AFCU Blog

man reading his computer screen

Is FIRE A Viable Goal For Everyone?

With all the trending talk about FIRE (Financially Independent, Retire Early), you may be thinking about this concept and wondering if it’s a viable goal for you. While many people retire early with contentment and happiness, an early exit from the workplace is not for everyone.

Here are some reasons why:

 

  1. Boredom breeds discontent

    Many gainfully employed people enjoy their jobs and experience a lot of satisfaction in their roles at work. If these employees left the structure of a workplace, they might find themselves battling boredom and, ultimately, depression. This can then trigger a physical decline well before old age sets in.

  2. You’ll miss your years of peak earning potential

    If you opt out of the workforce in your early 30s, you stand to miss out on reaching your peak earning potential, which tends to hit between ages 30 and 40. If you’re thinking of going less extreme and retiring sometime in your 40s or early 50s, bear in mind that each year you leave the workplace means a greater loss, since you’ll likely have reached your highest income level by then.

     

  3. You likely don’t have enough money to retire early

    A survey by GOBankingRates found that 42 percent of Americans have less than $10,000 saved for retirement. Even if you happen to have a handsome retirement fund set aside, it may not be enough to keep you going for half a century or more.

    Keep these factors in mind when you crunch the numbers:

    • You won’t be eligible for Medicare until you turn 65. Leaving your job can mean losing out on your health coverage. If you need to fund a large medical expense before you find adequate coverage, you may be forced to drain your retirement savings to cover it.
    • You may have to pay an early withdrawal fee on retirement funds. If you withdraw funds from your401 (k) or IRA before age 59 1/2, you’ll be hit with a 10% penalty.

       

  4. You won’t be contributing as much to society

    Once you bow out of the workforce and spend your days chasing thrills or the ultimate in relaxation, you’re no longer impacting the world in the same way. Like boredom, living selfishly can lead to unhappiness.

Related Posts

You are now leaving Acclaim Federal Credit Union

Acclaim Federal Credit Union provides links to web sites of other organizations in order to provide visitors with certain information. A link does not constitute an endorsement of content, viewpoint, policies, products or services of that web site. Once you link to another web site not maintained by Acclaim Federal Credit Union, you are subject to the terms and conditions of that web site, including but not limited to its privacy policy.

You will be redirected to

Click the link above to continue or CANCEL