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THERE’S LATELY BEEN much buzz about the FIRE—or financial independence/retire early—movement. The idea is to get yourself to the point where you don’t have to work anymore at a younger age than the traditional retiree.
There’s a wide spectrum of strategies, with a lot of the FIRE community relying on extreme frugality to supersize their savings. Others gun for something called FatFIRE: Think startup company that has a “liquidity event,” which leaves employees with millions in the bank, often at a young age.
I spent most of my 20s pursuing something in the middle. I never intended to retire before age 50, but I certainly didn’t plan on working too long after 50, either. Pursuing this strategy meant saving as much as we could and paying down debt at an aggressive rate. My wife and I both worked, so we were able to do this and still live a fairly nice lifestyle.
Then we had our first child. I now know that children are “budget busters” and that not having kids is a surefire way to boost your free cash flow. The financial impact of having children, however, isn’t the only reason I’m no longer pursuing FIRE. There was also the realization that I have 18 summers with each of my kids before they become independent. This clarified the way I wanted to spend my time. Thus began my transition from FIRE to a concept I’ve dubbed FIRR, which stands for financial independence/redistribute retirement.
Traditionally, retirement was a 30-year period following a 40-year working career. But what if you were able to redistribute some of those 30 years? What if you could pull forward those future activities that you’re excited about and enjoy them now or in the near future? For me, what if I could borrow some time from retirement to spend those 18 summers with my kids?
Perhaps the most obvious way to do this is to take a sabbatical. More and more companies seem to be offering this as a perk. Even more would probably be open to a negotiated sabbatical.
Another strategy would be to negotiate more vacation time. You might ask for this when you take a new job or ask your current employer for more vacation time instead of a raise. You might even “buy” more vacation time by taking a corresponding pay cut.
You’ve heard the cliché that, if you love what you do, you’ll never work a day in your life. Too often, we—and that includes me—persevere in doing things that make us unhappy today, so later we can do things that make us happy. But perhaps you could avoid the unhappiness by redistributing your retirement years by, say, switching careers, or employers, or your current role at the office. I love the question popularized by Tim Ferris: “What would you do if retirement wasn’t an option?”
As the onion layers peel off, you can imagine even more ways to redistribute retirement years. Maybe you don’t need more vacation time or you already have a pretty flexible schedule. But there’s something special, but costly, that you’re hankering to do. Why not skip most retirement savings for one year—though still save enough to get that employer match—and take the trip you’re dreaming of?
Notice that financial independence still comes first, because the financial planner in me still believes the “redistribute retirement” part can only come after you’re at least on track toward financial independence. Choosing to redistribute retirement without being on track would be financially irresponsible.
There are obviously serious career and financial considerations when contemplating many of these strategies. Remember, we’re talking about redistributing retirement, not early retirement. You’ll still have to work the proverbial 40 years, which means you’ll work until a later age. But perhaps the tradeoff would be worth it. That’s the choice I’ve made.
Robert Lindstrom is the founder of Provision Financial Planning, a fee-only financial planning firm in Towson, Maryland. He focuses on helping young families and near-retirees plan financially for life’s transitions. Follow Robert on Twitter @RLindstrom7211.
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Interesting strategy, but unless you are self-employed on some manner seems a bit risky.
I retired at 45 before there was FIRE. No kids! I’m glad I did because now at 72, I cannot do the things I did at 45. My biggest regret is I didn’t do more. And although I had saved much less than advisers told me I would need, I have more than enough for everything I want to do