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Article criticizing FIRE
Old 04-29-2019, 11:32 AM   #1
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Article criticizing FIRE

This might have already been posted. Would love to hear others take on this. I , personally, find a few of her comments so off base with this one leading the way " the math won't work" which is odd because the calculators tell me the math DOES work.





https://www.barrons.com/articles/ret...fk5I-NosS_VCBA
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Old 04-29-2019, 11:38 AM   #2
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It's kind of a fluff piece, but there's some truth to her POVs. Not everyone can make FIRE work, but some do. Not everyone wants to work until they're 90, but some can happily. Most people are somewhere in between, nothing new.

As for the "math won't work" statement you've highlighted, you left off that she is talking about people retiring in the 40s and 50s. While the math can work, it's considerably more difficult than for someone retiring in their late 50s or after. And the probabilities of success retiring in your 40s or 50s is also likely less predictable.

There will always be articles criticizing FIRE, and others criticizing working til you drop. Who cares?

Quote:
So that’s what I’d say to someone who wants to retire in their 40s and 50s. Did you hear what I said? And 50s! 50s is too young. The math won’t work.
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Old 04-29-2019, 11:39 AM   #3
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I think that it is nothing more than a filler piece.

This decision, and the success points, are purely dependent on one's financial situation and/or personal desires/goals.
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Old 04-29-2019, 11:47 AM   #4
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you left off she is talking about people retiring in the 40s and 50s. While the math can work, it's considerably more difficult that someone who is retiring late 50s or after. And the probabilities of success retiring in your 40s or 50s is likely less predictable.

Yes indeed. There seems to be a trend here to think that the articles pointing out the risks and difficulties of FIRE are talking about folks like most here who define retiring by 65 in good financial shape as FIRE. Frankly, I somewhat agree with most of these articles. There is indeed a significant amount of risk involved in FIREing on a shoestring when you're, say, 45. You need to be aware and understand just what you're doing.... not just jump onto a popular bandwagon.

Totally agree with you that once you've waited until you're 55+, risks drop substantially compared to those going a decade+ earlier.
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Old 04-29-2019, 11:58 AM   #5
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The primary problem with the article is that they interviewed two academics who most likely live beyond their means and define wealth by pure material possessions just from their comments alone. The statements made in the article are ridiculous:

"The person who says, “I want to retire early,” should probably talk to a therapist, because behind that is probably an uncertainty about what they want to do with their life, or they don’t like their job. But just financially, it doesn’t make sense unless you’re very, very rich, and if you’re very, very rich, you probably have expensive taste. For most people to quit work for 40 or 50 years, it’s just not a plan that can be sustained for anybody, except for people on TV. So that’s what I’d say to someone who wants to retire in their 40s and 50s. Did you hear what I said? And 50s! 50s is too young. The math won’t work."

I retired in my 50's and my wife in her 40's, seven years before me. The math worked out okay for us and we have never talked to a therapist in our entire lives.
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Old 04-29-2019, 12:00 PM   #6
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This might have already been posted. Would love to hear others take on this. I , personally, find a few of her comments so off base with this one leading the way " the math won't work" which is odd because the calculators tell me the math DOES work.
I'm curious OP, what are the approximate numbers that show the math works for you? Of the true FIRE types that I can think of here, there are folks who came into large sums due to employment with a successful start-up, folks who remained single with very few encumberments following a short but successful career, folks with inheritances, folks who moved to extreme LCOL areas, folks who have a working spouse (but still refer to themselves as FIRE'd rather than "kept,") etc. What's your story that has you out of the harness so young?
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Old 04-29-2019, 12:32 PM   #7
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I'm curious OP, what are the approximate numbers that show the math works for you? Of the true FIRE types that I can think of here, there are folks who came into large sums due to employment with a successful start-up, folks who remained single with very few encumberments following a short but successful career, folks with inheritances, folks who moved to extreme LCOL areas, folks who have a working spouse (but still refer to themselves as FIRE'd rather than "kept,") etc. What's your story that has you out of the harness so young?

Your first post mentioned that some people refer to "retiring early" as 65. I never heard that. Interesting, to me that is the "normal" retiring age.


I would describe my situation as the guy that "stayed single with very few encumberments following a short but successful career". I have a partner, but she and I just live together. I retired at 50, am 52 now and all the calculators put me at 95% + ..actually 100% now with the market move the last couple of years.
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Old 04-29-2019, 12:50 PM   #8
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Old 04-29-2019, 01:16 PM   #9
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"By the time you’re 40, you should have a little more than your annual income in the bank sequestered for your retirement in either a 401(k) or an IRA."


This person should not be allowed to give advice. If you are 40, you've been in the workforce for 22 years (18 if you went to a 4 year college). If in 22 (or 18) years you've only been able to sock away an amount equal to your annual salary, then you've either come on hard times for any number of reasons (which is completely understandable) or you just aren't trying to save.
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Old 04-29-2019, 01:24 PM   #10
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When I worked for the state if you were retirement age and didn’t have plans to go they would sometimes make it undesirable to stay if they wanted you gone. They transferred one guy’s job a hour away. One woman they sent her job to the opposite end of the state.
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Old 04-29-2019, 01:37 PM   #11
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Ok. I say the math can work. I retired almost 5 years ago at age 52. With kids under roof. My husband is 9 years older than me and retired at 62. We do not have a "fat fire"... We live on about 90k/ all inclusive. (taxes, health insurance) for a family of 4. We did it by maximising our retirement savings while working while also paying off our hcol house. We'll be able to put our kids through a bachelor's at a public, in state University with the 529 $ we stashed.

It was done in two professional (engineer and architect) salaries, no start ups. There was an inheritance.. it allowed me to pull the plug about two years early. We also have some rental income. . But it's one granny flat in our back yard.. very little work.

The math can work in your 50s.
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Old 04-29-2019, 01:44 PM   #12
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You can't know if 'the math will work' or not until your at or near the end of your retirement anyway. I'm always puzzled by people who say we've been retired for 5 or 10 years and report the financial aspect is working - happens here often. I even see people recommend retirement to newbies based on their early success with retirement, especially now after a long bull market.

You won't actually know for 30 years give or take...
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Old 04-29-2019, 01:55 PM   #13
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As rodi said above, the math can work for ER in your 50s with two people working "normal" professional/technical jobs and having kids - the keys are saving early and often, and controlling spending. We moved several times and always bought a house that we could afford on only one income - then saved the house payment and taxes that would have come with the house the realtor wanted us to buy ("but you can afford a much bigger house!"). Lather, rinse, repeat.
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Old 04-29-2019, 01:58 PM   #14
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While I was already laughing out loud at the article, when I cam across this, I knew the article was pure BS.


"And do you need to replace 100% of your annual salary?


You need 70% of what you normally live on."


How many times do we say I this forum is tat it isn't any percentage of your income which really matters in retirement, especially ER. It is your expenses, expenses, expenses. I'm not filthy rich and I don't have expensive tastes.


I worked on the math for many months in 2007 and 2008. I was only 44-45 then. I made my plan to get to age ~60 intact using just my taxable portfolio. After that, my picture only improves because of the reinforcements which begin arriving: SS, frozen pension, and unfettered access to my tIRA. I am 10 years into that 15-year time period and all is fine, just as I predicted. (In fact, things are better because of the growing markets.)


The math can work even in your 40s.
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Old 04-29-2019, 02:05 PM   #15
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I'm gonna rethink my decision for a year & get back to you.
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Old 04-29-2019, 02:06 PM   #16
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Originally Posted by Midpack View Post
You won't actually know for 30 years give or take...
+1 (Again!)

There sometimes is a tendency for folks here to want to be able to "lock in" future results, which just isn't possible. I believe that my worse case scenario leaves me with a few bux at the end, but I fully accept that there is some possibility things really could get worse than they ever have in the past. And, there is also a chance I'll end up with an amazing fortune. Only the passage of time will tell where on the continuum between broke and fabulously wealthy any of us will land. All we can do is conduct ourselves prudently following strategies that have worked for others preceding us and hope things don't change too much.
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Old 04-29-2019, 02:12 PM   #17
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Quote from article:
"But when researchers probe a bit and ask people why they retired, you get most people saying that their retirement isn’t voluntary. They were pushed out, or they were laid off, or they had to take care of their spouse or had to attend to their own illness."


I'd like to see backup on that research. I'm not sure that's true for anyone on this forum.
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Old 04-29-2019, 02:16 PM   #18
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The math can work even in your 40s.
The math can work even in your teens. Or even earlier. But I believe the folks pointing out the risks of early FIRE are suggesting that anecdotal examples do not guarantee results for everyone. And that the variability of outcomes for folks living primarily on passive income (the concept behind FIRE) increase significantly with the length of retirement.
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Old 04-29-2019, 02:32 PM   #19
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Quote from article:
"But when researchers probe a bit and ask people why they retired, you get most people saying that their retirement isn’t voluntary. They were pushed out, or they were laid off, or they had to take care of their spouse or had to attend to their own illness."


I'd like to see backup on that research. I'm not sure that's true for anyone on this forum.
I'll help ya "get sure" that it is true for some members on this forum. It's true for me. I was unceremoniously canned by MegaCorp and decided to call "fired," "FIRE'd" and joined the ranks of the long term unemployed. There are several others who identified themselves on a thread some time ago.

Hats off to you that you were totally in control of your retirement date. But that certainly wasn't my case.
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Old 04-29-2019, 02:46 PM   #20
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I'm curious OP, what are the approximate numbers that show the math works for you? Of the true FIRE types that I can think of here, there are folks who came into large sums due to employment with a successful start-up, folks who remained single with very few encumberments following a short but successful career, folks with inheritances, folks who moved to extreme LCOL areas, folks who have a working spouse (but still refer to themselves as FIRE'd rather than "kept,") etc. What's your story that has you out of the harness so young?
Yes but there are also people here who represent the opposite of some or most of the attributes: No liquidity event, multiple kids with subsidized educations, V/HCOL locations, non-working spouses, no side hustles, etc.

Just basic earn, save and invest at a higher level. Difficult but doable.
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