If you’ve spent any time in online personal finance forums, you’ve likely heard of the term “FIRE,” which stands for Financial Independence, Retire Early.
The movement was pioneered in the 1990s in a book called Your Money or Your Life by Vicki Robin and Joe Dominguez, as well as bloggers and authors like JL Collins — often called the “Godfather of FI” — whose book The Simple Path to Wealth continues to influence a new generation of savers to this day.
At its core, FIRE is about aggressive investing so you can build enough wealth to cover your living expenses decades before traditional retirement age. But Business Insider found that most millennials pursuing it today say it’s not really about chasing a life of permanent leisure. It’s about freedom — the ability to work less, choose what you work on and how much you want to work (1).
And despite inflation, rising housing costs and layoffs, some millennials are still pushing toward that goal, but with a more flexible mindset than the movement’s early adopters.
Traditionally, retirement in the United States happens much later in life.
According to a 2024 MassMutual survey, the current average retirement age is 62 — up from 57 in 1991 and 59 in 2002 (2). As health care costs rise and inflation increases the price of everyday essentials, many Americans are working longer out of necessity.
But FIRE challenges that norm. The original formula was simple but also pretty intense: live on as little as possible, invest as much as you can and aim to save roughly 25 times your annual expenses. That rule is based on the 4% rule, which dictates that you can withdraw 4% of your portfolio annually in retirement without running out of money.
In its earliest form, FIRE often meant extreme frugality: skipping restaurants, driving older cars, house hacking and saving 50% to 70% of your annual income. The goal was to exit the workforce as soon as possible, but for many millennials, the movement has evolved.
Take Amberly Grant, for example. Grant saved aggressively in her 20s and believed she’d be able to retire by the time she reached 40, but having kids and paying for her father’s housing in her 30s made reaching her savings goals much more difficult.
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“Because I’ve been so rigid with my spending and my idealism regarding my FIRE goals, I think it makes these times harder emotionally than they should be,” Grant shared with Business Insider (1). “I feel like a failure, but I’m not a failure; I’m just living life, and that’s OK.”
In other words, modern FIRE practitioners are realizing that life happens, and it might not always be possible to save half or more of your income.
Today’s version of FIRE often looks more flexible. For example, someone who loves scuba diving may prioritize travel but skips dining out and pricey streaming services. Another person may pursue “Coast FIRE,” meaning they’ve invested enough that their money can grow to their FIRE number, even if they reduce contributions and continue working.
The emphasis is less on deprivation and more on intentional spending: cutting ruthlessly where you don’t care, and spending freely where you do. This shift might make it possible for more people to embrace the FIRE movement.
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Is FIRE realistic for everyone? The honest answer is no, at least not in its more extreme form. However, as the movement shifts from bare-bones living to flexibility and freedom, it’s becoming easier for everyone to take what they need from FIRE strategies.
Even if early retirement isn’t your goal, here are some FIRE strategies that can help increase your financial flexibility.
Start as early as you can: The core of the FIRE movement is compounding interest. By saving aggressively in your 20s (when most of us aren’t thinking about retirement), your savings has more time to grow. But if you’re closer to your 60s than your 20s, you can still get started — though your timeline for robust retirement savings might be a little bit longer.
Set it and forget it: Have a set amount transferred from your checking account to your investment account each month. By “paying yourself first,” you’ll be able to save more because those funds won’t get spent elsewhere.
Keep it simple: Most FIRE enthusiasts focus on low cost index funds like the Vanguard Total Stock Market Index Fund Admiral Share (VTSAX), which has traditionally performed well. A common phrase in the FIRE community is “VTSAX and chill,” meaning you put all or most of your savings in this index fund and leave it for the long term (3). Consistency is more important than complex investing strategies.
Focus on what matters: Cut spending in areas that don’t add real value to your life, while keeping or even increasing spending on what truly matters to you. Intentional spending often leads to higher savings without feeling deprived.
For some millennial adopters, FIRE isn’t about retiring early at all. It’s about building enough of a financial cushion that they can say no to toxic jobs, burn out or being forced to work into their 70s.
Even if you have no desire to leave the workforce, the habits behind the FIRE movement — saving intentionally, investing consistently and aligning your spending with your values — can move you closer to the life you want to live.
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Business Insider (1); NerdWallet (2); Fiology (3).
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.