It may seem like a distant dream for most, but retiring in your 30s or 40s is viewed as a realistic goal for those following the FIRE movement.
Short for 'Financial Independence, Retire Early', FIRE has become popular with younger people looking to escape the rat race and achieve a greater work-life balance.
The movement prioritises intense saving, budgeting and investing - in order to reach your retirement age early.
It won't be for everyone though, FIRE requires time and sacrifices.
But is the dream actually feasible if you put your mind to it? We've been finding out.
Where did the FIRE movement come from?
The concept dates back to the early 1990s and was included in the book 'Your Money or Your Life' by Vicki Robin and Joe Dominguez.
In the 30 years since, the movement has spread across the world, with people sharing their personal stories of how they achieved financial independence - some as early as their late 20s.
"It emerged from the US and gained traction in Ireland and the UK, powered by influencers on TikTok," said Nick Charalambous, Senior Financial Advisor and Managing Director at Alpha Wealth, a Cork-based financial services advisory firm.
"They're promising an escape from the nine-to-five grind and a comfortable retirement," he added.
What is the end goal?
FIRE isn't necessarily about quitting work, as Mr Charalambous explained, but more so about reaching financial independence.
"Many people who reach financial independence choose to stay in their jobs," he said.
"Others go back to study or take a lower-paying job more aligned with their passions, while some may decide to retire and travel full-time or volunteer with causes they support," he added.
In short, those who reach FIRE, have the investment income and savings to do whatever they want, whether at work or elsewhere.
How does FIRE work?
FIRE involves saving and investing between 50 and 70% of your annual income - or more.
It also involves eliminating all debt and living frugally.
There are two main rules that apply to FIRE movement - the rule of 25 and the 4% rule.
Let's start with the rule of 25.
The idea is that once you save and invest around 25 times your annual expenses, you'll be ready to retire.
The first step is to work out your monthly spending, then multiply it by 12 to get your annual spending.
Once you have that figure, multiply it by 25. This is known as your FIRE number - how much you'll need to retire.
For example, say your monthly expenses are €4,000 euro, this means your yearly expenses are €48,000.
You would need to have savings and investments of €1.2 million in order to retire.
But that money can't just sit in your bank account, it needs to grow.
The idea is that the return on your investments will sustain your income, regardless of your age.
The 4% rules means that retirees can withdraw 4% of their savings in the first year.
After that, you can withdraw the same amount, adjusted for inflation, every year for the next 30 years.
These are general rules, and many people adapt the approach to work for them.
"While FIRE may look like solid financial advice in principle, its detractors say it is over the top and essentially recommends spending your most energetic and probably healthiest years in a sort of boot camp existence before reaping the rewards of a life in paradise later on, " said Mr Charalambous of Alpha Wealth.
Are there different types of FIRE?
There are many variations of FIRE, including Lean, Fat, Barista and Coast - to name a few.
Lean FIRE
Lean FIRE means that your retirement pot will only cover basic necessities, with no room for luxuries.
This could be suitable for those living a minimalist or lean lifestyle.
Many on this movement will have to supplement their retirement with other income sources.
Fat FIRE
The fat FIRE approach is aimed at those who want a fat, or more generous pot for retirement.
This approach would allow you to live a lifestyle of luxury with no cutbacks.
But a high salary and an intense saving and investment plan would be needed to reach your goal.
Barista FIRE
This variation won't allow you to completely retire early.
But it aims to allow you to leave your full time job, and opt for a less stressful part-time role.
This could allow you to achieve a greater work-life balance by freeing up more time to spend with friends and family.
Coast FIRE
While most FIRE strategies aim to allow you to retire in your 30s or 40s, Coast FIRE is a longer process which lets you 'coast' towards retirement in your 60s.
It is less aggressive than your typical FIRE strategy.
The idea is that you cut back on your spending and invest as much as you can until you reach your savings goal.
When you do hit that goal, you reduce your work hours so you earn enough to meet your living expenses and let your retirement pot grow.
Is the FIRE movement suitable for everyone?
The FIRE movement is probably most appealing to those in their 20s and 30s - thanks to TikTok.
Mr Charalambous of Alpha Wealth, who admits he has a somewhat jaundiced view of the FIRE movement, said he can see the benefits for young people.
"It fosters financial discipline and encourages an awareness of saving from a young age," he said.
"If you harness the power of compound interest early on and maximise your tax benefits, you will be amazed at how significantly your wealth will grow over time," he added.
But he warned that the full version is extreme and involves significant lifestyle sacrifices. You also need to be lucky with your investments for it to work.
Risks and obstacles can also throw you off course, very easily.
Things like marriage, divorce or paying for your children's education don't exactly fit into the FIRE strategy.
"FIRE doesn't allow for everyday life, in my view, " Mr Charalambous said.
"It doesn’t allow for the ability to adapt, but adaptation is key to success when things are going well - and when they’re not," he added.
Can I take a less extreme approach to retirement planning?
Absolutely, FIRE won't be for everyone.
Most people will be relying on their pension pot in retirement.
"I greatly advocate pensions," said Mr Charalambous.
"I suggest that somebody paying a significant amount of income tax at the higher rate of 40% should put more of their earnings into a pension to reduce their tax burden," he added.
So whether you're going to dive in and play with FIRE, or want to focus on boosting your pension - the best time to start is now.
