This article is not intended to serve as financial advice. All financial decisions, including investments, should be made carefully and potentially with the guidance of a financial planning professional.
The trending movement of early retirement can trace its origins to a 1992 book titled “Your Money or Your Life,” by Vicki Robin and Joe Dominguez. The book reframes expenses in terms of the hours you have to work. How many hours, in other words, does it cost to pay for brunch? (Who else is thinking about avocado toast differently now?)
From this concept arose the financial independence, retire early (FIRE) movement, which basically relies on frugality and, as Investopedia.com puts it, “extreme savings and investment.” Estimates put savings goals at something like 50% to 70% of one’s salary and then, upon retirement, withdrawing only 3% to 4% annually from your portfolio.
In terms of real numbers, Investopedia.com says the ideal savings goal is 30 times your yearly expenses, or approximately $1 million, which would theoretically last for 30 years of retirement.