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Don't Let Your Life Go Up in Flames When You're on FIRE

Don't Let Your Life Go Up in Flames When You're on FIRE

| November 12, 2019

Why work when you can travel, play, sleep in, and …

Umm … 

Sleep some more?

That’s both the promise and the dilemma of the popular Financial Independence Retire Early (FIRE) movement. FIRE folks spend minimally and save and invest maximally in order to turbocharge their retirement timelines. Some millennials are going so far as to target retirement in their early 40s!

Living within your means and avoiding too much debt are admirable goals that can, indeed, lead to financial independence. However, many 65 year olds struggle to fill their time during a traditional 20 or 30-year retirement. It’s going to be really challenging to make a 40 or 50-year retirement fulfilling, especially for folks who think retirement is just about having enough money to stop working.

Are you living your best life?

Younger FIRE enthusiasts often wear their spartan spending like a badge of honor. It’s common to see FIRE social media posts about the joys of eating microwave ramen every night and cancelling cable TV (especially if piggybacking on mom and dad’s subscriptions is an option).  

Older folks who want to retire early might not be quite so extreme ... or at least, they might not THINK they’re that extreme.

 A person who’s so focused on paying off a fixed-rate mortgage that he never takes his family on a vacation might consider himself frugal. But responsible financial planning isn’t about sacrificing your present quality of life so that you’re comfortable later. It’s about living the best life possible with the money you have, always. If you neglect your health, your relationships, and your hobbies now, a long retirement might not be long enough to make up for lost time.

 Now what?

A common motivation for FIRE is dissatisfaction with work. Endless vacation time certainly sounds appealing when you’re staring at another week of deadlines, long meetings, and cranky customers.

But new retirees of any age often find that their empty calendar is harder to fill than they’d imagined. This can be even harder for FIRE retirees whose friends and family members are on a more traditional retirement timeline. Are you going to travel by yourself? Play golf solo? Putter around the house driving your spouse up the wall?

Very few people love everything about their jobs. But if you don’t derive a sense of meaning from what you do, you’re not going to find meaning doing nothing in retirement.

 Exploring more fulfilling career options is almost always a better plan for your emotional and financial health than abandoning work altogether. Work provides us with purpose, connection to other people, and structure. In fact, many of today’s most successful retirees volunteer or work part-time jobs at companies and non-profits that they love. Others start their own companies.

 THEN what?

 As medicine, nutrition, and technology improve, life expectancy will continue to go up. That means a person who retires at 65 is, most likely, going to live longer in retirement than previous generations of retirees did.

FIRE enthusiasts often underestimate the price tag associated with retiring well before 65, even if they do manage to pay off major debts like home and auto loans. “Doing nothing” still costs something, especially if you’re planning a life of travel and leisure. Fancy restaurants and plane tickets add up when you’re not depositing a paycheck every month. A luxurious 50s FIRE retirement might make for an uncomfortably lean 70s, 80s, 90s, and even 100s

 Health care is maybe the biggest concern with FIRE plans. Some of these folks are going to spend out of pocket on insurance and medical expenses for a decade or more before they’re eligible for Medicare. Will they have enough left for the end of their retirement, when they might need to pay for assisted living? What about end-of-life legal costs, such as estate planning and health care directives?

 Early retirement can be a viable goal if you’re retiring for the right reasons. Let’s talk about some alternatives to setting your career and financial plan on FIRE that we believe will make every stage of your life as fulfilling as it can be.