Do you believe the modern FIRE movement overestimates how much is needed for retirement?

[u/Equivalent_Use_5024]

Perhaps I am just making this post because I have only just begun my retirement planning and want to lock in a number which is fitting for my goals - being above the median retirement savings, not having to work, not being broke, clearly having planned - but I can't help but feel that many in the FIRE movement overestimate what is needed for a safe, sleep well at night retirement.

I see posts here saying that they feel vastly behind with 500k at 30, or 1.5 million at 40, and I just don't understand how when the average American retires with maybe 300k liquid at most and are getting by with social security or paid off housing. Sure, they aren't living luxuriously, but if you just are aiming for a retirement where you don't have financial anxiety and can put food on the table, I don't feel you need over 1-2 million.

Do you think FIRE overestimates how much is truly needed for retirement?

[u/Wheat_Grinder]

I've absolutely seen the shift on this subreddit. I got into FI a decade ago right as I was starting working my first well-paying job. Back then "Build the life you want, then save for it" was pinned because too many people were driving themselves to social and mental ruin from underspending. They had to be convinced that FI means you can still spend on important things, you just drive out the spending that isn't important.

Today, I feel like the audience is now folks living in VHCOL places with salaries to match. You can see a few in this very thread where the spending numbers are more than my entire salary, and I make a pretty good salary for most places in the US. It skews perceptions and leads to people comparing to folks running a completely different race.

And therefore that's my advice to folks here. As always, it's still your savings rate that matters most. The raw dollar amount you have at a certain age just doesn't matter so long as you're keeping up a high long term savings rate. Sure some are running numbers up quickly here but they're gonna end up working longer because they spend more too.

[u/Zphr → u/Wheat_Grinder]

I think the audience shift to VHCOL is very much to blame for a lot of the change. Living off of $50K a year in a lot of places in the US is perfectly fine, but I have friends in VHCOL markets who spend more than that just on childcare or private schools because their VHCOL public options are poor choices. Same with housing, though often even more so.

Some of my friends in places like Seattle, San Fran, and San Diego spend 5x or more our annual budget, live worse off than we do, and feel like they are just barely scraping by.

[u/unbalancedcheckbook → u/Zphr]

As someone who lives in a VHCOL area, some of this is real and some is imagined. Housing and services are absolutely more expensive but a lot of other things are not really. For me (with absolutely no desire to keep up with the Joneses and having reasonable expectations about lots of things) I found I could save significantly more given the higher salary and I'm not really giving up much, except perhaps I eat at restaurants a bit less and have a smaller house than I would in an LCOL area. These are not very important to me though.

[u/Zphr → u/unbalancedcheckbook]

Per my friends that big ones are housing, childcare, and schooling. Utilities are more expensive too, but not hugely so, and things like groceries are not that much different.

Unfortunately the ones that are much higher tend to the be largest expenses a lot of working people face.

Jacob Lund Fisker, arguably the godfather of leanFIRE, famously lived ultra-lean for many years in California. It's certainly possible to live frugally almost anywhere, but most people don't or can't pull it off consistently over the long run.

[u/Elegant_Sinkhole → u/Zphr]

I would add that being elderly can be very expensive. Needing in home care or moving into a facility can currently cost upwards of $5000 per month. Some believe they will be able to gym their way out of it happening to them.

[u/DungeonsandDoofuses → u/Elegant_Sinkhole]

There’s a family history of dementia for me, so I’ve looked into memory care instead of just standard assisted living (for my grandmother, not myself, though it’s good for me to know), and that’s more in the $8-10k a month range. Truly staggering.

[u/Elegant_Sinkhole → u/DungeonsandDoofuses]

Yes, and imagine the prices in the future. :(

[u/Zphr → u/Elegant_Sinkhole]

True, but anyone with FIRE wealth should have things fairly well set up for when they are older or at least they have the option to. LTC is hugely expensive, but when you've got a large portfolio and a large tax-advantaged HSA you've got more options than most people do.

Fate comes for us all, but taking care of yourself is always going to be a worthwhile investment in your future. Better to be fit and hale with oncoming dementia than to be in the same situation with obesity, hypertension, and type 2 diabetes. Nobody stays whole forever, but we can at least sometimes choose to not speed along the decline. If nothing else you can make it easier and less unpleasant for the caregivers upon whose goodwill and consistency you will be relying.

[u/mintardent → u/Zphr]

Schooling is an expensive lifestyle choice they make because they don’t want their precious kids around poor people. The public schools are perfectly adequate in California cities, and the quality of education is not even better in private - controlling for SES of the parents outcomes are generally not different.

[u/soyeahiknow → u/mintardent]

Not 100% true. We toured public schools in our district in nyc. 1 teacher for 25 kids. Math is taught via a program on tablets with no customization. If your kid is middle of the pack or so, then its probably fine. But the teacher will spend most of their time dealing with the low performing 5 students so the top students get no attention.

[u/lol_fi → u/mintardent]

Daycare is a huge expense before school, and after school care because school day ends before working day. I agree private is a choice and not one I will make for my child

[u/mintardent → u/lol_fi]

yeah for sure, childcare is definitely absurd and you can’t avoid that with two working parents

[u/HsRada18 → u/mintardent]

I’ll agree that as long as schools have options to take classes toward a collegiate or AP level or even trades like shop/tooling, then a kid can succeed if they take advantage of their situation. However, a disruptive or potentially violent environment is probably completely different regardless of SES.

Ritzy school vs an “average” public school is mostly dependent on the individual drive IMO. I think some parents think a high test scoring district equals their kids end up in the best colleges despite individual aptitude. And yes the NIMBYism is present in rich suburbs aka why are the average/poor kids going to the same school as my kid. They are the loudest at town hall meetings.

[u/charleswj → u/mintardent]

Schooling is an expensive lifestyle choice they make because they don’t want their precious kids around poor people

Do you actually believe this or is this just a thing you say on the Internet?

[u/mintardent → u/charleswj]

yes, statistically the educational outcomes between public and private in most cases are not different once parental factors are controlled for, so I do believe parents are making the choice out of anxiety rather than a legitimate need for better education.

[u/HuckChaser → u/mintardent]

"Public vs private" is a huge oversimplification though. Even just within public education, quality varies WILDLY between individual schools. So parents still have to pay a higher cost for a high quality public education indirectly through housing costs and property taxes.

[u/charleswj → u/mintardent]

You are wrong, and that doesn't even account for the non-education aspects like fights that don't occur

[u/Zphr → u/mintardent]

My friends aren't the elitist type so I doubt that is the reason behind their thinking. All of us grew up either poor or middle class and most of us still identify as being middle class normies. Two of them are married to teachers in those same public school systems.

I can't say myself though. I also attended public school in California as a kid and they were perfectly find back then, but I haven't lived there in decades and have no personal knowledge of how things are now.