If you are working for money, you are not retired. Period. "Working for money" includes: writing books, writing blogs, running a roadside stand at which you sell the vegetables you organically grow in your backyard, and/or pursuing whatever other passion you happen to be pursuing but getting paid to pursue. Working for money makes you a worker, not a retiree. No exceptions. If FIRE folks would simply stop using the word "retired" inappropriately, I suspect people would stop being so mad at them and yelling at them on the internet.
9
This article is irritating. It lambasts the author for giving bad asset allocation advice, noting that her suggested mix of 33% cash / 33% bonds / 33% stocks has a poor return. Then it turns around and uses an almost as bad mix of 50% bonds / 50% stocks to criticize the 4% withdrawal rule.
If you’re 40 an looking for an indefinite survival period, the usual mix is 80% stocks / 20% bonds. Because the low return of bonds more than outweighs low volatility when you’re looking at 30 year periods. Mr. Brown either didn’t do his research, or deliberately sandbagged the results by choosing a poor ratio.
5
It's like that joke about how can you live like a millionaire? First, get a million dollars...
7
Here's purpose: Not to become identified with anything, include a 'purpopse'
3
This book, from its review, seems to have a Trumpian spin to its overly positive claims.
2
The article doesn't mention the cost of healthcare insurance. Does the book cover the topic of healthcare costs after you pull up stakes? Terribly unrealistic, IMHO.
I wonder if this is a vanity publishing endeavor (i.e. the author paid Hachette to publish the book on consignment). If not, Hachette could use some new editors.
5
All of the comments are interesting and reflect the individual wants and need of the writers. But I found the Vanguard Retirement Nest Egg Calculator link to be particularly helpful and somewhat accurate. It's just a general guide of course. There are NO guarantees. But if readers plug in various scenarios, they can at least guess at whether they are being even a bit realistic as they think about retirement and/or moving into a more desirable way to live.
3
Something I learned before I even retired 2+ years ago: If you're not making money, you're spending it.
Just make sure you plan for this. Lots of people say they want to travel when they retire. Well, travelling costs money. Essentially everything you may want to do costs money.
One more thing. Maybe someone wants to live like a hermit thru their 20s and 30s just so they can retire in their 40s. Not me. I went skiing every weekend, had fun with friends in various places, and didn't waste my youth saving every penny so I could retire and still live like a hermit because I needed 40 years of income.
17
the "purpose" and "plan" part of the book is nothing new to those not retiring early...journalists, advisors, and financial planners have been yammering on about these for years now, ever since they ran out of things to say about the financial aspect of retiring (though that hasn't stopped them from repeating that same advise ad infinitum)...every one of then proclaiming these ideas like they've just discovered a perpetual motion machine...
3
I'm onboard with the FIRE movement's renunciation of the knee-jerk pace of capitalism, but it always seems to be preached by people who came from the part of the workforce that bifurcated into intense, high-pay, high-prestige jobs by being relentless and cutthroat.
16
How is pretty simple. Get a job that pays pretty well, live like a poor person and invest the rest. Keep a low level life style in retirement. Or make a lot of money, invest it well and then you can have a decent standard of living in retirement. What exactly is early anyhow??
1
Let me get this straight—if everything goes right, this 42-year-old woman is going to live on $40,000 a year for the next 40 years? Whew, sounds fun, but no thanks. I guess she doesn’t expect to collect much from Social Security, considering she hasn’t contributed for very long. Let’s hope at least some SS and Medicare will be around for her when that Monte Carlo’s not working out, and of course, Medicaid which will fund her last years in a nursing home. Tanja Hester seems to have a good plan—write some bogus advice book the NYT reviews.
14
Duh this is ridiculously uncomplicated -- don't have children if you want to retire early. Problem solved.
8
@Bill but not at 40 I would think...
1
The real early retirement idea: write a vapid, poorly researched book promising that you will be able to retire 20 years early if you buy the book.
13
This is a false narrative. She didn't retire. She switched her career to a finance blogger and writer. She's selling a pipe dream and lying because she is still working and still earning money through work. Also, recommending a young investor hold 1/3 cash and 1/3 bonds is stupid. No one should have 1/3 of their portfolio in cash unless there is a big expenditure coming up, you're 80 years old, or the end of the world is nigh. So she's not even good at shilling financial advice. Thank you, next.
42
@Dottie - like a lot of critics of the early retirement movement, you have a very narrow view of what it is.
Early retirees are not moving from the office to a rocking chair where they slowly rock back and forth and stare at the wall (perhaps with a round of golf or two thrown in for kicks) until they die. Many early retirees engage in a variety of activities that will earn them income. Some are passive (i.e., rental properties), some are active work from time to time.
The point is that you don't *have* to work and when you do, you do what you chose to do and what you love to do and only for as long as you want to do it. So, yeah, maybe you take on a consulting assignment in your previous field or help out a friend in their business, or sell crafts on Etsy or write a blog or whatever. But you know what? When you decide you don't want to do that anymore because you no longer feel like it or because you want to go on a six-month tour of Asia, you can stop because you're not chained to a desk. How many people do you know that can quit their job right now and not be thrown into financial chaos within a matter of weeks?
If you've planned it right, income earned from active work in early retirement is just the frosting on the cake. It should supplement your comfortable nest egg, but not be necessary to survive.
6
That’s not retirement. That’s changing jobs.
17
@Manzari - I guess we have different definitions of a job. IMHO, a job is something I have to do to earn a living and pay the bills. In an ideal world, I'll also enjoy it. But I think for many (maybe most) people, a job is something they can take or leave.
The things I will do when I retire will be things I do for the pure enjoyment of doing them. If they earn money, great. If they don't, also great, because I won't need the money. To me, that's not a job.
Aspirational retirement for millennials.
5
How to Retire Early - in 14 easy steps!
1. Be born white into a high socio-economic class (so don't be born white in West Virginia or Mississippi, for example).
2. Don't take out student loans.
3. Don't get laid off.
4. Don't become underemployed.
5. Marry someone similar (assortive mating).
6. Don't get cancer.
7. Don't do IVF.
8. Don't have children.
9. Don't develop an autoimmune disorder.
10. Buy real estate at the bottom of the market and sell at the top of the market.
11. Get a rich family member (see step #1) to pay for most of real estate purchase.
12. Get a job where your employer pays into a "retirement fund" or matches your contributions.
13. Get a job that pays for your health insurance and make sure that the health insurance has no deductibles or co-pays but has out-of-network coverage.
14. Get a job (such as U.S. Representative) which provides the benefit of lifetime health insurance, even after retirement.
Simple!
57
@Kat Repeat rule 1 fourteen times.
2
@Kat - How to retire early in 12 not-so-easy steps:
1. Be a POC born into a working class family in the Midwest. Have nothing handed to you, ever.
2. Be single and have no one to rely on but you.
3. Have no relatives that ever have enough money to help you out financially.
4. Graduate with $45K in student loans (a lot in the 90s) and take 18 years to pay them back.
5. Take the safe gov't job that pays less than your friends are making, but that is stable and has good benefits. Work your way up while they job hop. Be willing to move across country (more than once) for better opportunities.
6. Always be educating yourself on how to improve your finances.
7. Live *beneath* your means. Know you can still save. Do so consistently, increasing the amount at every opportunity. Set up automatic savings and save a % of every raise, tax refund, bonus, whatever. Don't be a hermit, but know you don't need every shiny gadget, designer doodad or fancy vacation.
8. Don't buy your first car till you're 30 and house till you're 40 because see #4 and #7.
9. Avoid debt like the plague. If it can't be avoided, pay it off, ASAP.
10. Recognize that if I choose to have children, it may delay my plans, but that is *my choice* and that's okay.
11. Be grateful for blessings, including not having major illnesses.
12. Recognize that there are plenty of things that I can't control, but also *plenty* that I can. Focus on the latter.
Not simple, but worth it.
16
How to retire early:
1. Write a worthless book playing on the irrational hopes of the weak-minded.
2. Cash their checks.
26
Did she add a chapter on supplementing your income by writing a book on how to retire early? And does her investment draw down include a 10% margin for paying for health insurance before Medicare eligibility? Any book that is missing precise details like these is a con and a lie. Show me the math or go away. Give me your excel file, not your word.
28
Living below your means is one of the main components. And What type of lifestyle do you want? If living a simple life, on a small piece of land somewhere, is what's most important to you, then you can probably retire early.
If keeping up with the Jones's is more important, and you rack up some massive debt, you'll probably still be working part time at 70, at a job that you hate.
Don't get caught up in the jaws of the American consumerism beast.
7
She has no kids. That says it all.
12
Well, everyone who buys her book is helping her fund her retirement.
13
Books take a while to write so this must have been written during the last stages of the recent bull market which peaked about 3 months ago. During a rising market just about any strategy will seem to "work". Now that the tide is going out we'll see how many of these early retirees are able to stay out of the workforce when they aren't getting 10+% growth in their portfolios.
My bet is this book will take its place on the shelf next to "Dow 36,000" and the numerous ones explaining how to make a fortune in day trading.
6
The only thing keeping me from early retirement is healthcare, and I suspect I am not alone. I am fortunate enough to have 2 defined benefit pensions and we’ve been great savers. But I have pre-existing conditions, and I fear that someday the Republicans will be successful in repealing Obamacare, likely leaving me uninsurable. I would be one diagnosis away from having all our savings wiped out.
I have lived and worked in two countries with national healthcare systems. What are we Americans so afraid of?
40
@Inamuraj So if you were healthy you would have no problem. And I am not afraid of it, it just would bankrupt our country considering all our other needs or desires.
@vulcanalex No bankrupt...just cut back on the pentagon expenditure. National health care, while not cheap, is less expensive than our current Rube Goldberg.
6
You forgot Mom and Dad. Doubtful this couple in self made after being born into modest means. Their education was probably paid for, so, no student debt, and, if they are of a certain class, those triple digit income producing jobs were much easier to find. Then, there are the "gifts" that comfortable parents shower on the children, including, of course, at least a healthy down payment on the house in Tahoe (Tahoe has triple digit producing jobs for young people? Who knew?)
I meet a lot of people like this in ski towns. All don't work, or work low wage jobs while living well and not working hard at all, but some are modest and live under the radar, and some others, like this author, actually have the nerve to preach to others of normal means that, hey, you can do this too! It's easy! Ahem. Those, I avoid.
33
A lot of people who think they can't retire just aren't willing to move. People move to other countries to live quite nicely as expats, within a means that is not accessible in the states. Others move to cheaper states.
There's the tradeoff of having a house in an expensive metropolis for life in Mississippi or Vietnam. It's definitely not for everyone—but it depends on how much they value not working vs. staying exactly where they are.
4
@Questioner Small-town America is often affordable, but it is not known for being truly friendly, as opposed to superficially polite, to newcomers.
11
@lunanoire I live in a small town, it is very friendly to anybody who does not insist on applying their values to those that don't share them. We have Canadian doctors, and California management We have folks from Japan in many areas and a variety of cultures.
2
What about the contribution of social security to retirement? My spouse and I expect to receive $80,000 yearly (unless the trumpies intervene). That adds 2.4 million to a 30 year projection.
This make a big difference that should be factored in by Vanguard unless they want a fear factor to promote stock sales.
1
@RebeccaTouger; Social Security will help you retire, but it won't help you retire early. And that's what the book under review is about: retiring early.
5
In what world are you getting $80,000 per year from Social Security?
16
@RebeccaTouger
Rebecca:
The most that a couple could draw annually now and if both were maximum earners and they drew it at full retirement age is $ 66,000 and change. If you both planned to wait until age 70 maybe you'd get up to $80,000. Now $66,000 is not so bad in some parts of the country and if you don't get sick and if you have a paid for house and car/s it can cover a lot. But one of you might die . I'm not wishing this on you but old age has a lot of twists, turns and unexpected events. And if that happens you are down to one benefit. And as another has already pointed out it only kicks in very late. If you take it at age 62 you get a lower benefit.
So take another look at this foolproof plan. Trump is not the only possible wrench in the works.
3
Frugality is critically important if you would like to retire early. The greater your wants, the longer you will have to work.
7
Many Americans could shave a decade off of their working years if they had guaranteed healthcare at a reasonable price. Drop the Medicare age to 50 and allow people to buy in at sustainable rates. Suddenly lots of senior-level positions would open up for younger people.
50
@A teacher Just who would pay for that, and what is reasonable? Our providers all get paid pretty well and they are not taking a large cut in salary.
For most people retiring early is fantasy. Unfortunately, there are many that want to take advantage of people looking to retire early to pad their own bank accounts by selling them on this fantasy.
Work / life balance is challenging and consumerism is generally not the way to happiness so yes think carefully about your choices in life. However, if people are unhappy with their work, I might suggest that they try to find more rewarding work or find way to be happy in their current work. For most people, that is going to be easier than saving a million bucks.
24
If you enjoy your job and the intellectual challenges it provides as any work environment does, why would you want to retire in your prime at 50 when you still have so much to contribute to society (that's what work is about, isn't it?). If you retire at 50, with life expectancy in mid 80's, what are you going to do for the nest 30 - 35 years? Visit national/international parks and monuments to kill your time? Watch TV or keep yourself occupied with social media?
Not exciting.
21
@soza
"so much to contribute to society (that's what work is about, isn't it?)"
I'd say for approximately 98.5% of people, work is "about" making money...
Give me an internet connection and a food source and I could idle away 100 years easy
25
@soza -- honestly, I'm not sure whether comments like this make me feel sorry for the poster (who seems to have no interests outside work) ... or for me (who works to live and who could easily fill my days for the next 30 years with all manner of interesting things).
6
@soza
I plan to retire in five years, when I reach the age of 57. Granted, not as early as some of the early retirement advocates (though if I'd known it was possible, I definitely would have started saving much sooner), but earlier than most. This question is probably the most common one I receive and I find it baffling. Honestly, I can come up with 20 things I'd rather be doing than work just off the top of my head. Give me an hour and I can probably come up with 100.
I've had a long and successful career. I wouldn't say my job is a dream job (I wouldn't keep doing it if I won the lottery, for example), but it's been fine. I like my coworkers and I find it rewarding. Still, I can't wait to retire and do all the other things that I never get a chance to do because I don't have the time after working 50 hours a week, or I'm stuck in a commute or because I only have three weeks of paid vacation per year. I think it's incredibly sad when people are so defined by their work that this is all they are. If you're doing your absolute dream job and it's what makes your eyes sparkle, by all means, keep at it (though I think those people are the minority). But there's a great big world out there with millions of interesting and worthwhile things to do. If people expanded their horizons a bit, this wouldn't even be a question.
That's okay, though, it's just more stuff for me to do without the worrisome crowds.
15
There were three things which allowed me to retire at 50: I saved 12% of my income; my company had a defined Benefit pension plan which it supplemented by giving me an extra five years worth for retiring early; my company paid my healthcare insurance until Medicare started at age 65. We also lived and continue to live beneath our means, but comfortably - and in a lower cost of living place than we did while I was working. For me it was worth it. Others may want more toys and status.
23
Good for you!!! You are the exception, not the “rule”
7
@James Toomey Of course he is an exception, half of our people probably should never retire, they make too little mostly and spend too much for the rest.
1
@R. Anderson Do you live/work in Europe?
Most of the early retirements strategies are missing on health care costs and uncertainty about health care. Writers need to fill in this gap. Needless to say, health care is expensive even for a healthy person. IMO, all these retirement discussions are not useful if they do not include a meaningful discussion on provisions for health insurance until one touches the Medicare eligibility age.
61