On paper, the notion of early retirement is appealing. But the reality can be more grueling, usually revolving around working a slew of side hustles in order to save enough money to pull your retirement date forward.
That’s what Gwen Merz and Derek Sall learned, years into their early retirement journeys.
“Financial independence, retire early,” or FIRE, is a lifestyle movement that encourages you to build a cushy nest egg — at least 25 times what you’ll need for annual expenses in retirement — so you can leave the workplace before the typical retirement age.
The FIRE movement hit the scene in 1992, but it really took off with millennials over the last 15 years. While the path to FIRE looks different for everyone, and there are various approaches within the movement, most of the journeys begin the same way: Land a well-paying job in your 20s, save a significant chunk of money (anywhere from 50% to 75% of your take-home pay), and live far below your means. Many FIRE participants also boost their incomes with a side hustle (or several side hustles) or through real estate investments.
It can also mean developing an obsessive focus on hitting your FIRE number, the specific amount of money you need to save to retire by your desired age.
The idea of retiring early has a universal lure that’s attracting plenty of followers, but FIRE is also getting its fair number of detractors. Some are dropping out because it’s exhausting. Others are realizing that it’s costing them relationships and experiences that no amount of money can recover.
“It takes a lot of discipline and sacrifice,” said Jovan Johnson, a financial adviser at Piece of Wealth Planning in Atlanta. In order to save so aggressively, some FIRE participants give up years of doing important things like traveling with friends and family, Johnson noted.
That’s what happened to Merz, a 32-year-old IT professional from Missouri who went all-in on FIRE but became disenchanted with the lifestyle. “I could save a lot of money,” she said, “but I didn’t earn enough money to save a ton and also live the kind of life that made me a happy, fulfilled person.”
For Sall, a 37-year-old personal finance blogger and founder of Life and My Finances from Michigan, being committed to FIRE meant putting his marriage at risk. After severely cutting back on spending, he focused on procuring more passive income, but that meant limiting quality time with his wife and newborn child. “Thankfully, I snapped out of it,” said Sall. “I wasn’t going to end another relationship just to achieve my goals versus our goals.”
That’s not to say they didn’t learn any practical tips from the FIRE movement about paying down debt, saving or spending wisely. For many, striking a balance between extreme FIRE principles and living an enjoyable life is the sweet spot. This desire for equilibrium gave rise to offshoots of FIRE, like Barista FIRE and Coast FIRE, which still focus heavily on front-loading your savings, then switching to a lower-stress job to provide some residual income.
Whether you’re fascinated with pursuing FIRE or are planning to retire at the standard age, stay in line with your values and priorities, said Tyler Dolan, a certified financial planner and vice president of the Boston-based Keenan Financial. “It really boils back to checking in with what are your financial goals, what are your personal money beliefs, how do you handle money, what’s important to you?”
An all-consuming quest to save every penny
If you have the bandwidth to dive into FIRE, it can pay off significantly. In fact, both Merz and Sall found success early on when they started aggressively saving.
Merz went all-in on FIRE, living in the cheapest home she could find and keeping her expenses to around…