Case Study

Case Study: A Step-by-Step FIRE Plan for a $70k Salary

January 16, 2025
18 min read

"Can I really achieve FIRE on a normal salary?" This is the question Sarah asked herself at 28, earning $70,000 as a marketing manager. Today, we'll walk through her complete FIRE journey—from debt payoff to financial independence—using real numbers and our calculators to show exactly how she did it.

Meet Sarah: The Numbers

Age: 28

Salary: $70,000

Take-home: $4,200/month

Location: Austin, TX

Credit Card Debt: $8,500

Student Loans: $22,000

Savings: $3,000

401k: $12,000

Phase 1: Emergency Fund & Debt Elimination (Months 1-18)

Step 1: Build the Emergency Fund

Sarah's first priority was building a proper emergency fund. Using our Emergency Fund Calculator, we determined her target based on her specific situation:

Emergency Fund Calculation

Monthly Expenses: $3,200

Job Stability: Stable (Marketing role)

Dependents: None

Recommended Fund: 4 months = $12,800

Timeline: Sarah saved $500/month and reached her $12,800 emergency fund in 20 months (she already had $3,000).

Step 2: Debt Payoff Strategy

With her emergency fund building, Sarah tackled her debt using our Debt Payoff Calculator to compare strategies:

Debt Payoff Analysis

DebtBalanceRateMin Payment
Credit Cards$8,50022%$170
Student Loan$22,0005.5%$240

Avalanche Method:

Total Interest: $4,200

Payoff Time: 24 months

Snowball Method:

Total Interest: $4,800

Payoff Time: 26 months

Sarah's Choice: Avalanche method, paying $800/month total ($390 extra). Debt-free in 18 months, saving $600 in interest.

Phase 2: Investment Acceleration (Months 19-36)

Step 3: Optimize 401k and IRA Contributions

With debt eliminated, Sarah redirected her $800 debt payments into investments. Her strategy:

Investment Priority Order

  1. 1. 401k Match: $2,100/year (3% match)
  2. 2. Roth IRA Max: $7,000/year
  3. 3. Additional 401k: Up to $23,000 limit
  4. 4. Taxable Account: Remaining funds

Total Monthly Investment: $1,300 ($800 from debt + $500 previous savings rate)

Step 4: Calculate the FIRE Number

Using our FIRE Calculator, Sarah determined her target based on her projected expenses:

FIRE Number Calculation

Current Annual Expenses: $38,400

FIRE Annual Expenses: $45,000 (includes travel, hobbies)

FIRE Number (25x rule): $1,125,000

Conservative FIRE Number (28x): $1,260,000

Phase 3: The Compound Interest Years (Years 3-15)

Step 5: Maximize Savings Rate

Sarah gradually increased her savings rate through salary increases and lifestyle optimization:

YearSalarySavings RateAnnual Investment
Year 3$75,00025%$15,600
Year 6$85,00035%$24,000
Year 10$95,00045%$35,000

Step 6: Track Progress with Compound Interest

Using our Compound Interest Calculator, here's how Sarah's portfolio grew:

Portfolio Growth Timeline

Year 5: $125,000

Year 10: $385,000

Year 15: $850,000

Assumptions:

• 8% average return

• Increasing contributions

• Tax-advantaged accounts

Phase 4: The Final Push (Years 16-18)

Step 7: Coast FIRE Achievement

By year 16, Sarah reached "Coast FIRE"—enough invested that compound growth alone would reach her FIRE number by traditional retirement age, even without additional contributions.

Coast FIRE Milestone

Portfolio at 44: $750,000

Projected at 65: $1,200,000+ (without additional contributions)

This gave Sarah incredible peace of mind and flexibility in her career choices.

Step 8: Final FIRE Achievement

Sarah continued investing and reached her FIRE number at age 46:

FIRE Achievement Summary

Age at FIRE: 46

Portfolio Value: $1,275,000

Annual Safe Withdrawal: $45,000

Years to FIRE: 18

Total Invested: $485,000

Investment Growth: $790,000

Average Savings Rate: 38%

Final Salary: $105,000

Key Success Factors

Financial Strategies

  • • Eliminated high-interest debt first
  • • Maximized tax-advantaged accounts
  • • Increased savings rate with salary growth
  • • Maintained low-cost index fund portfolio
  • • Avoided lifestyle inflation

Behavioral Keys

  • • Automated investments and savings
  • • Tracked progress monthly
  • • Celebrated milestones
  • • Stayed focused during market downturns
  • • Built multiple income streams

Ready to Create Your Own FIRE Plan?

Sarah's journey shows that FIRE is absolutely achievable on a middle-class salary. The key is having a clear plan, tracking your progress, and staying consistent over time.

Use our calculators to create your personalized FIRE roadmap. Start with your current situation and see exactly when you could achieve financial independence.

Your Turn: Getting Started

Sarah's story proves that FIRE isn't just for high earners or extreme savers. Here's how to start your own journey:

  1. Calculate your emergency fund needs and start building it
  2. List all debts and create a payoff strategy
  3. Determine your FIRE number based on your desired lifestyle
  4. Optimize your investment accounts for tax efficiency
  5. Track your progress and adjust as needed

Remember: FIRE isn't about depriving yourself—it's about being intentional with your money so you can buy the ultimate luxury: freedom. Sarah's 18-year journey to financial independence started with a single decision to take control of her finances. Your journey can start today.