Exploring Financial Independence and Early Retirement in Singapore
Financial Independence, Retire Early (FIRE) is a movement centered on mindful frugality, substantial savings, and wise long-term investments. First introduced by Vicki Robin and Joe Dominguez in their book Your Money or Your Life, the FIRE concept has gained traction in recent years in countries like the United States and New Zealand, where enthusiasts explore various FIRE lifestyles, including Lean FIRE, Coast FIRE, and Barista FIRE.
In Singapore, the FIRE movement is gaining momentum among individuals reevaluating conventional definitions of career success and retirement. Currently, the statutory retirement age in Singapore is set at 62, with plans to increase it to 63 mid-year and to 65 by 2030. Advocates of FIRE defy societal norms by aiming to retire decades earlier, reflecting a significant shift in the priorities of Singaporeans.
Shifts in Life Priorities Spark the FIRE Movement
Bel shares a poignant memory of missing her grandmother’s funeral years ago due to insufficient compassionate leave. She also regretted not being able to attend the funeral of a close uncle because her organization only granted leave for immediate family members. During visits to her grandmother in the hospital, she noticed that most people could only spend time with their loved ones during the rare moments they could escape work.
This experience led Bel to ponder, “What if I had more freedom or flexibility with my time? I know I need to follow the rules because I am earning a salary. I felt trapped.” Now a teacher in her mid-30s, Bel has calculated her plans to retire at 40, although she may extend this by five years if she starts a family. Her FIRE strategy focuses on long-term investments, having begun her investment journey in her early 20s, giving her a head start over her peers.
As the eldest in her family, she feels a strong responsibility towards her parents, both of whom suffer from chronic illnesses. “I want to be there for them. I don’t know what will happen, so I want to prepare for the worst-case scenario. If I need to leave my job to care for them, I want the freedom and choice to do so.”
The Struggles of Frugality
In a society characterized by excess and visible displays of wealth, embracing a frugal lifestyle can sometimes seem like deprivation. Opting for frugality often requires asking tough questions: Do I really need this? Can I find a better deal? Must I buy this now, or can I wait? This intentional checklist makes shopping take longer, but it helps keep my finances in check. Reflecting on my consumption habits, I realize I might also consider pursuing FIRE.
Michelle has faced scrutiny for her commitment to the FIRE lifestyle, but she remains unfazed. “I love hawker centers, but some people can’t stand them—they prefer cafes and restaurants. The clash of interests can create polarizing attitudes with my social circle, which is why I choose my companions wisely. Some assume I’m either poor or wealthy and arrogant. Others think I’m crazy for my choices. I can’t change their minds, but their judgments reveal more about them than about me.”
Michelle balances her discipline with a mindful approach, aware of the pitfalls of extreme frugality. “There’s a risk of depriving yourself, like living on instant noodles to save money. What if that harms your health? If worrying about finances causes mental stress, then pursuing FIRE isn’t worth it.” After feeling overwhelmed by the corporate rat race as a manager in the public service, she switched to business consultancy in 2016, aiming to retire by 50. Her focus on frugality has become a way of life, allowing her greater freedom in her choices.
Felicia, on the other hand, allocates S$500 monthly for essentials like food and transport. Although asset-rich, she struggles with cash flow, wanting to enjoy life while planning for the future. Influenced by family members to invest heavily upon entering the workforce, Felicia, a civil servant in her early 30s, aims to retire by 55. Most of her savings go toward real estate and investments, creating a steady stream of income despite leaving her short on cash. She envisions a retirement filled with meaningful volunteer work and community connections.
The Dichotomy of FIRE: Camp FIRE vs. Camp YOLO
Every FIRE advocate I spoke with recognized that this lifestyle isn’t for everyone. Cal explains, “Not everyone prioritizes FIRE. The YOLO mindset means living for today without planning for tomorrow, lacking the incentive to save or invest because you’re satisfied with the status quo. FIRE is the exact opposite.”
Cal’s journey into FIRE began a few years ago after meeting someone who had retired in his 40s due to early investments. Inspired, she learned to invest any excess cash and discovered the FIRE movement. Now a home-based business owner in her early 30s, Cal believes retiring in her 40s is achievable by creating multiple income streams to reinvest.
“I want the flexibility to travel and enjoy my hobbies while only working two days a week,” she shares. Cal argues that even saving a modest amount each month is worthwhile, asserting, “If you can’t manage a small sum, how can you be trusted with a larger amount later?”
Individual Definitions of Enough
What constitutes “enough” is subjective and varies from person to person. Financial independence is deeply personal, shaped by individual experiences, aspirations, and family backgrounds. As Michelle notes, “Some people may not want to retire early, while others can’t. I view the ability to pursue a FIRE lifestyle as a privilege—those with higher earning potential and passive income find it easier to achieve.”
This highlights the role of privilege in the intergenerational transfer of wealth and social capital. Individuals from privileged backgrounds often have greater access to resources and support, placing them ahead financially. Reflecting on her own circumstances, Michelle acknowledges, “If I had been born into a situation without education or with family debt, my life would be very different. Some can’t even meet their basic needs, let alone consider FIRE.”
Bel shares that she and her fiancé witnessed their parents’ financial struggles as children, a reality that has influenced their adult decisions and choices.
The Youth Dilemma
Austin, an ex-teacher in his early 30s, successfully transitioned into the financial sector, advising clients pursuing FIRE. As young parents, he and his wife prioritize quality family time, choosing to spend on experiences that bring them joy rather than chasing early retirement. His goal is to be debt-free by 60.
Austin, who has observed young adults and now advises working professionals, noted the growing popularity of digital currencies among his students. After encountering ex-students who made significant returns on their crypto investments, he cautioned them about managing their wealth responsibly.
He emphasizes the difference between the YOLO mentality and the FIRE mindset. “Investors can treat their returns in ways that align with either approach,” he remarks.
Igniting Change
While the FIRE lifestyle means different things to different people, all proponents agree that financial literacy empowers better decisions regarding careers and life goals. Our discussions highlight how Singaporeans are redefining their relationships with work and money, prompting us to ask ourselves how we pursue our goals and take ownership of our finances.
I can’t envision life without meaningful work. Many thrive in their jobs and may never desire to leave. Yet, having the option to step away from undesirable situations is crucial. After learning about various retirement philosophies, I find the concept of “Barista FIRE” resonates with me. This lifestyle involves early retirement while still working part-time, allowing for financial flexibility.
Ultimately, what matters is having access to choices, whether we decide to pursue FIRE or not. Achieving this requires building savings, assessing our needs and wants, making prudent long-term investments, and minimizing debt. As Michelle wisely states, “We FIRE on our terms. Whether it’s $1 million or $3 million, we determine what is enough for ourselves, provided we understand the choices we have. Awareness is what makes all the difference.”
