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Achieve Financial Independence with O1ne Mortgage

Do you dream of retiring in your 50s, 40s, or even 30s? The “financial independence, retire early” (FIRE) movement aims for this by saving aggressively. While the FIRE movement has dedicated followers, some may find it too restrictive. Here are seven alternatives to FIRE that can help you achieve similar goals without extreme financial measures.

1. Lean FIRE

Traditional FIRE, also known as Fat FIRE, focuses on saving enough to maintain your current lifestyle post-retirement. To achieve Fat FIRE, your savings should be 25 times your estimated annual expenses. For example, if you need $100,000 annually, you would need $2.5 million saved. Lean FIRE, on the other hand, allows for a more frugal retirement, requiring less savings. For instance, with an annual budget of $40,000, you could retire with $1 million.

2. Barista FIRE

Health care is a significant expense in retirement, and retiring early can mean losing employer health insurance. Barista FIRE bridges this gap until you qualify for Medicare at 65. This approach involves building a nest egg to cover part of your expenses and working part-time to cover the rest. Look for jobs that offer health insurance or use Barista FIRE to reduce work hours or start a side gig you enjoy.

3. Coast FIRE

Coast FIRE leverages compound interest by maximizing savings early in your career and then letting your investments grow. Followers of Coast FIRE typically retire in their 60s, but depending on your lifestyle and investment returns, you might retire earlier. This method allows you to spend your entire income in later years while still building a substantial nest egg.

4. Flamingo FIRE

Flamingo FIRE involves three phases: saving aggressively while working full-time, stopping contributions once you reach half your FIRE number, and waiting for investments to double in value. Use the Rule of 72 to estimate how long this will take. For example, an 8.7% annual return means your investments will double in about eight years. Once doubled, you can retire.

5. Baby FIRE

Baby FIRE is ideal for prospective parents wanting extended maternity or paternity leaves or to stay home with young children. Determine your ideal post-children lifestyle and save accordingly. The amount needed and the best savings vehicles depend on your timeline and income. If parenthood is a decade away, invest. If it’s sooner, consider a high-yield savings account or a certificate of deposit (CD).

6. Geo FIRE

Geo FIRE involves moving to a location with a lower cost of living to stretch your money further. This can mean moving to a cheaper city, state, or country. If remote work is an option, move to a cheaper location while still working and save the difference. If moving isn’t feasible now, plan to relocate post-retirement to reduce expenses.

7. Slow FIRE

Slow FIRE is about balancing saving for the future with enjoying the present. This approach involves creating a budget that allows for both current enjoyment and retirement savings. Avoid debt, build an emergency fund, and invest consistently. Slow FIRE resembles traditional retirement saving but emphasizes steady, long-term growth.

The Bottom Line

Withdrawing money early from a 401(k) or IRA can incur taxes and penalties. Consult a financial consultant and tax advisor to determine the best savings strategy. Good financial habits like budgeting, automating savings, and maintaining a good credit score can help maximize your retirement opportunities. Regularly check your credit report and score, and consider signing up for credit monitoring services.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you achieve your financial goals with confidence.

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