What FIRE proponents should note

By Larissa Fernand |  09-03-23 | 

I am not sure early retirement is all that it is cracked up to be.

Before FIRE adherents pounce on me, I hasten to clarify. Proponents of FIRE (Financial Independence Retire Early) focus on spending mindfully on what they find important, saving early and frequently, and aim to retire in their 40s.

There are the financial implications of retiring early. What I am more sceptical about is if sufficient thought is given to how they judiciously plan to allocate their time and energy. Doing nothing is not what early retirement is about. So what then?

I reached out to an individual in his late 30s, who has embraced the FIRE journey with ruthless honestly. I put his thoughts under 5 questions to bring forth the clarity required in making this journey.

1. How much?

I began by focusing on the financial aspect of the plan. I used the thumb rule of accumulating 30x my annual expenses in savings.

While the monetary aspect is something everyone in my shoes must be concerned about, due importance must also be given to the softer aspects of early retirement. Start with the financials but don’t stop there.

2. What's next?

I have never been a purpose-driven individual. I have no judgement against those who are. If anything, I do admire their drive and quest. But it is not who I am. I don’t spend time pondering on life’s relevance or significance. My philosophy is simple: Do things because you like doing so, or because they are on the path of least resistance.

If I begin to enjoy gardening, I will pursue that. Similarly with travelling. And that is all there is to it. That is not my purpose. It is just something I take pleasure in.

So the question of looking for purpose post retirement never did arise. Until I began to realise that purpose is not a single articulated “thing”.  Most of us have multiple sources of meaning that help us find value in our work and lives. But we all will have to answer the question as to how we plan to fill the hours in a day.

You have to give thought as to how you will adjust to a lifestyle which will be radically different from the life you have had for the past 15-20 years. A lot of our lives are lived in auto-pilot mode. It would require a mental and emotional shift. This is why you must realise that retirement is not just about having the right amount of money.

Are there any hobbies and interests which you used to pursue but gave up? If you loved hiking, when did you last go on one? If you liked playing the guitar, do you even do so on weekends? Have you considered the possibility that they may no longer interest you?

Alternatively, are there any interests you plan to take up, such as learning a new language?

If your work defines you, you really need to be honest here. You don’t want to retire and then have an identity crisis.

3. Which path?

I opted for the ‘glide to retirement’ path, instead of the ‘plunge into retirement’ one.

One does not decide to migrate without careful planning. Same with starting a small business or planning to take a career break and go abroad for studies. Similarly, one cannot just dive into a different lifestyle without thought and planning.

Towards, this end, I decided to compromise on the money I make and have taken some time off from work. In June 2022, I reduced my working hours. This might seem counterintuitive but what it is does give me is a lot of mind space and extra time that will help me envisage what the future might look like.

It will also tell me how comfortable I would be with a transition to a retired lifestyle around five years down the road. I have been working continuously for the last 16 years interspersed with vacations. The longest being a 3-week holiday in Europe. But vacations are NOT retirement. And retirement is NOT a long vacation.

Hence, I took off from work to face reality.

I do understand that I come from a place of privilege. There are very few people in India who have the option of retiring early from a purely financial perspective. However, it would not be wrong to say that a lot of them would not be well prepared to handle the softer side of retirement. Being in a job brings a certain form of discipline to your life. A daily routine, which though may be hard and taxing at times, is difficult to get away from.

So, before you hang your boots in the hopes of an early retirement, have tough and realistic conversations with yourself. Remember, there is no right or wrong answer because it is an extremely personal situation. And consider doing a dummy run. Consider a sabbatical. If not, what about a pay cut to reduce your working hours? The extra time can be used as a pilot project to figure out what retirement will look like.

4. Family perspective?

You are not in this alone. Open up to your spouse and children and parents. Get their views and perspectives. You need to know if they are on board and how exactly they feel about this. It will also help to set expectations right.

5. Past pointers?

You cannot see into the future, but the past does provide pointers. How do you really feel about working? How do you feel on Monday mornings? Did you miss the adrenalin rush when you were on holiday? Could you completely cut off from work?

This is important.

Retirement is a personalised journey and everyone’s notions differ. And that is perfectly alright. But it does mean that you must be honest with and true to yourself. After all, retirement is not just a financial decision; it's much more than that.

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