Much of the above very fortunate and true. Except possibly ability to get a job, which I've always wondered if FIREes have overestimated. My NYT headline tells me this morning that unemployment has hit nearly 15%. Do you really think you'll be a competitive choice for a grocery store clerk in those kind of conditions? The problem is, FIREes don't need jobs until 20 million other Americans also do, which is of course the worst possible time to try to find a job.
I wonder the same thing about people overestimating their employability. People on the boards here generally seem very certain that they'll be able to get a minimum wage job for whatever hours they need, and I think some have forgotten -- or perhaps never knew in the first place -- how very difficult it can be to get one of those minimum wage jobs in a deep recession when everybody is looking for work. I think people's attitude is colored by living during good times when entry level jobs are plentiful.
I think the optimism is far healthier than worry, but it may not represent reality.
Except that a FIREe doesn't need to get a job during the time of low unemployment; they can wait until the employment market picks up again. The average downturn is approximately 3 years. While unemployment doesn't track that precisely, a quick glance at U.S. unemployment over time (
https://tradingeconomics.com/united-states/unemployment-rate) shows that the economy doesn't spend very much time above 6% unemployment. There was a ~11 years or so year period from about 1976-1987, and another ~6 year period from 2008-2014. Other than those 2 periods, the U.S. economy has rarely been above 6% for very long and when it did ('91-94) it's rarely gone very far above 6%. Even with a huge crash in the market, anyone who has saved at least 25x expenses should easily be able to cut expenses and ride out the poor economy and, in the worst cases, pick up work after things get back to normal.
When you put together all of the various approaches people take, it's hard to see how a period of high unemployment hurts someone who's FIREd but needs to work a bit to recover from a drop in their 'stache. I spent a lot of time on the 2018, 2019, and 2020 cohort threads as my date approached, and I can only remember a tiny fraction of people who *only* saved 25x of their lean expenses and thought they didn't have much risk. Most people used most of the usual risk mitigation approaches:
1. Save more than 25x of their planned expenses
2. Have a pension and/or Social Security in addition to a 25x 'stache (i.e. ignored that value and used it as a safety margin)
3. Planned expenses can be cut - often substantially
4. Skills that could be used in the gig economy to generate a small amount of income (as
@Nords correctly stated, less than $10k/ year provides a huge boost)
5. An ability to go back to work - even if they have to wait 5 years or more for the labor markets to improve.
My totally unscientific gut feeling from reading other people's plans suggests that most people are using not just one but most or all of the approaches above. I saved closer to 33x planned expenses, have a substantial amount I could cut from my budget without any problem, ignored S.S., and ignored my pension. 23 years after FIRE my pension and S.S. - even if they only pay out 70% of their supposed benefits - should cover all of my minimum expenses and more.
One of the stereotypes of the FIRE movement is that people blindly save 25x their expenses and then stupidly spend that without concern as markets drop. I don't think any such people exist. Sure, some just save 25x or less, but they generally jump in with eyes wide open. Maybe it's bluster, but I don't think it usually is. More often than that, most people that I've followed from the recent cohorts have back-up plan on top of back-up plan.
