I read a fascinating article by Steven Kurutz in the New York Times recently, it’s titled, “Retire at 43. You’re on FIRE.”
It talks about people who have made the conscious decision to live very frugally. They save a giant percentage of their incomes so they can retire at really young ages. Not 57 early retirement, but 43 or younger!
It’s fascinating, it’s a really interesting mindset. We really hadn’t seen a lot of this before, but have in the last five to ten years. People that want to have control of their lives, be independent and decide what they want to do on a daily basis.
Those are all great goals and to achieve them they are living on a small fraction of their incomes, instead of saving a small fraction like most people.
Wanting to live that way to retire that early also begs different questions.
One of the things that gives me pause is that it’s something they want to do now, and they are living very frugally to do it, but what if they change their minds after they’ve been retired for ten years? What if it no longer works for them?
They probably won’t because they’re having a great time being retired or maybe they can’t because their job skills have decreased relevance or a future employer might look askance at a big gap in job history.
What if they want to live a different type of life later? Their early choice may foreclose later options.
What if they or their kids have uncovered medical expenses? Or a relative gets sick or needs financial help?
As an aside, one of the couples, the wife was still working and the husband was “retired” and raising their children. That just seems like a pretty common situation with the stereotypical gender roles reversed.
In an odd twist, it might give them freedom sooner, but they may lose other options later. I don’t know; maybe it doesn’t. It’s a good mindset, an interesting mindset. I thought it was a fascinating article and I think you should read it.
Mike Garry, Yardley Wealth Management. We are a fiduciary, fee-only financial planning, and wealth management firm in Newtown, Pennsylvania. That’s in Bucks County. If you’d like to talk about this or anything else, please reach out: 267-573-1019, [email protected] or @michaeljgarry