Many critics of FIRE have a hard time realizing that they CAN retire much sooner than they think; they are just making the conscious decision to NOT to. The key is savings rate. I’m going to say it again to fully emphasize: THE KEY IS TO RETIRING EARLY IS TO HAVE A STRONG SAVINGS RATE. Many salespeople try to tout higher and higher returns on investment, but the reality is that ROI IS NOT NEARLY AS IMPORTANT AS SAVINGS RATE. Networthify (see link below – they did not pay me to say this) has a great calculator that will tell you how many years at what savings rate will allow you to retire:

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I plugged in the average annual income of employed dentists according the Bureau of Labor and Statistics in the US ($178,260 ignoring tax) and just clicked the graph to see how many years to retire it would take at a 60% savings rate. The result is that the average dentist could retire in 12.4 years even if they started with $0 assuming a 5% ROI, and a 4% withdrawal rate (a whole other article is needed to explain why 4% withdrawal rate is generally considered a “safe” withdrawal rate. Basically, the Trinity Study in 1988 states that if you withdraw 4% from your retirement, you should never run out of money even during the worst recessions in history. To be fair, Nobel Prize economist William Sharpe says running out of money in retirement is a tough problem, and one better alternative could be having “lock-boxes” of diverse assets each year to sell rather than a fixed percent withdrawal).

Most folks focus on Return on Investment (ROI) saying higher is better. Now ROI is important, but even a spectacular 20% ROI on every investment at the US average of 6% savings rate takes 24 years to retire. On the other hand, a 2% ROI with a strong 60% savings rate would allow a retirement in 14.5 years! Side note: I do not recommend trying to get a 2% ROI because inflation is normally about 2-3%, so you wouldn’t be making any return. A healthy savings rate is like fuel in your vehicle. Without any savings to invest (fuel), it doesn’t matter if you have a high ROI (Lamborghini) or a low ROI (beater) – you’ll go nowhere fast.

*credit to the ADA

Most people tend to save 6% (US average) and aim for a 7% ROI with the stock market, which would take a whopping 49.5 years to hit retirement (dentist or not). 49.5 years!!! Sadly this is how most people do retirement, but hopefully you won’t be one of them. Life is too short to have to spend that much time working especially when a small increase of savings rate earlier in your life can exponentially accelerate your retirement timeline and provide the freedom to spend your precious time the way you want. Even if one wants to die with a drill in their hand, FIRE doesn’t prevent that, it just gives the joy of working because they want to, not because they have to. Keep in mind the average retirement age of a dentist according to the ADA is now 70 (back in 2017, it was 68.9), and it will continue to increase. Most of us get out of dental school around age 27 – that’s over 43 years of working.

*credit to the ADA Health and Policy Institute

I personally have a savings rate of about 50% right now, but hope to improve it more in the future (If you have a savings rate that is higher, please reach out to us at – we’d love to share your wisdom & help more people on their path to FIRE!) I don’t feel deprived of anything at this savings rate, and I think most dentists would feel the same way. The Zig Zigler quote rings very true here: “you can have anything you want, but you can’t have everything you want.” While buying a boat or a corvette might not be “FIRE friendly,” your life is your own and if that’s important to you, make it happen. If it’s important you’ll find a way to work it into the budget. Just keep in mind that the longer the list of exceptions, the less successful FIRE will be. Many graduates feel “I got through dental school and I deserve to buy something nice” (I know this because I felt the same way), but it’s important to try to live like a dental student even after graduating.

25X Rule – the rough estimation of the total money needed to retire early. I spend about $6K a month, which is $72,000 per year. $72,000 x 25 = $1.8M. Most Americans need more than $1M to retire (per Charles Schwab) so this sounds believable.

A misconception most people have is that if you make a lot of money (like people think dentists do), then you are wealthy. Most dentists tend to spend up to their income (ex: if you take home $200K but spend $195K you’re actually relatively poor), so it doesn’t matter the total amount of money someone makes, it’s all about their savings rate. For those feeling they want to be very aggressive with their FIRE, there are lean FIRE communities on reddit and Mister Money Mustache that advocate this approach (and they are not dentists and did not have dentist income but they still make FIRE happen!). Other great resources for FI include Active Duty Passive Income, From Military to Millionaire, Physician on FIRE, Fire Drill Podcast, Mad FIentist etc.

Final Tips:

  1. Track everything through mint or other financial software.
  2. Pay yourself first – do NOT just “save what’s left over.” Sounds challenging, but this is doable!
  3. Raise your savings rate – try to shoot for 50% or higher. Savings rate will ALWAYS be the most important factor in FIRE.
  4. 25x Rule: Times your annual expenses by 25, and once you have hit that FIRE number, you are Financially Independent.
  5. Once retired, 4% withdrawal rate or less for safety for your eternal nest egg.

One thought on “You CAN Retire Sooner than Expected

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