By Vera Wilson
When I took a voluntary severance package after working with a company since my college graduation 16 years prior, I often joked I was retiring. It was wishful thinking on my part, but then again, I didn’t know about the Financial Independence/Retire Early (FIRE) movement at the time.
Followers of the FIRE movement have one goal: to accumulate wealth at a rapid rate so they can live without working. FIRE is fueled by millennials who put a high value on achieving financial independence early in their lives. For some, that means being able to leave a traditional job decades before the standard retirement age to travel, be more present for their family, or just escape what they perceive to be the drudgery of work. For others, it’s the freedom to pursue the work of their choosing without being a slave to a paycheck.
This is not for the “eat, drink, and be merry, for tomorrow you may die” crowd. FIRE followers often decrease their living expenses dramatically to reach their savings rate goal, which at minimum is 50% of their income. Terms like "frugality" and "simple living" are the mantras of FIRE fans. Increasing income through side hustles or investing is another way those in the FIRE community beef up their savings.
[RELATED: MOAA's Early Retiree Page]
Critics of FIRE say that it’s only truly achievable for the rich. How can you save 50% if you can barely cover your bills? Although it does seem out of reach for the masses, there are real-life examples of teachers, IT programmers, and others firmly entrenched in the middle class who are making it work. Those who enter the military early and receive full military pensions in their 40s are potentially good candidates for the FIRE plan.
A common misstep of FIRE followers is not adequately saving for early retirement (you might have to make your savings last up to 50 years!), so at the risk of repeating myself in this column, plan wisely — and preferably with a financial adviser at your side.
If the thought of retiring before you need reading glasses appeals to you, the book that started it all is Your Money or Your Life by Vicki Robin. As the movement has grown, there are numerous blogs you can follow such as Mr. Money Mustache or Our Next Life.