Written By : Kim Borwick
Edited By : Emily Miller
Financially Reviewed By : Peggy James, CPA
This page features 7 Cited Research Articles

Annuity.org partners with outside experts to ensure we are providing accurate financial content.

These reviewers are industry leaders and professional writers who regularly contribute to reputable publications such as the Wall Street Journal and The New York Times.

Our expert reviewers review our articles and recommend changes to ensure we are upholding our high standards for accuracy and professionalism.

Our expert reviewers hold advanced degrees and certifications and have years of experience with personal finances, retirement planning and investments.

The FIRE movement first gained traction in 1992 when writer and speaker Vicki Robin teamed up with former Wall Street financial analyst Joe Dominguez to publish the first edition of their bestselling book, “Your Money or Your Life.”

The book, which was updated in 2018, offers advice on lifestyle changes, such as simple living and frugality, which form the backbone of the FIRE movement. Since the publication of “Your Money or Your Life,” many proponents of financial independence, retire early have subscribed to the book’s tenets in pursuit of retirement or a work-life balance that’s more life than work.

What’s the Goal?

Contrary to popular belief, not every FIRE adherent is looking to jump straight from the boardroom to the RV. In fact, many of those who seek financial independence do so not because they don’t want to work, but rather because they want to work at a job that aligns with their passions and brings them a sense of fulfillment.

Freedom from financial constraints offers them the opportunity to merge their vocation with their values, which, for them, is worth the material sacrifice.

The FIRE movement is more about a person’s relationship with and attitudes about money than about wanting to spend the second half of their lives lazing about on a beach somewhere or puttering around the garage. It’s about values and how those values shape a person’s lifestyle, both during and after his or her time in the workforce.

Take, for example, chartered accountant Barney Whiter. His early lessons concerning money came from watching his parents struggle to pay their mortgage after a major recession in the U.K. sent interest rates skyrocketing.

“I picked up on the idea that it was scary owing the bank a lot of money,” Whiter told BBC Worklife in 2018.

In response, he made some significant lifestyle changes, including biking to work, cutting expenses and putting half — yes, half — of his income toward his retirement savings each month.

Whiter was able to retire at age 43.

Should You Join the FIRE Movement?

Maybe your relationship with money hasn’t been marked by any traumatic experiences. Maybe you’re not willing to commit to such extreme austerity. You may still find a version of FIRE that works for you.

For example, Lisa Harrison, founder of the blog and podcast Mad Money Monster has adopted a variation on the FIRE philosophy. It’s called financial independence optional retirement, or FIOR, and it takes into account the fact that she plans to continue working, albeit on her own terms, once she achieves financial independence.

What’s important when considering earnestly pursuing financial independence is that you have a clear vision for your future and realistic expectations. Once you’ve defined your goals and your ideal retirement lifestyle you’ll know which version of FIRE will help you achieve them while allowing you to enjoy life to the fullest now. And that’s different for everyone.

Our work gives our lives a sense of meaning. Some people love their jobs. For most employed Americans, career and identity are inextricably entwined. Without a plan for replacing the value and purpose your job brings to your daily life, FIRE followers may find themselves adrift.

In their 2014 article “Finding Meaning During the Retirement Process: Identity Development in Later Career Years,” researchers from Boston University and the University of Melbourne discussed the differences between the traditional career model, which follows a sequence of career stages, and the contemporary view of careers, which is characterized by “a lot of change, often self-directed, and movement across various boundaries, such as occupations, employing organizations, industry or sector specializations, different levels of work involvement … and type of employment.”

Graphic about the 5 stages of career change

In the contemporary model, the authors theorize, people transition and adapt to new identities more frequently. In this respect, retirement is similar to a career transition from one organization to another, which is especially true for people who choose to work when they don’t have to.

Joining the FIRE movement may give you a sense of control over your finances. After all, that’s what independence is all about — having control of your present and your future. You may not have control over the markets or the state of the economy, but with a shift in mindset and hefty dose of discipline, you can make the lifestyle changes, both big and small, to determine the trajectory of your financial future.

And you don’t have to go all-in on the FIRE movement to do so.

Looking for guaranteed income in retirement?
Annuities can provide you with income for life, ensuring you won't run out of money in retirement. Find out if an annuity is right for you.

How Much Will You Have to Sacrifice in the Name of FIRE?

Financial experts advise people who plan to retire at the traditional retirement age of 65 to save 12 to 15 percent of their income in a retirement savings account.

This retirement savings goal is far below the amount needed to implement any variant of the FIRE strategy. While the FIRE movement doesn’t always require what, for many, is an unsustainable lifestyle, you will have to make some sacrifices now to make early retirement a reality.

By now it should be clear that FIRE is more than a simple exercise in number-crunching and budgeting for retirement. It’s a way of life, and it’s not for everyone.

However, the FIRE — and FIOR — movement has been adapted over the years to accommodate different levels of extreme saving and investing.

Consider these alternative subgroups:
You save more for retirement than the average American worker, enough to fund your ideal lifestyle during your retirement years.
You adopt a lean, minimalist lifestyle during retirement, spending less than the average retiree.
Barista FIRE
You are able to quit your day-job, but you have to work part time to supplement retirement savings.
Coast FIRE
You save just enough that compounding allows you to “coast” the rest of the way to your retirement saving goal.

Saving and investing up to 70 percent of your income is a daunting enterprise, but for those who have grown tired of keeping up with the Joneses, it may not feel like a huge sacrifice.

For Whiter, it was a small price to pay for freedom.

“I felt like I was in a prison camp, working to sustain a lifestyle I didn’t actually want.”

Graphic showing a pyramid of steps for achieving FIRE
Source: Insured Retirement Institute

Is FIRE Achievable?

Critics of the FIRE movement cite the inaccessibility for a large percentage of Americans.

According to the Federal Reserve, many adults struggle with saving for retirement and many people who have some retirement savings “commonly lack financial knowledge and are uncomfortable making investment decisions.”

Furthermore, the Fed reports that “people answer fewer than three out of five financial literacy questions correctly, with lower scores among those who are less comfortable managing their retirement savings.”

These are important findings because aggressive investing is paramount to a successful FIRE strategy, and financial literacy underlies people’s decisions about the types of investments needed to execute FIRE, or any other long-term financial plan.

Critics also point to the unrealistic expectations set by the success stories of FIRE followers who have had opportunities that elude most working-class Americans. Few of us have the leverage of a large inheritance or real estate investments or high-performing portfolios to get us started.

The Plutus Foundation, a nonprofit that “provides grant money and resources to provide opportunities for the financial media to create, develop, and administer community-based programs that enhance financial literacy, education, and empowerment” has compiled a list of FIRE bloggers who offer a more realistic take on financial independence with advice that the average person can use.

In addition to not having enough income to get started, there are drawbacks to even successful FIRE strategies.

According to Greg Klingler, director of wealth management at the Government Employees’ Benefit Association in Fort Meade, Maryland, these downsides include:
  • Missing out on retirement contributions
  • The risk of outliving your savings
  • Less Social Security income
  • Pricey health care
  • Boredom
  • Limited activities
  • Well-being risks

Depending on your plans for your early retirement, many of these may not apply. For example, if you plan to continue working for your employer, you will still have health care coverage, mental and physical stimulation and a sense of purpose.

You can’t control financial shocks or economic crises, so there will always be a risk involved when it comes to the stock market, the stability of Social Security, the declining health of an aging parent or a global pandemic such as COVID-19.

But if you plan carefully with the help of an experienced financial advisor, you can mitigate the possibility of outliving your savings. Consider purchasing an annuity that guarantees lifetime income for added financial security in retirement. As with FIRE strategies, annuities can be customized to fit your financial plan.

Before you can decide if FIRE is something you can — and want — to achieve, you need to take inventory, not just of your assets and debts, but of your values, hopes and dreams for the future.

Financial independence and retiring early are worthy goals but not in and of themselves. Consider the source of the FIRE movement. When Vicki Robin and Joe Dominguez set out to test the limits of frugality, it was in an effort to align their actions and behaviors with their values and beliefs. This is referred to as “intentional living,” and it is more rewarding than a number on a bank statement.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: July 12, 2021

7 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Board of Governors of the Federal Reserve System. (2019, May). Report on the Economic Well-Being of U.S. Households in 2018. Retrieved from https://www.federalreserve.gov/publications/files/2018-report-economic-well-being-us-households-201905.pdf
  2. Hartman, R. (2020, June 3). The Case Against Retiring Early. Retrieved from https://money.usnews.com/money/retirement/articles/the-case-against-retiring-early
  3. Mad Money Monster. (2017, November 17). F.I.O.R. Financial Independence Optional Retirement. Retrieved from https://madmoneymonster.com/2017/11/17/fior-financial-independence-optional-retirement/
  4. See, C. (2020, May 27). 12 FIRE Bloggers Who Are Realistic Role Models. Retrieved from https://plutusfoundation.org/2020/fire-bloggers/
  5. Stokel-Walker, C. (2018, November 2). FIRE: The movement to live frugally and retire decades early. Retrieved from https://www.bbc.com/worklife/article/20181101-fire-the-movement-to-live-frugally-and-retire-decades-early
  6. The Physician Philosopher. (2020, February 22). Review of Your Money or Your Life. Retrieved from https://thephysicianphilosopher.com/your-money-or-your-life/
  7. Wang, L., Hall, D.T., & Waters, L. (2014, October). Finding Meaning During the Retirement Process: Identity Development in Later Career Years. Retrieved from https://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199935291.001.0001/oxfordhb-9780199935291-e-25