this post was submitted on 14 May 2024
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FIRE (Financial Independence Retire Early)
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FIRE is a lifestyle movement with the goal of gaining financial independence and retiring early.
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I believe that's usually expressed as mutiples of your annual income with the general idea being that if you hit those benchmarks you should be able to maintain your current quality of life in retirement. So if you make 50k euro, Fidelity would want you to have 50k total savings by age 30, 150k by age 40, 300k by age 50, etc. People in the US generally plan on a 4% safe withdrawal rate. So the 10x savings that the Fidelity chart recommends at retirement age would provide a safe 40% of your prior income withdrawal with social security making up the rest.
I personally express my own savings goals in terms of desired retirement income since earned income can vary quite a bit. In which case if I wasn't counting on social security I would want to have 1/(4%) = 25 x my annual retirement income before retiring. 25x is definitely a big mltiplier, but if your actual spending level is significantly lower than your current income level, it's a lot more attainable than it initially sounds.
I mostly like how this article frames time to retire based on savings percentages. It's worth a read. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/