Definition
FIRE (Financial Independence, Retire Early)
FIRE is a movement and strategy focused on aggressive saving and investing to build enough wealth to retire far earlier than the conventional age.
FIRE — Financial Independence, Retire Early — is the goal of accumulating a corpus large enough that its returns cover your living expenses, freeing you from needing to work for money. Followers typically save a very high share of their income and invest it for growth, often targeting a corpus of around 25–30 times annual expenses based on a safe withdrawal rate.
Variants include Lean FIRE (a frugal lifestyle on a smaller corpus), Fat FIRE (a generous lifestyle needing a larger corpus), and Coast/Barista FIRE (saving enough early that growth alone funds retirement, while light work covers current expenses).
In the Indian context, FIRE planning must account for healthcare inflation, family responsibilities, the absence of universal social security, and long life expectancy, so a generous safety margin and a robust health-insurance cover are essential.
Related terms
- Emergency FundAn emergency fund is a readily accessible reserve of cash set aside to cover several months of essential expenses, protecting against income loss or unexpected costs.
- AnnuityAn annuity is a financial product that pays a regular income stream, typically for life, in exchange for a lump sum — used mainly to secure income in retirement.
- Net WorthNet worth is what you own (assets) minus what you owe (liabilities) — a single snapshot of your financial health.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.