FIRE: surprises and tipsInterested in pro tips from those who have retired early. Curious what you thought you had planned out from a financial perspective about early retirement that you later realized you didn't.
For example, healthcare turned out to be much more expensive/inexpensive than you thought. A few months in you ended up having a stream of income or extra expense you never expected. Making a little extra money on the side from a hobby/interesting side hustle turned out to be a lot easier than you thought it would after having worked a stable job for the last X number of years. Thanks for sharing!
Early retired at 58 due to health issues, but had a substantial portfolio, though it took years to get it into place.
1
ACA was anything but, "affordable". The gap between 58 and 65 (Medicare) hit us hard (not others) with devastating health insurance and health care costs, including high deductibles and poor coverage (in our area not others). With the cost of out of pocket medical procedures and care, high insurance premiums and supplementals, we spent 100's of thousands. There was also the "ACA penalty/subsidy cliff" which, though laws have changed since, also took a toll on financials.
For us, "and only us", this was a huge "money pit" and as unrecoverable as SORR in early or pre retirement in a crashed economy.
**Never underestimate the potential high costs of medical insurance and medical expenses from unforseen (unpredictable) health issues and trauma.
2
As we were not "W2 Employees", we had no pension, and no company medical coverage, only our portfolio and years away from SS. Relocating from an UHCOL area to a M/Lcol area made a substantial difference.
**The value of a "cola'd pension" that covers one's retirement expenses is priceless. Many who are eager to FIRE and collect early SS at 62, and have smaller pensions as well because of early retirement, often pay a heavy toll in later years when inflation shrinks what they thought was "enough" when they "ran the numbers" for early retirement.
** Working additional years to maximize pensions and a portfolio can make a huge difference in later retirement years.
3
The financial industry is highly predatory, and those on the cusp of retirement or considering early retirement (FI), are vulnerable to FA's who "run the numbers" and say one can FIRE and get your continued business/commisions (AUM fees, etc), so caution. There's an eagerness to "do something" (aka: do something-itis when the possibility of FIRE looms. Like the smell of "freedom" from employment.
**So patience when considering FIRE. And, caution. (shields up, phasers on stun, slow down to warp speed).
4
If one has a substantial portfolio or substantial wealth when FIRE or retiring, there's a change in the ocean water and all types of financial "sharks" start circling the area. All are friendly. Suits. Free lunches in glass towers. You become an instant celebrity.
So....caution.
j
Statistics: Posted by Sandtrap — Sat Aug 17, 2024 1:26 pm — Replies 17 — Views 1073