It's official we are all wrong about fire

[NW-Bound]

I am not a fan of Suze, but people jump to condemn her without reading what she said.

If you are not a 25 or 30-year-old trying to retire early, her advice does not apply to you. There's nothing to get excited about here.

 

[youbet]

My feelings too. She wasn’t addressing the typical poster here who, like me, waits long past the 25 - 35 yrs of age she references.

 

[Helena]

Well using Dawg52's example of Mississippi applied to and extending your statement for a spending example, does one really need 5mil even at age 30 to live a lean fire lifestyle of let's say 30k spending a year? Of course not.

I am a single retiree who lives totally debt-free [including my house] in a less expensive part of the country. In the 11 years I've been retired I have lived comfortably on a lot less than $30,000 a year.

If one wanted to live like a king in retirement, several million dollars would be necessary.

But I've never lived like a king in my life. So I am more than satisfied with living a similar normal comforable life in retirement as I was living while I was working... with one major exception... I am now FREE to be my own boss, the captain of my own ship... and that blessing is priceless !!

.

 

[Helena]

Yup, follow the money. Not to mention you need to work until you are 70.

Hopefully you'll be dead by then and won't have to worry about it anyway.

Drivel

Same questionable source as the "experts" who advise you not take Social Security until age 70.

Back in the USSR, Pravda [Soviet government press] would print articles telling the people that their lifespan would increase the longer they worked.

Work until you drop, it saves the government money.

.

 

[Helena]

But....... but....... you waited long after the 25 - 35 yrs of age Suz advised not to retire with less than 5 million. You (and I) seem to have taken her advise and waited until our 50’s. Can’t think of many (any?) folks on this forum who 100% retired before 35.

In my post, I referred to the "experts." Suze is only one of many whose advice I have been reading for decades. None of them would have advised a 55 year old to retire with "only" half a million in assets. But everyone is different and one size certainly does not fit all. My decision to retire exactly that way was based on my own personal circumstances.

.

 

[DrRoy]

I expect that she is statistically correct to say that most/many people are not financially prepared for retirement. However, how much you need is all over the map and determined by your spending needs.

 

[flintnational]

Say it ain't so!

$5M is waaay to much. DR says you can earn 12% on your investments and take a 10% WR. That's $500k per year. Either Dave is wrong or Suze is wrong. No way both could be wrong! Maybe I should not merge guru advice. It tends to compound the errors.

 

[Maenad]

If she's objecting to the "I'm 32 and I have $300k saved and I'm gonna live in my RV and be fine with no health insurance and no plans for my kids education", then I'm with her.

I think she is, but she went WAAAY overboard with the gloom and doom, black swan events, etc. If all you read are the click-baity headlines, and the 20-something tech bros on Reddit/FI, you get a really skewed idea of FIRE, which I think is all she's (or her producers have) been exposed to.

And Suze also thinks we should all work until we're 70 at a career that we love. I'd love to know where I'm supposed to find that magical unicorn. She's forgotten that a lot of careers come with age discrimination, or are too taxing on your body to do until you're 70.

 

[Markola]

I expect that she is statistically correct to say that most/many people are not financially prepared for retirement. However, how much you need is all over the map and determined by your spending needs.

+1. Also, if the FIRE Reddits, etc. inspire young people to set savings goals and learn to invest, what is wrong with that? Most people don’t seem to give savings and investing any attention at all, so these Millennials are ahead of the game. Too bad she needs to “hate, hate, hate” what they are doing rather than engage and shape their enthusiasm.

 

[exnavynuke]

This is from another forum on the podcast:

Suze Orman was a guest on a financial podcast and spent a long time trashing FIRE. The show is here:

#153: Why I Hate the FIRE Movement, says Suze Orman - Afford Anything Podcast

Suze starts at around the 6 minute mark

I took notes on the first HALF so you don't have to listen:

1. Life happens - cancer, illness, death, accidents - $2 million when that happens is pennies

2. AI is coming - by 2030 we will have 25% unemployment. Tax brackets will increase to compensate for all the people not working and not paying taxes. Higher tax brackets mean you will keep a smaller % of your portfolio (e.g. 401k)

3. Healthy people today can live until 90, 95 or 100. long term care in the future will be $30k a month. Suze paid $250k a year for her mom.

4. Expenses increase over time, especially if you have kids.

5. Don't forget about inflation whacking away at your portfolio.

6. Markets can go down, dividends can drop to zero - a 4% withdrawal rate may be too high. Puerto Rico was paying 6% on its bonds before it defaulted.

7. FIRE before 50 is the biggest mistake you can make in a lifetime.

8. Need to invest as much as possible when you're young to get the biggest benefits of compounding.

9. A 3% withdrawal on a $3mil portfolio is fine without black swan events but she tells everyone to work as long as they can in an AREA THAT YOU LOVE.

10. Don't neglect disability insurance.

11. After 4-5 years of leisure and travel many people get bored.

12. Suze thinks it's fine to pursue FIRE in order to be a SAHP. But your child will go to school and get older and you need to fill those holes.

13. College costs will be $400k pretty soon - do you want to help your kids or not? Many parents choose to spend on their kids rather than retire. The students may not be able to borrow enough to pay for tuition and then the parents have to co-sign.
_______________________________________

I stopped listening at the 45 minute mark

Regarding the "problems" with FIRE stated, regardless of age, here is my take on them:

1. Adequate insurance makes this a non-issue. Being FIRE doesn't preclude one from having insurance..

2. Interesting prediction, but far from a reality and I feel it's about as likely to occur as winning the lottery. As such, I'll ignore it.

3. Long-term care is not necessary for everyone, but there is insurance and government assistance programs to make it feasible without shelling out $250k/year (which, pro-tip, 99% of America can't do in retirement yet manage to live anyway).

4. Yes, things change... hence proper planning. Oh, and avoid having kids too..

5. That's already accounted for... I thought she knew something about finance??

6. Yes, and markets can go up too. Hence studies on safe withdrawal rates and the ability for people who FIRE to adjust their spending as they see necessary based on conditions in the economy.

7. Without any supporting info, I disagree.

8. Duh... that's kind of one of the tenets of the FIRE movement.. save and invest...

9. Sounds great, and just as soon as I find someone willing to let me do what I want, when I want, and pay me well for it, I'll take that job. Until then, like the vast majority of America, I'll go work my job that I only do for the money and collect my paycheck so I can save enough to do what I want, when I want.

10. Yep, insurance is important for protecting your assets... again, duh.

11. Okay, find something else to do then if you happen to be one of those people...

12. Don't have kids and you can fill those "holes" in your life even earlier!

13. Don't have kids and you don't have to care about costs of kids...

 

[ExFlyBoy5]

As soon as I saw the link went to www.marketwatch.com/allclickbaitallthetime I knew it would be nothing but drivel.

 

[Rianne]

Suze is irritating and who's message is she spouting? I believe many financial planners give advice fed to them by outside sources. Or to the benefit of their own interests. I can think of one financial planner with Morgan Stanley who was showing us interest rates on corporate bonds. Enron was paying over 8% and I wanted to buy big. Well known company, giant in its industry. Our FP steered us away from it, gently I might add. She knew something but did not tell and I am grateful to her.
Suzy just flies off the handle spouting jibberish. Many listen because she's cute and sounds good.

 

[audreyh1]

7. FIRE before 50 is the biggest mistake you can make in a lifetime.

I FIREd at 39, and I don’t think it was my biggest mistake as now well over 50 our inflation-adjusted net worth is higher. So, since we could still comfortably retire now, I don’t think we made a mistake.

I agree that for most people pulling FIRE before 50 is very difficult to do, especially if you have kids.

11. After 4-5 years of leisure and travel many people get bored.

OK, this didn’t happen to us, and doesn’t seem to happen to the majority of early retirees on this forum. You may slow down a bit after some initial furious travel, but that doesn’t in any way mean boredom.

 

[Fedup]

I never liked Suze and I don’t have a clue who Dam Ramsey is(but I’ve heard of him through various Internet forums).
That’s said, the term FIRE is not just for young millennials.

 

[scrabbler1]

I am a single retiree who lives totally debt-free [including my house] in a less expensive part of the country. In the 11 years I've been retired I have lived comfortably on a lot less than $30,000 a year.

If one wanted to live like a king in retirement, several million dollars would be necessary.

But I've never lived like a king in my life. So I am more than satisfied with living a similar normal comforable life in retirement as I was living while I was working... with one major exception... I am now FREE to be my own boss, the captain of my own ship... and that blessing is priceless !!

.

Similar to you. I retired 10 years ago at age 45 and live easily on less than $30k a year, including in 2015 when I had some health issues which put me in the hospital for 12 days. I live in a HCOL area (Long Island, NY) but one condition for my ER was that there would be no change to my daily lifestyle. Also, no kids, no debts.

I ERed while the markets were crashing in late 2008 but that turned out to be very helpful because it created a nice buying opportunity for the big bond fund (see below) I bought into. At the time of my ER, I had about $850k total, with about $600k of it in taxable and the rest in a rollover IRA, so that $600k has to last me from age 45 to age 60. Not only has it gotten me 2/3 of the way there (I am 55 now), but it has grown to nearly $1M (and the IRA has doubled).

I lost a lot of respect for Orman when she began trashing bond funds on her TV show. Her latest bloviating erased what little was left.

 

[audreyh1]

Suze has been investing in municipal bonds for tax-exempt income AFAIK. I expect she saw her tax-exempt income shrink big time over the past 5 years.

 

[marko]

Yup, follow the money. Not to mention you need to work until you are 70.

IMO, not so much follow the money but follow the demographic.
My take:

Most people who do follow her are not brain surgeons. "I'm $200K in debt, make $50K, have zero savings but...gosh darn it, I'm going to retire at age 40, travel the world and live like a king!! Can't wait to tell my boss at the [insert menial job] to shove it!".

I think she helps keep a lot of these fools stay away from sharp objects and from making bigger life mistakes than they already have.

The group assembled here is generally an entirely different animal than those who she attracts.

 

[dr watson]

Suze knocked it out of the park, IMO, and sounded like the adult in the room. She was absolutely spot on with the risks of retirement at 30 that seems to be glorified by the FIRE movement.

 

[Walt34]

Suzie and the others do fulfill a useful role. When someone calls up and has to ask if borrowing $4,000 on a $25k salary in order to get an elf spotting certificate is okay, then Suzie does serve a good purpose.

I cracked up when I heard about that one.

 

[Offgrid Organic Farmer]

Suze says we're all wrong. Most of us don't have enough to retire early.

I clearly violated her 'rule'.

I retired at 42 with way less, and 17 years later we have not had any problems with retirement.

 

[Bestwifeever]

My friend’s first action on getting divorced was to buy a $1200 dust ruffle for her bed. She’s now working til 70. You bet she needed to hear someone like Suze.

 

[RobbieB]

People hear stuff all the time. The trick is actually learning. Listening is easy, doing is hard.

 

[Red Badger]

Suzie and the others do fulfill a useful role. When someone calls up and has to ask if borrowing $4,000 on a $25k salary in order to get an elf spotting certificate is okay, then Suzie does serve a good purpose.

I cracked up when I heard about that one.

+1.

While her and DR's (etc) advice has about zero application with the assembled masses here, they do provide some help to the truly financially ignorant. And I do agree that, like professional FA's, they make sure to get their cut (peddling less than stellar products).

 

[Maenad]

Suze knocked it out of the park, IMO, and sounded like the adult in the room. She was absolutely spot on with the risks of retirement at 30 that seems to be glorified by the FIRE movement.

Who's glorifying it, exactly? Other than the press writing misleading articles. I hang out here, on the MMM forums, and the FI subreddit, and while there's plenty of newly-graduated kids talking about retiring by 30 on Reddit, most of those kids are just reacting to the drudgery that is the working world, so they're trying to run away, and are called on it by others.

Maybe you're thinking of ERE? Well, Jacob went back to work, so...

I know that bloggers can paint a rosier picture than reality, but the "movement" is made up of the people I mentioned above, who know very well the the difficulty of retiring increases the younger you go. The 22 year olds will get the same ice-water bucket of reality that we all get.

 

[daylatedollarshort]

Most of the posters on the Reddit FI forum actually seem pretty reasonable in terms of savings and expectations. Many are tech workers who have very high salaries and are choosing FI over a high consumption lifestyle. Most aren't selling anything so they aren't pushing an unrealistically low cost lifestyle or savings amount just to attract followers like some of the fake ER bloggers.