Retiring in your late 40s or early 50s sounds ambitious—but it’s possible when you know your Financial Independence (FI) number. This number tells you how much you need invested to live comfortably without working. The good news? You don’t have to slash every expense to get there. Balanced FIRE is about calculating realistically and aligning your money with your values.

Step 1: Understand the 25x Rule

The FIRE community often uses the 25x rule: multiply your annual expenses by 25 to estimate how much you need invested.

• Example: If you spend $60,000 per year, your FI number is about $1.5 million.
• Why 25x? It’s based on the “4% rule,” which suggests you can safely withdraw 4% of your portfolio annually without running out of money.

Step 2: Define Your Joyful Expenses

Instead of cutting everything, focus on what truly matters:

• Travel, hobbies, family experiences—keep them in your budget.
• Cut what doesn’t add value (unused subscriptions, impulse buys).
  This way, your FI number reflects a life you actually want to live.

Step 3: Adjust for Flexibility

Your FI number isn’t fixed—it’s a living target. Consider:

• Healthcare costs (especially if retiring before Medicare).
• Housing choices (downsizing, relocating, or paying off a mortgage).
• Lifestyle upgrades (occasional splurges).
  Balanced FIRE means planning for flexibility, not rigidity.

Step 4: Factor in Income Streams

You don’t have to rely solely on investments. Many early retirees use:

• Rental income
• Side hustles or passion projects
• Part-time consulting
  These reduce the size of your FI number and give you more freedom.

Step 5: Run the Numbers

1. Track your current annual spending.
2. Multiply by 25 for your baseline FI number.
3. Adjust upward for healthcare, travel, or other priorities.
4. Adjust downward if you expect income streams in retirement.

Conclusion

Your FI number isn’t about deprivation—it’s about clarity. By calculating it with your joyful expenses included, you create a roadmap to retire early while still living fully. Balanced FIRE ensures you’re not just saving for tomorrow—you’re designing a life worth living today. With FinFit’s guidance, tools, and community support, you can confidently run the numbers, refine your plan, and stay focused on building a future that balances financial independence with the freedom to enjoy life along the way.

📚 Sources

• Investopedia – FIRE Movement Explained
• HerMoney – How to Retire Early Without Hating Your Life
• Afford Anything – Intentional Spending Philosophy
• Our Next Life – Early Retirement Stories
• Go Curry Cracker – FIRE with Travel Adventures