FIRE stands for Financial Independence, Retire Early. It means having enough invested that the returns cover your living costs, so work becomes something you choose rather than something you need.
Picture switching off the Monday alarm for good while rent still clears on the first. Standard retirement advice pencils you in at the office until sixty-five or so. FIRE pokes at that: how much would you need invested to walk away sooner, and how quickly could you build it? We’ll cover your FIRE number, coast FIRE, and how Skwad Sight scores your progress.
What FIRE actually means
FIRE is the point where the income from your investments can cover your living costs, so you no longer have to work for money. Lots of people keep a job after they hit it. Teaching, freelancing, running a bakery. The difference is nobody’s making them.
The idea traces back to Vicki Robin and Joe Dominguez’s 1992 book Your Money or Your Life, and it spread through a community of savers in the decades after. The FIRE movement on Wikipedia has the history. Strip the acronym away and the method is almost boring. Spend less than you earn. Invest the gap. Repeat until the portfolio can carry you.
You get two levers. Pull up your savings rate, the share of income you invest instead of spend. Or pull down spending: a dollar you never need is a dollar your portfolio never has to replace. Pull both and the finish line moves toward you from two directions.
Your FIRE number and the 4% rule
Your FIRE number is the invested total you’re aiming at. Shorthand: about 25 times your annual spending.
Why 25? It’s the flip side of a roughly 4% withdrawal rate. Historically, skimming about 4% off a portfolio each year has tended to last through a long retirement, and 4% a year works out to about 25 years of spending banked. Spend 40,000 dollars a year and your FIRE number lands near 1 million dollars.
Nobody else’s FIRE number is yours. Ditch a $90-a-month streaming-and-takeout habit and the target drops. Plan on ski trips every winter and it climbs. That’s why people talk about lean FIRE, built on a tight budget, and fat FIRE, with room to spend more than you do today.
How Skwad scores your FIRE progress
A big target decades away is hard to feel anything about. So Sight scores whether you’re on pace today, with two signals.
Arrival margin: are you on pace?
Arrival margin is the gap, in years, between when you’re on track to hit your FIRE number and the year you actually want to retire. Sight grows your invested balance forward at an expected return, finds the year it crosses your target, and compares that year to your retirement year.
Land on your retirement year exactly and you score solid. Show up a few years early and you’re at the top of the range. Running late pulls the score down, but gradually: a plan that’s slipped one year reads nothing like a plan that’s a decade adrift. “Someday” turns into a count of years, plus or minus.
Coast coverage: could you stop contributing?
Coast coverage asks something else entirely. How much of the balance you’d need to coast do you already have?
Coasting means your invested balance is big enough that, if you stopped contributing today, compounding alone should carry it to your full FIRE number by your retirement year. Coverage is the share of that coast number you’ve reached. The nearer you get to full coverage, the higher the score; cover all of it and you max out. It shows how much of the grind is already behind you.
Coast FIRE, explained
Why a whole section? Because coast FIRE is the milestone most people hit years before the real thing.
You’ve hit coast FIRE once what you’ve saved will grow into your FIRE number with no help. You’re not retired. The hydro bill still needs a paycheque. But you could stop adding to retirement accounts, send that money somewhere else, and the math still works. For many people that’s when the knot in the stomach finally loosens. It’s also why Skwad tracks your coverage of it, not just the finish line.
How Skwad tracks it for you
Tell Sight the year you want to retire and roughly what you expect to spend. It reads the balances in your invested and retirement accounts, grows them forward, and scores your arrival margin and coast coverage from there. Rather type the balances in yourself? You can track those balances without linking a bank.
One more thing: FIRE doesn’t get scored alone. It sits inside your wider financial health score, because a retirement plan doesn’t mean much if one bad month could knock it over. A healthy emergency-fund runway is what stops you selling investments at the worst possible moment.
Frequently asked questions
What does FIRE stand for?
Financial Independence, Retire Early. The goal is enough invested money that the returns pay your living costs, and a paycheque turns optional. Vicki Robin and Joe Dominguez popularized the idea with their 1992 book Your Money or Your Life; online forums and blogs took it from there.
What is a FIRE number?
It’s the invested total you’d need before work turns optional. The usual rule of thumb is about 25 times what you spend in a year, which lines up with pulling out roughly 4% a year. Spend 40,000 dollars a year? Your FIRE number is around 1 million dollars. Spend less and it shrinks.
What is coast FIRE?
Coast FIRE is when your invested balance, with no further contributions, should still grow into your full FIRE number by the year you want to retire. You’d still need a job for today’s rent and groceries. You just wouldn’t need to keep feeding the retirement accounts. Skwad tracks how much of that coast number you already cover.
See where you stand
FIRE turns “I’d love to retire early” into two numbers you can watch move: how many years early or late you’re on pace, and how much of the coast you’ve already covered. Open Sight in Skwad, set your retirement year, and see where your money’s headed.
