Early retirement is not just for the wealthy. With the right strategy, anyone can achieve financial independence.
Calculate Your FIRE Number
The exact amount you need to retire.
Your FIRE number = Annual expenses multiplied by 25. Spend €24,000/year? You need €600,000. Spend €40,000/year? You need €1,000,000. This is based on the 4% rule: withdraw 4% of your portfolio annually. Historically, this has sustained portfolios for 30+ years. In Europe, account for state pensions which reduce the amount you need by the present value of future pension payments.
Increasing Your Savings Rate
The single most important lever for early retirement.
Savings rate trumps investment returns for early retirement. At 20% savings rate and 7% returns, retirement takes 37 years. At 50%, it takes 17 years. At 70%, just 8.5 years. Strategies: House hack (live in one unit, rent others), Move to a lower cost area, Optimize the big three (housing, transport, food), Increase income through side hustles, Automate savings on payday.
The 4% Rule and Safe Withdrawal
How to make your money last forever.
The 4% rule comes from the Trinity Study: Withdraw 4% of your initial portfolio in year one, then adjust for inflation each year. With a 60/40 stock/bond portfolio, this survived 96% of 30-year periods historically. Conservative approach: Use 3.5% for longer retirements. Flexible approach: Reduce withdrawals 10% in down years. In Europe, state pensions and healthcare reduce withdrawal needs.