It’s difficult to parse out the early retirement facts from the fiction or myths. After all, these days, it’s hard to even define what early retirement really means.
There’s a big movement to retire early. FIRE (Financial Independence, Retire Early) has caught on. As it has, though, the writing around it has perpetuated certain myths. Let’s take a look at those myths and parse out fact from fiction.
The Popularity of FIRE
Before we dig into the early retirement facts vs. myths, let’s discuss the FIRE movement for a moment. ValuePenguin recently published an article about a TD Ameritrade survey on FIRE. In that article, the author notes that Google search results for the acronym have increased by 94% over the past five years. In other words, it’s a popular term.
However, the article also points out that generally speaking, people who are interested in FIRE are more focused on the “financial independence” part than the “retire early” part. This is important because it speaks directly to the myths surrounding this topic.
The myth is that people want to retire early so that they can lounge around all day. In other words, people presume that FIRE folks are lazy. The facts show the exact opposite.
7 Myths About FIRE
MarketWatch recently published an opinion piece in which writer Tanja Hester identifies seven common myths that people perpetuate when they don’t understand what early retirement is really all about. Those seven myths are:
- Early retirement requires extreme frugality.
- People who want to retire early don’t understand long-term risks.
- You have to take your Social Security early if you want to retire early.
- People who retire early don’t plan for long-term health care.
- Those who retire early will get bored quickly.
- Retiring early means you will lose your identity and therefore your purpose.
- You have to work into your older years if you truly want financial security.
In other words, many people believe that those who wish to retire early are thinking only about their immediate future. They don’t realize that they’d be better off just working at the same job for forty years. However, these are all myths.
Early Retirement Facts
Research (along with a deep dive into FIRE writings) will reveal that the seven myths above may be common beliefs but they aren’t accurate. First of all, in order to set yourself up to retire early, you really have to work hard.
Moreover, you have to be willing to plan for the future in a way that’s dramatically different from relying on “the system” to provide for you. In fact, myth #7 is the most important one above because it shows where the myth-mongers are coming from. It’s a fear-based position. Some people want to believe that if they play the game the way that they were taught then they will reap the rewards. As a result, they look at people who are changing the rules with a bit of trepidation.
Of course, there’s neither a right way nor a wrong way to proceed towards retirement. Some people will have the best life if they proceed with a regular 9-5 job from which they retire at 65. Other people want to take the early retirement route. Neither group understands each other very well, which creates a disconnect and a whole lot of judgment.
Instead of judging others, it’s important to look at early retirement facts. Don’t buy into the myths. Whether or not the FIRE route is right for you, understanding the motivations behind choosing it (or not) can help you move forward towards your own retirement in the best way possible.
- What Does Early Retirement Really Mean?
- FIRE for Noobs Series
- Here Are the Best Early Retirement Blogs