With recent high-profile coverage in The New York Times, the FIRE movement is poised to go mainstream, which raises the question: how many American families can really afford to retire early?
Financial adviser Robert Schultz with Rollins Financial in Atlanta, Georgia, thinks that FIRE advocates in their 20s and early 30s may be too young to fully appreciate the financial crisis of 2007-2008, and have been somewhat spoiled by the longest bull market in history.
What if someone tried to retire early back in 2006 and withdrew just 3 percent of their investments each year for the next five years? Schultz calculates that by the end of 2011, their retirement nest egg would have shrunk by 18 percent.
"The bigger risk, though, is that someone would have sold to cash and then not participated in the bull market," Schultz says. "Timing the market is incredibly tough for anyone, so being able to think you would miss downturns is impossible."
Hardcore FIRE advocates believe they've taken such risks into account, namely by diversifying investments among the stock market, bonds and rental properties, and by not flinching when the market "adjusts" from time to time.
Karen Altfest, Ph.D. with Altfest Personal Wealth Management in New York City says that most of her clients are looking to keep working beyond the traditional retirement age, not retire decades before. With more and more people living into their 90s, Altfest is concerned that most people won't put be able to put enough away to cover 50 to 60 years of normal living expenses, let alone the hyperinflated medical costs that often accompany the last years of life.
Hester can't speak for all FIRE aspirants, but says she was very much "scarred" by the financial collapse and advocates the most conservative early retirement plan possible, one that will weather the worst market corrections. She's also written extensively about health care and early retirement, much of which hinges on the future of the Affordable Care Act.
Clearly, early retirement isn't for everybody. Hester admits that she and Bunge were "incredibly fortunate" in their situation, not only by having well-paying jobs and no debt, but also through the "dumb luck" of dodging serious health emergencies or accidents. Still, Hester believes that financial independence is within reach for lots of folks who have some extra money left over at the end of the month.
You might not retire in your 30s or 40s, but a few years early sure beats a few years late.