What Is FIRE?
FIRE (Financial Independence, Retire Early) is a financial movement built around one core idea: save and invest aggressively enough that the passive income generated by your portfolio covers your living expenses indefinitely. Once you reach that point, work becomes optional.
🔥 Your FIRE number: Annual expenses × 25 = the portfolio size needed to retire (based on the 4% withdrawal rule).
The 4% Rule
The 4% rule (also called the Safe Withdrawal Rate) is the foundation of FIRE planning. Research by William Bengen (1994) and the Trinity Study found that withdrawing 4% of your portfolio in year one and then adjusting annually for inflation has a historically high probability of lasting 30+ years without depleting the portfolio.
Example
If your annual expenses are ₩40M, your FIRE number is ₩40M × 25 = ₩1B. Once your portfolio reaches that figure, you can theoretically retire.
Important Caveat
The 4% rule is based on historical US stock market data. For longer retirements (40–50 years), some planners recommend a more conservative 3–3.5% withdrawal rate to reduce the risk of running out of money.
Types of FIRE
Lean FIRE
Retiring on a minimal budget — typically ₩30M/year or less. Requires extreme frugality, but the lower target makes the goal reachable much sooner.
Fat FIRE
Retiring with a comfortable, even generous lifestyle — usually ₩80M+/year. Requires a much larger portfolio but leaves room for travel, hobbies, and unexpected expenses.
Barista FIRE
A middle path: hit a partial FIRE number, then work part-time for supplemental income (and, in some countries, healthcare). Not fully retired, but no longer dependent on a full-time job.
The Two Levers: Savings Rate & Investment Return
Time-to-FIRE is determined almost entirely by two variables: your savings rate (the percentage of income you save) and your investment return.
- Savings rate matters most. Lifting your savings rate from 20% to 50% can shave 15+ years off your retirement timeline.
- Returns compound over time. Even a 1% difference in annual return creates a massive gap over 20–30 years.
- Spending less is as powerful as earning more. A lower target spend reduces both your current outflows (numerator) and your FIRE number (denominator) at the same time.
* This simulator uses simplified assumptions. Actual outcomes depend on market volatility, inflation, taxes, and personal circumstances. Not financial advice.
