By Benjamin Brandt
Unless you've been living under a rock, you've probably heard all about the FIRE (Financial Independence, Retire Early) movement by now. Major publications ranging from the Wall Street Journal to The New York Times have written about its tenets and biggest stars, mostly due to the eye-catching headlines FIRE stories bring about. Headlines like:
"How This Couple Blew Off their 20s and Reached FIRE in their 40s"
"This Millennial Retired at 30 with the FIRE Movement"
Everyone loves stories about people who can challenge the status quo, and anything about a 30-something leaving their job should be click-worthy, right?
Despite thoughts I've shared on the topic so far, I'm not a total FIRE hater. The underpinnings of the FIRE movement are solid and worth pursuing. After all, the main functions of FIRE include cutting wasteful spending, saving a large percentage of one's income, and investing large sums of money in order to retire -- all goals I can get behind.
Unfortunately, there are some major problems with FIRE, in my opinion, including the fact that many of the followers of this movement are focusing too much energy on the "retire early" part of the FIRE movement.
The FIRE Movement Completely Misses the Point
Most of FIRE's biggest proponents are 20-somethings and 30-somethings who live like paupers to save money so they can quit their jobs the second they hit their retirement savings goals. At that point, FIRE enthusiasts plan on walking away from full-time work, telling their bosses to kick rocks, and pursuing a life filled with free time and all sorts of leisure activity.
In my opinion, this is the wrong goal entirely -- and for more reasons than one. For starters, most of the happiest and most fulfilled retirees I know are people who worked in meaningful roles their entire lives with the goal of giving back. These are people who cared about their jobs and worked diligently to leave their field of work better than when they found it.
Many of my clients even go back to work after retirement in a part-time role or as a consultant in order to continue giving back to a field of work or a cause they love. And they do it because they want to and because it brings personal fulfillment, not because they need money.
These retirees believe, as I do, that running out of money in retirement is not the worst outcome. The worst outcome would be reaching the end of your life and feeling regret but being too old to do anything about it.
FIRE seekers almost always take an opposite approach. They spend their 20s and 30s in jobs they apparently hate in order to save up the money required to walk away for good. This is a shame since they could easily use that passion and energy to find work they love, instead.
As someone who has worked with all kinds of investors saving for retirement over the years, I'm not even convinced people in their 30s or their 40s know what they want out of life.
Further, if you feel like you're just done working and giving back to society before age 40, there's a good chance you didn't aim high enough in your career to begin with.
FIRE May Not Even Be Possible in Your 20s, 30s or 40s
But that's not the only reason I hate the FIRE movement. In a lot of ways, I'm waiting for the other shoe to drop.
The FIRE movement has mostly taken shape over the past 10 years -- a length of time when we've experienced considerable economic prosperity. In 2019 alone, the S&P 500 is on an uptick, and plenty of other years have seen considerable returns over the past 10 years. In 2013, for example, the S&P 600 saw an amazing 29.60% gain. The Dow Jones industrial average saw a 26.50% return that same year.
"Children of summer" who have only been saving for early retirement for the past 10 years -- or even the past five years -- have never felt the sinking feeling most of us experienced from October 2007 to March 2009, when the Dow lost 50% of its value.
Since most FIRE enthusiasts are saving just enough to be able to "retire" with a 4% withdrawal rate each year, it's easy to imagine how any major loss in their portfolios will cause their early retirement plan to collapse.
Many FIRE enthusiasts in the online space seem to know this already, so they supplement their early retirement with blogging, podcasting, or a side hustle of some kind. But they're not really retired at that point. They're simply pursuing their passion and doing meaningful work, which they should have been pursuing all along.
The Bottom Line
Whether the economy is awesome or terrible one year from now, I'm certain about one thing: The FIRE movement is bound to leave its biggest fans mostly unfulfilled.
While well-intentioned, the FIRE movement causes people to miss the forest for the trees, to miss out on a lifetime of meaningful work in order to hurry through life and quit work so they can live life on a shoestring budget now and later on.
If you're considering pursuing FIRE, here's my advice: Don't rush to retirement just for the sake of pursuing leisure activities. Work until you're finished, even if you never stop. When you feel like you've completed what you set out to accomplish, then it's time to retire.
Figure out who you want to be and set out to become the best version of yourself you can imagine. Then take all the energy and passion you might dedicate to the FIRE movement and use it to create a life you don't feel the need to retire from.
About the author: Benjamin Brandt is a certified financial planner and Iraq War veteran. He is best known for his popular retirement podcast, Retirement Starts Today Radio. Benjamin has been recognized by Investment News as a Top 40 Under 40 adviser and one of the top 100 financial advisers of 2019 by Investopedia. When he isn't teaching people how to retire, he and his wife, Kristen, are likely at the hockey rink with their six children.