Imagine retiring at 35 or 40. It might sound like a pipedream, but according to a new financial movement, you don't have to be 60 or 70 years old to enjoy the perks of retirement.

Key points: The Financial Independence Retire Early (FIRE) movement has been gaining traction in the past few years

The Financial Independence Retire Early (FIRE) movement has been gaining traction in the past few years Australians pursuing the radical lifestyle plan say freedom from full-time work was a big motivator

Australians pursuing the radical lifestyle plan say freedom from full-time work was a big motivator One economics expert says it requires a high income and motivation

Proponents of Financial Independence Retire Early (FIRE) believe you can retire decades earlier if you adopt a frugal lifestyle, put together plenty of savings and have a keen eye for investment.

Overall, those following FIRE are focused on one main goal: building investments to a point where they produce enough income to retire or semi-retire from traditional work.

While the methods of getting there vary, most aim to achieve it by having a savings rate of 50 per cent or more and putting that money to work in investments — primarily low-cost index funds (which track part of a stock market index, such as the ASX200 rather than stock picking) or property.

As part of the ABC's personal finance project, we've spoken to people from the FIRE movement about how they planned to semi-retire so early in life.

This couple wants to semi-retire in their 30s

Julieanne Webb and her fiance Luke McManus are working towards FIRE.

While the movement aims to help people retire earlier, the people the ABC has spoken to say they have adapted the idea to suit their own goals.

Julieanne Webb and her fiance Luke McManus are in their early 30s and despite their young age, hope to semi-retire in about six months.

Ms Webb works as a children's educator in schools and Luke is a freelance graphic designer.

"At the end of the day, at this stage, our biggest driving motivator towards FIRE is to free ourselves from the obligation of work, especially full-time work," Ms Webb said.

"We're seeking greater work-life balance. Our intentions are to leave our full-time jobs, travel for a little bit (low-cost road-trip style), then come home and build ourselves our own tiny house.

"This doesn't mean we won't work in future, we probably will in some capacity … but having choices and freedom around that makes all the difference."

Currently, they're preparing for semi-retirement by living solely off her income. That way they can save and invest all of her fiancé's income in shares. They also own an investment property.

Many in the FIRE movement count hiking and more time in nature as a motivating factor to retire early. ( ABC Radio Hobart: Carol Rääbus )

They hope to achieve their goal by saving 12 times their annual expenses, then they will only need to earn enough to cover costs and they will leave their savings to compound.

"FIRE for us looks like waking up knowing the day is yours to spend as you wish," Ms Webb said.

"It's going away camping regularly, hiking, travelling. It's having the time and energy to exercise and meditate everyday and enjoy these things, rather than feeling like they're just another thing you need to fit in to your day on top of everything else."

Vien's saving so she has more time and flexibility

Pharmacist Vien Marshall, 31, said her desire for financial independence was influenced by her upbringing.

Vien Marshall is a pharmacist in New South Wales working towards financial independence.

She was born in a Red Cross refugee camp in Indonesia after her parents fled Vietnam.

"We didn't have much money so we chose to forgo little luxuries and I think I just got into the mindset that it's not the end of the world if I didn't have the latest toy," she said.

"My mum used to superglue my sneakers back together and I still do that sometimes.

"I think coming from a migrant background and seeing what your family can achieve with so little makes you feel like you have a headstart in life and you shouldn't waste this opportunity frivolously."

While she enjoys her job, she plans to reduce her working hours to spend more time with her family and volunteering.

"My dream life is quite simple. I just want more time and flexibility," she said.

"I want to be able to have the time to be there for my family, particularly when they need me. I want to be able to take care of my mum and give her my full attention when she is old."

Why is financial independence becoming popular?

For many followers of the FIRE movement, cutting down on work means they will hopefully have more time and flexibility to pursue the things they want to do.

But Adelaide University economics expert Ralph-Christopher Bayer said there were many reasons leading to the growth of the movement.

"Our working lives are becoming more uncertain. As careers become unstable, workplaces are changing quickly," Professor Bayer said.

"So people have the fear that their career might not exist anymore in the future, that their job might change so much that they don't like working anymore, or that the pressure increases so much that working might become unbearable in the future.

"A rational reaction to this increased uncertainty is to save more as an insurance against such adverse changes."

But is it only achievable if you're earning a decent income?

According to personal finance lecturer Di Johnson, the whole movement is near-impossible for those who are struggling to just meet daily expenses.

"For most people, aiming to save more than the required 9.5 per cent of income through superannuation for a comfortable retirement at 65 is a stretch goal." she said.

"Consequently, saving enough outside of super to retire by 40 would seem an absurd assertion."

Dr Johnson said it was hard to budget for all your future life events, especially for children or illness. ( Flickr: Kat Grigg )

Even for those on good incomes, there can be big risks with retiring early.

"For those who are wanting an escape from what they view as the daily grind, the FIRE movement does perhaps provide some hope, but there is a risk that they may be destined for a destitute end to life," she said.

"I love the idea of getting your base amount of savings up as fast as possible, but I really don't like the idea of drawing down when it hasn't had time to compound.

"The opportunity cost of drawing down on your savings so early is really huge."

Dr Johnson warned it was hard to budget for possible costly future life events, such as having children or getting an illness.

"I can't imagine how someone at 35 or 40 can estimate the costs of carer support or healthcare for when they're 90," she said.

"There are some major assumptions that if not looked at closely, could lead to a disastrous outcome, particularly if people then try to rejoin the workforce at a later stage without having kept up their skills."

What else do you have to watch out for?

The biggest turnoff for many people might be the extreme frugality they have to live by.

"FIRE is a bit like dieting. A very strict saving regime, with the rewards in the future," Dr Bayer said.

"So some yo-yoing is possible. Save aggressively for a couple of years, then splurge and start afresh.

"Going through these cycles might cause quite a bit of psychological pain, without leading to the initial goal of financial independence.

"I can imagine people who become so driven by saving that they actually will never really enjoy the fruits it bears."

This article contains general information only. It should not be relied on as finance advice. You should obtain specific, independent professional advice from a registered financial planner in relation to your particular circumstances and issues.