FIRE Movement: How to Retire Early Without Financial Worries

If you’re tired of the rat race and can’t wait to retire, the FIRE movement can help you can retire early without any financial worries.

ValueChampion Editorial Team

by ValueChampion Editorial Team on Jan 22, 2024

couple sitting under tree at sunset

Financial Independence, Retire Early (FIRE) Movement is a movement whereby people try to work hard, invest and live frugally. All this is done in hopes of having a happy early retirement without any financial woes.

This comes from a rejection of the typical retirement age of 65 and is free from the capitalist pursuit of employment, promotions, and high-end lifestyles.

To reach FIRE, one will need to save at least 30 times their yearly expenses which for most people would typically amount to around S$1 million. Living in your retirement years, one should only be withdrawing 3 to 4% of your accumulated funds yearly to ensure that they have enough to last through your retirement.

Related: Key Lessons From the FIRE Movement Everyone Can Benefit From

Table of Contents:

Methods of Achieving FIRE

There are different methods of achieving FIRE and depending on your choice, it could result in varying lifestyles and different saving goals.

types of fire movement


Fat FIRE is suited for the individual who does not want any compromise. These individuals want to maintain or enhance their standard of living when they retire.

As a result, these individuals will have to save significantly more than the other FIRE types and be very aggressive in getting raises or investments to save within the timeline. As there is less emphasis on a minimalist lifestyle during retirement, these individuals might take a longer time to achieve FIRE.

Other uses of Fat FIRE could be to ensure that one will have extra savings to combat any unforeseen circumstances that may arise during their retirement period.

The Fat FIRE method is most suited for the work hard, play hard individuals.


Lean FIRE refers to the type of FIRE that is more restrictive and forces the individual to live a minimalist lifestyle in their retirement. Typically, individuals will only spend on necessities and live with a restrictive budget.

Lean FIRE typically leads to less financial flexibility in retirement; however, this allows the individual to retire even earlier if they can live with a smaller monthly budget.

The Lean FIRE method is for individuals who love saving and living simply within their limited budgets.

Barista FIRE

Barista FIRE is a little bit different from the rest as instead of retiring fully, the individual would take up a part-time job or extra gigs to supplement their retired lifestyle. This means that they can potentially be covered by the company’s health insurance and also delay tapping into their retirement funds.

For most people, this would be a good balance and having a side gig would mean that one gets to pursue a passion that is perhaps a hobby that they were not able to do before retirement.

The Barista FIRE method is more suited for the hardworking individual.

Coast FIRE

Coast FIRE is essentially about saving very aggressively in one’s earlier years to take advantage of compound interest that they can earn for their retirement.

This individual still continues to work normally to pay for current expenses while saving for retirement. The savings and constant income enable one to have further flexibility later in life when enjoying retirement.

This is suitable for individuals who are disciplined to save aggressively and sacrifice certain entertainment in their early life to take advantage of compound interest.

man working
Source: Unsplash

Related: Best Savings Accounts That Give You High Returns

How to Achieve Financial Independence?

Save More, Spend Less

This is one of the most obvious parts of the FIRE movement, which is essential to allocate a greater portion of your income into savings and try to downsize your current lifestyle.

However, it is not as straightforward as you might think. Firstly, you will need to plan your big-ticket purchases early and factor them into your expenditure so that it does not come out and ruin your saving goals.

Things like house purchases and weddings will put a significant strain on your ability to meet your saving goals.

ItemsAverage Cost
Home RenovationS$45,588

Calculate your savings after deducting these expenses and you will have a clear picture of how long you need to save.

Secondly, one needs to manage their debt well. Interest costs can slowly creep up and accumulate to a significant amount.

For example, a mortgage loan can cost tens of thousands more in interest if your loan tenure is significantly longer. Credit card interest payments can also accumulate and reach an undesirable level. Ensure that you are always on top of your credit card repayments.

Here is a list of common debts for people in Singapore and their normal interest rates:

Common DebtInterest rate
Mortgage2.00% to 3.00%
Car Loan2.08% to 2.59%
Education Loan5.46% and 2.15% of processing fee
SME/Business Loan0.8% to 20%

Relook at your debts and see whether there are any ways to lower your interest rates or refinance your home loans.

Find All The Best Home Loans in SingaporeFind Out More

Be Active in Earning More

Earning more may seem to be another no-brainer, but the truth of the matter is that there are some considerations that you may not be thinking about.

If you wish to retire early, your time frame for working and earning is smaller. Given that when you’ve just started working, you will be working in a junior position and earning a relatively low wage as compared to your maximum potential earnings. This will make saving more in the earlier years harder.

With that in mind, it is important to always be active in seeking out higher-paying positions to increase your wage quickly. Beyond that, acquiring the necessary skills and knowledge is also important to show your competency and obtain a better salary.

Here is the average salary increment based on the role you’re in and the size of your company:

Firm Size Average Yearly Salary IncrementRank & File (%)Junior Management (%)Senior Management (%)All (%)
Less than 200 employees:
Admin & Support Service3.
Financial & Insurance Service4.
Information & Communication Service2.
Professional Services4.
Retail Trade2.
At least 200 Employees:
Admin & Support Service4.
Financial & Insurance Service1.
Information & Communication Service5.
Professional Services4.
Retail Trade10.18.4

Use the MOM statistics as shown above to benchmark whether you are getting the right pay increment and request for one from your superior. If you are not getting at least the industry average pay increment, it will be wise to move to a new job.

Do not be afraid to get a side hustle as well. Perhaps doing translation work or freelance photography on the side can earn you some extra cash that can make your saving journey a lot easier.

Read More: 5 Fun Side Gigs to Supplement Your Day Job Income

The 50-30-20 Rule: Is It Really Enough?

Many would have heard of the 50/30/20 rule. This rule essentially gets you to divide your income after tax into portions of 50, 30 and 20. 50% of your income will go to necessities, 30% of your income will go towards want and the last 20% goes towards saving.

However, this will not be enough for you to reach your goals and you may have to wait for more than 20 years even with 20% of your income fully invested in a compound interest investment plan.

By utilising 20% of your savings, it will result in taking a lot more time to reach FIRE. It is safe to say that this saving method is suitable for those with high spending and difficulty saving. It is for people trying to be more financially prudent and might not be as suitable for FIRE.

People who wish to achieve FIRE will need to save more aggressively, up to 50% of their salary after tax and up to 70% for extreme cases.

woman in car on road trip
Source: Unsplash

How to Retire Early?

High-Interest Savings Account

A high-interest savings account is useful to maximise interest earnings for the money that you keep in your savings account. If you do not wish to invest too much money, a high-interest savings account would make even more sense to save money in the long run.

Read More: Best High Interest Savings Accounts Singapore 2024

Credit Card Cashback

Finding a credit card that aligns with your saving goals will be beneficial in helping you maximise your savings while you spend. Look for credit cards with fee waiver options and those that allow you to earn cashbacks and rebates.

The cashbacks and rebates help you save on your monthly spending, by giving you a small amount back every month. It is by no means a large sum, usually ranging from S$20 to S$75. However, this helps you maximise your spending and comes in handy when your budget is tight.

Compare The Best Credit Cards in SingaporeFind Out More

Invest More

One of the fastest ways to shorten your time needed before retiring is to allocate more money into investments.

You should always have six to 12 months’ worth of your monthly income in your savings account to ensure that you have liquid assets in the event of an emergency. After that, put the rest of your savings into an investment instrument to get higher returns as compared to leaving it in the bank.

Learn more about valuations and investment strategies here.

Read More: Your Guide to Investment In Singapore

Compare Online Brokerages in SingaporeFind Out More

CPF Top-Up

Alternatively, you can consider topping up your CPF so that you can get to enjoy payouts when you reach the conventional retirement age. Besides enjoying the high-interest rates, you can also get up to S$16,000 cash relief per year when you top up your own and your family’s CPF accounts.

Note that the maximum amount you can top up is the difference between the CPF Annual Limit of S$37,740 and the mandatory CPF contributions made for the calendar year.

Ordinary Account (OA)Special Account (SA)Retirement Account (RA)Medisave
Interest2.5%4%4% (only for members above the age of 55)4%
  • Below 55: Up to 5% for the first S$60,000 of combined CPF balances
  • Above 55: Up to 6% for the first S$30,000 of combined CPF balance & up to 5% on the next S$30,000

This is a better investment option as compared to other risk-free investment plans or fixed deposits. Furthermore, by topping up early, you will have plenty of funds in your CPF to pay for your HDB downpayment and mortgage repayments.

CPF’s purpose is ultimately for retirement. After age 65, members will be able to get monthly payouts as their retirement income. This would mean that your savings will probably need to last until age 65 before your CPF becomes an income source.

With a 4% interest rates, it is definitely worthwhile to divest some of your savings into your CPF account.

Read More: Simple Ways To Grow Your CPF Interest

Retirement Plan

If you are aged 65 and above, you can sell the remaining lease of your HDB flat back to HDB. Learn more about how you can monetise your HDB flat. Beyond selling your lease back to HDB, you can also invest in an endowment plan or insurance saving plan.

For example, you can choose to put your money into a saving plan like Income’s Gro Saver Flex. If you put it in for 25 years, pay S$2,000 per month for 20 years and leave it for five years, you will get S$753,245.00 in maturity payout. This is considering the total amount of input of S$480,000.

Alternatively, you can also purchase endowment or saving plans with a 100% sum guaranteed with added life or health coverage to save on life and health insurance fees.

Read More: VC Compares: Endowment Plans vs ILPs — Which Should You Get?

Putting It All Together

1. Determine your required amount
  • Find out how much you need per year in your retirement
  • Multiply by 30
2. Calculating save: spend ratio
  • Look at your current income and allocate a save: spend ratio that you are comfortable with
3. Factoring in Big-ticket Purchases (House, car, wedding, kids)
  • Set a budget for big-ticket purchases like a wedding
  • Anticipate mortgage repayment and factor that into monthly spend amount
4. Think about investment opportunities
  • With the money you saved, think of how you want to invest or just leave it in a high-interest savings account
5. Consider taking side Hustle
6. Calculate years needed based on income and money target
  • With the minute details factored in, you find out how long it will take you to reach the required amount of money.
7. Actively refine methodology as you go along
  • Have parents to take care of
  • Planning to have kids
  • Getting married
  • Young adults
  • Young working individuals
  • Only Child
  • Wants a simple life
  • Not looking to get married
  • Does not have many dependants
  • Young adults
  • Students
  • Middle age workers
Barista FIRE
  • Have dependants
  • Looking to pursue passion
  • Parents
  • Working adult
Coast FIRE
  • Does not want to hustle for too long in adult life
  • Do not need too much of their money to be liquid
  • Students
  • Teens
  • Young working adults

This however, is not the be all and end all for FIRE. Life goals and circumstances may change which can lead to more savings or less savings. The example below will demonstrate how changing life goals changes the way one looks at FIRE.


It is possible to retire early given a certain amount of planning and financial prudence. When you decide to adopt FIRE, do note that not every method is suitable for you as life goals and tolerance to low monthly spending differs. If you have a family and children(s), you may not reach fire as quickly as a bachelor.

Think carefully about whether you want to achieve FIRE early, as this may mean choosing jobs that you do not like because it pays well and living life with very little frivolous spending to save more. Be sure to invest early, save diligently, and stay frugal and debt-free as much as possible. Check out our roundups of the best online brokerages, high-yield savings accounts, and debt consolidation plans to stay on track towards your financial goals!

Compare Online Brokerages in SingaporeFind Out More

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