by WEX Health
FIRE, the personal finance movement that stands for “financial independence, retire early,” sprang from the 1992 best-selling book “Your Money or Your Life,” but has exploded in popularity with millennials and in online communities during the past four years.
Media coverage of the FIRE movement often celebrates the ways it encourages young people to achieve financial independence, with the “retire early” part being optional. (We recommend this “5 Things to Take from the FIRE Movement Even If You Don’t Want to Retire Early” article on HerMoney.)
Those who adopt the extremely frugal FIRE lifestyle strive to increase their earnings while socking away somewhere between 50 percent and 75 percent of their income. The goal is to save aggressively enough to reach a level of financial independence that would allow retirement sometime in their 30s or 40s, should they so desire. FIRE-d up consumers are encouraged to devalue possessions and to compare every expense to the time they must spend at work in order to earn the purchase.
“Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.”
―Vicki Robin, co-author of “Your Money or Your Life”
Many of those in the movement are making health savings accounts (HSAs) a cornerstone of their savings/retirement plans, using them to save for healthcare expenses in retirement (estimated to be $150,000 for the average woman and $135,000 for the average man).
Because for those FIRE-d up consumers hoping to retire early, HSAs score major bonus points because you can withdraw funds from them at any time (so long as they’re for qualified medical expenses), as opposed to 401(k) and Roth IRA accounts, which both have early withdrawal penalties.