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Money Goals

Meet the Young People Who Are Retiring in Their 30s

The FIRE movement is all about retiring while you're young to travel and pursue your life dreams. No wonder it has a cult following.

Shomari Wills

Shomari Wills

Kirsty Shen and here husband Bryce are part of a growing movement to retire early and travel the world.

Kristy Shen was in her twenties working in information technology in Toronto when she knew something had to change. Her job was stressful and unfulfilling, and she was starting to have panic attacks. Then on what seemed like a typical work day her office mentor collapsed at his desk and was carted out on a stretcher. “I was like shit. This job is literally going to kill me.”

It was around that time that she stumbled into the FIRE movement, a group of young people who hope to retire early and pursue their passions by stashing away huge amounts of money in their twenties, thirties and forties, then living off their savings and investments for the rest of their lives.

FIRE literally stands for “Financial Independence Retire Early.” While the idea of retiring early is nothing new, the formation of an online community to promote that goal and share strategies for achieving it began to take off around 2001 with the blog Early Retirement Extreme. Today it has become wildly popular: a Reddit discussion board dedicated to early retirement has more than 380,000 subscribers, and one well-known evangelist of the movement, Mr. Money Mustache, gets millions of visitors to his blog each month.

From reading about it to actually living it

Kristy got started by reading “Your Money Your Life” an early retirement book from the 1990s by Vicki Robin. She also began visiting some blogs about the movement as well. In less than ten years, at age 31, she and her husband Bryce had saved up more than a million dollars and retired.

Kristy Shen traveling in the Swiss Alps.

“Our ex-coworkers thought we were nuts,” Kristy said. “They joked that they'll have pillows ready for our knees when we come crawling back to work.” The couple now spends their time backpacking across Europe and Southeast Asia.

Making the most of early retirement

Early retirees spend time managing their money, but are otherwise at leisure.

Tanja Hester saved enough to quit a “low six-figure” job as a consultant in Los Angeles at 38 and retire in Lake Tahoe in 2017. She now blogs and her husband volunteers with a group that forecasts avalanches. “We see friends and spend our time outdoors,” she said. “We feel like kids waiting for an adult to show up and tell us we can't do this.”

The Hesters enjoying their early retirement.

Steve Adcock and his wife both worked as engineers in Tucson, Arizona before they retired in 2015 with more than a million dollars at age 35. “We could either buy big homes, cars, and expensive dinners, or we could save everything we possibly could and achieve financial independence,” he said.

The couple is now living the #vanlife, traveling the country in an RV. “Our problem in our life now is it's almost too social. There’s always someone who wants to drink with you or hang out at the campsites.”

How to pull off an early exit from the daily grind

Early retirees follow three basic steps to achieve their goal: Cut back on their spending so they can invest at least half of their annual income, invest in low-fee retirement accounts that generated steady returns, and build massive nest eggs before quitting their jobs.

For Kristy Shen living modestly wasn’t much of an adjustment. “Having grown up poor in China, cooking instead of eating out, taking public transportation and living in an older townhouse instead of a fancy downtown condo was no big deal.” She and her husband saved more than $1500 a month by staying in their slightly run down rental which cost around $900 a month versus the $2500 or more for nicer digs.

Resisting “lifestyle creep”, the practice of spending more after getting a raise is key as well. “When we got pay increases or bonuses, we just put the money straight into our investments,” Steve Adcock said.

The Adcocks with their RV.

Automating contributions that go from your paycheck to either your retirement account, investment or savings account can also be a good idea. “We set up the withdrawals with our payroll,” Adcock added. “We never had to touch the money.”

When it comes to investing, the most common investment strategy of FIRE folks is to max out traditional IRAs and 401(k)s and put the remainder of their money in low fee index funds. Compounding interest helps the money pile up faster.

If you plan to retire in your 60s, than a saving 12 times your annual expenses before retirement makes sense. But FIRE devotees often aim to save more than 25 times their annual living expenses because they’ll need to live off their money much longer. For those who plan to live off of around $40,000 this often means aiming to build a seven figure nest egg. “A million was the magic number for us,” Adcock said.

Is FIRE right for you?

Before jumping on the FIRE bandwagon, consider if you are really committed to the frugal lifestyle it demands: “The amount of money that FIRE people are saving is basically austerity,” said certified financial planner Douglas Boneparth. While that might be doable for a while—or even fun depending on your personality—that’s tough to sustain over the long haul, especially if you’re trying to pay down student loans, save for a house, or start a family at the same time.

FIRE may not be for everybody, but its tenets of setting financial goals, budgeting, and saving can help anyone looking to up their financial game. Establishing your financial priorities, whether they are saving for a house, paying off student loans, or early retirement is important, as is creating and living by a budget.

Whether you dream of quitting your job to travel the world in your 30s or retiring to Florida in your 60’s, having a financial plan is always a smart move.