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I've spent years thinking about and pursuing early retirement. My thoughts: 1) You should never stop working. Humans need purpose. It may be worthwhile to thin
by asdfman123 2y ago
I've spent years thinking about and pursuing early retirement. My thoughts:
1) You should never stop working. Humans need purpose. It may be worthwhile to think of it instead as saving money so you can transition to a more meaningful job. Maybe one that doesn't pay anything at all, like child rearing, or volunteering.
This conclusion implies that if you CAN already do something meaningful, it's probably better to do it sooner rather than later because youth/time is more valuable than money.
2) The 4% withdrawal rate works in a world where the US is dominant and young. Economic growth is fueled by young workers. We are able to stay relatively young thanks to immigration, but birth rates are falling all around the world.
Also, the geopolitical world is changing. The most likely scenario is that US power continues for the next several decades. A less likely scenario is a painful major conflict with China/Russia/etc. in which the US wins. An even less likely scenario is a painful conflict that the US loses. In the second two scenarios, you can't rely on the 4% rule to hold.
3) I like the idea of financial independence. But financial independence in that you have a chunk of wealth to cushion blows or go on sabbaticals, not that you're done having to work forever.
- sceptical 2y agoI retired three years ago at the age of 49. I was rather successful as a software engineer and is content with what I achieved. My response to your thoughts. 1) I have not missed work at all for the last three years. Not a single day. I have not done any programming since I retired. Instead I spend my time on other hobbies and travelling. I try to take two week-long trips every month to new locations. That is plenty meaningful for me. I have nothing to prove, I already did that. My job now is to see the world while I still can. 2) Initially it was daunting to start living on savings / investments. Especially with an initial ~20% market correction and high inflation. However I am spending less than I expected, only around 2% withdrawal rate and I could reduce that by almost 50% if needed and still live rather comfortably. 3) Financial independence is nice. But you also have to spend the money, while you still can.
- pc86 2y agoI think "rather successful" is an understatement if you're able to travel for 24 weeks out of the year on only a 2% withdrawal rate.
- Gud 2y agoConsider reading “Get Real, Get Gone: How to Become a Modern Sea Gypsy and Sail Away Forever”, written by Rick Page who has been sailing around the globe for a long, long, long time without any 2% withdrawal rate available.
- creer 2y agoNot everyone's purpose is their job. The question is more "will you be active, interested, fed, fulfilled, if you stop working?" Even "busy" is not a requirement.
- creer 2y ago"4%" is very much in dispute. It's easy to get that by reading click-bait article titles, but the question is obviously more nuanced. "N%" works anywhere you don't have total chaos. Do you have many years of plausibly relevant statistics? Can you envision these statistics (which by now include minor wars, major wars, self-inflicted major nonsense, high-inflation crises, other economic crises, demographic waves, and sitcom writer strikes) - can you envision these statistics to be reasonably relevant going forward? (You should ask yourself the questions, but "now is different" is a red flag, as economic thinking).
- ta988 2y agoSingle data point: Pretty much every FIRE that I met regreted bitterly leaving the workforce and went back working (most often to do something different that they found more fulfilling like starting their own company burning all their saving, buying a farm, restaurants..).
- hkkwritesgmail 2y agoIf there is a big war like that between superpowers, I bet we will have so much to cry about that we will give a damn even if our investments go down to zero !