She Picks Up Pennies recently asked Is FI/RE distorting reality? She was talking about how FIRE attitudes can make you forget that some people, like herself, find their jobs satisfying.
But I’d like to take the question a step further: Is FI/RE even a good goal?
After all, the heat from an actual fire makes the air around it fuzzy and wavy, skewing how we see things. Heck, if you stare at a fire too long, once you do look around everything is dark and hard to make out.
In other words, FI/RE’s quasi-namesake can blind you to how the world really looks.
A misnomer
First of all, “retiring early” always drives me crazy as a notion because almost all the FI/RE bloggers proceed to take up some other form of work, even if it’s just making their sites a source of steady income. That’s not retirement!
Heck, some early “retirees” find themselves working far more hours than they did at their 9-5s. But I suppose Financial Independence/Change Jobs (FICJ) just doesn’t have the same ring to it.
And yes, there are probably non-bloggers out there who do retire early and stay retired. And those are the ones that I worry about the most. Because I’m not sure anyone short of multi-millionaires can be truly independent — and I’m talking several million.
Because independence implies that you’ll always have enough to live on. And I just don’t think that’s something you can safely rely on. Rentals go empty for long periods of time; investments tank. And because the universe has a nasty sense of humor, you could be hit with large bills during those times, draining the regular savings account at a time when your investments aren’t providing much income.
But most of all, I worry about FI/RE-ers’ health.
An apple a day… does diddly squat
People retiring early tend to be pretty healthy, which means they may be unprepared for the costs of illness. Especially since most healthy people seem to gamble on low premium, high deductible insurance plans.
Our (far too many) ER visits have run anywhere from $1,500 to $2,600 depending on the level of care needed. A two-day stint in the hospital — which is frustratingly easy to accomplish if, say, you break one ankle and badly sprain the other, get pancreatitis or have a UTI randomly run amok — will run around $4,000.
Unless you have a platinum plan, all of that will come out of pocket.
And those are just one-offs. A basic chronic illness can really rack up the bills. Just getting diagnosed could cost hundreds of even thousands. Blood tests will run you anywhere from $50 to $200 each (and doctors rarely run just one at a time). X-rays and ultrasounds are about $200 each. MRIs are $700 to $900.
All this means that retirees with a mystery set of symptoms could have a very bad financial year. True, they can switch for the following year, but in the meantime savings may take a big hit. All so that they can come up with a treatment plan that could cost even more money — including medications that may run $100+ a month. Heck, even Tim’s generic Ritalin is inexplicably $100 a month on his new plan.
Even if you don’t end up with an chronic illness, there are others that strike with alarming frequency in the population. Cancer certainly doesn’t respect age (or high deductibles).
And once they switch to a better plan the following year… That’s probably an extra $3,000 a year just for a better plan, and they’ll probably still end up with a noteworthy deductible.
Of course, even that figure is predicated on marketplace premiums remaining the same. The newest legislation could see costs skyrocket, which could really ruin some FI/RE-ers’ carefully laid plans.
Don’t get me wrong, I’m not saying that every early retiree is going to get sick. I just don’t think enough of them respect how easily they could get sick or how expensive it would be.
Time is on your side (too much of it)
There are a lot of hours in a day. Are FI/RE-ers ready to fill their time?
When I was unable to work, I slept 10 hours a day, read three books a week, watched hours of afternoon reruns and evening TV and still found a fair amount of time to be bored spitless.
Of course, I had limitations on how much I could do. I couldn’t go take hikes, play sports, garden, etc. I certainly couldn’t afford to travel. Maybe all of that that takes up enough time. Maybe. But day in and day out, especially if you don’t have kids? That’s a lot of time to fill, guys.
I often wonder just how many financially independent folks — especially the ones without blogs — are going to wind up bored out of their skulls.
Do you really hate your job?
FI/RE starts to make it feel as though everyone hates their job. That attitude would mean that anyone who is still working — especially for someone else — is to be pitied.
But as Penny realized, there are plenty of people who are happy with their work. Sure, a study she cites stated that only 50% of respondents reported being satisfied with their jobs. On the other hand, half of the people surveyed are satisfied with their jobs! That’s a pretty big number in a society that tends to portray work as a never-ending drudgery to be dreaded.
There are plenty of people not seeking to “escape” their 9-5s. I’m one of them. I like the security of a paycheck. I like my boss. And I love having definitive hours. If I were to just focus on this blog I’d work all hours of the day trying to grow it.
I think that FI/RE makes us forget that — or to feel embarrassed about it. People can get so caught up in the notion of retiring early that they don’t stop to ask whether it’s what we really want.
Some people should retire early
I’m not saying that FI/RE is necessarily a bad idea. And there are people who genuinely need to, either for health reasons (like Revanche over at A Gai Shan Life) or because their jobs are draining their souls.
And there’s nothing particularly wrong with vying for the “FI” of FI/RE. Why not get financially independent but keep that job with its dependable health plan and steady paycheck? Just in case.
But the “RE” portion. That concerns me. I think there are a lot of potential problems — ones that, I worry, haven’t been given enough thought/credence.
And I wonder if the entire concept has gotten a lot of people convinced that they dislike perfectly acceptable jobs, thereby potentially causing dissatisfaction where there wasn’t any before.
I guess what I’m saying is that probably a lot fewer people should get swept up in FI/RE-y passion.
Are there other concerns about FI/RE that I haven’t thought of? Are you vying for early retirement?
You make some good points about early retirement that I’ve never thought about before. Yeah, what about medical emergencies and serious/chronic illnesses? What about your investments tanking? Scary.
I’d love to retire early but… I wouldn’t have a few million to fall back on. Unless you’ve got at least a couple of million, are you truly financially independent? Probably not. Depressing as well as scary.
What has really begun to bother me lately is that nearly everyone I know who’s working is struggling. Some are quite a bit worse off than I am, and I’m only working part-time. Scary, depressing, infuriating, on and on and on…
I took a close friend out for her birthday on Saturday and asked her if she noticed a difference on her paycheck since our “tax break.” Yeah, a whole ten bucks. This is a woman who hasn’t had a raise in ten years. Yes, ten whole freaking years. (She’s a columnist/features writer.) We need raises and bonuses more than tax breaks! I went off subject but can you blame me?
This article gave me a lot to consider. My husband is semi-retired now due to my move to a different state as his employer. He works part time so we’re living on less money , but in a less costly area of the country which was our retirement destination before my job transfer.
My husband had cancer and has been in remission for several years. We don’t really feel we can relax but he takes better care of his health now. However, when or if the disease returns it becomes expensive even with good insurance because he is no longer able to work if/when he becomes sick again.
I want to quit my job and retire early, but with the possibility of returned ill health for my husband it would be hard to do. I am somewhat committed to retiring at my full retirement age due to this uncertainty. Additionally, while working we have the benefit of flexible spending accounts to shelter the money we do spend on medical care and have it not be taxed by our employers.
We have a lot of uncertainty about our future health concerns making committing to early retirement difficult.
I work as a secret shopper and intend to keep up that “side hustle” as long as I am still eligible for assignments, so I don’t know that I’ll really every really quit working entirely.
I intend to work until I am 62, maybe even 65. I live in the deep rural South, (SouthWest Central Alabama) so it is very cheap compared to other areas of the country. But, the big issue is health insurance. At the moment, I pay $30 a month because of my work. I would like to retire now (58) but won’t because of the health insurance issue.
I wouldn’t want to retire early because I’m in the group of people who enjoy their jobs. Sometimes I wish the pace was more consistent– it tends to alternate between high intensity and lower, both of which have problems… but I like the people I work with and I enjoy what I do.
My husband is less happy with his job and talks about wanting a new one. I get concerned when he talks like that too much, mainly because I’m afraid he’ll up and quit one day. We have substantial savings and would be able to sustain the loss of income, especially with my continuing to work… but I worry about his mental health without the stabilizing influence of work outside the home. He has a diagnosed mood disorder– the primary symptoms are depression/irritability and periodic obsession with projects. I think that his job forces him to keep to a healthier sleep schedule and having to work with others provides a level of socialization he’d otherwise let drop. I also think it’s good for him to maintain a focus on things outside his own head, and work pushes him to do that in ways that I don’t.
Based purely on my own experience during an extended period of unemployment more than 10 years ago, I think that even without a pre-existing mental health issue, not having work to do can do a number on your brain if you don’t have a good network of people to socialize with and keep you on more of an even keel. I think that I’m not alone in being this way. If I was FI/RE, I would need to replace my job with some other form of work– essentially exchanging work for pay to volunteering for no pay. I might choose to do less of it in terms of hours… but I don’t think that I would do well with no responsibilities and no commitments.
I’m definitely vying for early retirement, myself. I think the issue is that I don’t like the mandatory 9-to-five working for someone else. I would like to be financially independent so I could work on what I wanted to work on, when I wanted to work.
I got a small taste of FIRE when I was off work for two weeks for the holidays. Oh man, there was no shortage of things to do. I’ve seen this happen with actual early retirees, Our Next Life and 1500 Days. Everyone finds their groove in the end.
Some people are 100% content with staying at their 9-to-5, and that’s great! I envy them! But it’s still nice to have the F.U. money to give you the freedom to work less hours, relocate for a dream job, etc.
Mrs. Picky Pincher recently posted…What A Frugal Weekend! February 18
I agree that this isn’t necessarily a goal for everyone, and while I want to retire early (50, just about 10 years from now) I think you can plan for medical expenses and things to do with your time. The part of this post I totally agree with is that there seems to be just a general attitude that of course this should be everyone’s goal – the same way a lot of frugal sites assume that women want to be frugal so that they can stay home and raise families. We don’t all have the same goals in life, and while we can use the same tools (frugality, having an emergency fund, investing, looking at the long-term) it certainly doesn’t mean that we all have the same motivations.
“There seems to be just a general attitude that of course this should be everyone’s goal.”
What SaharaRose said! And what YOU said, i.e., some people like what they do and like their bosses and will keep working because it suits them.
One size does *not* fit all. Another example: Everyone should go to college. Well, NO, not everyone is cut out for college.
Or its corollary: Every parent should pay for the kid’s college. This is a nice idea in theory, but how many parents fail to fund their own financial security because they’re saving in a 529c instead of their own 401(k) or IRA plans? You can’t finance retirement!
I like what I do, and I still have stories to tell. It’s likely I will keep writing even after I take Social Security (with an eye toward the penalties, of course). FI/RE isn’t for everyone.
Donna Freedman recently posted…Cheryl paid off her mortgage.
Some yes, and some no 😉
I do believe it *should* be a goal for everyone to be FI: yes, you may like your job now, but it is truly amazing how quickly that can change. FI gives you options: if you like your job, then by all means, keep at it, but if that lovely boss of yours grabs an amazing new opportunity, the new person can ruin your daily life pretty quick – FI gives you the option to find another lovely boss/work environment.
(I am 100% with you Donna that NO, not everyone should go to college! And not only for the reason of the extremely high price)
As to the health/insurance issues brought up in the article: those can all happen to you while you are working, and when you’re fired from your job for not showing up because of said illness (or your job performance drops b/c of side-effects, or any other host of related issues popping up), now you’re really out of luck. FI, again, gives you options: you can take the time to get better, or accommodate your current job / find a better fitting job to your new reality. FI also requires proper planning and precautions: back up plans to those back up plans – insurance, HSAs funded while you are healthy for those times you aren’t, emergency funds, sinking funds, short term savings/long term savings/longer term savings, a buffer, etc. These are all there to help alleviate everything happening at once.
And then on to the RE part: you’re retirement is different than others (it’s like personal finance; personal retirement). What some people see as work, others see as play, or use to fit another need. For example, let’s say you’re a retired computer programmer, you might pick up some work for a friend’s business stuffing envelopes. It might pay a little something, but you are getting out of the house, you get to hang out with your friend, have some human interaction with other employees, and some extra pocket (beer) money. It might be a “real” job to some, but it’s busy work to the programmer, and it fills his/her need for social interaction. Yes, it comes with money, but so what? It’s their retirement. If something pulls in money, it doesn’t mean it’s only a job….it may be fulfilling some other aspect of the person’s life.
The whole point of the FI/RE (both parts of that equation) is options, and yes, everyone, EVERYONE, should have options.
Well, I don’t have to think “early” or “not early” ’cause I already pulled the plug. With enough white hair to never be early.
Could I have done it earlier? Not sure, maybe. Did I want to do it earlier? No. I enjoyed working most of the time. Did not like the office politics, the pressure, and the insane commutes to some places. But I did enjoy accomplishing something, being part of something productive, having social interactions around work, having a place in the world, and generally being part of movement.
So fortunately, I don’t have to have the FIRE FOMO disease that is so much part of the blogosphere these days.
On the other hand, I enjoy being frugal, reading about it, learning new things about it, trying new frugal things.
FI would be pretty incredible, but I agree that RE should not be a universal goal. My husband has a very hard time motivating himself to get anything done; having the structure of a job is beneficial to his feeling like he’s accomplishing things. I think that without it he’d mostly putter around & feel guilty for not doing anything. I’m living out my dream career of being a homeschooling SAHM, but in 15 years they will (hopefully) all be in college or vocational training. I might even be “out of a job” a few years earlier if they start doing all their classes at the highschool or through Running Start! At which point I intend to either start working part-time or do heavy-duty volunteering. There are so many needs in this world that I’d much rather be working and have plenty to give away than to sit on a beach with a strictly self-focused budget.
Whoah! You really have great points in this post! I agree with the misnomer thing. Yes! I observed that with other FI/RE bloggers, they’re really not completely retired when in fact they are still busy with other some sort of “jobs” that became the source of their income. We don’t know if they love what they are currently doing so much that it feels like they already retired. There goes the saying – If you love your job, it feels like a hobby, not a job anymore. On the other hand, I am also worried about their future possible health care expenses. Since they retire early, they have to sustain their retirement for longer years, double that when they are female. Hopefully and I trust they do, they have health care plan in place. It is never too early to rack up information about Medicare, Medicare supplement plans, Medicaid, and other forms of insurance that could potentially help them in time of their medical needs (sometime in the future).
{chortle!} Now stop that common sense, Abigail! It gets in the way of blogging… 😉
My father was doing FIRE long before there was any such buzzword. In those days, companies or unions provided retirement funds. A man worked to age 65 and could expect to die at about age 65 1/2. Women worked forever — in those days keeping up a house was serious physical labor. He set himself a certain amount to accumulate, and retired the minute he had that number of dollars in hand.
He retired at about age 54. Decided beer and skittles were not as wonderful as he imagined. Went back to work until his health gave out, around age 57 or so. Occupied himself as a security guard (this was a guy who made rather more than a decent living as a merchant marine commander, back when the US had a merchant marine) and then kept busy hunting, fishing, puttering around the house, and as a volunteer sheriff.
In retrospect from his experience, I’d say that if you’re obsessive about retiring and also are married, retirement is not likely to be as idyllic as you imagine. Best to have a side gig or an outside interest (money-making or not) set up to keep yourself amused BEFORE you knock off the paying job.
Funny about Money recently posted…I need another hole in my head….
There is a wave of lash back for FIRE this year. I think too many people got dragged into this and it’s not exactly the right fit. Not everyone has the right temperament to retire early. It’s been really for me, but regular people are probably better off working in some capacity.
I haven’t had any problem keeping busy because I’m a SAHD/blogger/landlord/investor. Too busy really.
Health – I’m a lot healthier now, especially mentally. I have no doubt that my health would continue to deteriorate if I stayed working.
Geesh, you do more retired than a lot of people do with a 9 to 5. I’m glad your mental health is better now that you’re out of the rat race. I know some people find their jobs soul-crushing, so in those cases I guess it is best to GTFO.
Hope to see you at the next Phoenix meetup. I need to check to see if there’s one planned.
I used to want to FIRE pretty badly. I read FIRE blogs for a couple of years like religiously. Then I started to really think about it. I didn’t want to stay in the insurance industry for 25+ years so that I could finally one day be free. It depressed me thinking about it.
The insurance field is very, very, very rigid and stressful. A lot of people end up quitting this field. I didn’t want to suck it up for 25+ years. That’s not truly living. I actually quit reading all FIRE blogs.
I decided to go back to school and get a degree in an enjoyable major, on the side while going to school I work as a social media manager. And with all the opportunities in online business these days, I realized I don’t have to stay in a crappy career.
I’m so happy you wrote a post about this. =)
I imagine insurance would be pretty rigid, so I can see why you’d want to escape. I’m glad you’ve been able to go back to school. I hope your next major results in a job you can enjoy more for the long-term.
Some really good points here. I think it also depends on what each person means by ‘retire’. For me, it simply means ‘never having to wake up at 6am to get to the office ever again’. But it does NOT mean, ‘never waking up at 6am…’ The primary difference is in the freedom of intent.
Way-back-when, retirement DID mean leaving the workforce and diddling about in the garden, doing crosswords and going on long walks.
I’ve been doing a lot of research recently on pension schemes (mostly in Europe, since I’m a Brit) I’m more and more convinced that the old definition of ‘retirement’ is getting increasingly ridiculously outdated.
Financial Independence DOES mean ‘Retire Early’, surely? Because it’s all about having the choice. (Take a look at any number of bloggers – Mr. Money Mustache is probably the most well-known example – and they certainly don’t stop working even though they no longer need to!)
It shows a lot about the human condition, and (I think) is a point in favour of concepts such as UBI…but that’s another discussion!
Great post here – it’s refreshing to read someone questioning basic concepts instead of taking them for granted. 🙂
Yeah, I think perhaps we need a new term other than retire because, as you said, there’s the connotation of it being quitting altogether. And most people who retire early do no such thing. Or at least the ones we’ve heard of, because they’re earnestly blogging away still which can be a lot of work!
Health is absolutely my biggest worry there. Cancer can cost a million dollars. This is partially why my “FIRE” plan is to quit the FT gig and just do my business part-time. Enough to contribute to my community and be satisfied. Enough to keep my skills up and a little money coming in. Since my business is very small it won’t really help with the health insurance bit, but it should at least keep me solvent or able to transition into other work if the need should arise later.