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FOR THE RECORD, I’m a card-carrying member of the FIRE—financial independence/retire early—movement. Except I don’t believe in the RE part.
All the folks I know who advocate FIRE, and who have achieved financial independence, are still working in some capacity. Many of them have websites, put out podcasts or write books on how to retire early—which is funny because they’re still working and making money.
For some reason, they feel the need to deny that they’re still working. But why deny the truth? There’s no shame in admitting that you enjoy working.
The pandemic taught us how important it is to have a sense of purpose. Some people woke up to the fact that having a job—any job—was better than just puttering around the house killing time or taking the dog out for yet another walk around the block.
The lesson: Even when you become financially independent and get your freedom back, you still need to find interesting, rewarding things to fill your day. Working at something you enjoy is one of the best ways of doing that. FIRE is still a good concept, one that I’m teaching my kids. We just need to redefine the RE part.
I retired twenty plus years ago, I’m not sure FIRE was a thing back then, I certainly hadn’t heard of it. I retired from a megacorp at 53, did some part time contract work for three years, and then stopped working altogether, so I definitely fully retired.
I enjoyed my job, a lot, for twenty five years, the last five, not so much. I heard too many stories of people who were going to do things when they retired, and then didn’t make it, or didn’t make it in good enough health. People had a tendency to retire from the megacorp at 65, and six months later they either dropped dead or came back to work.
I took early retirement so I could travel, and I had fifteen good years before I developed health problems. If I had waited until I was 65 I would have missed out on most of those years. However, my early retirement was only possible because I had a pension and retiree medical, I don’t think I was truly a FIRE practitioner.
I have a chart in my financial spreadsheet that indicates how much I need to retire by age. That line is fairly flat and high when one is young, and declines fast as one approaches Medicare and SS claiming ages (with variations for when you claim.) My chart also includes my actual retirement savings by year. That savings line grows faster and faster with age and eventually crosses the first line. Lets assume my chart indicates that my savings amount will cross that first line at age 62. That’s when I achieve true FI in this example.
Let’s call the savings amount where the lines cross $1M for purposes of this example. To retire just 7 years earlier, at age 55, I would need about $1.6M under the same set of assumptions. I suspect people have different curves, and so that 60% more in required savings from my example (1.6/1.0 = 160%) could be 40% or 80% or anywhere between depending on your assumptions – but I think it accurate in the implication that retiring early with security requires a significantly bigger nest egg than retiring at a more conventional age.
The requirements for FIRE are steep financially. The social implications also can be surprisingly daunting. As enticing as it may be, I think most of us also value the sense of accomplishment, excitement, and status of achieving within our sphere of work, and aren’t ready to drop that at age 40 or 45.
I’ve taught my sons that the point of financial goals is to gain freedom. FI offers the freedom to do the type of work you want, the amount of work you want, or no work at all if that’s what you want. The RE is optional (and requires careful consideration in light of the value most of us place on status/social capital.)
Yes indeed. Actually I have yet to find a FIRE folk actually retired in the traditional sense of fully FI for that matter. Several I follow have no kids and others have near draconian lifestyles by traditional standard. Each to his own, but don’t claim it to be what it isn’t.
Today I was watching a YouTube video interviewing a guy who retired at 33. He and his wife spent the first three years traveling and living in a small RV, now they live off the grid in the middle of a desert.
But the interesting thing he said was his “working” generates $35-40,000 a year income which covers nearly all their expenses. So, is he actually FIRE just because they accumulated $1.6 million?
If you are earning money for your work and not donating 100% of that money, you are not retired. Why not just fill your retirement doing volunteer work for free, assuming you are truly FI.