Table of Contents
The Rule of 25
The Rule of 25 tells you how much money you need to have saved and invested for retirement. That amount is 25 times your annual expenses (not income).
When your investment portfolio reaches this amount, you’ve got enough money to retire.
The Rule of 25 and FIRE Finance
This rule is a foundational component of FIRE Finance. FIRE stands for Financial Independence Retire Early and proponents of the FIRE Movement rely on the Rule of Twenty Five to help them with their retirement planning.
Additional Reading on The Rule of Twenty Five, FIRE Finance and the 4% Rule
- Here’s more info on how and why the Rule of 25 works.
- If you’re interested in FIRE, check out The Newbies Guide to Understanding FIRE.
- And here’s more on The 4% Rule.