An alternative to FIRE is to find a way to live off say 20h or less of work. The trick would be to find a way to get paid a good rate still for those 20. With 3 short days and a 4 day weekend, assuming you are doing a job you live I don’t see that as much different to being retired. And with digital nomadding (pandemic excepted) you could even travel. I’m not convinced that having nothing to do is great and I’m convinced you can find something you love that you can be paid for, albeit maybe less than if you are prepared to do a job you hate.
Ask HN: Can you still achieve FIRE if you start planning at 40?
21–30 of 47 posts
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#22Per https://www.marketwatch.com/story/this-is-exactly-how-much-i... , retirees have a lifestyle of roughly $60k or so per year. At a more modest $50k, and assuming a portfolio of working assets from which to draw this $50k, that would be something like a portfolio of about $830k at 6%. Assuming a 6% yearly net gain on investments, then if you can somehow sock away about $33k per year, you might achieve FIRE status in…
Don't forget taxes! Both on contribution and withdraw. Those under 50 are capped at $19k /year for 401k and $7k /year for IRA. Keep in mind you can't start withdrawing until age 59 1/2. So any money accrued above those limits will be taxed and any money you need to withdraw before that age will need to be separate and taxed.
> Both on contribution and withdraw
To clarify, the same money generally isn't taxed twice. Contributions to pre-tax retirement accounts are not taxed, but distributions are. On the other hand, contributions to Roth accounts come from taxable compensation, but qualified distributions are tax-free. Finally, you buy taxable investments with after-tax principal, and only its earnings are taxed later.
> Keep in mind you can't start withdrawing until age 59 1/2
This doesn't apply to taxable investments, obviously, but even for retirement accounts, there are ways around that.
https://www.madfientist.com/how-to-access-retirement-funds-e...
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#23One think I like to keep in mind with this sort of situation is that building retirement savings and an emergency fund can have immediate benefits of the added security blanket they provide, aside from the long-term goal of retirement. Even if someone got a late start or has a high amount of debt and retirement isn't looking so possible, building a safety net and improving your financial situation is never a bad idea…
> I just got laid off myself
Congratulations. Depending on how you look at it, it might feel the worst thing that ever happened to you but looking back, this would be the best thing (or pretty much up there) ever!
Feel free to reach out to me if you're in the U.S.
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#24Earlier quoted context omitted.
Even if we assume that saving that much is possible, the math only works if you're up for living a lifestyle costing 33% of your current earnings for the rest of your life.
This is something I wish was talked about more in personal finance. Salary and spending don't have to be coupled.
It is, but usually only to the extent of "spend less than you make" and "save X% of your income," where X is significantly less than 50%. Only until you get to the FIRE community do you see people start talking about 50-60+% savings rates.
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#25I always wonder how americans can achieve FIRE with the healthcare system. It seems doable until something goes wrong and you get a huge bill?
Most Americans who want health insurance have it. Insurance pays the the bulk of a huge bill. The individual pays a small fraction of a huge bill through deductibles, co-payments and co-insurance (depends on the policy.) This fraction can be paid from the savings a FIRE retiree would have accumulated without significantly affecting their investment income.
The individual pays a larger fraction of smaller medical bills, but because the bills are small, this is also affordable to someone with savings. The majority of medical events are inexpensive.
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#26[deleted]
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#27I always wonder how americans can achieve FIRE with the healthcare system. It seems doable until something goes wrong and you get a huge bill?
I never thought about that side of it; you do need health insurance. Anybody have an answer?
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#28I always wonder how americans can achieve FIRE with the healthcare system. It seems doable until something goes wrong and you get a huge bill?
I never thought about that side of it; you do need health insurance. Anybody have an answer?
This is what I came up with: https://www.usatoday.com/story/money/2019/06/04/early-retire...
Looks like private insurance, previous employer benefits, your spouse's insurance (if they're still employed), and bare-bones plans are all options.
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#2910-15 years is doable with a savings rate of 67%. At that rate, you're accumulating 2 years' worth of spending for every year that passes by. In 12.5 years, you'll have accumulated 25 years' worth of expenses. If you invest well over that time, you can either retire earlier or do it with a somewhat lower savings rate.
Even if we assume that saving that much is possible, the math only works if you're up for living a lifestyle costing 33% of your current earnings for the rest of your life.
Correct; there is no free lunch, spend time or spend money.
Re: Ask HN: Can you still achieve FIRE if you start planning at 40?
#30Earlier quoted context omitted.
This is something I wish was talked about more in personal finance. Salary and spending don't have to be coupled.
It is, but usually only to the extent of "spend less than you make" and "save X% of your income," where X is significantly less than 50%. Only until you get to the FIRE community do you see people start talking about 50-60+% savings rates.
I see it all around, like "housing should be around 30% if income" or a budgeting system like 50/30/20 (needs/wants/savings&debt).
I just think the concept of decoupling them isn't something people quite appreciate until you get really into personal finance. When going from college into a career your salary can double quite a few times and if you can keep you living expenses restrained it's a lot easier than a decade later trying to pull back and pay down debt.