Lean/Fat/Coast/Barista FIRE. 28-33x corpus + 3-3.5% SWR (Indian inflation). Savings rate 50-70% drives timeline. Equity-heavy accumulation + bucket withdrawal.
FIRE = Financial Independence, Retire Early. ACCUMULATE 25-33x annual expenses, retire decades early, live off corpus. INDIA ADAPTATION: (1) Higher inflation (6-7% vs US 2-3%) → use 3-3.5% SWR (28-33x). (2) Longer life expectancy planning. (3) Joint family + cultural factors. (4) Healthcare inflation 12%+. TYPES: (a) LEAN FIRE: minimal expenses (₹3-5cr). (b) FAT FIRE: comfortable (₹10cr+). (c) COAST FIRE: enough saved early, coast on growth. (d) BARISTA FIRE: part-time + corpus.
FIRE CORPUS (India): ANNUAL EXPENSES × 28-33 (for 3-3.5% SWR). EXAMPLE: ₹1L monthly = ₹12L annual. (a) Lean (25x): ₹3cr. (b) Standard (30x): ₹3.6cr. (c) Safe (33x): ₹4cr. FACTOR INFLATION: if retiring in 15 years, ₹12L today = ₹29L (6% inflation). Corpus = ₹29L × 30 = ₹8.7cr. SAVINGS RATE drives timeline: (a) 50% savings → ~17 years. (b) 60% → ~12 years. (c) 70% → ~9 years. STRATEGIC: high savings rate is the #1 FIRE lever.
SAVINGS RATE → FIRE TIMELINE (from zero, 12% returns): (1) 30% savings: ~28 years. (2) 40%: ~22 years. (3) 50%: ~17 years. (4) 60%: ~12.5 years. (5) 70%: ~9 years. (6) 80%: ~5.5 years. KEY: it's SAVINGS RATE not income that determines FIRE speed. EXAMPLE: ₹2L monthly income, 60% saved (₹1.2L) → FIRE in ~12 years. STRATEGIC: maximize income + minimize lifestyle inflation. Aggressive equity allocation (index funds) for the accumulation phase.
FIRE INVESTMENT MIX: (1) ACCUMULATION: 80-90% equity (index funds + diversified). 12% target. (2) APPROACHING FIRE: shift to 60-40 equity-debt. (3) POST-FIRE: 50-60% equity (for longevity) + debt cushion. WITHDRAWAL: (1) 3-3.5% SWR (Indian inflation). (2) Bucket strategy: 3 years cash + 7 years debt + rest equity. (3) Dynamic withdrawal (reduce in down markets). VEHICLES: (1) Index funds (low cost). (2) ELSS (tax + growth). (3) NPS (60% lumpsum). (4) PPF (tax-free debt). STRATEGIC: equity-heavy accumulation + bucket withdrawal.
FIRE STRATEGY: (1) CALCULATE FIRE number (28-33x inflation-adjusted expenses). (2) MAXIMIZE savings rate (50-70%) — biggest lever. (3) AGGRESSIVE equity SIP (index + diversified). (4) MINIMIZE lifestyle inflation. (5) MULTIPLE income streams (side income, freelance). (6) TAX OPTIMIZATION (80C, NPS, equity LTCG). (7) HEALTH INSURANCE critical (medical inflation). (8) FACTOR Indian realities: family support, healthcare, longevity. (9) COAST FIRE: front-load savings in 20s-30s. (10) POST-FIRE: bucket strategy + 3-3.5% SWR. (11) BUFFER: keep 1-2 years extra (sequence risk). CONSULT fee-only planner. India FIRE harder due to inflation but achievable with discipline.