Article criticizing FIRE

[karen1972]

One requirement of being able to ER was that I would not have to make any changes to my day-to-day lifestyle. I built into my budget a small cushion, or surplus, which would cover me in case I went on a little splurge once in a while. I refused to put myself into a situation where, if I spent an extra few hundred dollars in a month I would have to worry about offsetting it elsewhere or later on. All that would happen would be the cushion disappears temporarily.

Everyone budgets differently and its hard to tell what you consider day-to-day vs someone else. Most people I assume have a number for necessities, and then a rather large bucket for discretionary which was my point, cutting that isn't a big deal. Personally we use to spend $2k/month of food and alcohol for 2 people, we have now cut that back to $1k/month. If we had wanted to keep that lifestyle it would have required us to save an additional $400k .. I'm just saying we looked at the trade-off and for us, it made no sense to work longer just so we could go out and eat ridiculously fancy dinners. We certainly are not deprived at $1k/month, but we do have to say no at times to fancy dinner events.

 

[ncbill]

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.

That part reminded me of the recent Wall Street Journal article which said essentially "Don't retire early...you'll end up doing nothing more than watching TV & eating yourself to death."

I do agree with her next statement that it's hard to retire early if you have expensive tastes, but that's not us with our LCOL lifestyle even though we live in a MCOL area.

 

[sengsational]

Publications publish what some people want to read; there are people out there that want confirmation that all this FIRE stuff is "BS" so that they can continue to work until they die at their desk. Better for us. Keeps SS afloat.

 

[Rianne]

One of the bits I remember is that about 50% of their sample of retired folks were people who had been forced into retirement, because of being laid off, fired, for health reasons, or something else. I don't remember the exact stats, but it was about 50% voluntarily retired, and 50% involuntary. This was in a big, randomized sample. Not surprisingly, they found all kinds of people who had struggles and problems adjusting to retirement. And that is what the book focused on -- all the problems and struggles.

p.s. The linked article says in a sample of 2000, only about a third retired voluntarily, when they decided; two-thirds felt forced out early, for a variety of reasons (almost half because of health issues).

https://www.barrons.com/articles/yo...an-you-want-to-51545483600?mod=article_inline

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.

Appreciate calling me out on this one. A topic I've never pursued and am ignorant of the research. I guess I considered the term "FIRE" as a goal to achieve when you can't bear the working world anymore and worked to FIRE, financially independent on purpose. A term I considered an achievement not a forced condition. No offense intended for anyone who was forced out of job they wanted to keep.

 

[ExFlyBoy5]

"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.

This was the only quote in which I took issue with. I don't think this author is qualified to tell me if I need therapy or not. Early retirement *is* my therapy. But...

folks who have a working spouse (but still refer to themselves as FIRE'd rather than "kept,") etc.

Sorry, I guess actually, I am a "kept" man since my DW refuses to quit her j*b.

 

[bolt]

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.

On the other end of that spectrum a good friends 84, still working for the state of MA. WHY? Because, ....he wants to.

 

[O2Bfree]

My mom, who will be 90 in July, wishes she could still work. But her body and energy level say "no". She and dad ran a restaurant, and she really misses the interaction with customers.

 

[2177V]

I retired at 66 but FIRE is a good thing because people can become goal oriented.

If your goal is to retire early then I am OK with that.

My goal is to provide the very best for my family even at the cost of retiring at 66. I helped my daughter buy a house in the high cost SF area and the house is now free and clear while she is still going to college. She is happy because she does not have to stress over her finances. I went thru a divorce but my second wife is 20 years younger than me so I am happy. i helped my young wife start a small business with 6 employees and my wife is happy that she does not have to work for anyone.

My point: You make your own goal. Do let anyone tell you what your goal should be.

 

[Paulz]

I think part of the "issue" is in the "RE" part of FIRE. For many (most?), retire means you don't work for money. You volunteer, you do things you want to do, etc. It seems for many in FIRE, the retirement part means you don't go to work in a building and have set hours, but they are consulting, blogging, dare I say it....working. I'd waiver on the not getting paid thing by a few thousand dollars, but if you are making more than $5k a year doing something then you are working, and therefore NOT retired.

On the financial side, many in the FIRE movement have not tried to prosper through a deep and prolonged market downturn. It's much easier to feel good about one's financial outlook when every day you see the balances rise, but quite the opposite when its down day after down day.

Another factor is with health care. Yes, it works now that many are young and only need incidental coverage, but a critical medical need or chronic illness can test even the most prepared.

I'm not saying FIRE is not possible, but for the most part we've only seen it under the most optimal circumstances. A 3-4 year bear market would really flush out how realistic it is. As we all know, when you are really retired and in your later years, you cannot pivot back to work.

 

[Dtail]

My mom, who will be 90 in July, wishes she could still work. But her body and energy level say "no". She and dad ran a restaurant, and she really misses the interaction with customers.

My mom is 84 and still running her business, but does complain all the time she is tired.
She won't give it up though, as the ego satisfaction not to mention some bucks coming in makes her happy.

 

[trumpeting_angel]

I think part of the "issue" is in the "RE" part of FIRE. For many (most?), retire means you don't work for money. You volunteer, you do things you want to do, etc. It seems for many in FIRE, the retirement part means you don't go to work in a building and have set hours, but they are consulting, blogging, dare I say it....working. I'd waiver on the not getting paid thing by a few thousand dollars, but if you are making more than $5k a year doing something then you are working, and therefore NOT retired.

$5,000?

I am [not?] retiring this summer, but I'll continue to do some consulting that earns quite well, giving me between $20,000 - $25,000/year. That should help protect my portfolio while I wait to take SS.

Not getting up and commuting for an hour, not dressing up, working a few hours a week at home, and collecting handsomely for it - I still call it retirement.

On the financial side, many in the FIRE movement have not tried to prosper through a deep and prolonged market downturn. It's much easier to feel good about one's financial outlook when every day you see the balances rise, but quite the opposite when its down day after down day.

Another factor is with health care. Yes, it works now that many are young and only need incidental coverage, but a critical medical need or chronic illness can test even the most prepared.

These points are likely true for the quite-young FIRE folks who get a lot of media attention, but many in this crowd watched our investments plummet in 2008 and lived through the slow recovery. (And, I might add, are all too well aware of the need for health insurance! Investigate any of the threads on managing one's income to qualify for subsidized ACA coverage, for example.)

I'm not saying FIRE is not possible, but for the most part we've only seen it under the most optimal circumstances. A 3-4 year bear market would really flush out how realistic it is. As we all know, when you are really retired and in your later years, you cannot pivot back to work.

Perhaps not. I can pivot back, but I know I'm lucky in that respect, given my profession and the increasing demand for my services, as well as low physical demand.

Many others pick up odd jobs, pick up consulting, try a new profession, or put more effort into passive income streams.

I see you're new around here. It's great you are thinking about these issues - such thinking has benefited most of us. But stay awhile, and read up. You'll be amazed, I think. This is not the media's FIRE (flavor of the month). It's common sense, living below one's means, and careful, educated investing. And it works!

 

[FREE866]

I think part of the "issue" is in the "RE" part of FIRE. For many (most?), retire means you don't work for money. You volunteer, you do things you want to do, etc. It seems for many in FIRE, the retirement part means you don't go to work in a building and have set hours, but they are consulting, blogging, dare I say it....working. I'd waiver on the not getting paid thing by a few thousand dollars, but if you are making more than $5k a year doing something then you are working, and therefore NOT retired.

On the financial side, many in the FIRE movement have not tried to prosper through a deep and prolonged market downturn. It's much easier to feel good about one's financial outlook when every day you see the balances rise, but quite the opposite when its down day after down day.

Another factor is with health care. Yes, it works now that many are young and only need incidental coverage, but a critical medical need or chronic illness can test even the most prepared.

I'm not saying FIRE is not possible, but for the most part we've only seen it under the most optimal circumstances. A 3-4 year bear market would really flush out how realistic it is. As we all know, when you are really retired and in your later years, you cannot pivot back to work.

There has never been a 3-4 year bear market.I think that is why people don't consider that a big risk.

 

[audreyh1]

My mom is 84 and still running her business, but does complain all the time she is tired.
She won't give it up though, as the ego satisfaction not to mention some bucks coming in makes her happy.

Wow! Great example about why some folks keep working.....

Does she ever mention that she doesn't know what to do with herself otherwise?

 

[audreyh1]

There has never been a 3-4 year bear market.I think that is why people don't consider that a big risk.

Well, 2000-2002 sure felt like it. It was close to 3 years. And the recovery was long - just barely and then just in time for the 2008 even worse bear market.

I think when a lot of folks talk about surviving a bear market, they don't mean just the time dropping, which is indeed the bear market, but also getting through the recovery which can take much longer.

 

[Dtail]

Wow! Great example about why some folks keep working.....

Does she ever mention that she doesn't know what to do with herself otherwise?

She never has, but she receives huge attention from her clients who are mainly around her age and I believe this keeps her interested in keeping it going forward.

 

[gayl]

I stopped reading after this:

Ghilarducci:*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.*

I didn't need a therapist, not rich but have barely tapped my IRA (8K), I just wanted a change. But then that viewpoint threatens her industry

 

[Boothie]

Anybody Consider the Source?

From Wikipedia: Teresa Ghilarducci is an internationally known scholar on labor and retirement issues and one of the few women to hold an endowed professorship of economics at an American university. She has advocated for government to extend occupational retirement plan coverage to all workers.

I thought I remembered her. She became somewhat "famous" with her recommendation about 401(k)s and an additional mandatory 5% contribution by both employees and employers for retirement purposes to be handled by the government.

(USA Today) Teresa Ghilarducci's Suggestion to revamp retirement savings

 

[truenorth418]

Not getting married was very smart. I never married and I retired at 45. If I can do it anyone can.

Not getting married was one of the smartest decisions I ever made.

IIRC one of the lessons from The Millionaire Next Door was to get married and to stay married - the inference being that it's important to marry the "right" person.

That's good advice, but I figured not getting married in the first place was an even better decision.

 

[truenorth418]

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.

Count me as one of those who were "pushed out". Fortunately I was mentally and financially prepared to "retire" and so that's what I did.

 

[truenorth418]

From Wikipedia: Teresa Ghilarducci is an internationally known scholar on labor and retirement issues and one of the few women to hold an endowed professorship of economics at an American university. She has advocated for government to extend occupational retirement plan coverage to all workers.

I thought I remembered her. She became somewhat "famous" with her recommendation about 401(k)s and an additional mandatory 5% contribution by both employees and employers for retirement purposes to be handled by the government.

(USA Today) Teresa Ghilarducci's Suggestion to revamp retirement savings

Ah yes, Teresa Ghilarducci, notorious for wanting to confiscate private 401k and IRA savings and hand it all over for the government to manage - as if government doesn't have enough on its plate trying fix state pensions, Social Security, Medicare, Obamacare, etc.

 

[albireo13]

Ah yes, Teresa Ghilarducci, notorious for wanting to confiscate private 401k and IRA savings and hand it all over for the government to manage - as if government doesn't have enough on its plate trying fix state pensions, Social Security, Medicare, Obamacare, etc.

Awesome! .... like I really want the government to "manage" my personal retirement savings!!
More shrimp and martini lunches for the politicians!!!

 

[Red Badger]

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.

Many people confuse simple with easy. I spent a significant amount of my megac*rp time doing simple, but very difficult projects.

Some simple things that I've found to be difficult but (mostly) doable:

Lose weight
Drive the speed limit
Dun't cuss
Stop smoking
Leave an abusive spouse

#3 is my nemeses.

 

[Chuckanut]

Ah yes, Teresa Ghilarducci, notorious for wanting to confiscate private 401k and IRA savings and hand it all over for the government to manage - as if government doesn't have enough on its plate trying fix state pensions, Social Security, Medicare, Obamacare, etc.

Some people have obviously never heard of The Law of Unintended Consequences.

 

[audreyh1]

Not getting married was one of the smartest decisions I ever made.

IIRC one of the lessons from The Millionaire Next Door was to get married and to stay married - the inference being that it's important to marry the "right" person.

That's good advice, but I figured not getting married in the first place was an even better decision.

Hmmm - being married didn't stop me from retiring before 40.

 

[razztazz]

Hmmm - being married didn't stop me from retiring before 40.

Yes. I see the being married part as a net economic plus. I would have liked twice the money with half the work. Of course you're going to get richer faster that way. IF everything else lines up properly. i.e. the "staying married" part. Also, can you stand this person and can they stand you?

If you don't talk to The Spirits or have the proverbial crystal ball not getting married in the first place is always the best alternate.