The Financial Independence, Retire Early, or FIRE movement is getting an upgrade. Whether it's coast FIRE or Barista FIRE, there are now several variations of the quarter-century-old way of tackling early retirement.
The FIRE concept is simple (well, it was simple). Save and invest aggressively so you can retire well before the average retirement age of 62. Since achieving financial freedom isn’t a one-size-fits-all approach, variations of FIRE have emerged to suit different lifestyles.
Popular ones include:
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Coast FIRE: Particularly appealing to older adults, with this take on FIRE, you save aggressively to achieve your retirement number, and after that, you “coast” until your retirement age. Once you hit your number, the pressure to save is gone, which enables you to adjust your lifestyle, whether that's transitioning to a less stressful job, reducing the hours you work, or even taking time off.
Barista FIRE: In a nod to the flexibility a job at a coffee shop affords you, with the Barista FIRE approach, you work to save enough to cover the majority of your expenses in retirement, but plan to work part-time for supplemental income. The idea is to secure a stress-free, flexible job that offers health insurance benefits.
Lean FIRE: Being frugal is the cornerstone of Lean FIRE. Yes, you retire early, no, you don’t need a lot to do it. With this approach, people aim to retire on a very modest budget. By reducing living expenses, the goal is to build a small nest egg so that you can retire early.
Fat FIRE: The opposite of Lean FIRE is Fat FIRE. The idea is to save a ton of money to not only retire early but to do it in style. The goal is to amass enough money by saving and investing aggressively to live lavishly in retirement.
Now that you know the different types of FIRE, let's test your FIRE IQ and see where you fit in.
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