Hello Everyone:
I don't post a lot but I have been around here a very long time. I am now 5 years into my post-retirement FIRE life. At this point, I wanted to share where I was off in my planning. The purpose of this is so that readers who are in the saving and accumulation stage of things can potentially learn a thing or two and make a better plan. I want to be brief. And I won't be discussing in depth my own situation, but will just give some basic background information for context.
Background: Single, never married, no kids, retired under age 59.5 and still under that age. I started my FIRE planning before FIRE was even a thing, back in the 80s when I got my first job. I put my savings in index funds, avoided any and all debt, and was always well insured. And, yes, I am frugal.
ERRORS I MADE:
1. The biggest error, by far: Thinking I could control or choose my retirement date. I see this error all the time, usually implied, in posts on this forum. I developed a medical condition that caused me to be unable to perform my job duties. I couldn't control this and there is nothing I could do about it. If there is one thing I could have every reader take away from this post, this is it.
LESSON: Never assume you can control your "retirement" date. Always understand where your FIRE plan puts you if you have to stop working right now.
My FIRE plan really saved me. While I wasn't at the point I wanted to be, it turns out it was good enough and I didn't have to take some minimum wage type job to survive.
2. Disability: I had purchased private disability insurance. It wasn't cheap. I also counted on social security disability to kick in should something terrible happen. What unfolded, without giving details or wanting to get sidetracked in further discussions in this thread (it's not a social security disability thread) is that I was denied social security disability and my private policy, while it *did* pay out money was insufficient to replace in a major way my lost income. There were lots of limitations in the policy fine print.
LESSON: Buy the best disability insurance you can, but never assume it will be enough and never assume you will actually qualify for social security disability, even if you can't work your job. Be ready to live off your FIRE plan.
3. Expenses: I underestimated what I would spend, out of pocket, on medical expenses as well as underestimating my insurance costs. I purchased Obamacare insurance, getting about a 50% premium reduction via subsidies. But I nonetheless paid out of pocket thousands of dollars for various surgeries, eyeglasses, dental care, and hearing aids. In terms of insurance, in addition to Obamacare, I pay: Home, general umbrella liability, life insurance (term), and auto insurance. These add up to more than I expected or planned for.
LESSON: Be very careful when projecting medical expenses, and other insurance expenses. They easily can break your budget.
4. The 4% "rule." I spent countless hours, pre-retirement, planning, projecting, and otherwise thinking about how I was going to draw down my nest egg. So, what did I actually do it once retired? I spent what I wanted or needed to spend on the things I wanted or needed to buy.
LESSON: If you are a FIRE planner, you're probably already frugal. Trust yourself to do the right thing when the time comes. Go ahead and think about how you are going to spend your money if you want, but honestly, you'll probably just end up doing what I did. My "needs" spending is not flexible and my "wants" spending is modest, just like yours.
Summary: FIRE worked for me, but not at all how I expected. I remember well the dreams I had decades back of retiring to a beach in the tropics, toes in the sand and pina colada in hand. Well, that didn't happen. But what did happen was, when the unexpected occurred (i.e. life), FIRE allowed me to be prepared and turn what unprepared would have been a disaster into a comfortable, retired lifestyle. It allowed me to play the cards of life I was dealt in the best way possible.
I'm enjoying every day, I live well, and I focus on the good times ahead. And...I'm not stuck working some low pay job just in order to get by. FIRE works.
Good Luck with your planning.
I don't post a lot but I have been around here a very long time. I am now 5 years into my post-retirement FIRE life. At this point, I wanted to share where I was off in my planning. The purpose of this is so that readers who are in the saving and accumulation stage of things can potentially learn a thing or two and make a better plan. I want to be brief. And I won't be discussing in depth my own situation, but will just give some basic background information for context.
Background: Single, never married, no kids, retired under age 59.5 and still under that age. I started my FIRE planning before FIRE was even a thing, back in the 80s when I got my first job. I put my savings in index funds, avoided any and all debt, and was always well insured. And, yes, I am frugal.
ERRORS I MADE:
1. The biggest error, by far: Thinking I could control or choose my retirement date. I see this error all the time, usually implied, in posts on this forum. I developed a medical condition that caused me to be unable to perform my job duties. I couldn't control this and there is nothing I could do about it. If there is one thing I could have every reader take away from this post, this is it.
LESSON: Never assume you can control your "retirement" date. Always understand where your FIRE plan puts you if you have to stop working right now.
My FIRE plan really saved me. While I wasn't at the point I wanted to be, it turns out it was good enough and I didn't have to take some minimum wage type job to survive.
2. Disability: I had purchased private disability insurance. It wasn't cheap. I also counted on social security disability to kick in should something terrible happen. What unfolded, without giving details or wanting to get sidetracked in further discussions in this thread (it's not a social security disability thread) is that I was denied social security disability and my private policy, while it *did* pay out money was insufficient to replace in a major way my lost income. There were lots of limitations in the policy fine print.
LESSON: Buy the best disability insurance you can, but never assume it will be enough and never assume you will actually qualify for social security disability, even if you can't work your job. Be ready to live off your FIRE plan.
3. Expenses: I underestimated what I would spend, out of pocket, on medical expenses as well as underestimating my insurance costs. I purchased Obamacare insurance, getting about a 50% premium reduction via subsidies. But I nonetheless paid out of pocket thousands of dollars for various surgeries, eyeglasses, dental care, and hearing aids. In terms of insurance, in addition to Obamacare, I pay: Home, general umbrella liability, life insurance (term), and auto insurance. These add up to more than I expected or planned for.
LESSON: Be very careful when projecting medical expenses, and other insurance expenses. They easily can break your budget.
4. The 4% "rule." I spent countless hours, pre-retirement, planning, projecting, and otherwise thinking about how I was going to draw down my nest egg. So, what did I actually do it once retired? I spent what I wanted or needed to spend on the things I wanted or needed to buy.
LESSON: If you are a FIRE planner, you're probably already frugal. Trust yourself to do the right thing when the time comes. Go ahead and think about how you are going to spend your money if you want, but honestly, you'll probably just end up doing what I did. My "needs" spending is not flexible and my "wants" spending is modest, just like yours.
Summary: FIRE worked for me, but not at all how I expected. I remember well the dreams I had decades back of retiring to a beach in the tropics, toes in the sand and pina colada in hand. Well, that didn't happen. But what did happen was, when the unexpected occurred (i.e. life), FIRE allowed me to be prepared and turn what unprepared would have been a disaster into a comfortable, retired lifestyle. It allowed me to play the cards of life I was dealt in the best way possible.
I'm enjoying every day, I live well, and I focus on the good times ahead. And...I'm not stuck working some low pay job just in order to get by. FIRE works.
Good Luck with your planning.
