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Bottom Line Up Front

  • A FIRE mindset can put you on the path to financial independence and early retirement.
  • FIRE is based on 3 simple principles: spend less, save more and invest wisely.
  • With the right strategy, FIRE advocates claim many people can retire well before age 65.

Time to Read

5 minutes

Most people expect to retire between the ages of 62 and 70—usually when they’re eligible for Social Security. The timing for your retirement probably will depend on how much money you’ve saved. But, what if you could build what you need faster? What if you could retire in your 50s or even earlier? FIRE followers say it’s very doable.

What is FIRE?

Financial Independence, Retire Early (FIRE) is a lifestyle choice. It’s a path to achieving financial independence at a relatively young age. Followers believe financial independence enables early retirement. So, they work to accumulate enough wealth and income to retire in their 50s, 40s or even 30s.

How does FIRE work?

FIRE is based on 3 simple principles: spend less, save more and invest wisely. The traditional strategy may be more than some want to follow. But, its principles can help almost anyone build a robust retirement fund. Here’s how it all comes together.

  • Spend Less, Save More. FIRE proponents emphasize saving a significant portion of their income—as much as 50 percent. They adopt frugal lifestyles and minimize unnecessary expenses. They become masters of defining whether something is a need or a want.
  • Invest Wisely. According to FIRE followers, saving alone isn’t enough to achieve financial independence. They believe investing in things like stocks, bonds, real estate and index funds can fast-track growth.
  • Financial Independence. FIRE followers work to ensure their investments and savings can sustain their desired lifestyle. Their hope is that they can cover their expenses without having to rely on employment income.
  • Early Retirement. Once financially independent, followers can choose to retire early or do other things. For example, they can pursue passions or careers that may not be as financially rewarding but provide greater personal fulfillment.

But, there’s no one-size-fits-all approach. Creative enthusiasts have modified the traditional methods to suit their own styles.

FatFIRE. This approach refers to people who want to keep their current standard of living while they’re working and during retirement. That means they’ll need to save more than traditionalists, and it may take longer to reach their goals.

LeanFIRE. With this method, some become more minimalistic to save enough money to retire even earlier. The downside is that since they’ll have a shorter timeline to build up their funds, they’ll likely have a smaller base.

BaristaFIRE. This is a middle ground between the Fat and Lean approaches. It allows individuals to retire early, while supplementing income with part-time or gig work (e.g., working as a barista or driving for a rideshare service).

How can I get started?

Your individual circumstances—such as your enlistment tenure or your civilian career—will affect your path. Here are some general guidelines to help you begin your FIRE journey.

  • Set Clear Financial Goals. Start by deciding when you want to retire. Then calculate how much money you’ll need and for how long. Our retirement calculator can get you started. Make sure to account for inflation and unexpected expenses. Then you’re ready to determine how much you need to save each year to reach your goal.
  • Track and Control Expenses. If you create a budget and track your expenses, you’ll be in a better position to save a significant portion of your income.
  • Increase How Much You Save. Aim to save a substantial portion of your income. Consider adopting a frugal lifestyle and cut back on unnecessary expenses. Review your budget for ways to save more. Ask yourself if there’s a less expensive way to get what you want.
    Navy Federal Investment Services Digital Investor is a low-cost online investing tool designed to make investing simpler. You can also take advantage of our financial advising services.
  • Pay Off Debt. Focus on paying off high-interest debt (e.g., credit cards, personal loans). Being debt-free will free up more of your income for saving and investing.
  • Decide How You’ll Generate More Money.
    • Build a Diverse Investment Portfolio. Start investing wisely. Educate yourself on investing. Learn about stocks, bonds, index funds, real estate and how they may help your funds grow. Make sure to diversify your investments to minimize risk and maximize returns. Navy Federal Investment Services Digital Investor is a low-cost online investing tool designed to make investing simpler. You can also take advantage of our financial advising services.
    • Maximize Retirement Savings. Open an IRA (or SEP if you’re self-employed) and contribute the maximum allowed. They offer tax advantages you won’t get with regular savings options. And, they could accelerate your progress toward financial independence. You can do this even if you already have a retirement account at your job. And, if your employer offers to match your contributions, take advantage of that. It’s like getting free money.
  • Monitor Progress and Adjust. Regularly review your financial progress and adjust your plan as needed. Track your net worth, investment returns and savings rate to ensure you're staying on track.
  • Keep Learning. Learn about personal finance, investing strategies and other topics to help you reach your goal. There are plenty of books, blogs, podcasts and online communities that can help.

It won’t happen overnight. Much like a commitment to military service, it requires perseverance and diligent commitment to a clear objective. But, if you stay focused, the rewards can be tremendous!

Set your finances on FIRE

Whether you’re investing your first few dollars or reaching a major savings milestone, we’re ready to help celebrate your FIRE successes! And, the best way to get there is to offer you plenty of options to help you on your financial journey. See how Navy Federal can help you reach your savings goals.

Key Takeaways Key Takeaways


Navy Federal Financial Group, LLC (NFFG) is a licensed insurance agency. Non-deposit investments, brokerage, and advisory products are only sold through Navy Federal Investment Services, LLC (NFIS), a member of FINRA/SIPC and an SEC registered investment advisory firm. NFIS is a wholly owned subsidiary of NFFG. Insurance products are offered through NFFG and NFIS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of Navy Federal Credit Union (NFCU), are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. Deposit products and related services are provided by NFCU.

Digital Investor offered through NFIS.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.