FIRE Movement: The Pros and Cons

August 17, 2020 Author: Tess Downing, MBA, CFP®, Complete View Financial

Complete View Financial

For years it has been assumed that “most people”—even those who are earning relatively high salaries such as doctors and lawyers—will typically need to work until about the age of 65 before they can retire. In many ways, our society and our economy are both structured with this rough assumption in mind. But beginning about 10 years ago, the FIRE movement began challenging this conventional wisdom.

Understanding the FIRE Movement

The FIRE Movement, which stands for “Financial Independence, Retire Early” is a movement driven by people that seek to retire around the age of 45, or even as young as 35. Naturally, with the goal of retiring just two decades into their professional career, those who are a part of this movement will need to make many lifestyle changes. Generally speaking, this means maximizing income and minimizing expenses to the greatest extent you possibly can. In some cases, people will attempt to save 50 or even 75 percent of their income in order to meet this incredibly ambitious goal.

As you might expect, the FIRE movement works well for some people, but isn’t ideal (or even feasible) for everybody. Below, we will discuss the pros and cons of this growing movement.

Benefits of the FIRE Movement

The most obvious benefit of the FIRE Movement is that, if completed successfully, you’ll be able to retire extremely early. If you are able to retire at age 35, for example, it is not unreasonable to expect to have 50 or more years of post-retirement living. This will give you the chance to pursue lifelong dreams such as traveling, writing a novel, or opening up your own business.

Not all people who “retire” early actually stop working completely—the goal of “being on FIRE” is to put yourself in a position where the only work you need to do is work you actually want to be doing. For many people, this gives them the opportunity to pursue a workload and type of work that they are actually satisfied with.

The FIRE Movement, in general, also helps promote a frugal, anti-materialist, and fiscally responsible mindset. One of the main concerns of FIRE advocates is “lifestyle inflation.” They recognize that as people begin to make more money, they will inevitably upgrade most aspects of their lives including their car, their home, their vacations, and their material positions. If you are willing to be frugal and forego these common upgrades in order to have a more comfortable life later on, then pursuing the FIRE lifestyle might be right for you.

Drawbacks of the FIRE Movement

One of the most common criticisms of the FIRE Movement is that it is classist and is simply not possible for everybody. Telling someone who works 50 hours per week and makes $35,000 per year that “all they need to do” is “spend less and make more money” is usually something that can be tone-deaf and not very helpful. Realistically, if someone wants to achieve full financial independence at such an early age, they will probably need to be earning at least $100,000 per year.

The FIRE Movement can also create unrealistic expectations. If someone reaches the target age of retirement and hasn’t quite reached their savings objectives, they might still decide to retire anyway and think to themselves, “if something comes up, I can always go back to work.” Unfortunately, things are not always so easy. Unexpected medical issues, home issues, and other “surprise” financial challenges such as inflation and cost uncertainty can often make it difficult for FIRE advocates to stay afloat, especially if it has been decades since they retired.

Lastly, the FIRE Movement—even among the wealthy—requires people to sacrifice a lot. It is extremely difficult for anyone to retire when they have young kids or other financial dependents. Adhering to this movement may mean giving up many of the things you once wanted. Still, for some people, the benefit of retiring early significantly outweighs these costs.


The FIRE Movement has inspired many people to change their lifestyle and pursue a goal of early retirement. For some people, such as those with good-paying jobs and a willingness not to spend, this goal is more feasible than one might initially assume. For others, it is something that is likely out of reach. However, regardless of whether you choose to pursue this goal or not, there are a lot of lessons that we can learn. By saving aggressively and saving early, no matter who you are, you will be able to increase your level of financial freedom.