Compound interest means you earn interest on both your original investment AND your accumulated interest. This creates exponential growth over time. For example, $10,000 invested at 8% annual return becomes $21,589 in 10 years, $46,610 in 20 years, and $100,627 in 30 years — without adding any extra money. Starting early is the single most powerful thing you can do for retirement.

The 4% rule suggests you can withdraw 4% of your retirement portfolio in the first year of retirement, then adjust for inflation each year, with a high probability your money will last 30+ years. For example, if you need $60,000/year in retirement, you'd need $1.5 million saved ($60,000 ÷ 0.04). This rule is based on historical stock/bond market returns.

A common guideline: by age 30, save 1x your annual salary; by 40, save 3x; by 50, save 6x; by 60, save 8x; by 67, save 10x. So if you earn $75,000/year, aim for $75,000 saved by 30, $225,000 by 40, and $750,000 by 67. These are benchmarks — your actual needs depend on your lifestyle and expected expenses.

FIRE (Financial Independence, Retire Early) means saving aggressively (50-70% of income) to retire decades before traditional retirement age. Your FIRE number = annual expenses × 25 (based on the 4% rule). If you spend $40,000/year, your FIRE number is $1,000,000. Lean FIRE targets minimal spending; Fat FIRE allows for a more comfortable lifestyle.

Inflation averages 2-3% per year, meaning $100 today will only buy about $55 worth of goods in 30 years. Your retirement savings must outpace inflation to maintain purchasing power. If you need $50,000/year today, you'll need approximately $90,000/year in 20 years (assuming 3% inflation). Always use inflation-adjusted returns when planning retirement.