. 

For many adherents of coastFIRE, this is about having the peace of mind later in your career to be able to take risks or slowly begin scaling back, without having to worry about saving for retirement at the eleventh hour — hence, the theme of "coasting."

Some data suggests that this is a serious issue for people in the Generation X age bracket, who are poised to retire soon but as a collective have very little saved up in order to retire. One survey from last year even suggested that only 25% of all Americans in this age group have more than $250,000 saved, currently. 

There are some drawbacks to coastFIRE, because you can't always be sure of exactly how the market is going to go over the course of the next few decades, but it's typically safe to assume that your long-term returns on index fund investments will be approximately 8% to 10% per year. 

4. BaristaFIRE

BaristaFIRE is about approaching retirement from a hybrid method and focusing on having enough saved so that you do not have to work full-time, but still assuming that you'll be working part-time — perhaps as a freelancer or barista, which is where the name of this FIRE offshoot comes from.

Usually, the reason why someone would want to aim for semi-FIRE but get a part-time job is because they are hoping that they will get part-time work that provides health insurance. Starbucks is an example of one company that famously offers part-time employees health insurance, but it's not the only one. 

BaristaFIRE is also typically a little easier to achieve because you don't need to have as much saved up for retirement as you would need to if you were trying to retire early completely, assuming that a good bulk of your income is coming from your part-time job. And it's assumed that hourly wage jobs are typically plentiful and open to people of all age brackets and backgrounds.

For example, if you wanted to retire early and live off of $40,000 per year, you would need to save up at least $1 million before you could quit your job, but if you have a part time job that pulls in $20,000 per year, then you only need to have half of that amount saved up to make up the difference — $500,000. 

This type of FIRE may appeal to people who would like to stay somewhat busy, but perhaps don't like their current career paths and would like to achieve FIRE and redirect their lives and careers as soon as they possibly can, or for people who are interested in FIRE but anticipate having a lot of medical expenses and hoping to keep commercial health insurance to cover those extra costs.