On paper, the idea of early retirement is attractive. But reality can be more grueling, usually revolving around a series of side hustles to save enough money to push forward your retirement date.
That’s what Gwen Merz and Derek Sall have learned, years after their early retirement journeys.
“Financial Independence, Retire Early,” or FIRE, is a lifestyle movement that encourages you to build a comfortable nest egg — at least 25 times what you’ll need for annual expenses in retirement — so you can quit your job before the typical retirement age.
The FIRE movement hit the scene in 1992, but has really taken off with millennials over the past 15 years. While the path to FIRE looks different for everyone, and there are various approaches within the movement, most journeys begin the same way: Get a well-paying job in your 20s, save a large chunk of money (anywhere from 50 % to 75% of your take-home pay) and you live way below your means. Many FIRE participants also increase their income with a side hustle (or more side hustle) 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 in order to retire by your desired age.
The idea of retiring early has universal appeal that is drawing many followers, but FIRE is also getting its fair share of detractors. Some are dropping out because it’s exhausting. Others are realizing that it is costing them relationships and experiences that no amount of money can recoup.
“It takes a lot of discipline and sacrifice,” said Jovan Johnson, a financial advisor at Piece of Wealth Planning in Atlanta. To save so aggressively, some FIRE attendees forego years of doing important things like traveling with friends and family, Johnson noted.
That’s what happened to Merz, a 32-year-old IT pro from Missouri who went all-in on FIRE but became disillusioned with the lifestyle. “I could save a lot of money,” he said, “but I haven’t made enough money to save a ton and also live the kind of life that has made me a happy, fulfilled person.”
For Sall, a 37-year-old personal finance blogger and founder of Life and My Finances of Michigan, engaging in FIRE meant putting his marriage at risk. After slashing expenses, he focused on getting more passive income, but that meant limiting quality time with his wife and newborn. “Thankfully, I snapped out of it,” Sall said. “I wasn’t going to end another relationship just to get results my goal against Our targets.”
That’s not to say they haven’t learned some practical advice from the FIRE movement on how to pay down debt, save, or spend wisely. For many, finding a balance between extreme FIRE principles and living an enjoyable life is the sweet spot. This desire for balance has given rise to offshoots of FIRE, such as Barista FIRE and Coast FIRE, which still have a strong focus on feeding savings upfront, then transitioning to a less stressful job to provide residual income.
Whether you’re fascinated by pursuing FIRE or 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 Boston-based Keenan Financial. “Is it really about checking what your financial goals are, what are your personal beliefs about money, how do you handle money, what is 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 had early success when they started saving aggressively.
Merz went all-in on FIRE, living in the cheapest house she could find and keeping her expenses at around $22,000 a year. She made $65,000 a year, plus bonuses, and handled more side hustles. At this rate, she plans to hit her FIRE number of $635,000 and retire within 35 years.
Sall was also on the road to financial freedom. After paying off the mortgage and all other remaining debts, he cut his expenses down to just over $400 a month (food, phone bill, auto insurance, and utilities) and put the rest into investments and savings. To earn a passive income, he bought a house, fixed it up, and rented it out to tenants, a business that required significant time and effort away from his family, even as it was paying off.
“At age 29, I was making $60,000 a year in my job. I had just paid off my house and was heading towards FIRE,” she said. What appealed to him most about early retirement was the idea that, in a few years, he could spend his time as he saw fit.
The idea of flexibility and financial freedom are the key drivers of the FIRE movement. “The most appealing thing about FIRE is just the idea that you are truly free and independent from being dependent on a traditional job,” Johnson said.
Fall in love with FIRE
Despite staying on track and saving a considerable amount of money, Merz was not satisfied. She felt trapped in her 9 to 5 corporate job and wanted more control over her time than he did. It didn’t help that her workplace was toxic.
But something deeper wasn’t working.
After five years of researching FIRE, Merz realized it was mathematically impossible for her to earn and save the same amounts as her dual-income married friends. She was also getting exhausted working on more side hustles.
“I became really disenchanted with FIRE when I realized it was difficult for a single person to retire incredibly early with a high to above average salary,” Merz said.
Additionally, the effort required to sustain this lifestyle was starting to catch up with her and was leaving her with little time to relax or connect with friends.
Sall’s relationships, especially his marriage, were also starting to suffer due to his early retirement goals. He recalls the exact moment she learned that her obsession with FIRE was destroying her personal life.
He was headed to work on repairing his latest “project home,” which he planned to rent out for additional income. As he approached the door, his wife stopped him, angry that she was once again blocking her and their baby.
“When is all this going to stop? I’m sick of it!” his wife said. “Is this what life will be like with you?”
Something changed in Sall, and he found himself reconsidering his priorities and reflecting on the mistakes of his past. He’d become so hyperfocused on her goals for him, that he’d forgotten about their goals as a couple—an issue that had ended his previous marriage.
Find financial balance
These days, Merz spends a good chunk of his income in a comfortable home in St. Louis. She no longer lives in affordable housing and has a new job at a nonprofit where she feels empowered and supported.
Also, he no longer has any qualms about spending money to enjoy quality time with his friends. She recently pulled out $200 in cash to spend the day with a friend at a massive annual garage sale that her FIRE-focused ex-self would never even consider.
Although Merz has put a brake on his FIRE pursuits, he doesn’t quite regret his aggressive blocking. “I will have more money than I know how to make when I retire at 55,” Merz said. “That money is going to go up and up and into millions of dollars.”
Now, she’s made more room in her budget for the things that make her happy. “It’s great to save,” Merz said. “But also don’t sacrifice your relationships and ability to make memories while you can.”
Sall’s decision to step out of the FIRE movement helped save his marriage. He and his wife sold the project home, as well as their main home, and bought a new place in the woods with the profits.
“Looking back, I can honestly say it was the best decision we ever made,” said Sall. “I’ll still probably retire early, but instead of doing it by 34, I might be 44. Better to do it with my beautiful wife and kids who love me, than to reach it broke and alone.”
Both Merz and Sall are now in better financial positions because they attempted FIRE. But you don’t have to go to extremes of the FIRE movement to prioritize savings. To get started, Johnson recommends thinking about retirement and what it means to you so you can come up with a plan. He then he comes up with a budget or system to manage your money. Johnson said that instead of being extreme about the budget, he tries to be flexible. This way, you can enjoy life today while also saving enough to enjoy life later.
Some FIRE principles are helpful for anyone who wants to assess where their money is going, to make sure they aren’t overspending, and to continue to prioritize saving and paying down debt, according to Dolan.
Both Johnson and Dolan agree that FIRE offers an excellent strategy for getting out of debt, but don’t wear yourself out too much. You should still have some wiggle room in your budget for nights out with friends, family trips, or any other type of connection that’s important to you.
What makes one person feel fulfilled and fulfilled won’t be the same for another. “At the end of the day, everyone has their own beliefs about money. They have their own values, they have their own kind of habits with money that they’ve developed over the course of their lives,” Dolan said. And everyone should understand what they are for themselves.