FIRE: Financial Independence, Retire Early
Stop trading your best years for a paycheck. FIRE is the movement that lets you escape the 9-5 grind decades before traditional retirement.
What is FIRE?
FIRE stands for Financial Independence, Retire Early. It's a lifestyle movement focused on extreme savings and investing to achieve financial freedom years—or even decades—before the traditional retirement age of 65.
Traditional Retirement
- • Work until 65, hope you're healthy enough to enjoy retirement
- • Save 10-20% of income, invest minimally
- • 40+ years of mandatory work
- • Rely on CPP, OAS, and employer pensions
FIRE Lifestyle
- • Retire in your 30s, 40s, or early 50s
- • Save 50-70%+ of income, invest aggressively
- • 10-20 years of focused work, then freedom
- • Self-funded through investments
Understanding Traditional Retirement in Canada
CPP (Canada Pension Plan)
$1,364/mo
Maximum at age 65 (2024)
OAS (Old Age Security)
$713/mo
Maximum at age 65 (2024)
Combined Government Benefits
~$25,000/yr
Before tax, at maximum
Traditional retirement relies heavily on government benefits, which may not be enough to maintain your lifestyle. Most financial advisors recommend replacing 70-80% of your pre-retirement income. That's why personal savings through RRSP, TFSA, and employer pensions are critical.
Why Early Retirees Need More Savings
Longer Time Horizon
Retiring at 35 means your money needs to last 50-60 years, not 25-30 years. You need a larger portfolio to sustain decades of withdrawals.
No Government Benefits Yet
CPP and OAS don't kick in until 60-65. Early retirees must fund their entire lifestyle from personal investments for 20-30 years.
Healthcare Costs
Without employer benefits, you'll need to budget for private health insurance, dental, prescriptions, and potential long-term care.
Inflation Over Time
Over 50+ years, even 2% inflation can triple your expenses. Your portfolio must grow to keep pace with rising costs.
The Core Philosophy
FIRE isn't about being cheap or depriving yourself. It's about intentional spending—cutting ruthlessly on things that don't matter so you can invest massively in your freedom.
The goal: build an investment portfolio large enough that the returns cover all your living expenses. Forever. Work becomes optional.
Safe Withdrawal Rates: Your Path to Freedom
How much can you safely withdraw each year without running out of money? It depends on how long your money needs to last—which depends on when you retire.
The 4% Rule for Traditional Retirement
The famous 4% rule (from the Trinity Study) says you can withdraw 4% of your portfolio in year one, adjust for inflation each year after, and your money has a 95%+ chance of lasting approximately 30 years. This is perfect for traditional retirement at age 65.
Traditional Retirement Formula (Age 65+):
Annual Expenses × 25 = Your Retirement Number
Example: $50,000/year × 25 = $1,250,000 needed
Early Retirement? You Need a Lower Withdrawal Rate
Important: The 4% rule is designed for ~30 years of retirement. If you retire at 30, you need your money to last 50-60+ years—not 30. The 4% rule could leave you broke in your 70s.
The younger you retire, the lower your withdrawal rate needs to be since your retirement savings need to last longer.
Your Withdrawal Rate Based on Retirement Age
Calculate Your Retirement Number
Example: $40,000/year in expenses
Retire at 30 (3% rule)
$1,333,333
$40k × 33
Retire at 40 (3.5% rule)
$1,142,857
$40k × 29
Retire at 50 (4% rule)
$1,000,000
$40k × 25
Example: $60,000/year in expenses
Retire at 30
$2,000,000
Retire at 40
$1,714,286
Retire at 50
$1,500,000
The younger you want to retire, the more you need to save. But the tradeoff is worth it—retire at 30 with a 3% withdrawal rate and you'll never worry about running out of money, even if you live to 100.
Calculate Your Retirement Number
How much do you actually need to retire? Use this calculator to find your personal retirement number.
How much do you need per year to cover all your living expenses in retirement?
Include CPP, OAS, workplace pension, or any other guaranteed retirement income.
Your Retirement Number
$1,000,000
This is how much you need in investments to retire (based on the 4% rule)
FIRE Calculator: Find Your Number
Use this calculator to find your FIRE number and see how long it will take to reach financial independence.
Your FIRE Number
$???
This is how much you need invested to retire
Time to FIRE (at 7% returns)
?? years
Premium Feature
Unlock the FIRE Calculator to see exactly how long until you reach financial independence.
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The Different Types of FIRE
FIRE isn't one-size-fits-all. Different flavours suit different lifestyles and risk tolerances. Find the path that matches your goals.
Lean FIRE
Retire on a minimalist budget. Think $25,000-$40,000/year in expenses. You're not living lavishly, but you're free.
Retirement Number: $825,000 - $1,333,333 (at 3%)
Best for: Minimalists, low cost-of-living areas, those who value freedom over luxury
Traditional FIRE
Retire with a comfortable middle-class lifestyle. $40,000-$60,000/year covers most normal expenses without extreme frugality.
Retirement Number: $1,333,333 - $2,000,000 (at 3%)
Best for: Those wanting a balanced lifestyle with reasonable comfort
Fat FIRE
Retire with a luxurious lifestyle. $100,000+/year for travel, nice home, and no compromises. The premium FIRE experience.
Retirement Number: $3,333,333+ (at 3%)
Best for: High earners who want early retirement AND luxury
Coast FIRE
Save aggressively early, then "coast" with a lower-stress job. Your investments compound to full retirement on their own.
How it works: Save enough that compound growth does the rest
Best for: Those who want work flexibility now, full retirement later
Coast FIRE Example
Let's say you're 30 and save $200,000 aggressively. At 7% average returns, that $200,000 becomes $1,500,000 by age 60—without investing another dollar.
You've hit Coast FIRE. Now you can work a low-stress part-time job that just covers your current expenses. No more grinding for retirement savings.
The Secret to FIRE: Your Savings Rate
Forget the "save 20%" advice. To achieve FIRE, you need to think bigger. Much bigger. Your savings rate determines how fast you reach financial independence.
Why 20% Won't Cut It
At a 20% savings rate, it takes approximately 37 years to retire. Start at 25? You're retiring at 62. That's not early retirement—that's normal retirement.
The math is simple: the more you save, the less you need (lower expenses = lower FIRE number), AND the faster your portfolio grows.
Years to FIRE by Savings Rate
This is Where Higher Income Comes In
Saving 50-70% on a $50,000 salary is brutal. But on a $150,000 salary? Very doable. You can live comfortably on $50,000 and invest $100,000/year.
FIRE is a two-sided equation:
- 1. Cut expenses to reduce your FIRE number and increase savings rate
- 2. Increase income to supercharge your investment contributions
The fastest path to FIRE? Attack both sides aggressively.
Higher Income = Faster FIRE
There's a limit to how much you can cut. But there's no limit to how much you can earn. Increasing your income is the accelerator pedal for FIRE.
Person A: Average Income
- Income: $60,000/year
- Expenses: $40,000/year
- Savings: $20,000/year (33%)
- Retirement Number: $1,333,333 (3% rule)
- Time to FIRE: ~30 years
Person B: High Income
- Income: $150,000/year
- Expenses: $50,000/year
- Savings: $100,000/year (67%)
- Retirement Number: $1,666,667 (3% rule)
- Time to FIRE: ~12 years
Ways to Boost Your Income for FIRE
Ready to Start Your FIRE Journey?
This page covers the basics. But achieving FIRE requires a detailed, step-by-step strategy customized to YOUR income, expenses, and goals.
What You'll Learn in the Wealth Exit Strategy:
Stop dreaming about financial freedom. Start building it today.