By Jessica Wee

Contrary to the popular belief of our parents’ generation, retirement is a matter of our desired financial number instead of age. More and more people are following a formula of an extreme saving and investment movement known as FIRE – Financial Independence, Retire Early.

The FIRE movement originated from the book Your Money or Your Life by Vicki Robin and Joe Dominguez, published in 1992. The aim of the book is for the reader to retire early by being frugal, use extreme saving methods and generate an income through passive investment.

This appealed to people who wanted to quit their job, dissatisfied with consumerism, gain financial independence or move their retirement age forward.

The FIRE movement has gained momentum following the pandemic as it gave us much needed time to rethink our priorities and that led to the ‘Great Resignation’. According to a survey by the wealth management firm Moneyfarm, 1 in 4 adult ages 18 and 34 years old are setting early retirement as their new financial goal.

To start the FIRE journey, you will need to:

  • Build an emergency fund of at least 6 months worth of monthly expenses and spending. This fund should remain in cash (not put into an investment account) for easy access in the event of job loss/ family emergencies/ unforeseen events
  • Build up a net worth of 25 times your estimated annual expenses and spending to achieve financial independence
  • Expect that you will withdraw a maximum of 4% from your FIRE fund
  • Grow your savings by investing in ETF or index tracker funds which will give you a 4% or more return annually
  • Own your home as retirees will have more disposable income without needing to worry about a mortgage.

After you have accumulated enough (in an after tax investment account), you will be able to withdraw a certain amount to cover annual life expenses forever, no matter your age. If your emergency fund is unused, it can be put towards the FIRE fund.

Assuming that your annual expenses and spending is $24,000, your goal will be to save up to $600,000 for your FIRE fund.

If your FIRE fund is able to generate an investment income of 4% or more annually post retirement, your capital of $600,000 will replenish itself after every annual withdrawal and you will even have spare to leave for your beneficiaries in your estate planning.

Please note that this calculation does not account for future inflationary pressure.

An example to calculate your FIRE number:

Monthly expenses $2,000
Multiply by 12 X 12

Annual expenses $24,000
Divide by withdrawal rate 4%

FIRE number $600,000


How to start your saving journey?

How to start investing?



How to earn more?

How to protect and prepare for inflation?




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