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Ask HN: Can you still achieve FIRE if you start planning at 40?

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Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#31

Post by subhobroto »

maximente wrote: post #13

FIRE is about reducing spending. if you're breaking even on unemployment - say $500/wk post-tax (???), then you just have to be disciplined enough to not inflate your lifestyle wildly when you land FTE. if you make $1000 post-tax a week with a job and no spending increases, you immediately have a savings rate of 50%, which translates into working about 17 years. so you'd retire at 57. here's the calculator i use: htt…

> FIRE is about reducing spending.

NO.

Sure, people can achieve FIRE by being frugal, but hoarding money won't get you anywhere.

It's how you use it that's important.

For example, you can also achieve FIRE by setting up cashflow sources so that you are net positive cashflow.

FIRE is about learning that your life depends on net positive cashflow and figuring out ways to achieve that.

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#33

Post by rayhendricks »

fiftyacorn wrote: post #17

I always wonder how americans can achieve FIRE with the healthcare system. It seems doable until something goes wrong and you get a huge bill?

There are a good amount of healthcare resources for retirees and government workers in [WA, USA].

Before he passed away last summer my grandfather was using $26000USD/mo of insurance benefits which the state paid for as he was a retired public employee[0]. Literally added up all the expenditures because I was visiting and bored. This was mainly GP/Antibiotics at a hospital/PT work. The only thing they don't cover is long term care, of which we are currently paying $7500USD/mo for my grandmother.

Yeah, it's a lot of money and they sold their [Grandparents] house last year for approximately $490,000USD after realtors comissions and fees thankfully before COVID. But I hope that puts things in to perspective for those outside the USA.

Basically you have to do a medicare trust for your house or pay $6000-$13000USD/mo for longterm care. Usually what happens is people spend down the parental assets then apply for medicare and they try and find them a nursing home or memory care bed.

[0] https://www.hca.wa.gov/employee-retiree-benefits/retirees/ho...

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#34

Post by SenHeng »

I've always thought that FIRE was comprised of two separate things that weren't necessarily related, but one required the other before it could be achieved.

0. fix your personal finance situation

1. attain financial independence

2. retire early (if at all)

0 is a pre-condition that most people in the world are stuck at. Some manage to get to step 1. Step 2 is optional because it has a hard time limit and has a fuzzy definition.

Does retiring at 64 count as early?

Does working a part time job count as retirement?

So based on the above stipulations, I think FI is possible but RE depends on your POV.

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#35

Post by keiferski »

Is there really a significant difference between retiring at 55 vs. 65? Is this difference large enough to warrant shaping your entire life, job choice, spending habits, and place where you live around it?

Personally I would say that you should instead focus on 1) cutting down spending and 2) finding a part-time job that gives you free time to live your ideal life. Both of these are actionable items, doable within six months. An abstract FIRE plan of 10-15 years is not.

Many people interested in FIRE would be better off analyzing why they want to retire and what they could do then, that they can’t do now. Much of the time, ‘retirement’ is just sort of a magic undefined goal that goes unexamined.

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#36

Post by burntoutfire »

keiferski wrote: post #35

Is there really a significant difference between retiring at 55 vs. 65? Is this difference large enough to warrant shaping your entire life, job choice, spending habits, and place where you live around it? Personally I would say that you should instead focus on 1) cutting down spending and 2) finding a part-time job that gives you free time to live your ideal life. Both of these are actionable items, doable within si…

> Is there really a significant difference between retiring at 55 vs. 65?

Ten years of life is a VAST lifespan. Plus, you might not even make it till 65.

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#37

Post by burntoutfire »

subhobroto wrote: post #31
maximente wrote: post #13

FIRE is about reducing spending. if you're breaking even on unemployment - say $500/wk post-tax (???), then you just have to be disciplined enough to not inflate your lifestyle wildly when you land FTE. if you make $1000 post-tax a week with a job and no spending increases, you immediately have a savings rate of 50%, which translates into working about 17 years. so you'd retire at 57. here's the calculator i use: htt…

> FIRE is about reducing spending. NO. Sure, people can achieve FIRE by being frugal, but hoarding money won't get you anywhere. It's how you use it that's important. For example, you can also achieve FIRE by setting up cashflow sources so that you are net positive cashflow. FIRE is about learning that your life depends on net positive cashflow and figuring out ways to achieve that.

That's one of the approaches. But you can also live off the savings if you don't like risk.

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#38

Post by burntoutfire »

pfranz wrote: post #30
pmiller2 wrote: post #24

Earlier quoted context omitted.

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…

That's one of the main ideas behind the more extreme variants of FIRE - live like you lived when you were 25, keep getting raises, save 80-90% of your post-tax income. Also, learn to cook, fix things around your house, fix your car, grow some food etc and you'll be freed from from jobworld in 5-10 years max.

Re: Ask HN: Can you still achieve FIRE if you start planning at 40?

#40

Post by keiferski »

burntoutfire wrote: post #36
keiferski wrote: post #35

Is there really a significant difference between retiring at 55 vs. 65? Is this difference large enough to warrant shaping your entire life, job choice, spending habits, and place where you live around it? Personally I would say that you should instead focus on 1) cutting down spending and 2) finding a part-time job that gives you free time to live your ideal life. Both of these are actionable items, doable within si…

> Is there really a significant difference between retiring at 55 vs. 65? Ten years of life is a VAST lifespan. Plus, you might not even make it till 65.

That kind of just illustrates my point. In order to FIRE at 55, you're looking at a difficult time for a decade+, from 40-50/55. Who's to say you won't drop dead a month into your retirement at 55?

All the research and anecdotes I've come across illustrate how staying active and working (in whatever way possible) extend lifespan more than being retired and purposeless. So personally, I think FIRE only makes sense if you're retiring to pursue a greater goal that otherwise wouldn't be possible. And for most cases, this goal is still achievable without FIRE, if you get a little creative.

As I said above: better to figure out what your ideal life is and work at it now. IMO, FIRE is really only a rational option if you're young, have a high income, and are OK with living cheaply/into DIY. Even then, assuming that the markets/civilization in general will be predictable for the next 50-100+ years seems rather naive, especially with recent events (COVID).

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