Chubby FIRE: The Balanced Approach to FIRE

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You have heard of Lean FIRE and Fat FIRE. Now let’s look at Chubby FIRE, the Goldilocks version of FIRE– neither too lean nor too fat, but just right.

What is Chubby FIRE?

Chubby FIRE involves a moderately affluent lifestyle which is not as extravagant as Fat FIRE but is also not super frugal. FIRE involves becoming financially independent and retiring early, which leaves open a wide range of options. Chubby FIRE enthusiasts can count on an enjoyable retirement lifestyle, including some travel, dining out, and generally enjoying a nice standard of living without having to scrimp and pinch the pennies. Think of Chubby FIRE as an upper middle-class FIRE lifestyle, but not a wealthy lifestyle.

Key pillars of Chubby FIRE

Comfortable, but not extravagant lifestyle in retirement

With Chubby FIRE, you can maintain a comfortable retirement lifestyle and not give up any of the regular things you are accustomed to, such as dining out, travel, or entertainment. You do, of course, have to follow a sensible budget that ensures that your savings rate is high without having to scrimp and save on every penny. Even better if your home mortgage and other debt is paid off before retirement, leaving you free to enjoy all your assets without worrying about liabilities. 

You can supplement your retirement income with side income or real estate investing. This ensures that you are more comfortably set up in retirement and you de-risk your retirement further. 

Professional / Salaried Career

Chubby FIRE is ideal for people who have a professional or salaried career and making a good income, but are not super wealthy. Such a career will help you achieve a healthy savings rate.

Balanced investing

In keeping with the theme of balance, the Chubby FIRE investment approach is balanced and disciplined – neither too aggressive nor too conservative. Invest in low fees investment options while ensuring adequate diversification, tax planning and risk management.  

Healthy Savings Rate

To achieve Chubby FIRE, it is important to save a healthy proportion of one’s income but it is not necessary to live super frugally before retirement. Budgeting is key, to ensure that you spend on things that are really important to you but without being extravagant. 

Chubby FIRE Target: How Much Do You Need?

• A Chubby FIRE retirement lifestyle typically requires one to live on about $100,000 to $200,000 per year in retirement. 
• Assuming a 4% SWR, you will need $2.5M to $5M to retire. 

Benefits of Chubby FIRE

Comfortable, upper middle class lifestyle before and during retirement

Chubby FIRE focuses on having a comfortable, upper middle class lifestyle, both before and during retirement. This ensures that you do not have to be ultra frugal and subsist on ramen noodles. A healthy balance is maintained in one’s lifestyle and spending, while also ensuring that there is disciplined saving and budgeting. 

Balanced and Non-risky investing

It is important to understand that investing in stocks or real estate is important to grow one’s assets and build long term wealth. However, with Chubby FIRE, you avoid taking on excessive investment and focus on a balanced and disciplined approach to growing assets and wealth.  

Also see our blog post on Boglehead investing.

Chubby FIRE: Risks and challenges

Chubby FIRE requires a high income, which is not accessible to everyone

While you do not need to have as much wealth as in Fat FIRE, Chubby FIRE still involves having a professional or high paying career with a high savings rate. Therefore, it may be out of the reach of many people who are not focused on higher paying career choices. Moreover many people may prefer to be in less demanding or stressful careers and yet achieve FIRE by living frugally. 

Avoid the HENRY trap

Many high earners can become tempted by the HENRY (High Earners, Not Rich Yet) lifestyle. This means they have a high income but are low on assets due to a high level of spending. While people may have good intentions to save a good portion of their income, an upper middle class income can cause spending to get out of control with more expensive housing, fancy cars or private schools. You need to make a very conscious effort to avoid lifestyle creep. 

Pay attention to health insurance

If you intend to retire early, you need to make sure that you will have access to health insurance in your retirement years.

How to plan for Chubby FIRE

Aim for a healthy savings rate

Make a sensible budget that enables you to save a good proportion of your income while also enjoying life in the moment. A good approach here is to curtail spending on most things while splurging on a very small number of things that you enjoy the most. Some people may wish to spend money on their kids, or on travel or dining out with friends. But save aggressively on all other things that you do not care about. This enables you to achieve a high savings rate while enjoying the things you love. 

Balanced investment approach

Invest your savings using a disciplined, long-term investing approach, such as Boglehead investing. This involves mostly passive investing in low cost index funds and buying and holding for the long term. Make sure to diversify your assets and reduce volatility and manage risk.

Consider Low Cost of Living (LCOL) locations

After retirement, consider whether you want to move to low cost of living(LCOL) locations. This will help you reduce your retirement spending while maintaining a good quality lifestyle. Since the housing costs in retirement will be lower, you may even be able to retire early by moving to a LCOL. 

Plan your finances comprehensively

The Planwell financial planning app helps you plan for your Chubby FIRE goal in just a few minutes. Input your basic financial details and your planned retirement lifestyle. Planwell provides an instant financial plan and tells you the earliest age that you can achieve your chubby FIRE retirement. 

How does Chubby FIRE compare to other types of FIRE approaches?

Chubby FIRE vs Fat Fire

Both Chubby FIRE and Fat FIRE involve an affluent lifestyle before and during retirement. But Chubby FIRE involves a more balanced upper middle-class lifestyle. Fat FIRE, on the other hand, allows for an extravagant lifestyle after retirement and building significant wealth to be able to retire early. Moreover, one might invest more aggressively (and thereby accrue more risk) with Fat Fire, in order to earn higher returns. But with Chubby FIRE, we focus on a more balanced investing approach and optimize for both investment growth and risk management.

Chubby vs Barista FIRE

Barista FIRE allows one to retire early and afford a more comfortable lifestyle in retirement because people plan to work at least part time in retirement. With Chubby FIRE, there is no expectation to work in retirement, and the idea is to have enough saved to be able to retire and afford a comfortable lifestyle.  Also, with Barista FIRE, the part time job may come with health insurance, thereby reducing healthcare related risks in retirement. But with Chubby FIRE, we have to plan for health insurance.

Chubby vs Regular FIRE

The regular or standard FIRE involves living somewhat frugally before and during retirement. But with Chubby FIRE, the goal is to live a more comfortable lifestyle.

Moreover, Chubby FIRE is typically for upper middle-class people who hold salaried professional jobs before retirement. But the standard FIRE is accessible to everyone, not just upper middle-class folks.  

Conclusion

Chubby FIRE is a happy medium between the extreme frugality of Lean FIRE and the affluence of Fat FIRE. It typically works for people working in jobs that afford an upper middle-class salary and lifestyle. People considering Chubby FIRE need to do careful budgeting and planning but do not need to pinch pennies. They can adopt a balanced investment strategy that helps them grow assets without undue risk.

Planwell can help you plan for Chubby FIRE with our fully automated financial planning tool.

• What is Coast FIRE? Find out how to Coast Your Way to Financial Independence.
• What is barista FIRE? Retire early and work part-time.
• Lean FIRE: The frugal way to achieve financial independence and retire early. 
• How to retire early and achieve financial independence: Tips to retire early and achieve FIRE (Financial Independence, Retire Early)
• How to build a personal financial plan: Before you make a home purchase, make sure to build your personalized financial plan with our 10 step guide. 
• How to Use AI Budget Calculators and Tools to Plan Your Finances: Take advantage of our free FIRE calculator  to plan your finances more effectively.
• 5 Common Money Mistakes to Avoid: Learn about the pitfalls that could derail your early retirement plans.

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