11 Invisible Barriers to Early Retirement

By November 9 9 0

Early Retirement and F.I.R.E

F.I.R.E is a common phrase on social media these days. If you are not familiar with it, it stands for “financial independence, retire early”. In this exposition, we’ll look at the more innocuous barriers of retirement and early retirement specifically. Some of them may shift your perspective.

1. It’s going to Take Millions

Retirement is going to take millions of dollars. People might disagree with this but if you spend some time on a retirement calculator you’ll see if you get to the conventional age of 65 without millions you will run out of money. This is not as black and white as it seems because you never know when you will die and some people count on social security. The compelling factor here is your ability to work at 65 will be greatly diminished and you don’t want to be coming up short at that point in your life. If early retirement is your goal you will need even more millions.

2. Your 401k is not Enough

Your Retirement is a 401k away

Section 401k of the US tax code has only been around for about 40 years. We are only now seeing people try to rely on it and the truth is it’s not working. What we are really seeing is people’s 401ks being eaten up by hidden fees that they never gave a second thought to. If you really want to retire before 65 you’ll have to save and invest outside of the 401k. Creating a separate ROTH IRA is a good start.

3. You Can’t just Set it and Forget it.

Retirement is a broad idea. Typically people just associate it with a plan for them to stop working. They make a plan and then work that plan. However, that’s not enough. There are too many unexpected scenarios in life to forget your plan. Your plan needs to be dynamic and agile. Retirement is often totally derailed by financially helping adult children, divorce, and other unexpected problems.

It’s important that you have a cohesive plan and know where you will want to retire, know what you will do for healthcare, and be sure that you won’t run out of money. You might plan on moving to Costa Rica for early retirement. That could work but dramatic changes like that are easier said than done.

4. Investing is not Enough Either


The thing that people always ignore is that investing is only something that you can do when you actually have money. Saying that you will make money by investing is circular reasoning. You’ll need money to start.

Investing is undeniably a must for early retirement, but what people forget is you need to have money to invest. This is why it’s important that keep grabbing for more money in your career. Negotiate your Xmas bonus, ask for a raise, or give yourself a raise by taking another job.

5. The Early Retirement Novelty Wares off

Early retirement is a fantastic goal for your freedom. There is a trend you can’t ignore though. When people stop doing what they normally do they get bored rather quickly. You shouldn’t plan to retire and watch Netflix all day. This will get old and you’ll probably want something else to do.

While it’s true that being retired you can literally do whatever else you want but you might find that is a tough transition to make. You don’t want to retire too early and having a lingering threat of running out of money.

6. Social Security is Nebulous at this Point

Social Security

If you make some calculations on a retirement calculator you can see where an individual might have $2 million at 60 and because he can only spend about 4% a year for principal maintenance, his money will run out around 80. In that same scenario, if he has social security he will die with millions in surplus.

Social security makes a big difference and can ultimately facilitate early retirement. It has become a political issue and not a transparent one.

7. The X factor is Healthcare

The X factor

In the US you can retire whenever you feel like you can fully finance your life into the future. Most people in the US get their healthcare through their employer so early retirement now becomes prohibitively expensive. You can still retire early but don’t forget this cost. Ultimately it’s unknown and may even depend on just how healthy you are.

8. The Opportunity Cost of Early Retirement

Economically, everything you do has an opportunity cost. By committing to one thing you are not doing something that could potentially provide you more value. This is the elephant in the room for early retirement. Not having to work is amazing but by quitting your main employment you are potentially surrendering your best way to make money. Early retirement has an opportunity cost and it’s very expensive.

9. Retirement is Different for Everyone

To plan your retirement it is best to use one of the many calculators online. What nobody ever talks about is the uniqueness of your situation. Planning your retirement is not just the age you will retire it’s also how much money you will need to live on and how long you will live. These parameters start to make your situation very unique. The truth is, nobody knows these numbers we can only guess, take an average, and hope for the best. Retirement is a broad term so what it means to you might not be what it means to someone else.

There is probably a time when you will stop working and be literally take it very easy. I don’t think this is largely the goal of most people though. Progress is a major component of happiness and people need productivity to find a way to make progress.

10. Competing Priorities

Retirement is a major priority because you have been working towards it your whole life. This doesn’t mean that you won’t have other major financial commitments to contend with. It’s very easy to claim victory in early retirement if you live in a one-bedroom apartment, never marry, and never have any kids. It’s likely you will have other responsibilities that you will need to be funded before your retirement. You can’t just shrug this off for the unspecified utopia of retirement.

11. The Dissatisfaction of Living like a Monk

There is a famous quote, “it’s not about the destination it’s about the journey“. If you are living like a monk for this exalted day of retirement you might regret it deeply. None of us know when our last day is and that’s what makes it important to live our lives.

Living your life includes spending some money on experiences that bring you joy. If a fancy car will truly make you happy then you might consider buying it instead of questing towards being someone who retired in their 50’s. It’s inevitable that the older you get the more monotonous life will become. This is why it’s important to enjoy your money in whatever way will make you really happy.

What does it Mean to You?

Have you considered any of these things before? Let me know in the comments. If you are F.I.R.E evangelist on social media, don’t forget to smash my Twitter button below to share these thoughts with your audience.

  • Clarissa Cabbage
    December 4, 2020

    Interesting! I have heard of FIRE only recently. Unfortunately, retirement doesn’t seem within the grasp of many people. I often think I’ll be working until I die. But I hope at least that I can make a living doing something that I love and is meaningful to me. That’s what I am working towards now. Thanks for these tips on things to consider when thinking about retiring early.

    • Adam Wilson
      December 9, 2020

      You have a good attitude. Thanks for taking the time to read and comment.

  • MagicandBliss
    December 10, 2020

    Just what I needed. Really helpful post. Thanks for sharing!


  • Arpan
    December 10, 2020

    NGL I am quite skeptical about early retirement! It depends on the work you do till your retirement age! Anyways, awesome post buddy! ✌️

  • Rebecca @theloadedpig
    December 15, 2020

    Great article with a lot of important points that many people fail to consider. Healthcare is a big one that is a concern because you can’t estimate just how much it’ll cost you.

    • Adam Wilson
      December 24, 2020

      Thanks for dropping by and leaving a comment.

  • BearMoney Dan
    July 25, 2021

    So true about the need to be agile, people talk about 30 years retirement as if we can tell what’s going to happen. The same thing with social security, healthcare, and jobs etc.

    Set and forget only works to a certain point…

  • Ashley Pacheco
    July 26, 2021

    I like your point about how early retirement may not be exactly all it’s cracked up to be. I think people would benefit more from being able to take sabbaticals vs. leaving the workforce decades early. I’d totally be on board with that!

  • Steve @ The Frugal Expat
    July 29, 2021

    There are so many things that people do not consider when they make plans for early retirement. Social Security, Healthcare, and so many other things are something you need to consider and not forget about. Great article signifying what you need.

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