- Early retirees are not withdrawing from life. They’re embracing a purposeful life MORE fully than ever.
- Early retirees are not wild risk-takers. They are calculated risk-takers. They see the old bargain of a 9-to-5 job until they’re 70 as riskier than an early-retirement.
- The retirement plans of most early retirees aren’t naive, fragile castles built on sand. At least the ones I know of are anti-fragile, multilayered, flexible plans built on a combination of investment savings, retirement accounts, side businesses, and backup plans.
Here are examples from my own life about having enough to meet life’s unexpected catastrophes.
I had cancer and survived – physically and financially. In fact, my FI allowed me to heal without the pressure of “going back to work”. Additionally, it allowed me the luxury to take many months to go deep into my life to ask whether I wanted to go back to my old life or forward to a new one.
I asked:”Who else inside me wants to live who had not yet had a chance?” From that introspection I changed almost everything: where I lived, who I lived with, what I most valued, what I needed to grow, what I did on a daily basis. And insurance paid for all the treatment and several house sits gave me shelter to sweat through the transformation.
I’ve also been disabled several times in my FI years. First time was a herniated disk that ultimately needed surgery. I was cared for my dear friends, both during my disability and after my successful surgery. Four decades later I had arthritis and had a hip replacement, even while writing the update to Your Money or Your Life.
Again, friends helped me before, during and afterwards to get to the surgery, come home, get fed and washed for the first weeks and to PT appointments. My insurance paid for treatment and my social networks paid in the currency of love. In my younger years I was susceptible to depressions and healed those with friends, rest and ultimately just the right meds. All out of pocket but affordable as I used the system judiciously. And now, God bless, Medicare affords me therapy and i’m really really sane.
I’m not sure what health risks, if you are insured, will bankrupt you. Yes, it is a risk to leave a corporate job with insurance and go naked into FI, buying insurance on the aftermarket, but FIers are even figuring that out, and some who travel internationally buy one of many traveler’s 1-2 year policies.
Health insurance though, is only part strategy.
Ultimately we need political change. It should be a citizen benefit not a corporate job benefit. The United States in the last hold out in developed countries for private insurance but Medicare for all is building momentum. It’s only a matter of time – and in the meantime, we factor the costs into our FI income.
I’ve also had my partner die, my basement flood, the siding on my house fail, a car die and more common “exceptional expenses”. That’s what a 6 month cushion is for, and through thrift and some smart sharing economy choices the cushion account filled again.
Much of what life throws at you post early retirement can be addressed fairly easily through a combination of building close relationships with family and friends, insurance, level headed and lower cost choices, a MacGyver DIY knack and some gigging.
I think there is retiring forward and retiring backward. Suze did what many early retirees do. Some leave their day job, get rid of more excess not needed in a post job life.
Indeed, the simple life is one of the lures of early retirement.
This can mean time in nature, reading, meditation and family life. For many FIers, compensatory spending disappears, the shopping you do to reward yourself for a tough week at work. FIers might travel to exotic places. For some it’s backpacking. And people tend to learn new skills. For most it’s a language or an instrument or home cooking.
And then, a couple of years in more or less, the identity confrontation lands with a thud. Who am I now that I am not my job? How do I explain myself to others? How can I gain the respect and voice I had with my old job? I was somebody. Now I’m nobody.
Retiring forward is using this crisis of identity to grow spiritually or take on some of the bigger issues in the world through volunteering, study, serving on boards, entrepreneurship, training or social innovations. Or they attend to the relationships they neglected.
Not everyone does this. Many retire backwards, returning to their old professions after they’ve filled up on travel or hobbies, perhaps on their own terms, because that’s where they felt competent, needed and, truth be told, important. Many do a bit of both and feel their way along to who they will be and how they might spend their time in this new world of freedom, choices and sovereignty.
But I also want to question retirement itself. There were many reasons our current retirement system developed as it did. In 1889 German Chancellor Otto von Bismarck established the first government inspired retirement strategy to pacify the socialist rabble, to give them something inside the system so they wouldn’t break it. Even before that, Roman Emperor Augustus began paying pensions, funded by taxes, to Roman Legionnaires who had served 20 years.
After the Civil War pensions were were offered to soldiers and the widows of the fallen. In the late 1880s, starting with American Express and the B&O railroad, corporations began to offer pensions. As longevity increased, the idea arose that older workers needed to bow out so younger workers could take their jobs. And then came the 1950s and the idea of your “golden years” when you could play golf, socialize, and bounce the grandchildren.
It was a halcyon vision of no longer working, only playing, of the end of laboring, of golf carts and Sun City. As Boomers retire, many anticipating another 2 decades of living, the idea of the Third Act is challenging the image of the rocker. Perhaps they no longer need the money, but they need the meaning that comes from working with others in ways that contribute to society.
Twenty years of puttering and socializing isn’t much fun, especially for people as smart as those in the FIRE movement.
Retirement now requires reinvention which requires a deep dive into identity, belonging and values. As they say of aging, retirement is not for sissies. You are free to do whatever you want, but what do you want? And who is the one wanting it?
Post FI Life
From my own long experience I don’t think classic retirement (in the sense of disengaging from work in the best sense) is correctly placed at age 30 in the seasons of a life. At 30 you are just finding your way. At age 40 your are finding your voice, your power and leadership. At 50 your influence is in full swing.
After I “retired” in my late 20s I built skills and homesteaded, then traveled, volunteered, wrote, organized groups. At 40 I first felt the power of my own personality and purpose. I was 47 when Your Money or Your Life was published. In my 50s I was at the top of my game, speaking around the world about “enoughess.” I’ve slowed down a bit in my 60’s and early 70’s just because my body is aging – and my mind too – but I am coming into my spiritual prime. I will be very interested in seeing what people on FIRE do with their lives – I’m sure it will be interesting.
The question for early-retirees is, “To what am I dedicating my freedom?” It’s really not about how many millions you have – Nor how much play you can do before you get bored and go back to your old job.
FIRE (Financial Independence Retire Early)
In Your Money or Your Life we promised FI as a reward for systematically examining your relationship with money. I think this is what most people attracted to FIRE really want. Independence of thought. Of how they use their time. Of options. Of choices. Of dedicating their attention to something less soul-searing than cubicle life or the endless boring meetings of middle management. Retirement and freedom are two different animals. Doing “nothing” and doing your passion full time are not even the same species.
People don’t have to follow my path of service, spirituality and social innovation. There are so many ways to use your time for happiness, meaning, purpose and contribution. At the end of the day, we all want to have a well-lived life.
A final story Joe Dominguez use to tell. A broker wanted to impress a client with the prowess of his investment firm. He took the prospect down to the marina to show off the executives’ yachts. “That’s the CEO’s yacht. That’s the COO’s yacht. That’s the CFO’s yacht.” Each was grander than the last, but the client asked, “And where are the customer’s yacht?”
In my view, the FIRE yachts are more like Arcs – stocked with just enough of everything you need (in pairs so it will multiply) to cast off from your old life to make a better world and bring the dove of peace to earth.
Are you building an Arc?