Thinking About FIRE? Read This First

Executive Summary

The Financial Independence, Retire Early (FIRE) movement has gained serious traction, but behind the simplicity of the acronym lies a set of complex trade-offs. Keith Demetriades, CFP®, CKA®, explains how FIRE works, what it really takes to retire decades early, and how to adapt the mindset even if the full strategy doesn’t fit your life.

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Thinking About FIRE? Read This First

Imagine waking up on a Tuesday morning with no alarm, no meetings, and no work obligations. You’re not on vacation—you’re retired. In your 50s. Or even earlier.

That’s the promise of the FIRE movement: Financial Independence, Retire Early. And while the concept is appealing, it comes with a number of trade-offs most people don’t fully consider upfront.

If you’re exploring FIRE as a strategy—or just curious about how it works—this post will walk you through the essentials: how FIRE is structured, what it takes to achieve it, and how to evaluate whether it’s truly right for you.

What is the FIRE movement, and how does it work?

FIRE is built around one primary goal: saving and investing enough money to stop working decades before the traditional retirement age.

To do that, you typically aim to save 50% or more of your income and invest it consistently. You live on far less than you earn, grow your portfolio as aggressively as possible, and calculate the point at which your savings can sustainably replace your paycheck. That becomes your “FIRE number”—the amount at which you’re financially independent and can choose to retire early.

The lifestyle that supports FIRE, however, isn’t glamorous. To make the math work, you generally adopt a minimalist approach—no luxury upgrades, limited discretionary spending, and a strict focus on maximizing savings. And critically, that lifestyle has to carry into retirement. If your spending increases post-retirement, the math begins to unravel.

How do you calculate your FIRE number, and what are the limitations?

FIRE adherents typically use a version of the “4% rule.” To calculate your FIRE number, you multiply your annual retirement spending needs by 25. If you plan to spend $60,000 a year, for example, you’d aim to retire with $1.5 million.

That 4% rule assumes you can withdraw 4% annually (adjusted for inflation) and your portfolio will last at least 30 years. But that’s where FIRE complicates things: retiring in your 40s or early 50s means your portfolio may need to last 40–50 years, not 30.

There’s also the issue of retirement spending itself. Many people assume that expenses decrease when they stop working, but in early retirement, the opposite can be true. Travel, hobbies, home projects, family support, and health insurance costs can all increase, especially before Medicare eligibility at age 65.

So while calculating a FIRE number is straightforward, relying on it too rigidly—without accounting for longevity, lifestyle shifts, or rising costs—can lead to unpleasant surprises.

Is early retirement realistic for most people?

The principles behind FIRE: save aggressively, live intentionally, and avoid lifestyle creep, are useful for almost everyone. But the lifestyle required to retire early is not always practical or sustainable.

FIRE requires margin. That margin might come from a high income, low expenses, or a willingness to make major sacrifices. For some, that combination is achievable. But for those managing family costs, caring for aging parents, living in expensive areas, or facing medical expenses, saving 50–70% of income may not be realistic.

That doesn’t mean FIRE is irrelevant. You can adopt its mindset without committing to the full lifestyle. Maybe that means gradually increasing your savings rate, setting interim financial goals, or designing a sabbatical or part-time work arrangement in your 50s instead of a full stop.

There’s no prize for doing FIRE the “pure” way. The value lies in defining what freedom looks like for you, and building toward that.

What risks should you consider before pursuing FIRE?

Retiring early may sound appealing, but it comes with both financial and personal risks.

Health insurance is a major one. If you retire before Medicare eligibility, you’ll need to purchase private coverage, and that can be significantly more expensive than employer-sponsored plans.

Social Security is another consideration. Your benefit is calculated based on your 35 highest-earning years. Retiring early could mean you miss out on your peak earning years or have lower-income years averaged in, reducing your benefit over time.

Then there’s longevity risk. A 40+ year retirement introduces much more uncertainty around inflation, market performance, and your changing needs.

And finally, your own preferences change over time. What felt acceptable in your 30s—bare-bones budgets, limited comforts—may not feel the same in your 50s or 60s. Most people want more flexibility, comfort, and personal space as they age. FIRE plans built around strict frugality don’t always adapt well to those changes.

How can you adapt FIRE principles without following the lifestyle?

You don’t have to go all in on FIRE to benefit from its core ideas.

You can:

• Track your spending to build awareness and control
• Raise your savings rate gradually over time
• Use margin today to buy more flexibility tomorrow
• Rethink your definition of retirement—not as a destination, but a structure you shape

And you can ask better questions: What would I change now to build more freedom later? What kind of retirement rhythm actually excites me? Am I designing a life I want to live, or just trying to escape the one I’m in?

FIRE isn’t just a financial framework. It’s also a prompt to reflect on the life you’re building.

Be a savvy steward. Make your life count.

Contact Information

Keith Demetriades, CFP®, CKA®, helps individuals, families, and organizations integrate faith-based principles into their financial planning. Oikonomia is a foundational concept in his practice, reflecting his commitment to stewardship, purpose, and making your life count.
For more information, contact Keith at (806) 223-1105 or visit https://www.kingsview.com/advisor/keith-demetriades/.

Disclaimer: The information provided in this blog is for educational purposes only and should not be considered financial advice. Please consult a qualified financial advisor to discuss your specific situation and needs. Past performance does not indicate future results, and all investments carry risks, including potential loss of principal. Any financial product or strategy references are purely illustrative and should not be construed as endorsements or recommendations.