When I first found the FI community, there was one version of early retirement. You saved as much as you could, put it in index funds, and quit when you had about 25 times your yearly spending invested. That’s still the core idea, but people eventually figured out that not everyone wants the same life after work. Someone who’s happy on $30,000 a year in a paid-off house in Ohio needs a very different number than someone who wants to keep the kids in private school in Denver.
So now we have types of FIRE. A lot of them. Someone on Reddit probably invented a new one while you were reading that last sentence. I’m going to stick with the six that come up most often and walk through what each one costs and what kind of life it buys.
None of the ranges I’m using are official, because nothing about this is official. People will argue for days over whether Fat FIRE starts at $5 million or $7.5 million. If you think my cutoffs are wrong, you’re welcome to email me. I’ll get to it right after I finish reorganizing my sock drawer.
Traditional FIRE
This is what most people mean when they say FIRE, and it’s the yardstick for everything else on the list. You’re looking at a portfolio somewhere between $1 million and $2.5 million. Using the 4% rule, that supports spending of roughly $40,000 to $100,000 a year, which is a comfortable middle class life in most of the country.
If you earn a good income and save hard, you can usually get here in 7 to 20 years. Seven is the extreme end and requires a savings rate most people can’t stomach. Ten to fifteen years is a lot more typical, and that lines up with what I hear from people who’ve actually done it.
Your savings rate moves the timeline more than anything else. Mr. Money Mustache wrote about this back in 2012 in “The Shockingly Simple Math Behind Early Retirement,” and it still holds up. Save 10% of your income and you’re looking at a full career. Save 50% and you can be done in about 17 years. Investment returns matter, but nowhere near as much as the gap between what you earn and what you spend.
What I like about Traditional FIRE is that you can get there with a regular job. You don’t need to be a surgeon or sell a company. The people chasing it tend to care more about having their time back than about titles or big houses, and most of them have a pretty clear idea of what “enough” looks like. For a lot of people my age and younger, I think this has quietly replaced the old idea of getting a gold watch at 65.
The hard part is how big the number looks at the start. A million dollars feels pretty abstract when your checking account has $412 in it. And if you want something fancier than a middle class retirement, this range is going to feel snug.
In the FI world, this is the bread and butter.
Coast FI
Coast FI is a milestone more than a finish line. You can’t quit your job when you hit it. What it means is that the money you already have invested should grow into a full traditional retirement by age 65, even if you never add another dollar.
Let’s say you’re 25 and want $2.5 million in today’s dollars by the time you’re 65. If your investments grow about 7% a year after inflation, you’d need roughly $167,000 invested right now. You could stop contributing tomorrow, and if the market behaves the way it has historically, you’d get there. In actual future dollars, your account would be somewhere around $7 or $8 million, which is a fun number to bring up at Thanksgiving.
The math gets less friendly as you get older, since your money has fewer years to grow. At 35 you’d need about $328,000. At 45 it’s about $646,000, and at 55 you’d need around $1.3 million. If you’re on the older end, I’d also use a more conservative return assumption, because a bad decade in the market hurts a lot more when you only have one or two decades left.
I love Coast FI for what it does to your head. Saving $2.5 million can feel impossible. Saving $167,000 by your mid 20s feels like something you can plan for. Once you hit your number, the pressure to save every possible dollar goes away. You can take the job with more risk and more upside, or the one with less pay and a lot less stress. I see plenty of people in this community reach Coast FI in 3 to 5 years, thanks to early raises, aggressive saving, and those first dollars compounding.
If you want to play with your own numbers, The Fioneers have a Coast FI calculator I could spend an entire afternoon in. Scott and I talked with them about it on episodes 664 and 665 of the podcast. Or the more recent addition to our lineup, Evan Lawler, is pursuing Coast FI so many episodes featuring Evan also focus on Coast FI.
There are trade-offs. You’re still working until traditional retirement age, so you’ve got the FI without the RE. You’re also counting on the market to cooperate for a few decades, and every investment disclaimer ever printed will remind you that past performance doesn’t guarantee future results. The sneakiest risk is lifestyle creep. When you stop saving aggressively, the money that used to go into your 401(k) has a way of turning into a nicer car.
Barista FIRE
Barista FIRE picks up where Coast FI leaves off. Your traditional retirement is already taken care of, and you have enough invested to pull some money out each year, though not enough to cover everything. A part-time or low-stress job fills the gap.
The name comes from working at a coffee shop. When a barista’s shift ends, they go home and stop thinking about work. I once had a job that followed me home every night and sat on my chest at 2 a.m., so I understand the appeal on a deep, personal level.
Most people going this route aim for somewhere between $250,000 and $750,000, or 15 to 20 times their annual expenses instead of the usual 25. Many get there in 3 to 7 years, which can be 5 to 10 years sooner than Traditional FIRE.
The math is pretty simple. A $500,000 portfolio supports about $20,000 a year in withdrawals under the 4% rule. If you need $40,000 a year to live, you earn the other $20,000. Bartending on busy weekend nights and having the rest of the week to yourself would cover it for a lot of people.
Usually the hardest part is your ego. If you’ve spent 15 years building a career people are impressed by, stepping down to part-time work can feel strange, even when the part-time work is more pleasant. Finding the work tends to be easier than people expect, since you only need to cover living expenses and aren’t trying to save for retirement on top of it.
I’m convinced some Barista FIRE folks get more out of their years than anyone else on this list. They leave the grind early and still have real money behind them. It takes a certain kind of person to be comfortable drawing down a smaller portfolio, but the people who have that mindset seem pretty happy.
Lean FIRE
Lean FIRE usually means a portfolio of about $600,000 to $1 million. In an expensive area like much of the West Coast, that might stretch to $1.25 or $1.5 million. You’re living off your investments full time, but on a modest budget, roughly $24,000 to $40,000 a year using the 4% rule.
The big draw is that almost anyone with a steady job can get there. You don’t need a high income, rental properties, or a side business. A regular paycheck, low expenses, and about 10 years of consistency can put you at or near this number.
The catch is that you have to be happy living frugally for a very long time. Lots of people in the FI community decide that’s more frugality than they signed up for. It’s especially tough in high cost of living areas, and it doesn’t leave much cushion for emergencies or for helping family when someone needs it.
If frugality doesn’t come naturally to you, Lean FIRE will be harder. You can get creative with it, though. You could work a few months a year Barista style, or rent out a room while you’re traveling. You never have to get into real estate if you don’t want to, but covering a few expenses on the side makes a lean budget feel a lot less lean.
I also think a lot of people who say they want Lean FIRE are really after the freedom that comes with it. Once you hit that number, you can turn down work you don’t like. You can take a sabbatical or go work for a risky startup. You can finally quit the job that sent you to Google typing “how do I quit my job early” in the first place. Plenty of people hit Lean FIRE and keep building on their own terms, and I think that’s a great way to use it.
Chubby FIRE
I can’t explain why the name Chubby FIRE makes me laugh every single time, but it does. This is a portfolio of roughly $2.5 million to $6 million, supporting spending somewhere between $100,000 and $240,000 a year.
That’s an upper middle class life. Think a nice house in a good school district, maybe private school, good vacations, the occasional first class ticket, and college accounts that get funded without a lot of hand-wringing. You probably aren’t buying a $100,000 sports car or eating at Michelin star restaurants every weekend. The best description I’ve heard is that you aren’t saying no to much, but you aren’t saying yes to everything yet.
Chubby FIRE usually takes 10 to 20 years. The people who get there tend to have very high incomes, at least later in their careers, or they built and sold a decent-sized business. You still need a budget at this level. It’s just a roomier one.
A lot of the FI community seems to be heading this direction right now. I wouldn’t be surprised if Chubby FIRE becomes the most common goal among BiggerPockets Money listeners in the next couple of years, with Traditional FIRE close behind.
Fat FIRE
Fat FIRE describes your bank account. Your body can do whatever it wants. We’re talking $6 million and up, enough to support $240,000 a year in spending, and plenty of people at this level spend more than $300,000. If you get here, you’re almost certainly in the top 1% of wealth for your age.
Unless you inherit it or get very lucky, Fat FIRE usually takes an income in the $200,000 to $500,000 range. Business owners, doctors, and attorneys show up a lot, along with anyone who earns a lot and doesn’t spend all of it.
At this level you barely need to look at a budget. You might notice in June that you’ve already spent $200,000 and decide to take it easier for the rest of the year. Or not, since it won’t change much. You can own a second home without renting it out, fly business class on long flights, and stay somewhere nicer than the Motel 6. You can buy your dream car. Mine is a 1987 Toyota MR2, so I’m clearly not the right person to advise you on spending Fat FIRE money on vehicles.
Getting here is the hard part. For most people, everyday spending makes it nearly impossible to save that much.
I think there are really two kinds of Fat FIRE, and people tend to lump them together. One is the person spending $25,000 a month on luxury travel and a pricey neighborhood. Keeping that up all the way through retirement usually means you’re a top executive, a pro athlete, someone in private equity, or an early employee at a company that took off.
The other kind is the person with $6 to $10 million who spends like a Traditional FIRE household. Their portfolio just kept growing.
That second kind is me. I never set out to reach Fat FIRE. Carl retired, I kept working because I liked what I was doing, and my income covered our expenses with some left over. So we kept saving and investing long after we’d reached FI. We also made a few non-traditional investments that turned out really well. Unless we’re building a house, we don’t spend anywhere close to Fat FIRE levels.
I suspect a lot of people in this community will end up in the same spot later in life without meaning to. The habits that get you to FI don’t switch off when you hit your number, and the market keeps doing its thing. Add one more year syndrome, which I’ve had, Carl has had, and nearly everyone I know has had, and it’s easy to drift from Lean to Traditional to Chubby to Fat. Being able to walk away when the math says you’re done is a rarer skill than you’d think.
Picking Your Type of FIRE
Start with what a normal, happy year costs you. Skip the fantasy version with the villa in Tuscany and add up what you actually spend on groceries, dinners out, kids’ activities, and the trips you really take. Multiply that by 25, and you’ll have a pretty good idea which of these types of FIRE you’re aiming at.
Then figure out your Coast FI number. If you only calculate one thing from this list, make it that one, because knowing your traditional retirement is handled makes every decision after it a lot less stressful.
And expect your target to change. Plenty of people start out going for Lean FIRE and end up somewhere chubbier. Others chase Fat FIRE and figure out halfway through that a part-time gig and a smaller number suit them better. There’s no penalty for changing your mind, and nobody’s checking which acronym you picked.
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