Picture this schedule: meeting a friend for golf one day and a walk on the beach the next day. If you have the inclination, you could watch the sunrise with your coffee… read a good book… even take an afternoon nap.

This is often the picture painted of what retirement will look like. But this isn’t necessarily the goal of people who want to retire early. As is, way early.

After all, there’s no rule that says you have to wait until 65 to retire!

There’s a new movement, called FIRE, that’s been spreading in recent years where people in their 40s or even 30s are retiring…

What’s the FIRE movement?

Financial Independence, Retire Early (also called FIRE) is a financial movement and lifestyle strategy that aims to achieve financial independence and retire from traditional employment at a relatively young age.

Unlike “traditional” retirement, the goal of early retirement isn’t necessarily not working at all, according to Dave Ramsey, a well-known radio personality who offers financial advice. 

Instead, the FIRE movement is often centered on having the freedom to choose the work you want to do. This could even mean part-time employment, consulting, nonprofit work or pursuing entrepreneurial ventures.

Why would you want to retire early?

Everyone has different reasons, of course, but most common include:

  • Escape from unfulfilling job
  • Freedom to travel
  • Pursuing new passions
  • Spending time with loved ones
  • Improved quality of life in general – less stress, fewer demands, focus on wellness, time spent on what you want

So how do you retire early?

It’s no surprise that early retirement requires very careful planning. To make sure you can sustain a retirement lifestyle, you’ll need to diligently manage your finances and aggressively save and invest.

Some keys to retiring early include:

  1. Achieving financial independence. This means having enough savings and investments to cover your living expenses without the need for a traditional job. In other words, your passive income, generated from investments and other sources, should be sufficient to support your lifestyle.
  2. Large percentage of savings. Financial expert Dave Ramsey says a key aspect of FIRE is saving a significant portion of your income, often 50% or more. By saving aggressively and minimizing expenses, you can accumulate wealth more quickly.
  3. Carefully planned investment strategy. FIRE proponents typically invest their savings in a diversified portfolio of stocks, bonds, real estate, and other assets according to TIME. The goal is to grow their wealth over time and generate passive income through investments.
  4. Lower your cost of living. Many FIRE followers emphasize a minimalist and frugal lifestyle to reduce expenses and increase savings. This can involve cutting unnecessary spending, downsizing housing, and focusing on experiences rather than material possessions. This also includes living in an area with a lower cost of living.
  5. Add a side income. Generating additional income through side hustles or part-time work can help accelerate your journey to financial independence.

Of course, the FIRE movement isn’t for everyone…or even for most people. But what can we learn from this growing trend? That anyone can and should build wealth!

While you most likely need a high paying job to retire early, absolutely anyone can save and build wealth over time.

Whatever your goals are in retirement – whether it’s retiring at 50 to assist at your favorite nonprofit or retiring at 70 to golf everyday – you need a plan.

At INB, we can help by offering guidance in all areas of retirement planning. Give our INB Wealth team a call today.

Investment and insurance product and services disclaimer