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Is It Ever Too Late to Adopt the FIRE Approach? No, but the Mindset Shift Can Be Challenging.

Couple planning for retirement.
In This Article:

We'll discuss 3 questions you might have about the FIRE Movement:

How Older Savers Can Embrace the FIRE Movement

The FIRE Movement – which stands for financial independence, retire early – is widely viewed as a game played by young earners with high incomes. By adopting extreme savings behaviors, adherents stockpile cash and often take early retirement in their 40s.

But here's what you might not know: Older savers can also benefit from FIRE principles by making a mindset shift from spending to saving. And to be successful, you'll need to define what you most want to achieve with FIRE and ensure all decision-makers are on board to cut expenses.

FIRE Movement Key Principles

The overall goal for those in the FIRE Movement is to achieve financial independence, defined as a total savings of at least 25 times their annual salary. They save at least 50% of their annual income to reach this goal, often for as long as 10 to 15 years. They also seek out ways to increase their income.1

Now, those are much more realistic goals for early-career workers. Extreme savings habits can quickly become a lifestyle without mortgages, car payments, and kids to send to college. They trim expenses considerably to reach their envisioned lifestyle. For some, that's early retirement and a globe-trotting lifestyle. Others have no intention of stopping working and want a healthier-than-average nest egg.

The fact that FIRE isn't a one-size-fits-all strategy makes it ideal for savers who are further along in their lives and careers – even if you've topped out your earning potential. And while having more life under your belt has benefits, it also presents obstacles to overcome if you want to make FIRE work for you.


About Those Obstacles…


Perhaps “obstacles" isn't the best word. A better term is likely financial behaviors.

As a practiced practitioner of life and money by now, you make spending and saving decisions a certain way. And who you make those decisions with – along with who's impacted by those decisions – may be a bit more complicated. But by defining current challenges, you're better equipped to develop a FIRE-friendly savings plan that you can successfully implement.

  1. Debts
    As the saying goes, “more money, more problems." Those earning between $100,000 and $199,0002 carry the most credit card debt, and only one-third of wealthy cardholders pay off their credit card balances each month.3 Earning more can also make it more comfortable to buy a bigger house or a more expensive car and carry a credit card balance month to month.
    Mindset shift for FIRE success
    : Get uncomfortable being comfortable with debt.

  2. Family Obligations
    Whether it's saving for a child's college education or caring for aging parents, families can add non-negotiables to a monthly budget. However, while you can potentially split educational costs with your children, elder care can be more financially demanding. It's truly an art form to combine finances with your parents – and one that deserves the utmost care.
    Mindset shift for FIRE success: Consider working with a financial advisor to build a long-term care plan that cares for everyone.

  3. Additional Decision-Makers
    Young savers often have something their elders don't: autonomy. Managing finances with a spouse or partner is tricky at best. Therefore, a FIRE savings shift could mean an uphill battle if everyone's not on board.
    Mindset shift for FIRE success: You'll both need to bend on how you spend and save. Be ready to talk openly and make compromises.

  4. Retirement Account Savings Limits
    One saving limit older savers share with the young bucks is annual savings limits for qualified retirement plans. While there's favorable tax treatment and potential tax-free income from employer-sponsored plans and various IRA options, the IRS has clear maximums (or income limitations in the case of Roth IRAs).
    Mindset shift for FIRE success: Be ready to explore a wide array of taxable investment and savings options to maximize your nest egg.


3 Steps to Kickstart Your Later-in-Life FIRE Strategy


Just as FIRE isn't a one-size strategy, it's also not for everyone. If you read the challenges above and thought, "That's way too much work," FIRE's likely not for you, as it requires a fair amount of effort. But if you're open to exploring how FIRE principles can fit with your finances, you're in luck. There's a three-step process you can use to build a FIRE savings strategy that you can still swallow.

  1. Brainstorm and Define What FIRE Will Help You Achieve

    It's time for a family meeting – partners, kids, and all. And believe it or not, this is the fun part. Together, your family can decide what an accelerated savings plan or early retirement might mean for everyone. Whether it's more time to travel, your dream second-act career, or increased financial security, everyone gets a say.

    It's easier for everyone to embrace the impending saving and spending shifts if everyone participates in defining the ideal FIRE retirement. 

  2. Set Your FIRE Number

    When you know what you want FIRE to help achieve, you can calculate how much money you'll need to make it happen.

    The standard way to find your FIRE number is by multiplying your annual income x 25. For later savers, however, there's a better strategy: working with a financial planner specializing in retirement income planning.

    Advanced certifications like the retirement income certified professional (RICP) or chartered retirement planning counselor (CRPC) train advisors to create sustainable income plans for those nearing (within 10 years) retirement. They can leverage your accelerated savings goals and factor in current and future income streams (like Social Security) to help you craft a FIRE number that makes sense.

  3. Use Stages to Build Your Savings Plan

    If you genuinely want to be on FIRE, don't just jump into the flames feet first. Instead, build a savings plan that you can execute in stages. Not only will this help ease you and your family into new saving and spending habits. It will also prevent the financial burn that could make you pour water on all your FIRE plans.

    Stages could look like this:
    1. Pay off X% of debt this year.
    2. Once your debt is fully paid, increase retirement savings by X% of household income.
    3. Once retirement plans are maxed out, contribute X% of additional income to a taxable brokerage account with tax-favored investments.
    4. With additional funds, open a Treasury Direct account and set a recurring purchase for secure investments like Series I savings bonds.

    Your goals and steps will ultimately be as unique as you are. But if you're willing to make the mindset shift to supercharge your retirement savings, you could open up a future you didn't know was possible. 


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1 Kiplinger. "FIRE Savers Race to Retirement." Accessed February 2023.
2 Bankrate. "Survey: Credit card debt more common when net worth exceeds $100K." Accessed February 2023.
3 The Ascent. "How Do Wealthy Americans Use Credit Cards?" Accessed February 2023.