FIRE — Financial Independence, Retire Early

FIRE (Financial Independence, Retire Early) is a movement aimed at building enough capital to live off investments and leave work long before 65. The classic target: a portfolio equal to 25 times your annual spending, derived from the 4% rule.

The basic math

If you spend $40,000/yr, your FIRE number is about $1,000,000 (40,000 × 25). The 4% rule suggests you can withdraw 4% of a diversified portfolio in year one, indexed thereafter, with a low risk of depletion over 30 years.

The variants

Lean FIRE: minimalist spending, lower number;
Fat FIRE: comfortable lifestyle, higher number;
Coast FIRE: enough invested young that growth does the rest, no new contributions;
Barista FIRE: part-time work to top up.

FIRE in Canada

The TFSA (tax-free) and RRSP (tax-deferred) are the key vehicles. Mind the bridge before CPP/OAS and the withdrawal order.

Frequently asked questions

What is my FIRE number?

About 25 × your annual spending. For $40,000/yr of spending, aim for ~$1,000,000.

Is the 4% rule safe?

It's a robust rule of thumb historically, but not a guarantee. Many use 3.5% for a very long retirement or adjust to markets.

Can you FIRE in Canada?

Yes. The TFSA and RRSP, plus low-cost ETFs, are powerful tools. The main challenge is decumulation before CPP/OAS.

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