Fat FIRE: Financial Independence with a Higher Budget

Fat FIRE: Financial Independence with a Higher Budget

Fat FIRE is financial independence with a comfortable lifestyle budget, typically $100,000 or more in annual spending. Instead of cutting expenses to retire sooner, you save a larger nest egg to maintain or exceed your current lifestyle.

At $100,000 annual spending with a 4% withdrawal rate, you need $2.5 million. At $150,000, you need $3.75 million. At $200,000, you need $5 million.

Who Fat FIRE Is For

Fat FIRE typically suits high earners who are not interested in significant lifestyle changes. Someone making $300,000 and saving 40% can accumulate wealth quickly even with higher spending.

There is also more margin for error. If markets drop and you need to cut spending 20%, going from $150,000 to $120,000 is more manageable than going from $40,000 to $32,000. You have more room to absorb shocks.

A Typical Fat FIRE Budget

Fat FIRE spending often includes housing in a desirable area ($3,000 to $5,000 monthly), regular travel ($1,000 to $3,000 monthly), reliable newer vehicles, dining out, hobbies, and a generous buffer for unexpected expenses.

These budgets can comfortably support helping family members, pursuing expensive interests, handling medical issues, and weathering financial surprises without stress.

The Time Trade-off

Fat FIRE takes longer than Lean FIRE. Someone targeting $1 million might reach it by 40. Someone targeting $4 million might reach it by 50 or 55.

Whether this trade-off makes sense depends on what you value. Some people would rather work 10 extra years at interesting jobs than retire early to a tight budget.

The Fat FIRE calculator shows your timeline based on desired spending level. Try different amounts to see how each affects when you might reach financial independence.

Lifestyle Creep

One challenge for high earners is that spending tends to rise with income. As raises come, lifestyle inflates to match, pushing the Fat FIRE target further away even as income increases.

Tracking expenses and knowing your target helps. You can make conscious decisions about spending increases rather than drifting into higher costs without awareness.

Calculator results are estimates based on assumed returns. This is educational information, not financial advice.