Dealing with a major FIRE disruption

[HenryD]

When I got divorced in 2014 it set back my FIRE plans but did not cancel them entirely. I chose to keep practicing LBYM and tried to stay positive. I used a few mental accounting tricks, like the way I treated my alimony obligation. But, mostly the experience taught me humility about the fragility of financial stability (vs. independence at that point) and appreciating what I still had/have left to work with.

If you've experienced a major disruption, what did it teach you, and what helped you cope with a potentially different reality?

 

[Rianne]

You've asked a great question, one I was just discussing on Sunday with a friend. I have not experienced a major disruption recently, like losing my spouse or divorce. But I imagine the scenario and it is frightening. I'm interested in the posts that follow.

 

[COcheesehead]

Went through a divorce about 20 years ago. Took a 50% haircut in my finances at the time. Was not only bummed about my personal life, but also about my finances. Stayed the course, saved like a maniac, had some good luck in investing, business and RE and now I am on the doorstep of early retirement. The divorce ended up just being a speed bump. The second marriage also is way better than my first. LOL.

 

[RunningBum]

The dotcom bust. I was on the verge of ER, and this set me back about 10 years. The lesson I learned was to diversify and set up a reasonable asset allocation plan. Index funds over individual stocks.

Also, I learned not to let tax considerations rule. I had planned to wait a year to exercise my stock options until I was in a state with 2% lower taxes.

I went through a divorce as well, but that was before I really started to think about FIRE, beyond putting something away in a 401K. The divorce gave me control to LBYM, which was tough to do when your spouse does not have that mindset. So I wouldn't call my divorce a setback to FIRE even though I had to pay child support.

 

[Dtail]

Went through a divorce 10 years ago, but wasn't thinking or planning for FIRE back then. Cost me over 600k before counting potential investment income which could have been generated.
Gotta keep looking forward.

 

[FIREd]

I went through a divorce after reaching FIRE and took a pretty big financial hit. But I adapted to my new situation and reinvented my life in order to remain FIRE'd. My lifestyle today is not the one I had planned for, yet I am happy with it. Flexibility and resilience are essential on this FIRE adventure.

 

[HenryD]

... now I am on the doorstep of early retirement. The divorce ended up just being a speed bump. The second marriage also is way better than my first. LOL.

That's great to hear! I am hoping for the same.

 

[HenryD]

The divorce gave me control to LBYM, which was tough to do when your spouse does not have that mindset. So I wouldn't call my divorce a setback to FIRE even though I had to pay child support.

That's a great way to look at it - as an opportunity, almost.

 

[HenryD]

Cost me over 600k before counting potential investment income which could have been generated.
Gotta keep looking forward.

Between asset division and new obligations that's what mine cost too. My NW has recovered now, but I'll never get those years back.

Gotta keep looking forward.

Yes!

 

[Mr. Tightwad]

I've never been divorced or had to pay alimony because I never married in the first place. But reading this thread should teach any man reading it: never get married.

 

[Franklin]

i retired (the first time) in early 2008. Most of my worth was tied up in stock options in a stable mega corp. I had just retired at 52 when the market fell apart and my mega corp stock fell from 57 to 6 in just a few weeks. I was on a nice vacation at the time and watched it virtually burn up the value within those options (they never came back into the money). How could i catch a falling knife? Well I was still a valuable asset to another mega corp and just did my thing for another 10 years until I got it all back. I was lucky and humbled. Ive learned how to deversify since then.

 

[COcheesehead]

I've never been divorced or had to pay alimony because I never married in the first place. But reading this thread should teach any man reading it: never get married.

But women should?

 

[Mr. Tightwad]

But women should?

They should if they want to. And not if they don't.

 

[Oz investor]

I've never been divorced or had to pay alimony because I never married in the first place. But reading this thread should teach any man reading it: never get married.

am not married yet ... but if i were to get married .. that might disrupt my current progress ( in a good or bad way )

however thinking before you jump ( into a relationship ) might be a more relevant pearl of wisdom

 

[Mr. Tightwad]

am not married yet ... but if i were to get married .. that might disrupt my current progress ( in a good or bad way )

however thinking before you jump ( into a relationship ) might be a more relevant pearl of wisdom

I've vacationed in your city, very nice place.

Thinking before you jump...who can argue with that?

Relationship...I have no problem with those...A relationship instead of a marriage would have saved 2 posters upthread 600k.

When the man or woman in the black robe decrees your alimony amount all the thinking in the world won't reduce it a penny.

 

[Oz investor]

from what i have heard the lawyers get i nice feed if you split up ,

i guess you just have to take it all seriously ( early on )

 

[COcheesehead]

from what i have heard the lawyers get i nice feed if you split up ,

i guess you just have to take it all seriously ( early on )

In my case it was $2500 which was a fraction of the settlement.

As far as taking it seriously early on, I would challenge anyone to say what could predict a divorce is in your future. I married the love of my life, my soulmate and all that. She changed, was diagnosed with clinical depression. Was put on meds, decided she wanted other men in her life and the rest is history. I am sure if I took it more seriously I would have foreseen that 12 years earlier.

 

[athena53]

I've never been divorced or had to pay alimony because I never married in the first place. But reading this thread should teach any man reading it: never get married.

This WOMAN married a financial train wreck. It was OK as long as he had a good job, and especially after his mother died and he inherited $300K. We put $100K down on a house and the rest got spent on Stuff (a new Camaro. a $6,000 sound system and that was 1983) and his share of the expenses for a few years after he lost his job. The last 5 years he was unemployed and I struggled to keep the bills paid on my job alone. At one point a hospital tried to attach my wages for his medical debts and I couldn't answer the phone because it was always creditors.

The divorce was actually a blessing. No alimony, of course, and he refused to consider any settlement that would require him to pay CS for our 12-year old. I got 40% of the equity in the marital home (my share was $100K) and all the investments in my name (another $200K or so). The latter was in exchange for not getting CS and it was a good tradeoff- he never would have paid it.

I immediately plopped the $100K into another house, which I sold for a $200K profit 6 years later. I remarried at the same time but it was to a dear man who shared my financial priorities and was the male role model my son sorely needed. DH died in late 2016 but my son, DIL and my 3 grandchildren are a great joy in my life. Financial models say I have a 96% chance of NOT outliving my savings. I wont' marry again unless the guy can provide for his own LTC.

 

[The Cosmic Avenger]

Not on the scale of the previous stories, but recently we've had five-figure vet bills, and it's eaten most of the padding out of our budget this year, and now I've started to dig into one of our (non-retirement) cash cushions. It has me realizing that although our saving rate is high, we still have a lot of flexibility, and it's given me new perspective on the flexibility of our potential post-retirement budget.

 

[atmsmshr]

Deferral of original goal for FIRE by 55

Self inflicted - 1) built more home than needed in a safe neighborhood. 2) kept the kids in private schools until high school. 3). Put my career advancement on pause until the kids were both teenagers.

Not my original plan, but would do the same all over again.

Unexpected- several serious and ongoing medical issues for DW.

DW completes me, I feel blessed by the life we have shared - including the hard times.

 

[Aerides]

Ok I think we've beaten the "marriage > divorce" horse to death in this thread. Again.

Does anyone have any other experiences that might have changed their plans and created disruption to their ER?

 

[Kabowest]

I've never been divorced or had to pay alimony because I never married in the first place. But reading this thread should teach any man reading it: never get married.

After 17 years of marriage and three kids we had a very friendly divorce. We both walked away with our own retirement savings intact, and that was 21 yrs ago. Granted we were both professionally employed, which may not be the case for everyone facing divorce - neither of us were out to destroy the other -
we still had kids to raise and get through college. I retired 13 days ago at 58 and feel lucky that there were no major setbacks.

 

[HenryD]

Ok I think we've beaten the "marriage > divorce" horse to death in this thread. Again.

Does anyone have any other experiences that might have changed their plans and created disruption to their ER?

Just in my immediate circle, I have one person who lost everything being over-leveraged on investment RE, and one who was too late to the Dubai boom & bust. They both made it. Their experiences showed me that divorce is not the only way to get hit and that even a 100% loss and ruined credit does not necessarily spell doom.

I too was hoping to hear a more diverse set of stories about loss and adjustment/recovery, but maybe the emotional impact makes us more likely to speak up. Otherwise, it looks like diversification and adjustment are the lessons.

The dotcom bust... Index funds over individual stocks.

Most of my worth was tied up in stock options in a stable megacorp.

Not on the scale of the previous stories, but recently we've had five-figure vet bills...

 

[nhcycling]

Divorced about 15 years ago. It wasn’t exactly 50/50. More like 60/40 with me on the short end. I kept my entire 401k but got little else. I’ve always LBYM but really buckled down after the divorce; I own a modest house outright now, put 2 more kids through college alone and paid for a wedding and a second wedding coming up next spring in Ireland. I help #3 kid with med school living expenses. Not to mention paying hefty child support for 9 years even though my daughter split her time between us and 4 of the years was away at college. I’m married to the love of my life now and couldn’t be happier! On track for retirement. What did I learn? I guess I could’ve been less generous and retired way early. Family is everything to me and seeing and helping my 3 kids get a good start is important and they are great young independent adults. Well almost except for med student who’s in year 4 now. The ex - He’s broke, miserable. Oh well.

 

[robnplunder]

My 28 year old son decides to go an expensive, private, graduate school. Knowing he'd be in debt, we decided to pitch in & increased our yearly ER budget by $25k per year for two years. I.e, we went well above the preset FIRECalc spending limit. One of those two years, market went down a bit and I had a bit of angst. In the end (after he graduated), it wasn't much of a disruption.