Have you ever thought of retiring early?

The dream of not having to hustle every day and just live off your savings can look very good but what would it even take to get there?

Recently, the Zerodha founder Nithin Kamath discussed the Financial Independence Retire Early (FIRE) movement. While the millennials and Gen Z like it, it comes with hidden costs, both financial and emotional.

The FIRE approach encourages saving and investing – to save 30x your annual expenses. But is this even practical?

Consider a 40-year-old planning to retire at 45. Assuming monthly expenses of ₹1,00,000 and a life expectancy of 90 years, they’d need a corpus of ₹6.5 crore. In contrast, waiting to retire at 60 means ₹14.7 crore.

This means more time allows for a longer accumulation process.

Achieving ₹6.5 crore by 45 requires investing – ₹65,300/month starting at 25, or ₹33,000/month with a 10% step-up.

In contrast, retiring at 60 requires a monthly SIP of just 22,700, or ₹8,300 with a 10% step-up. While both scenarios rely on a 12% return, the time horizon and effort required are very different.

But if you are still thinking of using this approach then you should invest in salary protection for job security, balance debt repayment and asset investments and diversify your investments for steady income.

Is early retirement your dream too?