A tool designed to estimate the financial resources required for early retirement, commonly referred to as “Financial Independence, Retire Early” (FIRE), typically involves inputting various data points such as current age, desired retirement age, estimated annual expenses, current savings, and expected investment returns. For example, a user might enter a current age of 30, a target retirement age of 45, estimated annual expenses of $50,000, current savings of $100,000, and an expected annual investment return of 7%. The tool would then calculate the required savings target and suggest potential savings rates needed to achieve FIRE.
Planning for financial independence offers significant advantages, enabling individuals to potentially retire decades earlier than traditional retirement age. This provides increased flexibility and control over one’s time and resources, allowing for the pursuit of personal interests, travel, or other endeavors. While the concept of early retirement has existed for some time, the FIRE movement’s popularity has grown significantly in recent years, spurred by online communities and resources. The increasing availability of online tools makes planning and achieving FIRE more accessible to a wider audience.
