1. Here's two tips: The 4% withdrawal rate was based on a 30 year time horizon — take that into consideration when thinking how long your portfolio must provide for you. Also, health care is expensive and insurance is age based. The cost grows faster than inflation. And, if you need health care overseas, be prepared to pay cash up front before you get any help. Many countries are not like the United States in regard to treating everyone who comes into an emergency room.
— Shea Newton, CFP, Financial Journey LLC, Leesburg, Virginia
2. When discussing it with clients or prospects, I ask: What is appealing about FIRE? How do you feel about your current job and industry? What does retirement look like to you? What sacrifices are you willing to make today?
It's important to understand whether the client is interested in FIRE because of a disdain for their current situation or a calculated goal based on their vision for the future. If the decision is made to move forward, it's critical to understand the savings required. If someone retires at 45 years old, they could need retirement income for over 55 years.
— James Vermillion, Vermillion Private Wealth, Lexington, Kentucky
3. Find purpose and connection. Prepare diligently for life after FIRE because it's common to get depressed after achieving it. If you plan on relaxing, golfing and drinking mai tais on the beach, you'll get bored fast. And your friends probably will still be working 40 hours a week. We all need purpose and connection to others so, for those who have reached FIRE, I recommend starting a business or nonprofit and making sure you have lots of interesting hobbies to pursue.
People who hit FIRE early are always goal driven, highly motivated people, and typically end up doing something that makes more income (even if it's working part time just to get some human connection). Even a very small amount of income can go a very long way when you've based your FIRE math on earning no income after retirement.
— Ryan Cole, CFP, Citrine Capital, San Francisco, California
4. I normally tell clients that they need to be prepared to significantly change their relationship with money and their outlook on what retirement might look like. Meaning, they need to look at money as a tool to make early retirement happen rather than something that can buy them certain luxuries and material things. This mind shift can help remove the emotional component from one’s relationship with money. It’s often counter to how they grew up and what they were taught.
Also, they should be open to the possibility of taking on some work as someone who retires early will likely spend more time in retirement than they did in their working years. Having a side gig or recurring income source can go a long way in helping them retire early but not run out of money in the long run.
— Jamie Lima, CFP, Woodson Wealth Management, Ramona, California
5. I’ve found that “retirement” in its conventional role is not generally the goal. Instead, most people are seeking work optionality for the purpose of time freedom. With this time freedom, most desire the ability to pursue passion projects, focus on health and wellness, and spend more time with those they love. In saying that, it is paramount that, if you choose to pursue FIRE, ensure you aren’t running from a job or responsibility, but striding toward the ability to live an even more meaningful and intentional life.
— Jim Crider, CFP, Intentional Living FP, New Braunfels, Texas
6. FIRE, like any philosophy, can be taken too far. For many, such a lifestyle decision can require more sacrifice than it’s worth. I tell my clients it’s all about finding a healthy balance that works for the individual. This balance comes down to exploring the trade-offs involved between saving more and working longer. Simply, save more = retire early; save less = retire later.
Also, there is a BIG difference between “not needing to work,” and “not working.” Even individuals who retire at a conventional age realize that retirement does not necessarily imply that they stop working completely. Rather financial independence creates opportunities that might allow you to explore life goals that are not solely tied to producing an income. And often these alternative goals can be even more fulfilling than a traditional career.
— Trishul Patel, Investing Forever Advisory, Hummelstown, Pennsylvania
7. Live like a monk. Consider a tiny home or owning a rental property. And don't have children.
— Steven J. Stanganelli, CFP, Clear View Wealth Advisors, Amesbury, Massachusetts
8. I believe that FIRE is a great concept and can teach individuals how to be good stewards of money in many ways. First of all, it teaches living within your means and not spending more than you make. Second, it promotes intentionality and putting finances towards ambitions that are most important, instead of not controlling where your finances go. Third, it requires thoughtful planning. Through budgeting, investing, and lifestyle management, there are many areas that have to work in concert to make FIRE a possibility.
Most of the people I see who make FIRE work practice these principles and have discipline to maintain it. It is not a lifestyle for everyone and can have pitfalls, however it can create a lifestyle based around independence and freedom, not just money.
— Tim Bauer, CFP, Evergreen Financial Group, Billings, Montana
9. I would advise those interested in the FIRE movement that rather than banking all the money they can working a job they hate to retire early, consider finding a job you love that adds value to your life. Traditional retirement is long enough, often eclipsing 30 plus years. When you extend retirement to 50 years or longer, you are counting on more things going right than you may be able to control. Find a job you love, and love your work and your life.
— David W. Mullins, CFP, David Mullins Wealth Management, Richlands, Virginia
10. It is possible, and it's a worthy goal — especially the “FI” part. The “RE” part is optional and need not be included in initial planning. FIRE, whichever part is pursued, is as much a mental/emotional and lifestyle decision as it is a financial scenario. It requires discipline over many years, so it needs a strong “why.”
There are many ways to get to FIRE but all require active planning and monitoring — rarely does this happen by accident! Need to have a plan, or a general idea, of what happens if you get to your FIRE goal (be careful what you wish for, as you just might get it!).
— Marco Rimassa, CFP, CFE Financial, Katy, Texas
11. The first thing I ask people is define what “retire” means to them. It’s not the same definition used by our parents and grandparents, so figure out what that looks like. And don’t look at it like it’s a finish line, rather a point in which you shift gears to do something different. Make sure you include things that will give you a sense of fulfillment, accomplishment, and enrichment. For example, while it’s doubtful you will want to sit in a hammock all day by yourself, you’ll want to include activities that give you purpose. Include goal-oriented tasks, since one thing I hear often is people lose their sense of self-worth.
— Brandon R. Opre, CFP, TrustTree Financial, Huntersville, North Carolina
12. I define financial independence as the ability to maintain your desired lifestyle without the need for earned income. I caution clients who are expressing interest in early retirement to define what they are retiring to, not just what they are retiring from.
There are common misconceptions about the FIRE movement, and the philosophy is simply focused on having options in life that aren't contingent on financial consequences. Financial independence is less about not working, but more about having the ability to work because you want to — not because you have to.
— Cody Garrett, CFP, Measure Twice Financial, Pearland, Texas
13. When a client asks me about the FIRE movement, I ask them “What about the movement is appealing to you?” Most of the time when they bring up the topic, it’s more out of curiosity rather than a true desire to retire early. This is a great opportunity to dive deeper with a client on what their feelings are towards money and their job. It might be a sign that they are burnt out from their work, or they feel that their current financial situation isn’t adequate. Whatever the reason might be, it’s a great jumping board to more meaningful discussions.
— Jessica Goedtel, CFP, Pavilion Financial Planning, Allentown, Pennsylvania
14. I am always very happy to find clients interested in the FIRE movement, because if they get started with it, it stresses tracking expenses and saving and investing money. It's a great way to become more savvy about one's finances.
The caution I have is that many of them are using the 4% rule to consider how much they can tap of their investments to sustain them once they retire. And Bill Bengen points out that the rule is meant for someone older, not younger (30 - 65) investors.
— Delia Fernandez, CFP, Fernandez Financial Advisory, Los Alamitos, California
15. People trying to achieve FIRE often take a “spend as little as possible and invest as much as possible” approach to finances. Therefore, their financial plans are reliant on low expenses and high investment returns. If something happens to either increase expenses (perhaps having a child?) or lower investment returns (perhaps the Federal Reserve keeping interest rates low), FIRE may be unattainable.
What FPs can do is make sure plans are updated regularly to account for life changes and create financial forecasts which are based on future expectations. A mistake is using only historical returns for a client’s financial plan. For instance, government bonds are not going to yield 5.6% annually with their current sub-2% interest rates.
— Chris Diodato, CFP, WELLth Financial Planning, Palm Beach Gardens, Florida
16. FIRE is financial planning for our generation, and not different at all from traditional retirement age financial planning. I always stress the “financial independence” aspects of FIRE over “retire early” because clients seem to be more interested in a work life balance than fully retiring, and because financial independence is the goal of any retirement plan, whether you are retiring at age 65 or 25.
— Jake Morris, CFP, Fun Financial, Rhinebeck, New York
17. I would run several “what-if scenarios” looking at more of the worst-case unexpected type scenarios so you understand what impact taxes, inflation and catastrophic type of events can have on your long-term plans. When you have less buffers built in, the more impactful these situations will have on derailing your extended long term retirement plan. I would create an A,B and C plan along with putting guidelines in place to have the flexibility and agility to change your financial plan. When you retire early you can lose the ability to save, and you start drawing down which reduces that money’s ability to compound. Stress around finances can quickly steal what independence provides, which is a fulfilled happy retirement.
— Ashley Folkes, CFP, Bridgeworth Wealth Management, Birmingham, Alabama