What Is FIRE?
FIRE (Financial Independence, Retire Early) is a financial movement built on one core idea: save and invest aggressively enough that your investment portfolio generates enough passive income to cover your living expenses — forever. Once you reach this point, work becomes optional.
🔥 The FIRE number: Your 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, then adjusting for inflation annually, has a historically high probability of lasting 30+ years.
Example
If your annual expenses are ₩40,000,000, your FIRE number is ₩40M × 25 = ₩1,000,000,000. Once your portfolio reaches this amount, 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 use a more conservative 3–3.5% rate to reduce the risk of running out of money.
Types of FIRE
Lean FIRE
Retiring on a minimal budget — typically under ₩30M/year. Requires extreme frugality but can be achieved much faster with a lower savings target.
Fat FIRE
Retiring with a comfortable or generous lifestyle — usually ₩80M+/year. Requires a much larger portfolio but allows for travel, hobbies, and unexpected expenses.
Barista FIRE
A middle path: reaching a partial FIRE number, then working part-time for supplemental income and healthcare benefits — not fully retired, but no longer dependent on a full-time job.
The Two Levers: Savings Rate & Investment Return
The years to FIRE is determined almost entirely by two variables: your savings rate (what % of income you save) and your investment return.
- Savings rate matters most. Going from a 20% to a 50% savings rate can cut your time to retirement by 15+ years.
- Returns compound over time. Even a 1% difference in annual return has a huge impact over 20–30 years.
- Reduce expenses, not just earn more. Lowering your target annual spend reduces both the numerator (spending) and denominator (FIRE number) simultaneously.
* This simulator uses simplified assumptions. Actual results depend on market volatility, inflation, taxes, and personal circumstances. This is not financial advice.
