The Milestones of Financial Independence: Charting Your Personal Path to Prosperity

This is the header graphic for the Fiology Lesson that discusses the milestones of financial independence. The photo displays a group of people with their hands raised in victory for reaching their goal.

Milestones of financial independence represent not just a path to a comfortable retirement, but a bold endeavor to redefine the relationship between work, money, and life. Rather than adhering to the standard counsel of saving a mere 10-15% of income for retirement, the ethos of financial independence urges a more assertive approach.

By saving more aggressively, the journey to financial independence accelerates, granting you the liberty to spend more of your life pursuing what genuinely matters to you. It’s about more than just ensuring financial stability – it’s about shaping a life where your actions align with your values.

With well-defined planning and unwavering commitment, these financial milestones become not only achievable, but also transformative, paving the way to a life less burdened by financial constraints and more enriched by freedom and choice.

What are Financial Milestones?

Financial milestones are monetary goals that, once achieved, bring you closer to financial independence. These milestones are often tied to age, as financial priorities tend to change throughout different stages of life.

For those of us who are wanting to achieve financial independence sooner than the masses, we focus on the objective rather than rules of thumb of traditional financial advice. If you can retire sooner, wouldn’t you want the option, even if you decide to continue to work for money. 

Below is a list of the more common terms you’ll discover as you spend time in the financial independence community. Some of these different paths will appeal to you more than others. It’s your journey. 

After this FI-specific section, we’ll return to reflect on the traditional “how much money should I have by each age?” type of thinking. It’s good to know this for two reasons. First to consider if the traditional advice applies to you, as well as to help ensure that even if you don’t desire the fast track to financial independence (but why wouldn’t you?) you can still be doing just fine financially.

Milestones of Financial Independence

Financial independence isn’t a one-size-fits-all journey. Everyone’s path will be different, tailored to their lifestyle choices, goals, and personal circumstances.

Recognizing this, it’s beneficial to familiarize yourself with several variations of financial independence. In this part of the article, we delve into the specific definitions of five distinct approaches to achieving financial independence.

These terms – Coast FI, Barista FI, Lean FI, Fat FI, and Slow FI – represent different strategies and lifestyle choices within the broader financial independence movement. 

Understanding these terms and their implications can help you craft a personalized and realistic path to your own financial independence. Let’s dive in and learn how each strategy works and could possibly shape your financial future.

Defining the Terms: Different Paths to Financial Independence

Coast FI:

This is the point where you have enough money invested that you don’t need to invest any more to reach your retirement goal. For instance, if you’re 30 years old with $200,000 saved, assuming an annual return of 7%, you’d have over $2 million by age 65 without investing another penny. The ‘coasting’ concept comes from the idea that your current expenses can be covered by working, while your investments grow in the background.

Barista FI:

Barista FI refers to a stage where you have enough savings and investments to cover most of your living expenses, and you only need to work a part-time or low-stress job to cover the rest.

For example, if your annual expenses are $40,000, and your investments generate $30,000 (using the 4% rule), you’d only need to earn $10,000 from your ‘barista’ job.

Lean FI:

Lean FI means achieving financial independence with a frugal lifestyle. If you can reduce your annual expenses to $25,000, you’d need a nest egg of $625,000 to maintain this lifestyle indefinitely (again using the 4% rule).

This might involve living in a low-cost area, minimizing housing costs, and spending little on luxuries.

Fat FI:

The opposite of Lean FI, Fat FI involves achieving financial independence with a more lavish lifestyle. If you want to spend $100,000 annually in retirement, you’d need to save $2.5 million.

With Fat FI, you’re aiming for a level of wealth that allows for luxury travel, high-end dining, and other expensive pursuits without worrying about your budget.

Slow FI:

Slow FI is a philosophy that doesn’t focus on reaching financial independence as quickly as possible. Let’s say your ideal lifestyle costs $50,000 per year, requiring $1.25 million saved.

Instead of rushing to save that amount, you might decide to work part-time or freelance once you’ve saved enough to cover half your expenses ($625,000, providing $25,000 per year using the 4% rule).

This approach gives you more free time and less stress while still progressing towards full FI.

Financial Milestones by Different Ages: General Traditional Advice

I want to be very clear here, I do not personally advocate the following timeline to reach financial independence. However, if you wanted to compare your own personal financial plans with broad strokes of general financial guidance that is found out in the world by reputable sources, below is worth knowing. 

My opinion is that you should disregard the ages below, focus on the process of getting through all of the below milestones as quickly as practically possible and achieve financial independence on a timeline that works for you.

Financial Milestones by Age 20

The journey to financial independence often begins in earnest during your 20s. Here are some key milestones to consider at this stage:

  1. Saving for future education or training: Whether it’s for a graduate degree or a coding boot camp, having funds set aside can give you options and flexibility.
  2. Starting a modest retirement fund: Even a small monthly contribution to a retirement fund can grow significantly over time due to compounding interest. For instance, a consistent investment of $200 per month at an average return of 7% will accumulate to over $525,000 by age 65, as shown by this compound interest calculator.
  3. Establishing credit: This can be achieved through the responsible use of a credit card, which can help with everything from renting an apartment to getting a cheaper rate on insurance.

By your late 20s, aim to have at least one year’s salary saved up. This forms a solid foundation for future financial stability and growth.

Financial Milestones by Age 30

As you navigate your 30s, here are some financial goals to consider:

  1. Paying off student loans: The average student loan debt for a 30-year-old is around $33,000, according to data from
  2. Owning a home: The median age for first-time home buyers is 33, according to a report from the National Association of Realtors.
  3. Boosting retirement savings: As per a Fidelity study, by age 30, you should aim to have the equivalent of your annual salary saved for retirement.

Financial Milestones by Age 40

When you reach your 40s, focus on:

  1. Achieving a higher net worth than debt: The average 40-year-old has a net worth of around $80,000, according to Federal Reserve data.
  2. Increasing retirement savings: As per Fidelity’s recommendation, aim to have around three times your annual salary in retirement savings by age 40.

Financial Milestones by Age 50

By the age of 50, here are some targets to hit:

  1. Maximizing retirement savings: Make the most of catch-up contributions in tax-advantaged accounts like 401(k)s and IRAs.
  2. Diversifying investments: This is a good time to re-evaluate your investment portfolio.
  3. Increasing retirement savings: Aim to have six times your annual salary saved for retirement.

Financial Milestones by Age 60

As you enter your 60s, here are some goals to consider:

  1. Planning for your retirement lifestyle: Now’s the time to think about where and how you want to live in retirement.
  2. Evaluating retirement income sources: Ensure you have diverse income sources such as pensions, annuities, and retirement savings.

Financial Milestones by Age 70

Entering your 70s usually marks the transition into full-fledged retirement. Here are some things you should be doing:

  1. Reviewing your estate plan: Ensuring your wills, trusts, and beneficiary designations are up-to-date can give you peace of mind and make life easier for your loved ones later.
  2. Considering charitable gifts: If philanthropy is important to you, now’s a great time to consider giving, which can also provide tax benefits.
  3. Evaluating your retirement savings: Ideally, you should have about ten times your final salary saved for retirement. However, this will depend greatly on your personal lifestyle, expenses, and overall health.

Focus on Your Own Milestones of Financial Independence

While these milestones are generally agreed upon guidelines, remember that everyone’s financial journey is unique.

Don’t be disheartened if you don’t meet all of these targets exactly, or the targets of others in the financial independence community. The key is to set realistic and achievable goals, stay focused, and adjust as necessary.

Remember, the path to financial independence is not a sprint, but a marathon. It requires diligence, patience, and strategic planning. So keep going, and know that each step you take brings you closer to your financial goals.

Celebrating Your Milestones: Why and How

Reaching financial milestones is more than just hitting numbers on a spreadsheet; it’s a profound accomplishment that deserves recognition and celebration. Acknowledging your achievements reinforces positive financial behaviors, keeps you motivated, and makes the journey to financial independence much more enjoyable.

Why Celebrate Financial Milestones?

  1. Motivation: Celebrating your milestones, big or small, can boost your morale and motivate you to keep working towards your goals.
  2. Reward: You’ve worked hard to reach these milestones. Giving yourself a well-deserved reward can serve as an incentive to strive for the next one.
  3. Reflection: Each milestone provides an opportunity to reflect on your financial journey, what you’ve learned, and how you’ve grown.
  4. Encouragement: Sharing your celebrations can inspire others on their own paths to financial independence.

How to Celebrate Financial Milestones

Celebrations don’t need to be extravagant or costly; in fact, they should align with your financial independence ethos. Here are a few ways to commemorate your progress:

  1. Personal Treat: It could be something as simple as a nice dinner out, a book you’ve been wanting to read, or a relaxing day at the spa.
  2. Memorable Experience: Create lasting memories by investing in experiences rather than things. This could be a hike to your favorite spot, a road trip, or trying out a new hobby.
  3. Share Your Success: Consider sharing your milestone with loved ones or within your financial independence community. They’ll likely be proud of your accomplishment and offer their congratulations.
  4. Help Others: What better way to celebrate your financial independence than by helping others on their journey? You could donate to a charity, sponsor a scholarship, or offer to mentor someone else who is seeking financial independence.

Remember, the journey to financial independence isn’t just about the destination, but the path you take to get there. Take time to celebrate your milestones, as each one represents a step closer to your goal.

Additional traditional financial food for thought:

In this section, we’ll address some common questions about financial milestones and expectations at different ages.

  1. “How much money should I have by each age?” There’s no one-size-fits-all answer to this question, as it largely depends on your personal lifestyle, goals, and circumstances. However, as a rule of thumb, by age 30 aim for the equivalent of your salary saved, three times your salary by 40, six times by 50, eight times by 60, and ten times by 70.
  2. “How much should I have saved up by age?” Again, this is subjective and depends on personal factors, but the rule of thumb mentioned above can serve as a useful guide.
  3. “How much money should a 75-year-old have?” Ideally, a 75-year-old should have at least ten times their annual salary saved for retirement. However, given factors like longer life expectancy and potential health care costs, more may be preferable.
  4. “How much money should an average person have?” The average American’s net worth is around $746,821, according to Federal Reserve data. However, this figure can be skewed by high-net-worth individuals, and the median net worth, which is often a better indicator, is $121,411.
  5. “How much money should I have in savings by age?” In addition to retirement savings, you should aim to have an emergency fund of 3-6 months’ worth of living expenses, regardless of your age.

Remember, these are general guidelines and may not fit everyone’s unique situation. Always consider your personal financial goals and circumstances, and consult with a financial advisor for personalized advice.

The Milestones of Financial Independence (FI) are checkpoints along our FI journey that represent significant accomplishments. They allow us to acknowledge our successes of the past and look forward to our next achievements. The Milestones of FI make it clear that FI itself isn’t a specific number in your bank account.

In addition to getting closer to achieving Financial Independence, milestones represent growth, accomplishment, and maturity of perspective. 

Additional Resources:

Take Action: 

  1. After reading and listening to the resources above, select the achievement framework that resonates with you the most.  Use the number that represents the amount of value you have chosen as your goal to reach FI, determined in How Much Money Do I Need to be Financially Independent? and discover when you can expect to reach each milestone or checkpoint.  You can sketch it out, graph it in excel, or type it in narrative form. Post it somewhere you will regularly see it as it will provide you motivation to reach the next milestone.
  2. Think of how you are going to celebrate achieving each milestone.  Who will you share this experience with? Do you know someone, or have met someone since beginning this course, with which you can share your results?  


“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.” – Franklin D. Roosevelt

David Baughier

My passion for helping others led to the curation Fiology. Help me spread the message of Financial Independence by clicking a colorful link above and sharing this post on your favorite social platform. Thank you!

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