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I'm 52 and, after taking a year off, I will probably work until about age 56 as well. I'll have a pension coming at 55.
The dealbreaker for me was the automatic 20% withholding from my retirement accounts. Yes, you can get that amount refunded to you when you file your taxes if your tax rate is below that, but in the meantime, you have to take out even more money to support yourself. I just couldn't do it. So I recently went back to work. I have just over 2 years until my pension kicks in. So at that point, once my pension is taken into account, my tax rate will probably be 20% or higher, anyway.
The dealbreaker for me was the automatic 20% withholding from my retirement accounts.
Is that a function of your plan? I withdrew money from my IRA under 72t and am now taking RMDs. There was/is no mandatory tax withholding on those. Fidelity presumes a 10% withholding on withdrawals, which you can zero out or otherwise change. Also zero withholding for a pension.
Sam Dogen, the Financial Samurai, never retired. He struck out on his own as a blogger. He was doing work all those years, writing and publishing, probably a few public speaking gigs here and there. But he was making money from his evangelism of FIRE.
Critics always say stuff like this about the FIRE movement. FIRE people frequently mention the RE (Retire Early) part is optional. He certainly wasn't making the same kind of money as a blogger that he did as an investment banker (his previous profession). He blogged because he liked it, not because he absolutely had to have an income. Similarly, right now he's hoping to get a 6 month a year job with the Golden State Warriors that pays 40k a year. 40k a year isn't much anywhere for someone with 2 kids. And that's even more true in an expensive town like San Francisco, where he lives. Sure, if he gets the job, the 40k salary and health insurance benefits won't be trivial, but the implication that he's going to work mostly out of financial necessity is just silly.
The point of FIRE isn't to just stop working and do nothing. As other FIRE critics point out, life as permanent vacation gets boring, even if you can afford it. The purpose of FIRE is to have the flexibility in your life to do what you want, when you want, with or without a paying job.
Last edited by mysticaltyger; 05-01-2023 at 09:41 AM..
OK, this is my belated April Fool's Day post because I forgot to write one on Saturday! My mind is mostly focused on the kids during the weekends.
I’m still waiting to hear back from the Warriors, but everything I've written in this post is true. Ideally, I land a job with them, but there are no guarantees.
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Originally Posted by oneasterisk
Lol that first link is for financial samurai and if you read you the bottom, it's a late April fool's joke.
I'm still shooting for retirement at 56. Not as early as I'd like, but I found the FIRE movement later in life. I had been doing some things already on my own, but I'm much more intentional now. At 56, I'll have a 25 year pension that should pay for my annual expenses, a taxable brokerage with a few hundred thousand, and a paid off home. There will also be a traditional retirement accounts with a healthy balance.
Right, but he's not getting a job because he doesn't want to have to eat dog food to survive, it's more like he's bored, trying to fill time and get out of the house.
Quote:
I need to find a way to get out of the house more often. For six years, so much of my life has evolved around raising young kids. Now that both are in school, I need a new purpose
Unless you are a co-owner you cannot inherit debt. I am guessing that SR choose to pay his parents debt. Mr MM donated 500k profits from his blog to charity. That’s really awesome!
The FIRE movement always seemed like a whole lot of wishful thinking to me, unless you had a career/job/profession that could pull in millions very quickly. I do know several individuals who have built up substantial real estate holdings and one of them did quit their 9 to 5 job, but she now spends all her time managing the dozen rentals she owns. She still has a job, just working for herself. A far cry from the "my time is my own" FIRE people.
The number one mistake I see among subscribers of FIRE is that they greatly underestimate how much they need to actually be FIRE. Anyone who made it to $1 or $2 million (aka their "Lean FIRE") saved at age 35 and calls it mission accomplished is delusional. I'd want at least $10 million to even consider retirement.
The number one mistake I see among subscribers of FIRE is that they greatly underestimate how much they need to actually be FIRE. Anyone who made it to $1 or $2 million (aka their "Lean FIRE") saved at age 35 and calls it mission accomplished is delusional. I'd want at least $10 million to even consider retirement.
That's up to you, but I think you're being kinda silly. Most people are never going to have a net worth of $10M, even when you calculate the imputed value of SS, Medicare, & pensions.
I'll concede $1M may be on the low end if:
--You have kids
--You have no other source of income (pension, SS, side job).
--You live in an expensive area
--You don't have health insurance nailed down. (Some people can have millions and legally get a cheap Obamacare plan because it goes by income, not assets).
--You still have a mortgage/rent.
But lots of people with $1M work around these things. They move to Mexico, SE Asia, Portugal, or some other country where they can pay out of pocket for cheap health care or get cheap health insurance (pretty much anywhere is cheaper than the U.S.)
Or, like a friend of mine recently did---He worked a 3 week gig as a substitute manager while they were working on finding a new manager. He can do these temporary gigs and to pay for his $1100 a month healthcare plan. He has more than $1M, but nowhere near 10M. In the meantime, he's off to Europe for his 2nd weeklong trip of the year.
Once you have $1M in assets, especially if a significant % is outside retirement plans, you have a lot more options about where to live and how to spend your time. You're not tied to expensive parts of the U.S. or the world. Lots of people in the FIRE crowd are willing to use geographic arbitrage to live the lives they want. They also tend to forego having kids--or have fewer of them (and almost never have them by 'accident' or outside of marriage). If you're skipping kids, that makes retiring in your 30s much more difficult, but not impossible if you have a 6 figure salary and are a good saver from your early/mid 20s. They also tend to have their mortgages paid off or are ok renting in less expensive parts of the world. The other asset they have is TIME. Time to shop around and play the airfare/travel points games. And they have the flexibility to be where other people don't want to be or can't be because they're tied down to a specific area for employment reasons.
In short, skipping kids and the flexibility of having $1M gives you a lot of options for saving on living expenses that you don't have if you're dependent on a job.
It's basically all employer sponsored retirement plans.
Quote:
Originally Posted by jiminnm
I withdrew money from my IRA under 72t and am now taking RMDs. There was/is no mandatory tax withholding on those. Fidelity presumes a 10% withholding on withdrawals, which you can zero out or otherwise change. Also zero withholding for a pension.
Yes, I thought about moving my money to an IRA (or using my existing IRA) and doing 72t, but I just didn't want to go through the aggravation and the lack of flexibility with the 72t rule put me off.
I also thought about taking out my Roth IRA contributions, but I didn't like messing up the tax free growth. I also didn't have enough in Roth contributions to support myself decently for the next 2 years.
So I just decided the heck with it. Just work 2 more years and see how it goes.
I think if I'd had another 50k in a regular taxable money market account, I'd probably have said the heck with working. But I didn't, so I went back to work.
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