What do you need to do in order to retire early?

Financial Independence and Early Retirement (FIRE) is a growing movement for people looking to retire earlier than the traditional age. Personal finance contributor Christopher Liew digs into the origins of the FIRE formula and outlines steps to implement it in your life.

Are you dreaming of an early retirement that would allow you to travel and enjoy free time with your friends and family?

Financial Independence and Early Retirement (FIRE for short) is a growing movement for hard-working, goal-oriented workers looking to retire earlier than the traditional age and achieve financial independence.

Today, I’ll explore the origins of the FIRE formula and outline the steps to implement it in your life, so you have a better understanding of what early retirement entails.

The current median retirement age in Canada is 64.9, according to Statistics Canada. In 1998, the median retirement age was 60.8. This means that, two decades later, the average working Canadian has to work 4.1 more years before they can retire compared to the turn of the century.

Thanks to advances in medical technology, people are living longer than ever, and centenarians (people over age 100) are the fastest-growing age group. That said, if you're 60 years old, you’re probably a bit envious of the people who got to retire at your age in the late 1990s, while you still have another 5 years of work ahead of you.

Given the increasing average retirement age, it only makes sense that some would want to rebel and create a plan to retire well before 65.

The core principles of FIRE involve living frugally, maximizing savings, and making strategic investments to generate sufficient passive income that covers living expenses without the need for active employment. This way you can actually enjoy your retirement.