Can you still achieve FIRE if you start planning at 40?

One think I like to keep in mind with this sort of situation is that building retirement savings and an emergency fund can have immediate benefits of the added security blanket they provide, aside from the long-term goal of retirement.

Even if someone got a late start or has a high amount of debt and retirement isn't looking so possible, building a safety net and improving your financial situation is never a bad idea.

I just got laid off myself, and while I'm many years away from any kind of potential retirement, my savings over the last several years put my mind at ease because I know I can easily go a year if I have to without any additional employment, even though hopefully I'll have a new job much sooner than that.

FIRE is about reducing spending.

if you're breaking even on unemployment - say $500/wk post-tax (???), then you just have to be disciplined enough to not inflate your lifestyle wildly when you land FTE.

if you make $1000 post-tax a week with a job and no spending increases, you immediately have a savings rate of 50%, which translates into working about 17 years. so you'd retire at 57.

here's the calculator i use: https://networthify.com/calculator/earlyretirement?income=50...

10-15 years is doable with a savings rate of 67%. At that rate, you're accumulating 2 years' worth of spending for every year that passes by. In 12.5 years, you'll have accumulated 25 years' worth of expenses.

If you invest well over that time, you can either retire earlier or do it with a somewhat lower savings rate.

For the unitiated like me https://en.m.wikipedia.org/wiki/FIRE_movement

Is there really a significant difference between retiring at 55 vs. 65? Is this difference large enough to warrant shaping your entire life, job choice, spending habits, and place where you live around it?

Personally I would say that you should instead focus on 1) cutting down spending and 2) finding a part-time job that gives you free time to live your ideal life. Both of these are actionable items, doable within six months. An abstract FIRE plan of 10-15 years is not.

Many people interested in FIRE would be better off analyzing why they want to retire and what they could do then, that they can’t do now. Much of the time, ‘retirement’ is just sort of a magic undefined goal that goes unexamined.

I always wonder how americans can achieve FIRE with the healthcare system.

It seems doable until something goes wrong and you get a huge bill?

An alternative to FIRE is to find a way to live off say 20h or less of work. The trick would be to find a way to get paid a good rate still for those 20. With 3 short days and a 4 day weekend, assuming you are doing a job you live I don’t see that as much different to being retired. And with digital nomadding (pandemic excepted) you could even travel. I’m not convinced that having nothing to do is great and I’m convinced you can find something you love that you can be paid for, albeit maybe less than if you are prepared to do a job you hate.

I've always thought that FIRE was comprised of two separate things that weren't necessarily related, but one required the other before it could be achieved.

0. fix your personal finance situation

1. attain financial independence

2. retire early (if at all)

0 is a pre-condition that most people in the world are stuck at. Some manage to get to step 1. Step 2 is optional because it has a hard time limit and has a fuzzy definition.

Does retiring at 64 count as early?

Does working a part time job count as retirement?

So based on the above stipulations, I think FI is possible but RE depends on your POV.

Per https://www.marketwatch.com/story/this-is-exactly-how-much-i..., retirees have a lifestyle of roughly $60k or so per year. At a more modest $50k, and assuming a portfolio of working assets from which to draw this $50k, that would be something like a portfolio of about $830k at 6%. Assuming a 6% yearly net gain on investments, then if you can somehow sock away about $33k per year, you might achieve FIRE status in 15 years.

So there you have it: The event horizon is based on how realistically you can soldier on and invest 66% of your target retirement income each year for 15 years. Not sure how realistic that is for most people, let alone this hypothetical 40-something in the doldrums.

I'm using 6% for sake of argument for no good reason, but it's the usual rate used in converting a pension into a lump-sum. It is possible to do much better - stock market has been about 8% to 11% on average. So maybe 6% works as a fudge-factor in this sort of planning versus life's many ups and downs.

Anyway, if one had 30 years towards this "$50k FIRE", then the yearly "at 6%" investing is $10k; at 20 years, $21k; 10 years, $56k.

First define what is retirement to YOU. If you can live with 1000 USD per month vs say 10,000 per month, we are talking different strategies. In general though, why not.

Pragmatically, you'll be in a better shape, and have a better chance of succeeding, if you start the journey than if you don't.

it's possible to retire at any age

keep your costs fixed and live within your means

theoretically if I saved the entire year worth of salary of a SWE, could live off of that for 3 years (3 years of 50k salary)

it really is easy if you come from a struggle background - everything I get from this point on is simply a +

One of the best things I can recommend is getting control of finances, instead of letting others and money control you, using Dave Ramsey's 7 baby steps: https://www.daveramsey.com/dave-ramsey-7-baby-steps

I can attest it makes life better!

(...with or without purchasing one of his books/dvds/etc; no affiliation but customer; we bought some of his materials for our children. Some of them told us they prefer a free BYU personal finance course, but I dont have that link as handy at the moment).

There’s no “one size fits all” answer to the question. Some people certainly have started from zero at age 40 and have happily retired before the legal retirement age. Whether or not it’s possible for you depends. Life situations vary enormously.

Two suggestions:

Read Rolf Dobelli’s “The art of the good life” to get a realistic idea of how the world works, and how both character and the fates have a role in how your life plays out.

Set up a spreadsheet to model earnings and expenses from age 40 to age 90 and see what the model tells you. Play with the numbers to develop a strategy that works for you and your situation.

Read this blog, it is pondering this topic quite thoroghly: http://earlyretirementextreme.com/

Do you own your house? Depending on what you think you need verses what you want. If you are willing to live in a country where the typical standard of living is lower than what you are use to. You will probably not speak the language.

Are you willing to live in a mobile home? If you are flexible and self reliant then definitely yes. If you need luxury, meals delivered, swimming pool, etc then probably not, well not in 10 to 15 years, maybe 25 to 30. But it depends how much you make.

Read the book "Millionaire Fastlane" by M.J. DeMarco. You need to create massive value that is automatable and scalable to make millions in < 10 years.