FIRE Isn’t For Me, Or Why I’m Not Planning for Retirement in my 20’s
FIRE, or Financial Independence, Retire Early, is a concept that swept through the financial hemisphere. As a movement, it started sometime in the early 2000’s, although that date is contested some within the community, and has gained significant traction in the last several years. The idea is to save exorbitant amounts of your income and retire before traditional retirement age.
Bloggers at the forefront of the movement have done important work pushing the narrative – to save less than you earn and invest the difference. Tanja Hester retired in her 30s, A Purple Life will be retiring in a little under a year, and Angela, from Tread Lightly, Retire Early has plans to be able to retire once her kiddo reaches college–although she recognizes that her journey is more about the financial independence, and less about the early retirement.
My Initial Thoughts about FIRE
At the offset, this lifestyle seemed amazing. If we worked insanely hard, we could live life unencumbered for the next ever. Who doesn’t want that? To have no boss, or to be your own master, and do what you will with time. It seemed almost too good to be true.
And so I dug deeper. What did I want to get out of life as a singular? And what did we want to get out of life as a couple?
The answer was not lounging on the beach for the next 50 years, as alluring as that seems. Instead, the goals required money, time, and resources.
- I want to get my master’s and my Ph.D. exploring sustainability and immigration in America.
- I want to spend time travelling to advocate and lobby for immigration rights.
- We want to own a farm.
- We want to foster.
- Hubby wants his MSW and to pursue drug rehabilitation work with teens.
- Hubby wants to open an after school program for low income families.
All of these goals mean we need to stretch our timeline to retirement. It means that we probably won’t reach retirement until we’re retirement age. It means we’re centering our careers around things that matter to us and bring value outside their monetary contribution to our household.
FIRE is about maximizing, and while there’s a push towards slow FI that The Fioneers highlight in their series on Slow FI, the whole of the movement’s momentum is too fast paced for me.
I’d even argue that at 21, I shouldn’t be planning for retirement.
Hold your pitchforks, I’m still a proponent of 401(k)s, IRAs, and any other retirement account you can get your hand one. I’m a firm believer of saving for retirement. I contribute 17% of my (combination of pre and post tax) pay into a 401(k) and my husband contributes 15% into his retirement account. Together, we have around $12,000 saved for retirement – not to shabby for a couple in their early to mid 20s.
I encourage my friends to open 401(k)s if they have access to them, and IRAs if they don’t. I know the difference between a Roth account and a traditional account, and I know how to leverage these accounts to retire super early, if I wanted to – or if I had the money to.
But saving for retirement and planning for retirement are two entirely different things. I know I’m going to retire, so I’m making sure my financial butt is covered. But I’m not banking on a when.
Life Happens, and I Want to Roll with the Punches
I also know that a lot of life can happen in the forty years between me and typical retirement age. Liz, from Chief Mom Officer, and I were chatting on Twitter the other day about this. Her husband almost died from septic shock, and that experience changed the way she viewed finance and retirement.
And while I don’t have a story that dramatic, our framework for work and money is fairly similar. I don’t know what’s going to happen in life. I don’t know if kids are in the pictures, or what kinds of fertility treatments I might need if they are in the picture. My family has a sordid medical history and my health is fairly wonky as well. I’m not willing to risk medical bankruptcy for a few years of carefree life.
I don’t know what my future holds, and while I’m saving for retirement, planning on retirement could limit some of those possibilities. I’d much rather pursue a slower route to retirement, and even retire at a more traditional age, if it meant security and possibilities were accessible to me.
Scarcity Mindset with FIRE? Not exactly.
And while this might seem like a scarcity mindset, I don’t think it is. Life is full of abundance and wonder, even while holding down a job. Neither my husband or I have hopes or aspirations to hit $100K salaries. Our fields don’t pay that much, and trying to seek it out would leave me frustrated and deflated. Switching fields into something like tech or marketing isn’t something that neither of us would want to do because I really enjoy working where I’m at now, and those fields aren’t in my husband’s skill set.
An understood income cap limits our ability to speed our progress toward FIRE. It’s a lot easier to save 50% of $200K a year than it is to save 50% of $60K. And knowing that is enough to keep me from calculating my FIRE number, or the number we need to retire from our day jobs. It’s so far away and so intangible, it’s demoralizing.
I’d rather focus on financial improvement, and the journey that lies ahead, than the end destination. I can plan for work, in 20 or so years, when I’m closer to that phase of my life. But for now, saving a couple hundred a month and focusing on shorter term goals – like a house and a degree – are things that I find more fulfilling and have more immediate meaning and worth to me.
Retirement will come, whether I like it or not, and I’d rather spend my time between now and then embracing experiences rather than obsessing over Monte Carlo simulations and maximizing every dollar.
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I love this post. I know we’ve talked about this before, so I don’t have much to say other than THANK YOU for saying it. Early retirement is not for everyone and it’s okay to love your work and job and keep working into your 60s.
YES! So okay. I felt like at first, I was trying to fit into a mold of who I thought a good money person was supposed to be… now I’m more okay with the idea of a fulfilling career, or even two fulfilling careers – one money making, and the other volunteer based. That idea appeals more to me FOR SURE.
I’m on the fence- so I think I’ll just lower my working hours- or take more vacation time. I like my career, and I like free time.
Lowering working hours is definitely something I’m considering as of late. Right now I’m full time + side hustle, and I know it’s not super sustainable.
Another way of looking at this is that you can define your own retirement. It does not necessarily mean lounging on the beach. It can include reaching your goals and doing all the things you listed. The difference would be, that you are in the position to choose to work, or not. You would be financially OK if you choose not to work, and if you do choose to work, it is your choice, not a necessity.
Having said that, and having lived for some years through many changes in many workplaces, a FIRE mindset is almost required nowadays to keep afloat. If medical expenses come up, you are better prepared. If your company/organization goes through reorganization or bankruptcy and you lose your job, you are better prepared.
It just makes sense.
Yeah, I know the other way to look at it… but at 22 I don’t think I need to be gung ho dreaming about retirement yet. I’m saving for it 100%. It’s important, that’s for sure! But I’m trying to be more present in the moment and looking that far forward isn’t helpful in the long term for me.
Saving for retirement (and life in general) makes a TON of sense. That’s why we have a 10k emergency fund, and why we have almost 15k in our retirement accounts. But I don’t think that’s a FIRE mindset, just a financially savvy one.
Absolutely! Enjoy the journey.
I’m 100% with you on this.
Yay!! Glad I’m not alone. 🙂
i won’t be able to retire early. That’s just how it is. I’ve accepted that. But I’m glad you’re looking ahead enough to save while also seeing that you should embrace life and also not assume you know how it’ll go. I think the RE people may be in big trouble if/when their health starts declining, given that very few seemed to have planned for it.
YES! I haven’t seen a lot of “what if my health goes…” contingencies. And I’d have to have those with any FIRE plan I put together.
And I don’t think RE is actually what I want with my life either. I can make SUCH a huge difference working, and I enjoy the work I do.
I agree with you. The FIRE movement is inspirational and I follow many of the ideas and principals. But I am not planning an early retirement. What I do is save like a FIREman and then invest like an investor.
Hahahaha, love that “save like a FIREman”. I really enjoy working… and right now, I’m okay keeping at it for a long while.
This was such a good article! As we get closer to hitting our FIRE number I am less inclined to retire. I don’t think I ever focused on the RE part of FI/RE. What the FIRE movement made me do was evaluate my current financial situation. I realized that I was extremely wasteful. I didn’t accumulate tons of debt but I was flushing money done the toilet. I spent a lot of money on nonsense. The FIRE movement helped me understand intentional spending and optimizing money. And you understand it! You know the power of compound interest. You understand retirement accounts. I didn’t. I’m forever grateful to all those who wrote and shared their journey. Personal finance is well, personal. You have to do what’s best for you and it sounds like you are.
YES! That’s the huge benefit of stumbling on personal finance and FIRE; I’m thankful for it… but I’m not sure that I’m all that interested in RE, or even a huge saving’s rate. I’m trying to figure out the next stages of life right now and I don’t know what that looks like, but it isn’t early retirement.
I’ve done a 180 on the idea of wanting early retirement in the last 12 years.
Back then, I wanted nothing more than to build my big career and guarantee my financial stability in various concrete tangible ways. I couldn’t conceive of wanting to retire / stop working for income. Perhaps somewhat ironically, it was because of my health that I couldn’t conceive of wanting to stop working, now it’s because of my health that I do want to be able to stop working. But until and unless I have a much more solid set of assets that can cover a whole lot of medical issues, I don’t think we’re anywhere close enough to plan on an early one, whether I want it or not.
Health is a huge thing for me, too. I don’t have the best genetics, and I’m predisposed to some super weird things. So I totally get the 180* mentality. I think if my health starts declining, the RE part of FIRE will speak more to me, but by that point, I’ll have done the hard work (hopefully) to set myself up for success.