What is Fat FIRE?

Fat FIRE is a variation of the Financial Independence, Retire Early (FIRE) movement that focuses on achieving early retirement while maintaining a more luxurious lifestyle. Unlike traditional FIRE or Lean FIRE, which often emphasize extreme frugality, Fat FIRE aims to accumulate a larger nest egg to support higher annual expenses in retirement. This approach allows individuals to retire early without significantly compromising their standard of living.

How to Use the Fat FIRE Calculator: Your Guide to Luxurious Early Retirement

Step 1: Enter Your Current Age

Begin by inputting your current age. This serves as the starting point for calculating your retirement timeline and helps determine how many years you have to save and invest.

Step 2: Specify Your Desired Retirement Age

Input the age at which you wish to retire. This helps the calculator determine your investment horizon and the number of years you’ll need to fund in retirement.

Step 3: Input Your Current Savings

Enter the total amount of money you’ve already saved for retirement. This includes all your investment accounts, such as 401(k)s, IRAs, and taxable brokerage accounts.

Step 4: Specify Your Annual Savings

Input the amount you plan to save each year towards your Fat FIRE goal. Be realistic but ambitious – remember, Fat FIRE often requires a high savings rate.

Step 5: Estimate Your Annual Expenses in Retirement

Enter your expected annual expenses during retirement. For Fat FIRE, this number is typically higher than traditional retirement estimates, as it accounts for a more luxurious lifestyle.

Step 6: Set Your Expected Annual Investment Return

Input your anticipated annual investment return as a percentage. This should be a conservative estimate based on historical market performance and your investment strategy.

Step 7: Estimate the Annual Inflation Rate

Enter your expected annual inflation rate. This helps the calculator adjust your future expenses and investment returns for the decreasing purchasing power of money over time.

Step 8: Calculate and Analyze the Results

Click the “Calculate Fat FIRE” button to see your results. The calculator will show whether you’re on track to achieve your Fat FIRE goal, displaying your projected savings at retirement and the required savings for Fat FIRE based on the 4% safe withdrawal rule.

Step 9: Interpret the Results

If you’re on track, congratulations! If not, don’t worry. The calculator provides a breakdown of any shortfall, allowing you to adjust your savings rate, retirement age, or expected expenses accordingly.

By following these steps and using the Fat FIRE Calculator consistently, you can effectively plan and work towards achieving financial independence and early retirement with a high standard of living. Remember, Fat FIRE requires dedication and significant savings, but with proper planning and execution, it can lead to a rewarding and comfortable early retirement.