How to Retire at 35
Everyone has different goals with money.
And some people have crazy goals.
Imagine being done with work extremely early.
Like 35 Early.
What would you do with all of that free time? How else would you be spending it?
The answers to these questions are what motivate people to join the F.I.R.E. movement.
F.I.R.E. (Financial Independence Retire Early) is a lifestyle of aggressive saving, consistent investing, and minimal spending freeing you to live off of your investments - no paycheck needed.
Do you have what it takes to achieve FIRE? Let’s see.
As with any goal, let’s start with the end in mind.
What would you do once you reach FIRE?
FIRE requires a LOT from you and the juice needs to be worth the squeeze.
- Want to travel the world full-time?
- Spend time taking care of family?
- What about working a lower-paying passion job and supplementing the income with your FIRE savings?
- Or maybe full-time volunteering?
You’ll have to sacrifice a lot to achieve FIRE, so understanding why you’re making that sacrifice is a must.
Once you have your why, how do you find your number?
A common rule of thumb is to take your desired annual spending in retirement and multiply it by 25.
For example, if I want to spend $60,000 per year, I’ll need to have $1,500,000 in invested savings to reach FIRE.
This calculation is based on the ‘4% rule’ which suggests withdrawing no more than 4% of your total savings each year.
Once you find your number, let’s say you want to hit FIRE in 15 years. Below is how much you’d need to save each month starting now to retire in 15 years:
For the finance nerds in the group: I used a PMT function with a 7% real annual return over 15 years. The FV is the Total Savings Needed to Retire.
Calculations aside, it’s clearly a tall order to save what’s needed to retire in just 15 years.
But those pursuing FIRE aren’t aiming for easy, they’re aiming for fast financial freedom.
Could you achieve FIRE in 15 years?
I’m not sure I want to make that large of a sacrifice.
But it definitely gets me thinking.
Even if I didn’t retire, the flexibility could be incredibly valuable.
I met a relatively young couple at our church who ‘retired’ to raise their kids.
As I understand it, they can go back to work one day if they want but won’t have to. They each get to be full-time parents.
To be clear, they are likely leaving serious money on the table by choosing to not work.
Their lifestyle could be growing exponentially, but they set their priority - it’s not nicer stuff.
That’s cool.
Another thing that achieving FIRE flexibility could enable is volunteering full-time at a non-profit.
Non-Profits have salary constraints.
A skilled, full-time volunteer could make a huge impact.
That’s also cool.
The more stories I hear and read about money, the more convinced I am that the freedom that money provides is worth far more than the additional stuff you can buy with it.
So, even if retiring by 35 isn’t in the cards for you, what would you do if you achieved financial freedom earlier than planned?
As we enter 2025, it may be worth a look at your savings plan - would an additional 5, 10, 20% savings be worth it to you?
Only you can answer that, but it's worth some thought!
Want to read more about FIRE? The r/FIRE Subreddit is very entertaining.
