No. of Recommendations: 11
OK I admit it, I was wrong.

In the past, I didn't see anything wrong with calling yourself "retired" if you still needed to work in order to meet your expenses. I saw no need to be a purist: ie if you work then you can't call yourself retired. But after reading over the Hocus plan again, I began to recognize that the problem doesn't lie with mere word definitions. The problem lies with not recognizing the potential risks that one runs with this type of plan.

One problem with this type of plan is that I think we tend to overestimate the amount of money that we can make, our post-FIRE motivation to work, and the availability of desirable part jobs. Some professional folks are lucky in that they work for themselves and can easily downscale. The rest of us are not so lucky.

If you were FI when you retired, this is no big deal. However it is different for those who have to work. Out of desperation, you might be forced to take a really undesirable part-time job. Your pre-FIRE job may start to look pretty good after you have done a turn as a Wal-mart Greeter :-)

Another problem is that going into retirement already needing to work limits your options should your plan begin to to fail. The truly FIREd can keep going back to work as a ultimate plan "B"--but if you are already working... It's similiar to comparing a two-income family to one with a stay-at-home spouse: The one income family has the option where the stay-at-home spouse can start working, thus increasing their income.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement