Financial Independence, Retire Early (FIRE)
Retirement means no longer needing to work while having enough money for living expenses and financial responsibilities. It's about pursuing the lifestyle we wanted during our working years. The FIRE movement offers a path to achieving this financial independence much sooner.
What is Financial Independence, Retire Early (FIRE)?
FIRE (Financial Independence, Retire Early) is a financial movement that gained popularity among Millennials in the 2010s. Financial independence and the freedom that comes with it are frequently associated with retirement after decades of work. FIRE followers aim to achieve this independence at a much younger age.
Achieving financial freedom and potentially retiring earlier is within reach without sacrificing your current quality of life. MyFuture's Qualified Financial Advisers have helped many clients develop achievable FIRE plans without waiting for their pension to mature.
Who is the FIRE movement designed for in New Zealand?
People who follow the FIRE movement in New Zealand use this approach as a detailed financial plan for spending within their means, reducing expenses, increasing income, and building investment portfolios. These strategic steps help secure financial autonomy well before the traditional retirement age.
The typical FIRE model requires extreme discipline in saving and investing funds to generate sufficient passive income to cover living expenses during retirement.
FIRE from the Perspective of My Future
MyFuture's philosophy differs slightly from strict FIRE principles. We believe in creating wealth and achieving financial independence while still enjoying life along the way. Our financial plans help clients retire earlier without requiring drastic lifestyle changes today.
Get Ahead With Quality Financial Advice
Our Qualified Financial Advisers can help you achieve your FIRE goals with a tailored financial plan and proven financial expertise.
How much do I really need for financial independence?
FIRE followers aim to save 25 times their expected annual expenses and establish a 4% withdrawal rate from savings. This target is often called your 'FIRE number.' Retirement funding comes primarily from aggressive saving and investing strategies.
Some ‘Lean FIRE’ followers spend only the bare minimum, saving up to 75% of their full-time income. Most people find that if they pursue FIRE, their savings rates are between 25% and 50%. Maintaining three to six months of emergency savings remains vital for FIRE success.
The FIRE movement represents just one path to financial independence. Other models can also help people reach retirement goals earlier. A qualified financial adviser offers the expertise to navigate these complex financial decisions.
The team at MyFuture can evaluate your financial status, identify your personal goals, and develop a realistic implementation plan to build lasting financial security. Our experienced planners understand that your financial priorities may evolve. We meet regularly to ensure your financial plan remains aligned with your goals.
How can I reach early retirement in NZ, even if pursuing FIRE isn’t realistic?
Reaching FIRE requires sufficient savings and passive investment income to support your lifestyle after you stop working. Your financial needs depend on your retirement lifestyle and the ongoing costs of necessities, wants, and unexpected expenses.
Many experiment with various savings strategies, investment approaches, and lifestyle adjustments with mixed results. MyFuture offers concrete financial plans for securing early retirement. Our advisers commit to developing lasting relationships throughout your journey to becoming financially independent.
What is our 6-Step Financial Advice Process?
The 6-step financial advice process is the international benchmark for financial planning. This holistic approach is proven to increase the likelihood of you achieving your financial goals.
Discovery Session
This is our opportunity to get to know you better, understand your financial goals (short, medium and long-term), and what resources you have to achieve those goals.
Research & Recommendations
During these steps, we do the research, run the numbers, document and present our recommendations to you. This can be a comprehensive financial plan focused on long-term wealth creation and/or a statement of advice focused on your more immediate financial needs. We will need to verify the information you provided during the Discovery Session by requesting supporting documents such as loan and savings account balances, payslips, etc. This ensures we are using highly accurate information when developing our recommendations.
Implementation
This step is all about implementing the recommendations. We don’t just provide the recommendation; we take responsibility for helping you implement it. This could involve helping you to complete application forms, working with a broker to restructure your lending, or finding you suitable investments. We understand you’re busy, so our goal is to make your financial world as easy as possible by doing as much as we can in-house for you. However, ultimately, we never have access to your money and cannot sign anything on your behalf, so you need to be an active, willing, and ideally enthusiastic participant in this process.
Ongoing Service & Reviews
This is where the real fun begins—managing and tracking your long-term financial success. We have periodic reviews to ensure your strategy is still appropriate if your goals or circumstances have changed. We adjust when necessary and provide annual snapshots so you can see your progress over time. Most importantly, you have your very own trusted Personal Financial Adviser available anytime to help with the little or big stuff. Worried about making next month’s mortgage repayments? Call us. Your parents gave you an early inheritance? Call us. Broke up with your partner and split all your assets? Call us! We’re here for you every step of the way to ensure that whatever life throws at you, you stay on track with your long-term financial goals.
Frequently Asked Questions
A FIRE lifestyle aims to reduce stress, secure funds, and create more time for activities you enjoy. The FIRE concept focuses on freedom and choices rather than simply quitting your full-time job.
The best time to start saving is now. The earlier you accumulate savings, the sooner you can set a potential retirement date. Consider your income, existing investments, high-interest debt, risk tolerance, retirement timeline, saving capacity, retirement living costs, credit card debt, home ownership status, potential inheritance, and pension income.
Remember that KiwiSaver funds remain unavailable until age 65. Early retirement plans require separate retirement accounts or investments dedicated to your goals.
The 4% rule helps estimate 30-year retirement needs, but it ultimately depends on your lifestyle goals. MyFuture's certified financial planners can help you define your FIRE number.
FIRE with a large family requires additional planning, but remains possible. Bulk purchasing may reduce per-person costs, though overall expenses will be higher. Many FIRE followers with families take on a part-time job for extra money while enjoying more flexible schedules.
Being dedicated to FIRE might conflict with friends and family who spend more freely. Honest communication about your financial values and goals helps maintain relationships. Open money discussions benefit everyone involved. If local support proves difficult, online FIRE communities offer motivation, financial education resources, and emotional support throughout your journey.
Get in touch and learn how to retire early in NZ with MyFuture today
Talk to us today for a FREE no-obligation Discovery Session. Our expert advisers will establish a clear path to financial independence through our proven six-step process. Whether you dream of full FIRE or want more financial autonomy, we'll help build the strategy to make it happen.