Did the Great Resignation class of 21-22 just pick the worst time to retire?

[EscapeVelocity2020]

I think age at FIRE is also a factor.  If you are in your 50's you should probably error on the side of YOLO'ing and making the most of the younger years you have left.  If you are thinking about FIRE in your 30's and have no idea what your expenses will be over the next 5 decades, then working an extra year or two in order to have more income for the next 50yrs might be a good tradeoff.

It seems a weird sort of imbalance.

To a 30 year old sacrificing a year of life now so their 70 year old self will have more money feels like a good and responsible thing to do.
Yet most 70 year olds would probably sacrifice a lot of money to buy one more year, particularly that that extra year was a healthy 30-something year.

This is what I think about when I think of that Y2K retiree.  If that person was 30 when they retired, they are just 52 now and probably biting their nails on what to do.  But if they were 50, then they are well in to claiming SS (probably wisely deferred until full retirement benefits age) and have Medicare.  It's never fun to lose money, but they'll ride it out OK.  It's also not like they ever planned to go back to work and at this stage in the game it won't be necessary (this is roughly my Dad's situation, so I'm quite familiar with it)... 

[bmjohnson35]

I think age at FIRE is also a factor.  If you are in your 50's you should probably error on the side of YOLO'ing and making the most of the younger years you have left.  If you are thinking about FIRE in your 30's and have no idea what your expenses will be over the next 5 decades, then working an extra year or two in order to have more income for the next 50yrs might be a good tradeoff.

It seems a weird sort of imbalance.

To a 30 year old sacrificing a year of life now so their 70 year old self will have more money feels like a good and responsible thing to do.
Yet most 70 year olds would probably sacrifice a lot of money to buy one more year, particularly that that extra year was a healthy 30-something year.

That's probably true but those 70 yr Olds with money to sacrifice have extra money. They wouldn't have that option if they undersaved. I also look at in terms of percentages. If you consider ages 20-60 as prime years. A 50 yr old choosing to work 2 more years is sacrificing 20% of their prime remaining years. A 35 yr old working 2 extra years is sacrificing 8%.

Oh crap, I only have 7 1/2 more prime years left! ;-)

[mistymoney]

I think age at FIRE is also a factor.  If you are in your 50's you should probably error on the side of YOLO'ing and making the most of the younger years you have left.  If you are thinking about FIRE in your 30's and have no idea what your expenses will be over the next 5 decades, then working an extra year or two in order to have more income for the next 50yrs might be a good tradeoff.

It seems a weird sort of imbalance.

To a 30 year old sacrificing a year of life now so their 70 year old self will have more money feels like a good and responsible thing to do.
Yet most 70 year olds would probably sacrifice a lot of money to buy one more year, particularly that that extra year was a healthy 30-something year.

While I think both sides are informative in this discussion, as has been stated by others above....... I think it's a bit dramatic to call working OMY "sacrificing a year of life", rather than a year of retirement, freedom, etc. Sure, a 52 week vacation is better than a 2/3 week vacation with about 10 or more 3-4 day weekends thrown in, but most people do still have a lot of living in a working year.

And for those 70 year old who would like an extra year in their 30-something year old self? They'd likely take it working or not working, however they could get it!

[wageslave23]

I think age at FIRE is also a factor.  If you are in your 50's you should probably error on the side of YOLO'ing and making the most of the younger years you have left.  If you are thinking about FIRE in your 30's and have no idea what your expenses will be over the next 5 decades, then working an extra year or two in order to have more income for the next 50yrs might be a good tradeoff.

It seems a weird sort of imbalance.

To a 30 year old sacrificing a year of life now so their 70 year old self will have more money feels like a good and responsible thing to do.
Yet most 70 year olds would probably sacrifice a lot of money to buy one more year, particularly that that extra year was a healthy 30-something year.

While I think both sides are informative in this discussion, as has been stated by others above....... I think it's a bit dramatic to call working OMY "sacrificing a year of life", rather than a year of retirement, freedom, etc. Sure, a 52 week vacation is better than a 2/3 week vacation with about 10 or more 3-4 day weekends thrown in, but most people do still have a lot of living in a working year.

And for those 70 year old who would like an extra year in their 30-something year old self? They'd likely take it working or not working, however they could get it!

That's another important variable. How much worse is a working yr compared to a retired year? You can only answer that on a case by case basis.

[Metalcat]

For those taking this thread personally, don't.  Obviously no one knows your personal situation and reasons for FIRE (and to a certain extent, no one cares).  Pointing out blindspots is helpful, on both the conservative and risk side.  I for one have found the discussion interesting and informative from both viewpoints.  I think age at FIRE is also a factor.  If you are in your 50's you should probably error on the side of YOLO'ing and making the most of the younger years you have left.  If you are thinking about FIRE in your 30's and have no idea what your expenses will be over the next 5 decades, then working an extra year or two in order to have more income for the next 50yrs might be a good tradeoff.

Or spending those two years retraining in a high paying, flexible, fun, recession-proof, ageism proof, part time friendly, geographically flexible, remote-work friendly credential for a profession that I can hop in and out of at will and will really enjoy and likely do for free quite a bit along the way.

I retired as the main breadwinner from my first profession at 38. For me, investing in my human capital is INFINITELY more valuable than a slightly padded 'stache.

I like studying and working, if I'm not making money off of it, I do it anyway. So that's by far the best, most fiscally conservative lever I can pull, I'll likely make much more money in my lifetime from my "retirement" work than from my original career. I modeled my retirement after Pete's: figure out profitable shit you love doing. Do that.

If I didn't do this grad school program, I would be doing a different, less lucrative one. So it costs me basically nothing except for a small student loan because the other program would have been free. I will likely do the other program in my 60s.

When looking at FIRE, especially a very early FIRE people forget that although a long timeline is a risk factor, time is also your heaviest lifter when it comes to wealth. So if you retire in your 30s, figure out a fun and enjoyable way to generate money while you are still young and energetic, then suddenly time isn't a risk factor that erodes your probability of success.

Time can be harnessed to dramatically amplify the value of your savings.

So say you have a soul/body destroying corporate job and you save about 1M by your mid 30s. You live on 40K/yr.

You "retire" and need that 'stache to support you forever including an increase in health costs later on.

You could work a few more years and pump that 'stache up to 1.25M and create a negligible difference in your long-term SORR risk.

Or, assuming your professional skills are useless to you (unlikely), you could retrain in an area you enjoy and work casually to generate 20-40K/yr while just keeping yourself busy and engaged in your life.
Maybe your kids are still in school and you have a lot of workday structure in your life anyway, so it fits well.

Maybe you left the corporate world and finally became a carpenter like you had always dreamed (recent other thread discussed this).

Now every single year that you don't withdraw 4%+estimated inflation is a year that your  stache grows. It doesn't matter if your income is steady or reliable, just that on average, you your WR works out to be very low.

Now you're facing your mid 50s with a 'stache that's mostly been left to grow for 20 years.

Maybe now you totally quit. Maybe you've learned new and marketable life skills along the way and have new, profitable projects you would like to try.

You already have MUCH more money than you would had you OMY'd a few times and not worked anymore. But let's say you leave the 'stache largely alone for another 15 years, because generating your COL is just so frickin' easy with hobbies that pay.

Your 'stache has been snowballing now for 30 years. What kind of monstrosity of wealth are you heading into your golden years with? What would it look like compared to the OMY option?

Say Pete never touches his 650K 'stache. Assuming 7%, it's worth over 7M by the time he's 65. Much, much more than if he had OMY'd a few years and never used his ample human capital.

For *me* the biggest risk I can take retiring from my brutal career early is to not leverage my human capital or time at all. The value of my skills/skills I can learn, is far, far beyond what I can save in a few years. And the heavy lifting of decades of compound interest on a modest sum is so much more than I can generate in a few years.

Once I wrapped my mind around the fact that I could turn time, the biggest liability of my plan, into an asset, and all I had to do was find a fun way to leverage my human capital??? That's when I understood my specific risk and asset profile.

Money isn't a thing in and of itself, it is a placeholder for time and energy. If I can use my time and energy in ways that make my life better AND make a profit, then I'm essentially double dipping on time because I get both the income AND the 'stache gains. And I'm not blowing my time and energy assets because I took the time to find work that actually adds to my quality of life.

I mean, imagine if I could invest in a degree that got me paid $100+/hr to write on this forum. Wouldn't that be an idiot proof choice?

My two years are INFINITELY better invested in my current education than they would be in two more crushing, disabling, marriage risking years of my former career.

My path is what's best for me, specifically, given my risks and assets. It took me many years of analysis to figure it out. It was NOT my original plan, or my second, or third, or fourth, or fifth. It took a lot of energy and trial and error to figure out.

Know your levers, figure out the best ones for you. Don't get tunnel vision.

Edit: autocorrect typos on my phone

[Cranky]

Also, we haven't actually touched any of our investment accounts. They can just sit there and do their thing. We're living - carefully - on dh's pension. We have a pretty good cash reserve for major items like the new windows. My social security goes directly into savings.

So maybe the message is - have multiple sources of income.

Yeah, but most people can't just create a pension, let alone one that covers all of your expenses and by definition if you FIRE you are not yet eligible for social security.    Beyond that,  other sources of income generally involve working, even blogging is work.

But the Great Resignation, statistically, does seem to be mostly older people who are close to SS.

Beyond that, there are a million (probably literal) jobs dh and I could get that would cover our expenses at this point.

I poked back through my accounts, and my grocery costs have actually gone down in the last year...

[wageslave23]

For those taking this thread personally, don't.  Obviously no one knows your personal situation and reasons for FIRE (and to a certain extent, no one cares).  Pointing out blindspots is helpful, on both the conservative and risk side.  I for one have found the discussion interesting and informative from both viewpoints.  I think age at FIRE is also a factor.  If you are in your 50's you should probably error on the side of YOLO'ing and making the most of the younger years you have left.  If you are thinking about FIRE in your 30's and have no idea what your expenses will be over the next 5 decades, then working an extra year or two in order to have more income for the next 50yrs might be a good tradeoff.

Or spending those two years retraining in a high paying, flexible, fun, recession-proof, ageism proof, part time friendly, geographically flexible, remote-work friendly credential for a profession that I can hop in and out of at will and will really enjoy and likely do for free quite a bit along the way.

I retired as the main breadwinner from my first profession at 38. For me, investing in my human capital is INFINITELY more valuable than a slightly padded 'stache.

I like studying and working, if I'm not making money off of it, I do it anyway. So that's by far the best, most fiscally conservative lever I can pull, I'll likely make much more money in my lifetime from my "retirement" work than from my original career. I modeled my retirement after Pete's: figure out profitable shit you love doing. Do that.

If I didn't do this grad school program, I would be doing a different, less lucrative one. So it costs me basically nothing except for a small student loan because the other program would have been free. I will likely do the other program in my 60s.

When looking at FIRE, especially a very early FIRE people forget that although a long timeline is a risk factor, time is also your heaviest lifter when it comes to wealth. So if you retire in your 30s, figure out a fun and enjoyable way to generate money while you are still young and energetic, then suddenly time isn't a risk factor that erodes your probability of success.

Time can be harnessed to dramatically amplify the value of your savings.

So say you have a soul/body destroying corporate job and you save about 1M by your mid 30s. You live on 40K/yr.

You "retire" and need that 'stache to support you forever including an increase in health costs later on.

You could work a few more years and pump that 'stache up to 1.25M and create a negligible difference in your long-term SORR risk.

Or, assuming your professional skills are useless to you (unlikely), you could retrain in an area you enjoy and work casually to generate 20-40K/yr while just keeping yourself busy and engaged in your life.
Maybe your kids are still in school and you have a lot of workday structure in your life anyway, so it fits well.

Maybe you left the corporate world and finally became a carpenter like you had always dreamed (recent other thread discussed this).

Now every single year that you don't withdraw 4%+estimated inflation is a year that your  stache grows. It doesn't matter if your income is steady or reliable, just that on average, you your WR works out to be very low.

Now you're facing your mid 50s with a 'stache that's mostly been left to grow for 20 years.

Maybe now you totally quit. Maybe you've learned new and marketable life skills along the way and have new, profitable projects you would like to try.

You already have MUCH more money than you would had you OMY'd a few times and not worked anymore. But let's say you leave the 'stache largely alone for another 15 years, because generating your COL is just so frickin' easy with hobbies that pay.

Your 'stache has been snowballing now for 30 years. What kind of monstrosity of wealth are you heading into your golden years with? What would it look like compared to the OMY option?

Say Pete never touches his 650K 'stache. Assuming 7%, it's worth over 7M by the time he's 65. Much, much more than if he had OMY'd a few years and never used his ample human capital.

For *me* the biggest risk I can take retiring from my brutal career early is to not leverage my human capital or time at all. The value of my skills/skills I can learn, is far, far beyond what I can save in a few years. And the heavy lifting of decades of compound interest on a modest sum is so much more than I can generate in a few years.

Once I wrapped my mind around the fact that I could turn time, the biggest liability of my plan, into an asset, and all I had to do was find a fun way to leverage my human capital??? That's when I understood my specific risk and asset profile.

Money isn't a thing in and of itself, it is a placeholder for time and energy. If I can use my time and energy in ways that make my life better AND make a profit, then I'm essentially double dipping on time because I get both the income AND the 'stache gains. And I'm not blowing my time and energy assets because I took the time to find work that actually adds to my quality of life.

I mean, imagine if I could invest in a degree that got me paid $100+/hr to write on this forum. Wouldn't that be an idiot proof choice?

My two years are INFINITELY better invested in my current education than they would be in two more crushing, disabling, marriage risking years of my former career.

My path is what's best for me, specifically, given my risks and assets. It took me many years of analysis to figure it out. It was NOT my original plan, or my second, or third, or fourth, or fifth. It took a lot of energy and trial and error to figure out.

Know your levers, figure out the best ones for you. Don't get tunnel vision.

Edit: autocorrect typos on my phone

I 100% agree.  Especially for any 20 somethings reading this thread. If you are thinking about FIRE in your 20's, then you should probably focus on switching careers instead.  In my 20's, I naively thought, well I only have 4-6 more years at this job I don't enjoy no point in switching careers that will take me at least 4 years of education/training.  A LOT changes from 20 somethings to 30 somethings priorities, budgets, etc.  If I could do it all over again, I would switch careers.  Now I really am on easy street with my semi interesting, part time but pays full time remote job.  But I wish I would have skipped the last 4 years that turned into 8 years.

*I might actually have that mythical $100/hr to post on MMM forum job ;)

[Metalcat]

Also, we haven't actually touched any of our investment accounts. They can just sit there and do their thing. We're living - carefully - on dh's pension. We have a pretty good cash reserve for major items like the new windows. My social security goes directly into savings.

So maybe the message is - have multiple sources of income.

Yeah, but most people can't just create a pension, let alone one that covers all of your expenses and by definition if you FIRE you are not yet eligible for social security.    Beyond that,  other sources of income generally involve working, even blogging is work.

But the Great Resignation, statistically, does seem to be mostly older people who are close to SS.

Beyond that, there are a million (probably literal) jobs dh and I could get that would cover our expenses at this point.

I poked back through my accounts, and my grocery costs have actually gone down in the last year...

True.

The "Great Resignation" is either people who can afford to retire or people who will take some time to figure what to do next.

Literally everyone I know who has retired during the pandemic has been someone who was either working longer than they needed to and pandemic BS was the push they needed to move on. A lot of boomers were comfortable in their roles working well past 65. The pandemic made those roles a lot less comfortable.

Or, there are people who quit and ate currently in the process of working on their next professional life phase. I'm currently in school with a few hundred of those.

Very few are going to just retire without quite enough money and say "Welp, I guess that's it. Time to let inflation destroy my future and do nothing about it."

[Metalcat]

I 100% agree.  Especially for any 20 somethings reading this thread. If you are thinking about FIRE in your 20's, then you should probably focus on switching careers instead.  In my 20's, I naively thought, well I only have 4-6 more years at this job I don't enjoy no point in switching careers that will take me at least 4 years of education/training.  A LOT changes from 20 somethings to 30 somethings priorities, budgets, etc.  If I could do it all over again, I would switch careers.  Now I really am on easy street with my semi interesting, part time but pays full time remote job.  But I wish I would have skipped the last 4 years that turned into 8 years.

*I might actually have that mythical $100/hr to post on MMM forum job ;)

I was actually just talking about this the other day.

I didn't choose to leave my career, the damage to my spine forced my hand. The risk of staying dramatically outweighed the risk of leaving. I could have lost my ability to control my bowels had I stayed OMY. Now THAT is a risk, lol.

I was reflecting, as one does when happily retired, on the fact that it's actually a remarkable stroke of luck that my career fell apart as early as it did.

Because I didn't save nearly enough to feel really financially robust, it made the option of full retraining sound so much more reasonable.

Had I managed to work another 5-7 years, get a solid fatFIRE cushion and feel "safe enough" to weather a few decades. I'm not sure I would have pulled the lever of full retraining so easily.

I probably would have needed a much longer decompression period too, which would make me even older by the time I decided, and lower the benefit of retraining even more.

That would also leave me with several decades and very limited options for professional engagement because my former career was so specialized. So these 2 years up front at 40 set the stage for the whole second half of my life.

In the end, I come out *way* ahead by having plan A fail.

Plan A would have left me with a good financial cushion and not a lot of options by the time I turn 65.

My current plan, probably Plan M by now, leaves me just stupidly rich and professionally at my peak by 65.

People REALLY underestimate the potential value of retraining.

Still, it is just ONE lever. I talk about it a lot because it's *my* main lever and one of the most obvious hedges for SORR.

But like with any other lever of risk, it's important not to get tunnel vision. There are people here whose next lives really do include absolutely no paid work.

That's their risk profile, and they need to hedge around that.

[djadziadax]

Has anyone figured how much has a bond tent helped this time around as bond have been smashed along with equities? Very little, I would wager given how far eg BND has fallen.

I admire the bravado on display from our recent cohorts. You may yet survive this all. However, if it were me who pulled the plug 12 months ago, went about my new life, forgot about the markets and came back a year later to find that between withdrawals, market falls, and inflation my x25 stash had now shrunk to a x17 stash after just 1 year of retirement I would be shitting myself.

Vand, good point, this is the dreaded Sequence of Returns Risk, and this time, it is a doozy given the factors you mentioned.

One issue is that there is nowhere to hide in this climate - real estate (horrible given mortgage rates, rents will fall, etc, etc.), bond/stock - correlated on the way down, inflation - horrible, employment - soon to be 5% per the promises of the FED. Will this be sorted out in 2 years (as many may have a 2 year cushion)? Maybe, but we wont be hitting the OTH anytime soon, maybe not for many years, as the FED will not support the market.

What if we have a sideways market (range bound) for 2-3 years? What does that do to a portfolio?

Sequence of Return Risks are a slasher.

I have not retired yet, and am building a substantial cash account....cash is loosing 8% or less if you exclude owner - equivalent rent, which is better than the 20% and counting in the market.

Shivers...

[wageslave23]

I 100% agree.  Especially for any 20 somethings reading this thread. If you are thinking about FIRE in your 20's, then you should probably focus on switching careers instead.  In my 20's, I naively thought, well I only have 4-6 more years at this job I don't enjoy no point in switching careers that will take me at least 4 years of education/training.  A LOT changes from 20 somethings to 30 somethings priorities, budgets, etc.  If I could do it all over again, I would switch careers.  Now I really am on easy street with my semi interesting, part time but pays full time remote job.  But I wish I would have skipped the last 4 years that turned into 8 years.

*I might actually have that mythical $100/hr to post on MMM forum job ;)

I was actually just talking about this the other day.

I didn't choose to leave my career, the damage to my spine forced my hand. The risk of staying dramatically outweighed the risk of leaving. I could have lost my ability to control my bowels had I stayed OMY. Now THAT is a risk, lol.

I was reflecting, as one does when happily retired, on the fact that it's actually a remarkable stroke of luck that my career fell apart as early as it did.

Because I didn't save nearly enough to feel really financially robust, it made the option of full retraining sound so much more reasonable.

Had I managed to work another 5-7 years, get a solid fatFIRE cushion and feel "safe enough" to weather a few decades. I'm not sure I would have pulled the lever of full retraining so easily.

I probably would have needed a much longer decompression period too, which would make me even older by the time I decided, and lower the benefit of retraining even more.

That would also leave me with several decades and very limited options for professional engagement because my former career was so specialized. So these 2 years up front at 40 set the stage for the whole second half of my life.

In the end, I come out *way* ahead by having plan A fail.

Plan A would have left me with a good financial cushion and not a lot of options by the time I turn 65.

My current plan, probably Plan M by now, leaves me just stupidly rich and professionally at my peak by 65.

People REALLY underestimate the potential value of retraining.

Still, it is just ONE lever. I talk about it a lot because it's *my* main lever and one of the most obvious hedges for SORR.

But like with any other lever of risk, it's important not to get tunnel vision. There are people here whose next lives really do include absolutely no paid work.

That's their risk profile, and they need to hedge around that.

This is getting off topic, but how do you know you will enjoy the second career before spending several years retraining? You had the benefit of necessity, but this has always been part of my hang-up.  There are dozens of things I am interested in, but most require 4-6 years of education. 

[djadziadax]

When I see some comments, I wonder what these folks thought during the darkest days of the 2008/9 downturn, when their portfolios were dropping like a rock and Congress failed to pass the bank bailout the first time.  You know, when Lehman went bankrupt overnight, money market funds broke the buck, and even rich people were freaking out because the free money overnight lending seized up.  Most likely they weren't around, just like I wasn't around for the Great Depression so it's hard to imagine doing things like washing aluminum foil off to re-use it multiple times.

It's easy to be confident when markets are high (and they are significantly up from 2020, which is when the Fed implemented all the stimulus and ZIRP, thus kicking off the inflation that they are now combatting).  I don't think this weak market backdrop is going away any time soon.  Hopefully I'm wrong, prepared for the worst and hoping for the best as they say, but the tone at Bogleheads and ER.org was pretty grim (the MMM forum wasn't really around at that time).  I don't think anyone was crowing about how great ER was from October 2008 to March 2009...

Of course, with hindsight now, all that angst eventually subsided and eventually the party was back in full swing by 2011, but it was a bumpy ride.  All the confidence I'm seeing right now seems misinformed if we end up having a repeat of the Great Financial Crisis (which is more likely to happen than not during our investing career).

Edit to add - this post is not directed at Malcat, hopefully it is not interpreted that way

There is one big difference now - high inflation (i.e. not seen in 40 years). This makes it all very different from 2000 or 2008 as the FED cannot use the usual bag of tricks to support the market.

[Metalcat]

I 100% agree.  Especially for any 20 somethings reading this thread. If you are thinking about FIRE in your 20's, then you should probably focus on switching careers instead.  In my 20's, I naively thought, well I only have 4-6 more years at this job I don't enjoy no point in switching careers that will take me at least 4 years of education/training.  A LOT changes from 20 somethings to 30 somethings priorities, budgets, etc.  If I could do it all over again, I would switch careers.  Now I really am on easy street with my semi interesting, part time but pays full time remote job.  But I wish I would have skipped the last 4 years that turned into 8 years.

*I might actually have that mythical $100/hr to post on MMM forum job ;)

I was actually just talking about this the other day.

I didn't choose to leave my career, the damage to my spine forced my hand. The risk of staying dramatically outweighed the risk of leaving. I could have lost my ability to control my bowels had I stayed OMY. Now THAT is a risk, lol.

I was reflecting, as one does when happily retired, on the fact that it's actually a remarkable stroke of luck that my career fell apart as early as it did.

Because I didn't save nearly enough to feel really financially robust, it made the option of full retraining sound so much more reasonable.

Had I managed to work another 5-7 years, get a solid fatFIRE cushion and feel "safe enough" to weather a few decades. I'm not sure I would have pulled the lever of full retraining so easily.

I probably would have needed a much longer decompression period too, which would make me even older by the time I decided, and lower the benefit of retraining even more.

That would also leave me with several decades and very limited options for professional engagement because my former career was so specialized. So these 2 years up front at 40 set the stage for the whole second half of my life.

In the end, I come out *way* ahead by having plan A fail.

Plan A would have left me with a good financial cushion and not a lot of options by the time I turn 65.

My current plan, probably Plan M by now, leaves me just stupidly rich and professionally at my peak by 65.

People REALLY underestimate the potential value of retraining.

Still, it is just ONE lever. I talk about it a lot because it's *my* main lever and one of the most obvious hedges for SORR.

But like with any other lever of risk, it's important not to get tunnel vision. There are people here whose next lives really do include absolutely no paid work.

That's their risk profile, and they need to hedge around that.

This is getting off topic, but how do you know you will enjoy the second career before spending several years retraining? You had the benefit of necessity, but this has always been part of my hang-up.  There are dozens of things I am interested in, but most require 4-6 years of education.

I try shit. A LOT OF SHIT.

I tried several careers before picking my first one. I've tried several different types of work since then. I put in the time to learn what I actually enjoy.

FTR, I didn't jump straight to school. Well, I did, dropped out, did another MAJOR project, failed spectacularly, learned a lot about what I don't want from that, took time off, tried several other things out first, seriously considered a different grad degree, found a series of mentors for that profession, spent months immersing myself in it and learning if it was a good fit, almost did it, found out I need 6 major orthopedic surgeries over the next 2 years including having both femurs broken, had to regroup to figure out what my options were, found a great online grad program that would produce a very similar outcome, registered for that.

This is all easy to do when you're retired and have free time.

But I still have all of those other skills and credentials that I picked up along the way as well. Hence the giant pile of $30-50/hr jobs I'm *also* qualified to easily get. Hell, I have a shift for one tonight and they might take me on as a trainer because I'm also experienced and skilled in teaching/coaching/mentoring.

There's literally no condition short of brain damage where I'm unemployable and I'll just keep adding and adding and adding to those skills and options.

Edited: for clarity

[djadziadax]

When I see some comments, I wonder what these folks thought during the darkest days of the 2008/9 downturn, when their portfolios were dropping like a rock and Congress failed to pass the bank bailout the first time.  You know, when Lehman went bankrupt overnight, money market funds broke the buck, and even rich people were freaking out because the free money overnight lending seized up.  Most likely they weren't around, just like I wasn't around for the Great Depression so it's hard to imagine doing things like washing aluminum foil off to re-use it multiple times.

It's easy to be confident when markets are high (and they are significantly up from 2020, which is when the Fed implemented all the stimulus and ZIRP, thus kicking off the inflation that they are now combatting).  I don't think this weak market backdrop is going away any time soon.  Hopefully I'm wrong, prepared for the worst and hoping for the best as they say, but the tone at Bogleheads and ER.org was pretty grim (the MMM forum wasn't really around at that time).  I don't think anyone was crowing about how great ER was from October 2008 to March 2009...

Of course, with hindsight now, all that angst eventually subsided and eventually the party was back in full swing by 2011, but it was a bumpy ride.  All the confidence I'm seeing right now seems misinformed if we end up having a repeat of the Great Financial Crisis (which is more likely to happen than not during our investing career).

Edit to add - this post is not directed at Malcat, hopefully it is not interpreted that way

There is one big difference now - high inflation (i.e. not seen in 40 years). This makes it all very different from 2000 or 2008 as the FED cannot use the usual bag of tricks to support the market.

True but many retirees aren't as impacted by inflation as a working person would be. I don't work so I don't commute so I don't care if gas is over $6.50/gal. Same with needing a dependable car or even using public transit. There are LOTS of ways to optimize expenses once FIREd that you may not be able to do while working. I haven't seen any real impact of inflation yet other then some food price increases. Where as I seriously felt the burn of the great resession back in 2007 ish when I lost 50% of my NW. I didn't have to go back to work or do anything to earn any more income then, but I did some belt tightening for a couple of years. I imagine it will be the same this time.

The larger point is that the FED's hands are tied to support assets at the moment. And yes, personally can control your inflation in spending. But the market may not be able to recover in a while and therefore a portfolio may stay in a depressed state from its high for much longer than expected. Two or three  years of negative  or neutral returns in not great.

[djadziadax]

What we know so far is:

- The performance in the first 10yrs of a 30yr drawdown period is most highly correlated with the SWR a portfolio is able to sustain by the end of those 30yrs, although we don't necessarily have to wait that long and should have a pretty good idea of the path we are on after about 5yrs

- At the last market peak, stocks were priced to return well below their long term average. While price and future return don't correlate that well for stocks, they are still the single best guide we have

- Bonds were also priced to deliver abysmal returns for the foreseeable future given where yields were sat at

- Most investors worst short term fears have been realised, and retirement portfolios are tanking. Yes, we may only be 10-15% of the way towards knowing for sure if this turns into one of the worst performing 5yr or 10yr periods which would historically have tested the limits of what we think retirement portfolios are able to deliver, but that is a fair start.

- Short term market prognosis is still not good. You should not expect a new bull market to start whilst we are in a well established downtrend now and the path of least resistance is  down.  That might change, but it will only be evidenced by the market walking the walk instead of talking the talk, and actually managing to break itself out of the long term downtrend


Time is not on the side of the 2021 retiree's portfolio whilst the above the above factors hold true. While there is no immediate need to panic, the further more we inch towards a "terrible outcome" scenario.

Very very valid.

The issue with the market, from the people I follow, is QT (quantitative tightening) the opposite of which (QE) is what moonshot asset prices in the past 2 years. QT is in full swing now and will continue for some time according to the FED, i.e. until the FED balance sheet has shrunk considerably.

On the other had, the funds rate is also climbing, which is pushing bond yields higher, which causes outflows from assets (and bond prices tanking).

So give those two things taken together, it is dark days ahead.

Per the FED -  they are willing to crash the economy and real estate to tame inflation. That is what Powell said in nicer terms.

[vand]

Well Malcat never ceases to entertain and impress me with her ability to change the parameters of the discussion to turn it into a reaffirmation of how brilliant she is at everything and a 99% portfolio drawdown is therefore inconsequential to her.  Reminds me of another infinite optimizer:

[Metalcat]

Well Malcat never ceases to entertain and impress me with her ability to change the parameters of the discussion to turn it into a reaffirmation of how brilliant she is at everything and a 99% portfolio drawdown is therefore inconsequential to her.  Reminds me of another infinite optimizer:

Well tell me how YOU really feel. lol

ETA: Oh well, to be fair, you can interpret every story about myself as either a success or a miserable failure. Many people would NOT want to emulate my choices, which is why I emphasize repeatedly that my choices are best for me, not necessarily anyone else.

I can be obnoxiously long winded and insistent though, so I'll take that hit

[tooqk4u22]

Very very valid.

The issue with the market, from the people I follow, is QT (quantitative tightening) the opposite of which (QE) is what moonshot asset prices in the past 2 years. QT is in full swing now and will continue for some time according to the FED, i.e. until the FED balance sheet has shrunk considerably.

On the other had, the funds rate is also climbing, which is pushing bond yields higher, which causes outflows from assets (and bond prices tanking).

So give those two things taken together, it is dark days ahead.

Per the FED -  they are willing to crash the economy and real estate to tame inflation. That is what Powell said in nicer terms.

QT is not in full swing...it's only $95B per month and is from run off and not active selling.  They really should have been selling more and faster to let long term rates rise and keep short term rates a little lower to still promote short and medium term investments that help with supply side.

[Metalcat]

When I see some comments, I wonder what these folks thought during the darkest days of the 2008/9 downturn, when their portfolios were dropping like a rock and Congress failed to pass the bank bailout the first time.  You know, when Lehman went bankrupt overnight, money market funds broke the buck, and even rich people were freaking out because the free money overnight lending seized up.  Most likely they weren't around, just like I wasn't around for the Great Depression so it's hard to imagine doing things like washing aluminum foil off to re-use it multiple times.

It's easy to be confident when markets are high (and they are significantly up from 2020, which is when the Fed implemented all the stimulus and ZIRP, thus kicking off the inflation that they are now combatting).  I don't think this weak market backdrop is going away any time soon.  Hopefully I'm wrong, prepared for the worst and hoping for the best as they say, but the tone at Bogleheads and ER.org was pretty grim (the MMM forum wasn't really around at that time).  I don't think anyone was crowing about how great ER was from October 2008 to March 2009...

Of course, with hindsight now, all that angst eventually subsided and eventually the party was back in full swing by 2011, but it was a bumpy ride.  All the confidence I'm seeing right now seems misinformed if we end up having a repeat of the Great Financial Crisis (which is more likely to happen than not during our investing career).

Edit to add - this post is not directed at Malcat, hopefully it is not interpreted that way

There is one big difference now - high inflation (i.e. not seen in 40 years). This makes it all very different from 2000 or 2008 as the FED cannot use the usual bag of tricks to support the market.

True but many retirees aren't as impacted by inflation as a working person would be. I don't work so I don't commute so I don't care if gas is over $6.50/gal. Same with needing a dependable car or even using public transit. There are LOTS of ways to optimize expenses once FIREd that you may not be able to do while working. I haven't seen any real impact of inflation yet other then some food price increases. Where as I seriously felt the burn of the great resession back in 2007 ish when I lost 50% of my NW. I didn't have to go back to work or do anything to earn any more income then, but I did some belt tightening for a couple of years. I imagine it will be the same this time.

The larger point is that the FED's hands are tied to support assets at the moment. And yes, personally can control your inflation in spending. But the market may not be able to recover in a while and therefore a portfolio may stay in a depressed state from its high for much longer than expected. Two or three  years of negative  or neutral returns in not great.

Agree not great but most people who FIRE - especially those who did so when young and plan for a long retirement - aren't going to totally depend on a 4% WR to cover their expenses. Most of us have back up plans to our back up plans to cover us in a multi-year downturn. And even if someone planned to be 100% in stocks most will cut their discretionary spending by a large amount during the low years. 50% of my planned spending during FIRE is discretionary so when the great recession happened I cut much of that out. It was pretty painless and only for a short term compared to the overall length of my planned retirement - or at least until I would be old enough to access other retirement accounts, or pensions, SS etc.

I find those of us who have backup plans on backup plans being categorized as unrealistic or overly optimistic to be kind of strange.

[mspym]

When I see some comments, I wonder what these folks thought during the darkest days of the 2008/9 downturn, when their portfolios were dropping like a rock and Congress failed to pass the bank bailout the first time.  You know, when Lehman went bankrupt overnight, money market funds broke the buck, and even rich people were freaking out because the free money overnight lending seized up.  Most likely they weren't around, just like I wasn't around for the Great Depression so it's hard to imagine doing things like washing aluminum foil off to re-use it multiple times.

It's easy to be confident when markets are high (and they are significantly up from 2020, which is when the Fed implemented all the stimulus and ZIRP, thus kicking off the inflation that they are now combatting).  I don't think this weak market backdrop is going away any time soon.  Hopefully I'm wrong, prepared for the worst and hoping for the best as they say, but the tone at Bogleheads and ER.org was pretty grim (the MMM forum wasn't really around at that time).  I don't think anyone was crowing about how great ER was from October 2008 to March 2009...

Of course, with hindsight now, all that angst eventually subsided and eventually the party was back in full swing by 2011, but it was a bumpy ride.  All the confidence I'm seeing right now seems misinformed if we end up having a repeat of the Great Financial Crisis (which is more likely to happen than not during our investing career).

Edit to add - this post is not directed at Malcat, hopefully it is not interpreted that way

There is one big difference now - high inflation (i.e. not seen in 40 years). This makes it all very different from 2000 or 2008 as the FED cannot use the usual bag of tricks to support the market.

True but many retirees aren't as impacted by inflation as a working person would be. I don't work so I don't commute so I don't care if gas is over $6.50/gal. Same with needing a dependable car or even using public transit. There are LOTS of ways to optimize expenses once FIREd that you may not be able to do while working. I haven't seen any real impact of inflation yet other then some food price increases. Where as I seriously felt the burn of the great resession back in 2007 ish when I lost 50% of my NW. I didn't have to go back to work or do anything to earn any more income then, but I did some belt tightening for a couple of years. I imagine it will be the same this time.

The larger point is that the FED's hands are tied to support assets at the moment. And yes, personally can control your inflation in spending. But the market may not be able to recover in a while and therefore a portfolio may stay in a depressed state from its high for much longer than expected. Two or three  years of negative  or neutral returns in not great.

Agree not great but most people who FIRE - especially those who did so when young and plan for a long retirement - aren't going to totally depend on a 4% WR to cover their expenses. Most of us have back up plans to our back up plans to cover us in a multi-year downturn. And even if someone planned to be 100% in stocks most will cut their discretionary spending by a large amount during the low years. 50% of my planned spending during FIRE is discretionary so when the great recession happened I cut much of that out. It was pretty painless and only for a short term compared to the overall length of my planned retirement - or at least until I would be old enough to access other retirement accounts, or pensions, SS etc.

I find those of us who have backup plans on backup plans being categorized as unrealistic or overly optimistic to be kind of strange.

Because we are not allowed to use any of our contingency plans without running foul of the IRP...

This whole thread is split between which part of FIRE you are focused on - FI or the RE (where RE is defined as never earning another cent again)

[tooqk4u22]

Because we are not allowed to use any of our contingency plans without running foul of the IRP...

This whole thread is split between which part of FIRE you are focused on - FI or the RE (where RE is defined as never earning another cent again)

I think the RE part should be defined as the expectation of never having to earn earn another cent.  Doesn't mean you won't by choice, accident, or need (such as bad SORR or too lean FIRE or some other event). 

But if you go I to FIRE expecting to earn money a day needing it then probably not really FIRE.

[bryan995]

Because we are not allowed to use any of our contingency plans without running foul of the IRP...

This whole thread is split between which part of FIRE you are focused on - FI or the RE (where RE is defined as never earning another cent again)

I think the RE part should be defined as the expectation of never having to earn earn another cent.  Doesn't mean you won't by choice, accident, or need (such as bad SORR or too lean FIRE or some other event). 

But if you go I to FIRE expecting to earn money a day needing it then probably not really FIRE.

FIRE with plans to work part time (out of necessity) is not FIRE. That’s just quitting your job and or  switching careers. If you need to return to work after either a bad SORR or 2 years of inflation then you did not plan well enough. There is often a penalty associated with quitting and then later returning to work. You likely won’t make as much as you could have should you have stayed, gained more experience, more promotions etc. It is far less efficient.

Do folks really want their stash to be approaching $0 during the final years of life at the ripe old age of 80-90-100-120-150? (Lots of research on anti-aging these days!)

Not me. Returning to work out of necessity will not be an option.  I won’t plan for a mere 30 years of funds.  I plan to die with a stash larger than what I started with. #TeamOMY

[Morning Glory]

Because we are not allowed to use any of our contingency plans without running foul of the IRP...

This whole thread is split between which part of FIRE you are focused on - FI or the RE (where RE is defined as never earning another cent again)

I think the RE part should be defined as the expectation of never having to earn earn another cent.  Doesn't mean you won't by choice, accident, or need (such as bad SORR or too lean FIRE or some other event). 

But if you go I to FIRE expecting to earn money a day needing it then probably not really FIRE.

You could go in with the idea that you have a x% chance of not having to work again. Then it would be disappointing to have to go back but you'll at least have gotten a break, and if you don't you'll feel very lucky.

 I guess I don't really get the logic here . I have young children and my job got shittier during the pandemic and I can find another one easily I have to. Why is it failing if I use my FU money to take a break that might be permanent if the sequence of returns is right?

[2Birds1Stone]

That's not always true @bryan995. DW and I both took 9 and 13 month sabbaticals before we even knew there was a pandemic and at the end of 2020 both easily found jobs and are earning significantly more than before the break.

By continuing to work long enough to reach some magical number (and let's be real, you'll* just keep moving the goalposts on yourself), you're guaranteeing your employer gets your youngest and healthiest years.   

*don't mean you specifically, but many who are going for this type of plan are.

Personally I'm with you. The difference between saving 25X expenses and 33X for someone with a 50-75% savings rate is not much longer, but those don't seem to be the type of folks who are going for a <3% fatFIRE budget either.

DW and I plan on using a historically failsafe withdrawal rate based on a 60 year retirement and failure defined as dropping to or below 25% of inflation adjusted initial portfolio at any time during 60 years.  Even with our suboptimal AA (we are using rising equity glidepath), that failsafe withdrawal rate is 3.33% across all historic scenarios, and jumps to 3.77% for those where equities are already 25% off all time highs (as is the case today). 3.77% vs. 4% is very little extra work for anyone with a remotely decent savings rate.

[Metalcat]

Because we are not allowed to use any of our contingency plans without running foul of the IRP...

This whole thread is split between which part of FIRE you are focused on - FI or the RE (where RE is defined as never earning another cent again)

I think the RE part should be defined as the expectation of never having to earn earn another cent.  Doesn't mean you won't by choice, accident, or need (such as bad SORR or too lean FIRE or some other event). 

But if you go I to FIRE expecting to earn money a day needing it then probably not really FIRE.

FIRE with plans to work part time (out of necessity) is not FIRE. That’s just quitting your job and or  switching careers. If you need to return to work after either a bad SORR or 2 years of inflation then you did not plan well enough. There is often a penalty associated with quitting and then later returning to work. You likely won’t make as much as you could have should you have stayed, gained more experience, more promotions etc. It is far less efficient.

Do folks really want their stash to be approaching $0 during the final years of life at the ripe old age of 80-90-100-120-150? (Lots of research on anti-aging these days!)

Not me. Returning to work out of necessity will not be an option.  I won’t plan for a mere 30 years of funds.  I plan to die with a stash larger than what I started with. #TeamOMY

I personally expect to die with many times what I started with.

You can IRP me about it, that's valid, but it doesn't make my plan more risky.

There's a huge difference between quitting your job with too little money and saying "fuck it. I'll just go back to the work I don't want to do if I have to" vs someone leaving the corporate world, taking up carpentry because it's always been their dream, and now having the ability to generate pretty substantial income at will, especially early on in a looooong "retirement" timeline.

Take a look at what the calculators say about the impact of even a small amount of "hobby income" in the early years of a looooong "retirement" timeline. It's insane.

Again, if you want to IRP them for it, have at it, and you will have to litigate each case based on how FI you actually think they are what counts as retirement. Is the military vet who has a job at Home Depot for the discount not retired? Where's the line? I certainly don't feel like I have the authority to draw that line.

ETA: I had a previous response to another poster, but this one is shorter and better.

[wageslave23]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

[maizefolk]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

The problems arise when introducing uncertainty about the future:

Am I retired if I haven't worked in five years, but there is a 10% chance I'll decide to/have to find a job sometime in the next five years? A 1% chance? A 49% chance?

[dividendman]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

The problems arise when introducing uncertainty about the future:

Am I retired if I haven't worked in five years, but there is a 10% chance I'll decide to/have to find a job sometime in the next five years? A 1% chance? A 49% chance?

Yes, the problem is you don't know if you need to be earning the money until later.

By wageslave23 and others' definition of retirement, Michael Jordan didn't retire in 1994, or 2001 or even 2003, because hey, he still earned money later and he might need the money if he gambles too much.

I don't get why people get riled up over the word retirement. I guess if Roger Federer does a Rolex ad he's not retired either. *shrug*

[Metalcat]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

IDK, my retired military friend who has a full pension and works at Home Depot for the discount and for something to do calls himself "retired" and I would give side eye to any IRP who criticizes him.

I mean, they can, but I would consider that to be pretty douchey.

That's just my personal, biased opinion though. Hardcore IRP types are welcome to disagree that anyone who works at all is not retired. I don't think the vast majority of people would agree, but counter cultural opinions are the norm here.

I don't call myself retired because I think it's "cool," it's how everyone in my profession and personal life sees me. I often say "medically retired," but not always, and most often I say I'm "a retired medical professional, but now I'm a student." It all depends on how much personal information I want to share with the person.

"Retired" is purely a financial term for some, but for others, especially those in professions like military, medicine, clergy, where careers make up a huge part of identity, "retired" means "I'm not that person anymore" more than "here's my bank balance."

I'm from one of those "identity" professions. Hanging up the title "Dr." feels like a substantial, world altering thing for me, and many folks in similar roles feel like they aren't retired even if they stop making money but volunteer their services doing the exact same job instead.

Should "retirement" be defined in absolute strict terms of earning money vs not earning money because we're on a personal finance forum? You could argue that, as you just have, and there's validity in that argument.

Except, this particular forum belongs to someone who doesn't subscribe to that definition at all, so I personally don't feel obligated to do so.

[Must_ache]

Anyone who assumes that a blind faith that they can withdraw 4% +estimated inflation, down to the cent, year after year, regardless of what the markets actually do, and that that will predict the future of their investments is...well...reading comprehension impaired...at best.

I personally have never, ever, not once, ever, in MANY years spending MANY hours here EVER seen someone actually pull the plug at exactly 25X their estimated (aka made up) annual spend, with a blind faith that the 4% "rule" would protect them from portfolio failure.

Excessive, unrealistic faith in the 4% rule just isn't the pathology that this particular population suffers from I'm afraid.

I am glad to hear you say that, but recall we have a thread in this forum called "Stop worrying about the 4% rule" and I really wouldn't trust even the average MMM forum reader to take on the an appropriate amount of pessimism and an appreciation for the risks involved (I work as an actuary). 

[wageslave23]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

IDK, my retired military friend who has a full pension and works at Home Depot for the discount and for something to do calls himself "retired" and I would give side eye to any IRP who criticizes him.

I mean, they can, but I would consider that to be pretty douchey.

That's just my personal, biased opinion though. Hardcore IRP types are welcome to disagree that anyone who works at all is not retired. I don't think the vast majority of people would agree, but counter cultural opinions are the norm here.

I don't call myself retired because I think it's "cool," it's how everyone in my profession and personal life sees me. I often say "medically retired," but not always, and most often I say I'm "a retired medical professional, but now I'm a student." It all depends on how much personal information I want to share with the person.

"Retired" is purely a financial term for some, but for others, especially those in professions like military, medicine, clergy, where careers make up a huge part of identity, "retired" means "I'm not that person anymore" more than "here's my bank balance."

I'm from one of those "identity" professions. Hanging up the title "Dr." feels like a substantial, world altering thing for me, and many folks in similar roles feel like they aren't retired even if they stop making money but volunteer their services doing the exact same job instead.

Should "retirement" be defined in absolute strict terms of earning money vs not earning money because we're on a personal finance forum? You could argue that, as you just have, and there's validity in that argument.

Except, this particular forum belongs to someone who doesn't subscribe to that definition at all, so I personally don't feel obligated to do so.

I guess it all depends on what your motivation is in saying you are "retired". Like I said, if it was me, I would say I retired from the military and now I work part time at home depot. Or I retired from being a Dr. and now I tutor children part time. If you just "I'm retired", people when be confused when you say you are heading to work the next day. But like I said, it all comes back to what you are trying to communicate.  What makes sense to me is to be as precise in your description as possible.

[EscapeVelocity2020]

I always enjoy these discussions about what constitutes 'retired', there is usually something to it.  It's when people summarily dismiss the discussion by calling 'IRP!' like they've had an unwarranted visit from the Spanish Inquisition, that's when fruitful discussion collapses.  Calling someone out for some fictional Retirement Policing infraction is childish, but people still seem to love doing it.

[dividendman]

Anyone who assumes that a blind faith that they can withdraw 4% +estimated inflation, down to the cent, year after year, regardless of what the markets actually do, and that that will predict the future of their investments is...well...reading comprehension impaired...at best.

I personally have never, ever, not once, ever, in MANY years spending MANY hours here EVER seen someone actually pull the plug at exactly 25X their estimated (aka made up) annual spend, with a blind faith that the 4% "rule" would protect them from portfolio failure.

Excessive, unrealistic faith in the 4% rule just isn't the pathology that this particular population suffers from I'm afraid.

I am glad to hear you say that, but recall we have a thread in this forum called "Stop worrying about the 4% rule" and I really wouldn't trust even the average MMM forum reader to take on the an appropriate amount of pessimism and an appreciation for the risks involved (I work as an actuary).

Yeah, but in the "Don't worry about the 4% rule" thread, in the very first few posts, you have people saying (paraphrasing from arebelspy and others) "4% is a good place to start, it'll probably work, and if it doesn't, just being a little flexible will make it fine"

[wageslave23]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

The problems arise when introducing uncertainty about the future:

Am I retired if I haven't worked in five years, but there is a 10% chance I'll decide to/have to find a job sometime in the next five years? A 1% chance? A 49% chance?

Yes, the problem is you don't know if you need to be earning the money until later.

By wageslave23 and others' definition of retirement, Michael Jordan didn't retire in 1994, or 2001 or even 2003, because hey, he still earned money later and he might need the money if he gambles too much.

I don't get why people get riled up over the word retirement. I guess if Roger Federer does a Rolex ad he's not retired either. *shrug*

I think its pretty simple actually.  If you don't plan to work anymore then you are retired. If you plan to work in the future then you are taking a break. If you aren't planning to work ever and again but then decide later to go back to work for whatever reason the you unretired. Michael Jordan retired and unretired a couple of times.

[Morning Glory]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

I just tell people I'm taking a break, without going into how long it might be.  I am female and I have small kids so it's not that unusual.  I don't explain about fire or anything,  just tell them what I previously did if they ask. I keep my professional license updated and may take some part time or temporary work to maintain skills after I have had a full year off.

I would have been happy to reduce spending to mitigate sequence risk and inflation but my spouse was unwilling to cut certain expenses so he got a job. The IRP would probably call me a sahp even though I have the higher earning ability and had saved enough as a sole earner to cover a 4% wr at our old spending levels before packing it in.  His income will not cover our complete spending but it's enough to mitigate the inflation (and his lifestyle inflation) and sequence risk, and also makes it easier to get a mortgage.

[dividendman]

I think its pretty simple actually.  If you don't plan to work anymore then you are retired. If you plan to work in the future then you are taking a break. If you aren't planning to work ever and again but then decide later to go back to work for whatever reason the you unretired. Michael Jordan retired and unretired a couple of times.

Ok, I think I can get on board with that. So basically no high net worth individuals ever retire since they own businesses, do consulting, give advice, manage their affairs, have multiple income streams, get paid for speeches etc.

It's actually pretty hard to not earn money through your own actions if you have enough of it.

I quit working for high tech megacrops earlier this year but have since made some cash in credit card rewards/churning, created a partnership and a sole proprietorship for investment holdings and might make a few bucks as a poll worker just because I'm interested to see how it works... I guess I'm unretired/took a break for a few months!

I also might go back to megacorp for a day or two next year for a paid talk on my area of expertise, so I won't be retired next year either, dang.

[Metalcat]

Anyone who assumes that a blind faith that they can withdraw 4% +estimated inflation, down to the cent, year after year, regardless of what the markets actually do, and that that will predict the future of their investments is...well...reading comprehension impaired...at best.

I personally have never, ever, not once, ever, in MANY years spending MANY hours here EVER seen someone actually pull the plug at exactly 25X their estimated (aka made up) annual spend, with a blind faith that the 4% "rule" would protect them from portfolio failure.

Excessive, unrealistic faith in the 4% rule just isn't the pathology that this particular population suffers from I'm afraid.

I am glad to hear you say that, but recall we have a thread in this forum called "Stop worrying about the 4% rule" and I really wouldn't trust even the average MMM forum reader to take on the an appropriate amount of pessimism and an appreciation for the risks involved (I work as an actuary).

I know that thread well, and have posted many times in it and I totally disagree with you.

It's my perception from years here that most MMM type folks are on the ultra conservative side with respect to SORR risk. As I said before, I see way more cases of people here with ultra low WRs, plus a paid off house, plus a cash buffer, and still they don't feel confident pulling the plug.

Perhaps I'm reading different threads than everyone else, but I've always seen an over abundance of pessimism here rather than the opposite. Specifically among those who are actually FI, not those dreaming of it.

Sure, we might get people who arrive thinking they can retire with 4% and never worry, but people who actually have the stones to pull the plug??? lol, usually by the time they get close, they've dramatically increased their pessimism, padded their budget, padded their 'stache, and employed every SORR hedge they can find.

I've watched a lot of fairly optimistic people here over the years become less and less confident the wealthier they get.

But yeah, if someone comes here with a plan to retire NOW with exactly 25X their modest estimated budget, with no intention of modifying their spending, and no willingness to ever work again, and they're 35???

Hoo boy, you can bet I'll be the first in line to say "What the fucking fuck dude? Have you even read ANYTHING about SORR???" and give them a link to Big ERN to scare them straight.

Again, perhaps I'm just magically missing all of the threads that say that, but seems improbable.

ETA: to be fair, a lot of the posters I've mentioned are now gone. They often disappear when they finally feel rich enough to pull the plug. So perhaps the narrative is swinging back towards unrealistic optimism and I just haven't noticed???

[EscapeVelocity2020]

I think its pretty simple actually.  If you don't plan to work anymore then you are retired. If you plan to work in the future then you are taking a break. If you aren't planning to work ever and again but then decide later to go back to work for whatever reason the you unretired. Michael Jordan retired and unretired a couple of times.

Ok, I think I can get on board with that. So basically no high net worth individuals ever retire since they own businesses, do consulting, give advice, manage their affairs, have multiple income streams, get paid for speeches etc.

It's actually pretty hard to not earn money through your own actions if you have enough of it.

I quit working for high tech megacrops earlier this year but have since made some cash in credit card rewards/churning, created a partnership and a sole proprietorship for investment holdings and might make a few bucks as a poll worker just because I'm interested to see how it works... I guess I'm unretired/took a break for a few months!

I also might go back to megacorp for a day or two next year for a paid talk on my area of expertise, so I won't be retired next year either, dang.

If it makes you happy, I think you qualify as retired.  But I also don't think Elon Musk is retired.  Hopefully you can see the difference between yourself and Elon Musk so I don't have to explain it to you, but I'm willing to go in to some finer points if need be.

[Metalcat]

I'd say if you need the extra income from a job then you are not retired.  I don't know why a label is necessary though. Either you work full time and if someone asks what you do, you tell them I work for ... Or you are retired and say " I used to work at ..., but I'm retired now." Or the third option is I retired from my job at ...., but I work part time at Home Depot now." Is the problem that people want to say they are retired even though they have a job in order to sound cool? I don't see any benefit to saying you are retired if you have a job. I guess if you want to sound cool, you can add "but I don't need the money because I am financially independent ". But you just sound like a dbag.

IDK, my retired military friend who has a full pension and works at Home Depot for the discount and for something to do calls himself "retired" and I would give side eye to any IRP who criticizes him.

I mean, they can, but I would consider that to be pretty douchey.

That's just my personal, biased opinion though. Hardcore IRP types are welcome to disagree that anyone who works at all is not retired. I don't think the vast majority of people would agree, but counter cultural opinions are the norm here.

I don't call myself retired because I think it's "cool," it's how everyone in my profession and personal life sees me. I often say "medically retired," but not always, and most often I say I'm "a retired medical professional, but now I'm a student." It all depends on how much personal information I want to share with the person.

"Retired" is purely a financial term for some, but for others, especially those in professions like military, medicine, clergy, where careers make up a huge part of identity, "retired" means "I'm not that person anymore" more than "here's my bank balance."

I'm from one of those "identity" professions. Hanging up the title "Dr." feels like a substantial, world altering thing for me, and many folks in similar roles feel like they aren't retired even if they stop making money but volunteer their services doing the exact same job instead.

Should "retirement" be defined in absolute strict terms of earning money vs not earning money because we're on a personal finance forum? You could argue that, as you just have, and there's validity in that argument.

Except, this particular forum belongs to someone who doesn't subscribe to that definition at all, so I personally don't feel obligated to do so.

I guess it all depends on what your motivation is in saying you are "retired". Like I said, if it was me, I would say I retired from the military and now I work part time at home depot. Or I retired from being a Dr. and now I tutor children part time. If you just "I'm retired", people when be confused when you say you are heading to work the next day. But like I said, it all comes back to what you are trying to communicate.  What makes sense to me is to be as precise in your description as possible.

I like precision in language as well, which is why I simply don't rely on the term "retired" when I'm actually talking about analyzing the risk in someone's financial plan. Whether they're considered "retired" or not doesn't actually change the risk of them running out of money. You can call yourself FI if you have 300K and are depending on extreme geoarbitrage to afford never having to work again, but I'm gonna call out your plan for being extremely high risk.

I will specify "Left their career with no intention of ever doing paid work again" or whatever specifics apply to that person, and then look at the factors that influence their actual risks, SORR being just one of those factors. I care more about being precise in how we describe the real risks of the plan, not what label we apply to the plan.

Call it OMY, CoastFI, SWAMI, quitting, having a hobby job, retirement, second life, becoming a scientologist, etc. Call it whatever floats your boat. The label doesn't predict the risk, which is what threads like this are all about.

If it was a thread titled: "Should the people of the Great Resignation class of 21-22 be allowed to call themselves 'retired' if they have a higher risk of needing to earn more due to inflation?" then I would have responded differently.

IRL I also don't always feel it necessary to explain my life story and financial situation to people I barely know who ask me what I do. Most of the time I say "retired" and people say "oh cool" and no one actually gives a shit. About 40% of people don't even ask me what I retired from. I stuck with "medically retired" for the first year because that felt the most accurate, but got really sick of explaining my very complicated health situation to people who don't really care but feel compelled to ask because of the label I elected to use. lol.

I have started just saying "I'm a grad student" because I look really young and live in a building full of undergrads. Saying that makes me feel way cooler than saying I'm "retired" because I look, act, and dress like a 20-something grad student, and I love being able to "pass." That's far, far more misleading though.

[2Birds1Stone]

Since this IS MMM forums and all, let the founder define it for us, https://www.mrmoneymustache.com/2011/04/13/what-does-early-retirement-mean-anyway/

Spoiler alert, most of y'all are getting face punched.

[EscapeVelocity2020]

Since this IS MMM forums and all, let the founder define it for us, https://www.mrmoneymustache.com/2011/04/13/what-does-early-retirement-mean-anyway/

Spoiler alert, most of y'all are getting face punched.

So we should disregard any possible conflicts caused by his blog both defining "retirement" and its success being dependent on the idea he is, in fact, Early Retired and making, at last admission, $400k/yr...  LOL.  I know, I know, IRP spotted!

[2Birds1Stone]

Since this IS MMM forums and all, let the founder define it for us, https://www.mrmoneymustache.com/2011/04/13/what-does-early-retirement-mean-anyway/

Spoiler alert, most of y'all are getting face punched.

So we should disregard any possible conflicts caused by his blog both defining "retirement" and its success being dependent on the idea he is, in fact, Early Retired and making, at last admission, $400k/yr...  LOL.  I know, I know, IRP spotted!

Your VERY FIRST POST ON THE MMM FORUMS was oddly enough on this very topic.....

I'm glad that this thread has continued to this point, I thought Kendalf tried to cut this off way too early and these last few posts have been very interesting to me.  I agree with the philosophical questioning about if MMM is really 'retired', and if he's not, then what the heck is retirement?  My 70 old Dad has been retired for 15 years, my wife has not been retired, although she is not doing 'fun things that she wants to do every day'.  She doesn't earn W-2 income, but she doesn't go around saying she's unemployed or retired either.

To me, I would also want to understand the MMM cashflow situation.  They may have a great networth, with assets kicking the crap out of liabilities, but if you go cashflow negative (owning two homes and remodelling one), then you don't stay FI very successfully.  But we have no insight into the income from the blog or the outflow, other than the categories he has labelled as personal. 

I wish, if MMM were going to go full disclosure on how to be Mustachian and provide a transparent budget, that he would give the readers some of these big gaps painting the full picture of income and outgo over the course of the year and let us decide if they are relevant.  Sure, it's his blog, but please don't be hostile and attack readers and forum posters for 'nitpicking' valid and interesting issues.

Why not just head over to https://www.early-retirement.org/forums/ and hang out with the rest of the curmudgeons? ;)

[Metalcat]

Since this IS MMM forums and all, let the founder define it for us, https://www.mrmoneymustache.com/2011/04/13/what-does-early-retirement-mean-anyway/

Spoiler alert, most of y'all are getting face punched.

So we should disregard any possible conflicts caused by his blog both defining "retirement" and its success being dependent on the idea he is, in fact, Early Retired and making, at last admission, $400k/yr...  LOL.  I know, I know, IRP spotted!

No, absolutely not. We've always been big fans of criticizing Pete here, and he seems pretty okay with it.

However, it is pretty rich to come to this place and dictate that only a definition of retirement that *isn't* compatible with his is acceptable here.

[clifp]

Anyone who assumes that a blind faith that they can withdraw 4% +estimated inflation, down to the cent, year after year, regardless of what the markets actually do, and that that will predict the future of their investments is...well...reading comprehension impaired...at best.

I personally have never, ever, not once, ever, in MANY years spending MANY hours here EVER seen someone actually pull the plug at exactly 25X their estimated (aka made up) annual spend, with a blind faith that the 4% "rule" would protect them from portfolio failure.

Excessive, unrealistic faith in the 4% rule just isn't the pathology that this particular population suffers from I'm afraid.

I am glad to hear you say that, but recall we have a thread in this forum called "Stop worrying about the 4% rule" and I really wouldn't trust even the average MMM forum reader to take on the an appropriate amount of pessimism and an appreciation for the risks involved (I work as an actuary).

After being retired for 23 years, and being part of various FIRE forums for almost as long.  I mostly agree with MalCat.  I have yet to meet an actual early retiree who's plan was too slavishly follow the 4% rule no matter what. Hell most of us don't even once a year, withdraw an amount of money based on our initial retirement savings, rebalance and then spend that money.  Most folks move money on a monthly or quarterly basis, from investment to spending.

That said, I continue to believe that 4% is fine for a normal retirement 62-62, but not appropriate for early retirement.  As a class of 2000 retiree, I would not be happy going into my "golden years with 20-25% of my original stash in 2022 $. If I retired a 65, or even 55 I'd be ok.

The "don't worry about the 4% rules thread" has always been a bit of a problem.  Almost all forums have a roughly 5-15 ratio of lurkers to posters.  We know a lot of people quit work during Covid, some probably visiting MMM and took away the 25x of my spending needs, and missed the finer points. 

When the market continue to go up during Covid, and they found they were really happy not going into the office, I'm sure many pulled the plug. I suspect lean FIRE folks in this cohort will have a tough time, in the years ahead.

[EscapeVelocity2020]

Since this IS MMM forums and all, let the founder define it for us, https://www.mrmoneymustache.com/2011/04/13/what-does-early-retirement-mean-anyway/

Spoiler alert, most of y'all are getting face punched.

So we should disregard any possible conflicts caused by his blog both defining "retirement" and its success being dependent on the idea he is, in fact, Early Retired and making, at last admission, $400k/yr...  LOL.  I know, I know, IRP spotted!

Your VERY FIRST POST ON THE MMM FORUMS was oddly enough on this very topic.....

I'm glad that this thread has continued to this point, I thought Kendalf tried to cut this off way too early and these last few posts have been very interesting to me.  I agree with the philosophical questioning about if MMM is really 'retired', and if he's not, then what the heck is retirement?  My 70 old Dad has been retired for 15 years, my wife has not been retired, although she is not doing 'fun things that she wants to do every day'.  She doesn't earn W-2 income, but she doesn't go around saying she's unemployed or retired either.

To me, I would also want to understand the MMM cashflow situation.  They may have a great networth, with assets kicking the crap out of liabilities, but if you go cashflow negative (owning two homes and remodelling one), then you don't stay FI very successfully.  But we have no insight into the income from the blog or the outflow, other than the categories he has labelled as personal. 

I wish, if MMM were going to go full disclosure on how to be Mustachian and provide a transparent budget, that he would give the readers some of these big gaps painting the full picture of income and outgo over the course of the year and let us decide if they are relevant.  Sure, it's his blog, but please don't be hostile and attack readers and forum posters for 'nitpicking' valid and interesting issues.

Why not just head over to https://www.early-retirement.org/forums/ and hang out with the rest of the curmudgeons? ;)

Wowsers,  good to know I’m consistent!  Also, people are way more ‘progressive minded’ here than those other fora.  Even if I’ve sounded grumpy for 8 straight years, I get way more out of what Pete and Mustachians bring to the FIRE lifestyle!  I did start out a Bogleheads my first several years though, developing my financial management philosophy. 

[Metalcat]

Anyone who assumes that a blind faith that they can withdraw 4% +estimated inflation, down to the cent, year after year, regardless of what the markets actually do, and that that will predict the future of their investments is...well...reading comprehension impaired...at best.

I personally have never, ever, not once, ever, in MANY years spending MANY hours here EVER seen someone actually pull the plug at exactly 25X their estimated (aka made up) annual spend, with a blind faith that the 4% "rule" would protect them from portfolio failure.

Excessive, unrealistic faith in the 4% rule just isn't the pathology that this particular population suffers from I'm afraid.

I am glad to hear you say that, but recall we have a thread in this forum called "Stop worrying about the 4% rule" and I really wouldn't trust even the average MMM forum reader to take on the an appropriate amount of pessimism and an appreciation for the risks involved (I work as an actuary).

After being retired for 23 years, and being part of various FIRE forums for almost as long.  I mostly agree with MalCat.  I have yet to meet an actual early retiree who's plan was too slavishly follow the 4% rule no matter what. Hell most of us don't even once a year, withdraw an amount of money based on our initial retirement savings, rebalance and then spend that money.  Most folks move money on a monthly or quarterly basis, from investment to spending.

That said, I continue to believe that 4% is fine for a normal retirement 62-62, but not appropriate for early retirement.  As a class of 2000 retiree, I would not be happy going into my "golden years with 20-25% of my original stash in 2022 $. If I retired a 65, or even 55 I'd be ok.

The "don't worry about the 4% rules thread" has always been a bit of a problem.  Almost all forums have a roughly 5-15 ratio of lurkers to posters.  We know a lot of people quit work during Covid, some probably visiting MMM and took away the 25x of my spending needs, and missed the finer points. 

When the market continue to go up during Covid, and they found they were really happy not going into the office, I'm sure many pulled the plug. I suspect lean FIRE folks in this cohort will have a tough time, in the years ahead.

100%

Anyone who retires from their career with a lean budget during a whacky economic time period should be prepared to potentially have to generate income down the line.

For some people this is stupidly easy and no big deal, like my anesthesiologist colleague who slow travels 90% of the time in his RV and works 3-10 weeks a year for about $20K/week . For others it could be a MAJOR challenge due to skills degradation, ageism and resume gap bias, etc. They might be wise to proactively retrain.

My position is anyone dumb enough to only casually read about the 4% rule and make major, permanent, life altering decisions while putting zero effort into understanding the risks and making no effort to have a back up plan is just...well, a fucking idiot.

That person deserves to learn the hard way.

[mistymoney]

I quit working for high tech megacrops earlier this year

so.....the tech side on big agra?

[Metalcat]

I quit working for high tech megacrops earlier this year

so.....the tech side on big agra?

He worked with @maizefolk obviously

[mistymoney]

:)

[TreeLeaf]

I quit working for high tech megacrops earlier this year

so.....the tech side on big agra?

He worked with @maizefolk obviously

I spent about five minutes reading through the posts on this thread trying to figure out what you guys were talking about because my mind automatically translated 'megacrops' to 'megacorps' several times, lol.