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Most investors aren’t on ‘FIRE’ about this early retirement movement

libadmin April 15, 2019
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“Just 1 percent of U.S. investors who are in the workforce — defined as nonretired adults with at least $10,000 already saved in stocks, bonds or mutual funds — say they are saving 50 percent of their take-home pay in order to retire early,” Lydia Saad, senior editor at Gallup, wrote of the findings. (iStock/iStock)
April 15 at 7:47 AM

I’m definitely a fan of FIRE, the crusade of supersavers who are living on less and investing aggressively so they can retire early.

FIRE stands for Financial Independence/Retire Early. Its followers promote what for many is an extremely frugal lifestyle. Their budgets aren’t dragged down by debt. They don’t buy into the cult of consumerism. Instead, they push their savings goal to as much as 50 percent or more of their net income. Then they take their savings and invest so they can retire early, in some cases before they hit 40.

FIRE devotees have become media darlings. Here’s a selection of headlines about them:

— “This couple who retired in their 30s with over $1 million are living their best lives”

— “What would it really take to retire in your 30s or 40s?”

— “How these millennials are planning (and living) their early retirement”

— “These ‘super savers’ are retiring earlier than most. Here’s what they’re doing differently”

Based on the attention the FIRE movement has received, it may seem like everyone is doing it — or at least trying.

But despite numerous stories about early retirees, the hype is greater than the reality, according to a Wells Fargo/Gallup Investor and Retirement Optimism survey. Turns out, few people are on fire for FIRE.

“Just 1 percent of U.S. investors who are in the workforce — defined as nonretired adults with at least $10,000 already saved in stocks, bonds or mutual funds — say they are saving 50 percent of their take-home pay in order to retire early,” Lydia Saad, senior editor at Gallup, wrote of the findings. “That translates to about one-half of one percent of all nonretirees.”

Fifty-four percent of investors surveyed said it would be impossible for them to reach the supersaver stratosphere of FIRE disciples.

Here’s what people were asked: How realistic would it be for you to save 50 percent of your take-home pay to retire early?

Only 1 percent of respondents said they could do it, and 3 percent reported it wouldn’t be too difficult to save that much money.

“Aside from the difficulties inherent in saving a large proportion of one’s earnings, one reason so few investors are already pursuing FIRE may be a lack of familiarity with the techniques,” Saad wrote. “More than half of nonretired investors, 55 percent, say they have heard nothing about various approaches for ‘super-saving’ to achieve financial independence and early retirement.”

Poll Question: How much have you heard about various approaches for “super-saving” to achieve financial independence and early retirement?

A Lot A Moderate Amount A Little Nothing
4% 16% 25% 55%

Source: Wells Fargo/Gallup Investor and Retirement Optimism Index, conducted November 2018

What’s encouraging about the poll is that most people wanted to learn more and thought they could benefit from the strategies supersavers employ to achieve financial independence, regardless of whether they had heard of FIRE or believed it was personally feasible.

FIRE certainly sets a high bar, but simply aiming for early retirement will put you in a better position once you leave the workforce.

Here are four tactics to help you achieve supersaver status:

— Don’t stay in debt: Ready to pay off your credit cards? Try the ‘Debt Dash’ method.

— Make saving a priority: Does America have a savings crisis?

— Stop the race for more: How much money do you really need to feel rich?

— Let your money work for you by investing: Who wants to be a 401(k) millionaire?

Read more:

The top regrets of retirees

Can you save half your income so you can retire early? FIRE advocates say it’s possible.

3 myths about this early retirement movement

Retirement Rants and Raves

I’m interested in your experiences or concerns about retirement or aging. What do you like about retirement? What came as a surprise?

If you haven’t retired yet, what concerns you financially?

You can rant or rave. This space is yours. It’s a chance for you to express what’s on your mind. Send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put “Retirement Rants and Raves.”

David Boman of Mt. Pleasant, Wis., shared what it was like leaving his job.

“The most difficult thing about moving into retirement was that I had been a leader of approximately 75 people in a health care organization in which I had 24/7 responsibility until the day I left and then I had no responsibility,” he wrote. “The emotional withdrawal from the people who were, unfortunately, most of my social life was very difficult to manage. I also went from being important to the organization to not being important and almost feeling as if I needed to avoid the door hitting me in the backside on my last day of employment. This seriously affected my sense of self-worth. Initially I tried to put structure back into my day until I realized that doing so was really just re-creating what a workday looked like. It took over a year for me to fully come to the realization that my retirement was a gift to me after the stresses of 30 years of leadership. I have learned to let each day unfold as it wishes and to enjoy each minute of it.”

S. Clark of Bowie, Md., wants to hear more about the joys of retirement.

“I am so sick of the negative articles in general that primarily focus on the downside of getting older,” Clark wrote. “Problems with retirement, long-term disability issues, prescription problems, money not enough. . . . It’s like getting older is nothing but an uphill battle with no joy. There is a lot of good news in retirement — people are living longer and living healthier than in years past. Many live very vibrant lives up to the end. I am standing right at the threshold of ‘seniorville’ and I am not going to let these negative articles take me down and ruin the great adventure of getting older.”

Your Thoughts

How did you feel after retiring? Was there a difficult adjustment period? Send your comments to colorofmoney@washpost.com. In the subject line put “Retired.”

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