By Priya

July 26, 2021


Show notes

🎙 The race to FIRE is a tough one. It takes years of dedication to investing and growing your portfolio before you reach financial independence and you can retire early. When you retire early, you need a bigger nest egg because you’ll be drawing income from your investments for decades longer than traditional retirement. And it takes decades to build a portfolio that’s large enough. But what if there was a way to speed up your journey? You might be able to reach FIRE even earlier by taking advantage of a program that’s sitting right under your nose… 🤔

This episode discusses topics like:

  • Why simple FIRE calculations on the internet fall short and leave you vulnerable to running out of money or having to go back to work;
  • How FIRE works with an age-restricted retirement program like superannuation in Australia or 401 (K) in the US; and
  • How much earlier you can retire using a phased approach to early retirement as opposed to the simple FIRE calculations out on the internet (the 25x rule).


Hey, friends! And welcome back to Girl on FIRE, the financial independence podcast for independent women. 

My name is Priya, I’m a Chartered Accountant, an analyst and the creator of Paper Money Co. 

I’m also a fierce financial feminist and the host of this podcast. I believe that a woman who is in control of her money, is in control of her life.

Today, I wanted to give you more of a behind the scenes look at my path to FIRE. Because my personal path to FIRE looks different to a lot of what you’ll see people talking about out in the internet wilderness. 

And if you’ve gotten your hands on my FIRE & Investment calculator spreadsheet, or if you saw the video tutorial I made for you where I shared my actual calculation — you would have seen how grand and complex it is. 

Now, you know that I don’t just go expenses times 25 is my FIRE number and bing bang bong, I’ll retire when I get there. 

I spent an entire episode talking about all the different assumptions that go into my calculation. I created a video tutorial to walk you through it.

You know my calculation is much more complex than the simple 4% or times 25 rule. And the reason for that is twofold.

One, because Australia’s retirement scheme, which is called superannuation, impacts what my retirement will look like. 

But also because I’m an analyst. I make my grocery list in a spreadsheet for goodness sake, I can’t just throw together a two minute calculation and have my future and my freedom depend on it. That’s just not me. 

So, in this episode we’re going to be talking a bit about how FIRE works with superannuation.

Now, for my listeners in the US, superannuation is Australia’s retirement savings program. It’s like your 401 (k).

So, my superannuation, or super for short, is a tax advantaged retirement account that a portion of my salary is paid into every time I get paid. 

And that’s mandatory. It’s part of my wages and the government tells my employer to pay it into a retirement account instead of my bank account. 

And then my contributions into the retirement account are invested by fund managers. 

It’s 100% my money. It’s part of my wages. But I don’t invest it myself. The fund manager invests it for me. 

Now, my listeners in the US may not be under Australia’s retirement system but this episode will still be interesting for you for one main reason. 

That retirement fund is money that I can’t get my hands on until I’m at least 60. I believe that’s similar to what happens with a 401 (k) in the US. 

You can’t withdraw from your 401 (k) until you’re 59 1/2, unless you want to pay an early withdrawal penalty.

Under extreme circumstances, we can withdraw our super early in Australia. But I’ve never needed to do that. And it’s something I would avoid for as long as I possibly can.

So, my money is going to sit there and grow and I can’t get my hands on it until I’m 60. 

But what does that mean for FIRE? How does having some of my money locked away out of my reach for 30 years impact my plans for FIRE?

Now, in this episode I’m going to be talking about my superannuation, my retirement account that I can’t touch until I’m 60. 

But I’m also going to be talking about my non-retirement account, my brokerage account that I can access whenever I want. 

So, to keep things clear, when I say superannuation or super or retirement fund, I’m talking about the money I can’t touch until I’m 60.

When I’m talking about money I have immediate access to, I’ll call it my non retirement account. So just remember that distinction throughout this episode.

Now, if all goes to plan, I’ll be retiring at 45. That’s 15 years from now. Which means I won’t have access my retirement fund when I retire. I’ll have to wait until I’m 60 to get my hands on that money.

So, what does the path to FIRE look like when you don’t get access to your retirement fund until you’re at traditional retirement age?

That’s what we’re going to be talking about in this episode. And the reason why it’s so important is because a lot the FIRE stuff you see out there is based on a simple calculation. 

It’s saying that you need X amount of money to cover X amount of expenses for X amount of years. And that simple calculation is based on the traditional retirement model. 

Where you retire at some point and use that money until the end of your life. The age restriction to access your retirement fund doesn’t come in to play.

Because traditional retirement assumes you retire at 60 like you’re quote / unquote “supposed to”.

But the problem with simple calculations like that is that it doesn’t take into account the complexity of retiring before you can access your retirement fund, before traditional retirement at 60.

It’s the calculation a lot of people use to determine how much money they need and when, but it doesn’t take into account that you don’t have access to all of it when you need it.

And I find that super ironic. But that’s why I created my own FIRE calculator. Because that simple calculation wasn’t good enough for me. And you’ll see why in this episode.

But before we get started, I want to remind you to head to my website — to download your free copy of my Investing Starter guide 

It’s totally free, you just need to enter in your email address and I’ll send it straight to your inbox. 

It gives you a step by step plan to follow to get your finances ready to start investing, including working with a budget, building an emergency fund and paying off debt.

The sooner you can get your foundation set and get those good money management practices in place, the sooner you can start investing and building your wealth. 

If you’re really serious about learning to master your money, then it’s the perfect guide for you, and I’d hate for you to miss out on it.

My online program Financial Mess to Money Success teaches you exactly how to implement those foundational strategies to your own finances. 

I hold my students’ hands and we work on their finances together. 

But it’s not currently open for enrolment, so this is the next best thing. 

As always, Girl on FIRE is about learning, so whip out your favourite notebook or journal and get ready to take some notes. 

If you’re not into writing things out by hand, you can always find the transcript on my website —

Okay, let’s dive in!

FIRE vs Traditional retirement

First, let’s just take a really quick look at the difference between FIRE and traditional retirement.

FIRE (Financial Independence, Retire Early)

Okay, so we know that FIRE means Financial Independence, Retire Early. Or what I’ve been seeing on the interwebs lately is Financial Independence, Relax Early. So, take your pick.

Either way, it means that you don’t have to rely on earning income from a job to cover your expenses. 

You don’t need to sell your time on Earth in exchange for income. Instead, you earn income from your investments. And that’s what you use to cover your expenses and fund your lifestyle. 

Traditional retirement

But in traditional retirement, you have a retirement fund, whether that’s your superannuation or your 401 (k). And you can’t access that money without penalties until you’re about 60. 

So, let’s look at a timeline here. I’ll use myself as an example. I’m currently 29. I want to retire at 45 which is in 15 years. And I can’t touch my super, my retirement account until I’m 60.

Now, to help you visualise what I talk about in this episode, I have a screenshot of my FIRE timeline in the show notes for you to follow along.  

Retirement Timeline

That timeline is pulled straight from my FIRE calculator and it’s updated with my most recent numbers. 

FIRE & superannuation or 401 (k)

But what does this timeline mean for my path to FIRE? It means that my path to FIRE isn’t run in a straight line. It’s more like a relay race. 

There’s a different part of my wealth, my overall portfolio, being tagged in at a different time. 

For example, I can access my retirement fund when I’m 60. And I can use that money until the end of my life. 

But if I want to retire before 60, I need additional money outside of my retirement fund to cover my expenses until I turn 60. 

I need money that I can access freely, without age restrictions or penalties when I’m 45. That’s why I have a brokerage account that sits outside of my retirement account. 

It’s independent of my retirement fund. It’s money that I could withdraw tomorrow if I wanted to and I won’t face any penalties for it. 

But here’s where it get’s interesting. And also complicated, but mostly interesting. 

Most of the time when people are talking about FIRE, they have this FIRE number and they want to grow their portfolio to match that FIRE number. 

And that money is supposed to fund their lifestyle in retirement until the end of their life.

You can retire early, retire at 45 and use that money to cover your expenses. But remember what I said about your different accounts being tagged into the race at different times. 

You can’t access your super or your 401 (k) at 45, that needs to wait until you’re 60. But you can access your investments outside of your retirement accounts. 

And so the interesting thing is that your non-retirement account doesn’t need to last you until the end of your life. 

It only needs to last you until you’re 60, because at that point, your non-retirement account can tag out. It can be fully depleted.

And your retirement fund can join the race. And it’ll take you all the way until the end. Do you see what I meant by calling it a relay?

Reaching FIRE & retirement in phases

Now, if you look at the timeline graphic I’ve got for you, you can see how this works when planning for early retirement in a normal person’s life. 

There are multiple stages or phases in my path to FIRE. It’s not as simple as just building a portfolio until it reaches one specific number.

And that’s because the amount of money I need, the way I invest, and the money I have access to will change throughout my life. 

Let’s look at it through my phased FIRE calculation. So, let’s go through my timeline in detail. Let’s start with Phase 1. 

Phase 1: Building your non-retirement investment portfolio 

Phase 1 is the sucky part. That’s where I have to work to build up my portfolio. 

Now, the important thing to note here is that during phase 1, I’m working on my non-retirement account. 

I’m working on building my investment account outside of my retirement fund, outside of my superannuation. 

And, remember, that’s the account that I have immediate access to. There’s no age restriction. 

Also, that non-retirement account doesn’t need to last until the end of my life. It only needs to last until I can get my hands on my retirement fund. 

So, I’m working and focusing on building my non-retirement account. But I’m still putting money into my retirement fund, my superannuation or 401 (k). 

It’s still growing and compounding. I don’t need that money now, but I’ll need it when I’m 60.

So, my non-retirement account only needs to last me the 15 years between 45 and 60 when my retirement account can take over. It doesn’t need to last me the 50 years from 45 to 95, which is the conservative estimate I take for my life expectancy.

That’s a massive difference. And that massive difference means I need a lot less money in my non-retirement account. 

So, that’s phase 1. It’s all about building the non-retirement account so that it can last me for 15 years.

Phase 2: Building your retirement fund

Now, phase 2 begins once my non-retirement account can cover my expenses until age 60.

And at that point, I’m financially independent, but I’m not able to retire yet. Because my retirement fund doesn’t have enough money in it yet. 

Think of your retirement fund like a field of seeds. Those seeds need to grow into a forest by the time I turn 60 so that I can harvest enough berries to last me until the end of my life. 

But by the time I enter phase 2, I haven’t planted enough seeds yet. My forest will grow, but it won’t be enough. And I’ll run out of berries before I die. 

So, what does that mean? That means I need to keep working. But now the focus shifts. 

In phase 1, I was working and focusing on growing my non-retirement account. Which means I was putting all my investments into my brokerage account.

Because I can access that money at any time. I don’t need to wait until I’m 60. But by the end of phase 1, I’ve got enough money to cover my expenses until I’m 60.

So, in phase 2, I shift my focus to growing my retirement fund. I’m planting more seeds. 

And those seeds are going to continue growing until I can harvest them at age 60. 

Now, during phase 2, you kind of have 2 options. You can just switch all your regular investing to your retirement accounts. 

Or, you can live off your non-retirement account and put your entire salary into your retirement account. 

Of course, every situation is different, so it will depend on your own circumstances and strategy. But those are generally the two options you have. 

At this point, I’m planning that during phase 2, my entire salary will go to my retirement fund. 

And we’ll live off the non-retirement account. Everything I earn will go into my superannuation or my 401 (k).

And I need to keep doing that until I’ve planted enough seeds. Until the balance of my retirement fund is large enough that it’ll grow to into a forest that I can sustainably harvest from age 60 until the end of my life.

FIRE & investment calculator spreadsheet

But before we move on, I want to ask my Girls on FIRE for a favour. If you’ve listened this far into the episode then you’re probably enjoying it, right?

So, here’s what I’d like you to do next. Pause this episode for a few seconds and head on over to

I want you to leave a rating and review for Girl on FIRE because it helps me provide better content based on what you’re enjoying the most.

It helps other women out in the internet wilderness come and find us as well.

And it’s also a great way to support this show for free, and for that I’d love to send you a little something to say thank you.

So, once you’ve done that, take a screenshot of your submitted review and email it to me at

If you do that, I’ll send you a copy of my FIRE and investment calculator. Which, if I do say so myself, is pretty damn amazing.

And just happens to be the subject of the episode you are listening to right now.

It’s how I plan for my early retirement and my wealth. It shows me how my wealth is going to grow, when I can retire and how long my money will last.

And it also has a separate tab that takes Australia’s superannuation into account as well. 

And you can use it to analyse companies and different investment options when you’re picking stocks too. 

I’ve never actually seen anything like it before, so it’s pretty special. And I’m currently not offering that spreadsheet anywhere else except on my Patreon

Not in my shop, not to my email list — it’s a ghost. So, this is kind of a money-can’t-buy type deal.

The only way to get your hot little hands on that spreadsheet is by submitting a rating and a review, taking a screenshot and sending it to me.

That URL again is I’ve made it nice and easy for you.

So, go hit pause and do that right now. It’s okay, I’ll wait. 

Okay, that concludes my little ad-break, so let’s get back to it.

Phase 3: Early retirement

Okay, so once your retirement account is big enough, once you’ve planted enough seeds, you enter phase 3. 

Phase 3 is where all the fun stuff happens. You’re financially independent and you finally get to retire early. This is where you reach FIRE. 

You’re living off your non-retirement account. And your retirement fund is untouched and is growing nicely in the background.

You don’t need to go to work, you can do whatever you want with your time. 

Because you no longer need to work to cover your expenses. Your returns from your non-retirement account do that for you. 

Now, remember what I said before about the relay race. Your non-retirement account only needs to last you until you can touch your retirement fund at 60.

That means phase 3 ends when you’re 60 and you can access your retirement account. And it also means that during phase 3, you can use up your entire non-retirement account. 

Of course, pace yourself appropriately. You don’t want to blow through it all in 5 years and then have to go back to work. 

But by the time you’re 60, your non-retirement account can be $0. Because at that point, you don’t need it anymore. 

Phase 4: Traditional retirement

Because at 60, you’re in phase 4. You’re in traditional retirement.

The seeds you planted in your retirement fund have grown beautifully and you can harvest them now. And you can live off that money for the rest of your life.

Now just because this wasn’t already complicated enough, you can see from the graphic that my timeline has an extra phase. It has phase 5. 

Phase 5: Accessing the pension

And that’s because in Australia, for my age group, traditional retirement age isn’t 60. Yes, you can access your retirement account at 60 but you don’t qualify for the pension until you’re 67. 

So, the official traditional retirement age for my age group is 67. That number has already gone up once in my lifetime, and it’ll keep going up. 

Because we have an ageing population, everyone is spending their money trying to buy a home instead of preparing for retirement, and the government doesn’t know how to handle our money.

So, who knows what the official retirement age will become over the next decade or so, but at the moment, for me, it’s 67.

Which means that I can access my retirement fund at 60 but I don’t qualify for the pension until I’m 67. 

So, some people retire at 60, some will start working less hours and transition to retirement from age 60, and some people will wait until they’re 67 to retire. 

And in my FIRE calculator, I’ve intentionally created the model to account for both situations. 

Simple FIRE calculation is based on traditional retirement

Okay, so that’s how I plan for FIRE and what my path to FIRE looks like using my complex calculator. 

Now, let’s take a look at what my path to FIRE would look like using the simple FIRE calculations you see on the internet. 

The ones where you take 25 times your annual expenses or you look at your savings rate instead of your investing rate like I do, which we talked about in episode 19.

I’ve mentioned in a few episodes that I’m planning for $70,000 of annual expenses in retirement, which includes my early retirement years. 

According to the 4% rule, if I multiply my annual expenses by 25, that means I need a portfolio value of $1.75M to retire.

And based off the assumptions of the Trinity Study which we talked about in episode 23, that will cover me safely for 30 years.

So, using the simple FIRE number calculation that you see all over the internet, that means I can’t retire until my net worth is $1.75M. 

And based on that calculation, I’ll be 54 when that happens. And based on the Trinity Study, I can safely withdraw 4% of my portfolio each year for the next 30 years. 

Which means that my money will safely cover me until I’m 84. If I live past 84, I may have to rely on the pension in those last years of my life.

The simple FIRE calculation is based on traditional retirement, not early retirement

Now, here’s the key thing I want you to take away from this episode. Did you notice the difference in the two FIRE calculations?

On one hand, you have the simple calculation that you see all over the internet. 

You calculate your FIRE number using the 4% rule and your savings rate and then grow your net worth to that number. 

Under that calculation, I would reach FIRE at 54. That’s still early retirement, but it’s only 6 years early.

But with my model, where you take age-restricted retirement funds and non-retirement accounts into consideration, I’m on track to reach FIRE at 43. 

That’s a difference of 11 years. 

And the reason for that difference is because under the simple calculation, one portfolio needs to last you from early retirement until the end of your life. 

And it does that because it’s based on the calculations used for traditional retirement. 

The 4% rule didn’t factor in millennials who aren’t interested in spending 40 years working for the man for 20 years of freedom. 

It was based on retiring in your 60s at a traditional retirement age and using your retirement fund until the end of your life. 

It’s called the FIRE number calculation on the internet these days but it doesn’t actually take into account retiring early. At least not in places like Australia or the US where you have an age-restricted retirement or pension program.

When they did the Trinity Study, they didn’t need to worry about what happens if you retire at 45 and you don’t have access to your retirement fund for 15 years. 

Because at that time, only millionaires and billionaires were retiring before traditional retirement age. FIRE wasn’t a thing. 

And in episode 28, I dedicated an entire episode to talking about understanding assumptions and looking under the hood of a calculation or model to see how it really works. 

And the truth is that a lot of people out there are basing their FIRE number and their path to FIRE on a calculation or assumptions that were not designed for early retirement.

Retirement programs make FIRE easier

Now, to finish off this episode, there’s one big thing I want to draw your attention to.

Using the simple FIRE calculation which is based on traditional retirement, I’ll retire at 54. 

Using my FIRE calculation which takes an age restricted retirement program into consideration, I’ll reach FIRE at 43.

Which means that having access to an age restricted retirement program like superannuation or 401 (k) makes it a lot easier to reach FIRE. 

You can see this in my own calculations. With the same numbers, I’ll reach FIRE 11 years earlier because of Australia’s superannuation program.

11 years. That’s not a small amount of time. Can you imagine what you can do with 11 years of not having to go to work?

I worked it out, I work for about 240 days a year.

Over 11 years, that’s 2,640 days. Which, for an 8 hour workday plus an hour of commuting is 23,760 hours of not having to go to work and watch the clock tick backwards. 

What could you do with all that time?

Next weeks’ episode

And that’s all I have for you Girls on FIRE today!

My challenge for you this week is to run a simple FIRE number calculation for yourself and see what the difference is. How much earlier could you retire with a superannuation or 401 (k) program?

On next weeks’ episode we’re going to be talking about why it’s so hard to save and invest for retirement.

It’s going to be a super interesting episode so you’re definitely not going to want to miss it.

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The advice shared on Girl on FIRE is general in nature and does not constitute financial advice. The information shared does not consider your individual circumstances. Girl on FIRE exists purely for educational purposes and should not be relied upon to make an investment or financial decision.

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