I see a lot of people wanting to retire as early as possible. Most of those never are able too. Then I know some people who are able to retire right now. But they don't. I fall in the latter category. And my theory is that once you get enough income you can actually do what you like. In my case still coding, but only projects I like to do. But I will probably never retire. Way too boring.

Retirement doesn’t mean you have to move to Florida to golf and flirt with grannies. The point is that you can do whatever you want - it might be some sort of work.

It’s a question of what would I do if I didn’t have to build my whole life around working 8 hours every weekday

I'm in the latter category also. Had a job off-shored at the end of 2019 and was out of work and thinking about retiring then. I didn't look too hard for another job but found one. I also didn't do much with my time off.

That's the RE part of FIRE. The FI part is nice though. I didn't stress out about looking for a job during a pandemic where companies suddenly shut down hiring. And I don't stress out about my job now. If there's any stress, I remind myself about FI. And if there's still stress after that, I'll just quit, it's Machu Picchu time.

Fits my experience well. It is work until you’re wealthy enough, then it is play. When my friends say they want to “retire early”, they all mean “do what I actually want with my time”. I’m continuously surprised how many people don’t realize money equals freedom and instead consider it a shallow pursuit. Getting the wrong message from scrooge and the wolf of wall street perhaps. You can sit around playing guitar all day, or whatever it may be…but you need money. It is fungible for all things in our society - time, votes, work, resources.

That's why there's a distinction between FI (financial independence) and RE (retire early). One can be financially independent without having to retire early. You also might be missing the definition of retirement that's usually used in FIRE, which is that you can go do whatever you want without needing to treat it as a job; it doesn't mean to just laze around on a beach somewhere as one might normally think of retirement.

> just laze around on a beach somewhere as one might normally think of retirement.

This is also a weird thing to think about "normal" retirement.

Yes, exactly this. I found work stressful and fraught when I needed the money. Once I didn’t, I was free to enjoy the work I enjoy.

If anything, the flexibility in my schedule from financial independence opens me up to a lot of unpaid work I don’t enjoy (helping with my aging mother) because I’m the one who can. Ironically now that I don’t have to work, I wish I had more time to work!

I used to want to retire early and ASAP, firmly in the "lean fire" category.

Then I found a job which pays significantly under market but that I actually enjoy doing. My priorities have changed a lot.

Unfortunately said job is highly unstable and provides little opportunity for transferrable skills, so I still aim for a 50% savings rate, for peace of mind.

I may do some coding but certainly not 40 hours a week with managers looking over my shoulder.

Same here. My "retirement" will likely just be me teaching or doing some other kind of work that has a much lower earning potential, but still would be considered a traditional job. My retirement savings are meant to make up for that.

IME, when you talk to people it's about quickly getting to the point that you could retire, if you wanted/needed to.

Maybe! But I’m getting tired of working even if it’s interesting. I’d rather now spend time with family or travel.

For the uninitiated, this calculator is actually for a broader movement called FIRE (Financial Independence Retire Early). They have subreddits at r/financialindependence and r/fire, and variants for the more ambitious like FatFIRE.

The general FIRE modus operandi is to live very financially frugally for a period of time (several years or more) to save as much money as possible to, well, retire early (or at least be comfortable with a less intensive and lower paying job).

> The general FIRE modus operandi is to live very financially frugally for a period of time (several years or more) to save as much money as possible to, well, retire early (or at least be comfortable with a less intensive and lower paying job).

This is a subset. The only real mechanism/requirement is saving enough to retire or be financially independent, over whatever timeframe you want. That means typically means 20-30% or higher savings rate on income. One way to increase your savings rate is to have low expenses -- live frugally, as you say. The other way is to have high income.

There're several illegal ways as well.

I think that is already covered under lower your expenses or raise your income.

Nice! Looks pretty good as long as I stay here in Central-Eastern Europe and live a minimalist lifestyle. (Buy second-hand clothing, used gadgets, no car as long as possible etc.)

Actually promoting a materially minimalist life is very healthy, because - as long as it's voluntary - it lets one focus on maximizing happiness not coming from material possessions.

My problem is I like building things for fun, and things cost money

Yes, it's a real issue, unluckily having expensive hobbies instead of cheaper ones. :)

For example, I love motorcycling and really enjoy skiing - but have to find a balance in order to save some money. I guess this is up to everyone's own to find out.

Personally, I keep on motorcycling with a simpler, older bike that's cheap to maintain. And I don't ski, because nobody else in my family does, so we choose other activities that we could enjoy together like traveling a bit or hiking.

Skiing costs be really brutal, I grew up doing it but stopped because of the expense which is unfortunate

"You can afford anything but you can't afford everything"

The 4% rule may not be entirely reliable. See: Ben Felix’s YouTube video on the topic. I’d be aiming for a 2% rule and holding some extra cash (call me paranoid).

> The 4% rule may not be entirely reliable. See: Ben Felix’s YouTube video on the topic.

Felix (and Cameron) recently interviewed Bengen (who came up with the rule) on their Rational Reminder podcast, and it may actually be 4.5% now:

* https://rationalreminder.ca/podcast/135

* https://www.youtube.com/watch?v=_nYTrCxluaY

In 2006 he had it at 4.5% and in October 2020 at 5%:

* https://www.fa-mag.com/news/choosing-the-highest-safe-withdr...

The reason being is inflation.

The really high inflation of the 1970s (and 1980s) chewed up savings for retirees and brought down SAFEMAX down, but in the 1950s and '60s it was actually 5% per Bengen.

2% is awfully difficult to achieve without some radical lifestyle adjustments before and certainly after retirement.

Nonetheless, it’s a good idea. Instead of cash, however, I would opt for paid part-time work if possible.

A large cash reserve isn’t protected against inflation nor will it grow; the downsides are too big imho.

Agreed. This may be what your video talks about, but the decrease in interest rate over the last 40 years has a lot to do with the increase in stock market valuations. Interest rates are E/P, the correspondence with a stock market P/E is straightforward. Interest rates are now at zero and can only go in the opposite direction. And probably will since everybody is now concerned about inflation.

> Interest rates are now at zero and can only go in the opposite direction.

Are you asserting interest rates can only go up from zero? Or only down? And for either direction, why?

I think it is warranted to have a conservative estimate given the aging of the population pyramid. There will be more demand for labor relative to supply than post WW2 decades which saw the opposite, increasing amounts of supply of labor relative to demand.

Although, more than cash, a few loyal and useful kids would be a much better play to mitigate those risks.

Defaulting stock returns to +8% is pretty ridiculous.

There's also something obviously buggy about the calculation because there's a suspicious minimum in the retirement age. If I zero out spending it says I should retire 8 years ago. If I set spending to double my income it says I should have retired 45 years ago. I spending is 220% of my income, I should have retired 921 years ago. When spending is 235% of net income, I should have retired 59325 years ago, in the late Pleistocene.

Do not use.

These calculators never account for portfolio volatility.

If you haven't already, check out the "Projection method" drop down. If that isn't accounting for portfolio volatility, can you explain how it should do so?

That doesn't (significantly) account for volatility. The dropdown allows either fixed returns (beta = 0.0), some Monte-Carlo approximation (beta = 0.0 with extra steps), and historical cycles (beta = 1.0).

Letting choose a beta on the historical cycles would help with these projections.

While tools like these are useful, I flirted with the whole FIRE mythology but found it more harmful than inspirational. If you start seeing everything in this utilitarian monetary way it poisons everything. The work to get to the FIRE point makes you miserable and the lack of meaning after you get there is soul crushing.

Planning is useful, but don’t make the mistake of single-mindedly focussing on FIRE. There’s more to work and life than financial independence.

I am generally in support of FIRE but it seems a lot of it relies having on ever rising stock market and housing prices. I have been around during the 90s and have seen the .COM bubble and the 2008 crash and have seen how things can turn bad quickly. I am not sure if a lot of FIRE people can ride out a longer downturn. Once you have to cut into your principal even a rising market won’t bail you out because you have nothing to invest.

Governments have done a lot to reinflate the last bubbles but I don’t see how they can manage the next downturn (which will come for sure. It’s not different this time). Deficits are already high. Interests are low. What else do they have?

I am generally a fan of the FIRE methodology, but recent inflation levels have scared me that, if they are not corrected, saving potentially looses too much value.

Any thoughts on this?

This shouldn't be a problem if you're invested. There's a reason the S&P went up almost 30% this year - a lot of it was an adjustment for the boost in money supply.

To me, even though the experts say otherwise, this feels very pre-2008. I know the experts are saying to have no fear... but that's what they were saying in pre-2008 too. I guess I'm too nervous to invest and that's on me.

The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008.

So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008.

Short term money market have been greatly improved and central banks have shown multiple times their readiness to intervene.

The part that is always glossed over in MMT is that taxation is thr regulatory factor. Except that in this low trust political climate it's absolutely impossible that anyone manages to raises taxes.

Thus, I think that inflation is the greatest of current risks. Especially unacounted inflation (housing, healthcare services...).

> The key difference is that central bankers were in a very different state of mind in 2008. MMT realy imposed itself post 2008.

> So while it's relevant to brace for a small crash due to interest rates adjustments if inflation continues, I wouldn't bet on a full scale snowballing cash grab, that killed relatively healthy institutions like in 2008.

This is a dangerous view because you're assuming the Fed won't be backed into a corner like Volcker. They may end up having to choose between the markets and the integrity of the dollar. When entertaining the counterfactual, it seems in hindsight like Volcker made the right call (and many economists endorse that notion), even though it manifested considerable short term pain.

I think the situation might be similar that's right. But Volcker increasing rates took a lot of time to curb inflation and didn't cause a crash like in 2008.

Market crashes are unpredictable, and anyone who says otherwise is not expert, but a charlatan. Having said that, if your investment horizon is sufficiently long (as in more than 10 years), we can be reasonable sure that you're likely to get a positive return on your investment, regardless of whether the market crashes or not.

Experts say to have no fear because as long as you do not sell your assets after they drop in value, the government will be there to pump up the values again.

The only broad market index fund owners that were hurt by 2008 were those that sold at low prices. The people that hung on a couple years were greatly rewarded.

And that's very relevant when you're talking about FIRE. You shouldn't have to liquidate any substantial part of your portfolio at one time. Once you're no longer on your own income, you should plan ahead with a 1-2 year runway (deciding the exact amount is an optimization problem that can be run against historical data) to hedge against having to sell off too much at a loss during a downturn.

This is only a problem if you receive a windfall. Otherwise you should simply be continuously investing some portion of your income at all times.

> There's a reason the S&P went up almost 30% this year - a lot of it was an adjustment for the boost in money supply.

This is commonly repeated and feels like it doesn’t hold up to scrutiny.

2021 was the third time in a decade with ~30% returns.

https://www.macrotrends.net/2324/sp-500-historical-chart-dat...

Maybe it’s partly true but there’s no way that’s the whole explanation and if anything it’s probably just a better explanation for why last year wasn’t flat or negative.

You seem to be implying that an increase in money supply has to be the only catalyst for outsized annual S&P returns, and I'm not following that logic.

I just said I don’t believe it’s the case.

Your exposure to inflation is limited to cash balances, and therefore shouldn't a big concern. A bigger problem is, in my opinion, the low interest rates, because that means you'll be forced to take on risk (e.g. invest in stocks, rather than treasuries) if you want to get any meaningful return on you investments.

Most of your retirement savings will be in equities and other assets that have inherent protection from inflation.

You will want a few years spending in cash or near-cash assets, there are inflation protected securities that you can use for that.

The historical models account for inflation -- including vastly higher rates than we are experiencing today.

you gotta buy stonks

For me FIRE is about how easily and effortlessly money can be extracted from the system.

Just look at webcam girls or if you want to avoid nudity chinese streamer girls. A girl can earn insane amount of money every day for 4 hours of just talking and smiling. It's absolutely ridiculous.

> You can retire in -14.1 years at age 40

I'm very interested, where can I sign up for -14.1 years?

I got a similar result! I put in my age (59) and my liquid savings amount and got the answer:

> You can retire in -13.4 years at age 45.

I'm not sure, given inflation and the taxes that I'm going to want to retire while I can still earn an income.

Unfortunately, these calculators usually only do work for US citizen. I‘m from Europe (or Germany rather) where there are a lot of different factors needed to take into account in order to get a realistic number (legal pension fund etc.)

You can use https://projectifi.io for that. I use it since I'm Ozzie and it's properly accounting for Australian Superannuation.

Who wants to “retire” and do nothing for the rest of your life?

Just save a ton, buy whatever stuff truly makes you happy, and your savings give you flexibility. Like taking a year off between jobs, etc.

> Who wants to “retire” and do nothing for the rest of your life?

This is an extremely reductive characterization of retirement. There's no rule you have to do nothing.

> buy whatever stuff truly makes you happy, and your savings give you flexibility. Like taking a year off between jobs, etc.

You could definitely do this in "retirement."

> Just save a ton, buy whatever stuff truly makes you happy, and your savings give you flexibility.

Retirement simply means that you could just live off of your savings interest. But that doesn't mean that you have to stop working.

For me, this is about three things: 1) Prioritizing joyful experiences, social connections, self-development and happiness over (expensive) material possessions 2) Being financially responsible, knowing how much I earn, owe, spend and save 3) Maximizing future life options involving less well-paying jobs (working part-time, retiring, taking some time off, starting a new career, whatever) when I get bored/burnt out of my current career or get health issues, need to look after a family member etc. So much can happen in a life.

Buying stuff is not a universal recipe for happiness.

Neither is retirement, obviously, but you are correct that being financially independent gives you the freedom do do what you want. Whether that is time off between jobs, working on independent projects, etc.

I do. A little. I want to retire at 60. My SO is younger than me by nearly a decade. If I retire at 60, I figure we can have a good 10-15 years of traveling and having fun.

It depends on your retirement goals. Some people prefer the "financial independence" aspect in order to have the freedom to do or work on things they're interested in and brings them happiness rather than for the sake of just money.

i wanna do stuff just not at my job

Shameless plug to my own version of this: http://mngo.org/fire

Shameless plug to my own version of this: http://mngo.org/fire