Question 1

What is FIRE?

Accepted Answer

FIRE stands for Financial Independence, Retire Early. The principle: save and invest aggressively (often 30–50% of income) until you have a pot large enough that the safe-withdrawal rate covers your annual expenses indefinitely. The standard rule of thumb is 25× annual expenses (based on the 4% safe-withdrawal rate).

Question 2

What's the difference between Lean FIRE, FIRE and Fat FIRE?

Accepted Answer

Lean FIRE typically targets £20,000–£30,000 a year in retirement spending (~£500K–£750K pot in the UK). Regular FIRE targets a "comfortable" lifestyle, often £40,000–£60,000 a year (£1M–£1.5M pot). Fat FIRE aims for £80,000+ a year (£2M+ pot) without lifestyle compromise. The number that fits you depends on your housing situation, family setup, and what you want retirement to look like.

Question 3

Does FIRE work in the UK with pension access at 55/57?

Accepted Answer

Yes, but you need an ISA "bridge" strategy. UK pensions can't be accessed until 55 (rising to 57 from 2028), so to retire before then you need taxable/ISA investments to cover the gap. Most UK FIRE plans split between pension (for after access age, with tax relief) and ISA (for the bridge years before).

Question 4

What return rate should I use for FIRE planning?

Accepted Answer

A long-run global equity portfolio has historically returned around 7% nominal (5% real after inflation). FIRE communities often use 5–7% for planning to stay conservative — assuming bad sequences hit you near retirement. Our default 7% reflects long-run UK assumptions; lower it to 5% for a more cautious view.

Question 5

Should I include the State Pension in my FIRE number?

Accepted Answer

Most FIRE planners exclude it deliberately — both because it kicks in at 67+ (after you're hopefully already independent), and because policy changes over a 30+ year horizon make it uncertain. Treating the State Pension as a bonus rather than a foundation is the conservative default.

Question 6

What's the catch with the 4% rule?

Accepted Answer

It's a rule of thumb, not a guarantee. The 4% rule assumes a 30-year retirement and a balanced equity/bond portfolio. For a 50-year FIRE retirement, many planners drop to 3.5%. Sequence-of-returns risk — bad early years — is the biggest threat: a 30% market drop in year one means a much larger percentage of your pot is being drawn down at depressed prices.

PigE — UK pension forecast & retirement calculator

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