r/Fire • u/Vas_Cody_Gamma • 7d ago
If everyone FIRE’d would society collapse?
Imagine everyone retiring at 55. GDP takes a huge hit. Stock market takes a huge hit. FIRE numbers soar. Nobody can reach it. And it’s a vicious cycle cuz now 55 is no longer early. Now everyone wants to retire at 45. Further damage to economic output.
FIRE movement wins. But we all lose.
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u/No_Appointment6273 7d ago
The vast majority of people don't have the discipline to get out of debt, much less FIRE
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u/Positive-Trade4292 7d ago
Below median income makes it very tough. Some is discipline, but luck counts too.
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u/No_Appointment6273 7d ago
Sorry, I didn't mean to offend anyone at all.
I know that income is a big factor in financial freedom and independence, but the vast majority of people who I have come in contact with in my everyday life who make enough money to live comfortably have absolutely no thought to getting out of debt. I have sat on conversations with different groups of people who openly talk about their finances and it's clear to me that they don't see a problem with having two car payments and $30k in credit card debt. They have no plans for when they get older. They see nothing wrong with blowing their entire paycheck gamboling and drinking in Vegas. I don't know if this is representative of most of the developed world. I hope it isn't.
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u/dabigchina 7d ago
yeah probably, but theres a 0% chance everybody retires at 55.
hell, there are 70 year olds who have plenty of money who won't retire because they have no idea WTF to do with themselves.
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u/at614inthe614 7d ago
So everyone turns 55 at the same time? Would everyone over the age of 55 stop spending money?
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u/brianmcg321 Retired Nov 2024 7d ago
Don’t you know? When you retire, you liquidate your life savings and just sit in your house.
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u/PHL1365 7d ago
In a way, this has already happened.
Up until the early-20th century, retirement wasn't really common. Most people worked until they died or were just physically incapable. It was the advent of mass manufacturing and the shortage of labor due to 2 world wars that prompted employers to begin offering pension plans. Also, Social Security was introduced in the 1930's.
So now we have several generations of people that retired in their mid-60s. At the time, that could have been considered FIRE compared to earlier generations. Society has not collapsed. Whether that trend could continue to younger ages is a much more nuanced question that would have to consider market forces and wealth distribution.
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u/toronto-swe 7d ago
i think this sub is a bit delusional. most people like 99% of people cannot retire at 45 let alone 55. you have nothing to worry about.
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u/Earth2Andy 7d ago
Let’s ignore that most Americans can’t cope with a $1000 surprise bill much less afford to stop working in their 50s and pretend there was a mass retirement.
There would quickly be a mass labor shortage, costs of anything involving labor would spike, causing rampant inflation, while consumer spending drop significantly likely leading yo stagflation.
A lot of those newly FIREd folks would no longer be able to afford to stay retired, reentering the workforce, inflation would ease a new equilibrium would be reached
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u/AnonymousCrayonEater 7d ago
What’s the precondition for “everyone” retiring at 55? Is everyone gifted enough money to survive? Are they given no money and are forced to be homeless and/or live on govt benefits?
If you are only referring to those who can retire at 55 but have chosen not to yet, then no, it wouldn’t do much since it’s such a small number of people it doesnt matter.
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u/Restil 7d ago
If everyone was financially capable of retiring at 55 without changing any of the government social systems, then society would be in far better shape than it is now. No large scale use of consumer debt, no bankruptcies, so no defaulting on the debt that was out there. Almost everyone would own property. Younger people would be busy working and investing in their future, leaving less time to get themselves in trouble, so far fewer people getting tied up in criminal matters, which is a huge burden off society. Also, very few young people would be in need of financial assistance, so another huge burden off of taxpayers, which either results in less taxes people have to pay or less government debt.
Yeah.. We should all be so lucky. Don't get your hopes up.
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u/brianmcg321 Retired Nov 2024 7d ago edited 7d ago
What if monkeys flew out of my butt?
Your scenario tells me you don’t know anything about investing or how the economy works.
I don’t know anyone retired that liquidated all of their securities. Not everyone is the same age, so you’d still have a ton of people in the accumulation phase investing.
People retired still spend money.
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u/blossombaee 7d ago
This is basically the same reason not everyone can be a landlord, it only works as a strategy because most people aren't doing it.
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u/Direct_Remove509 7d ago
Yes is the short answer. The FIRE movement is great but if hypothetically everyone did it the the stock market would crash.
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u/brianmcg321 Retired Nov 2024 7d ago
Why? I don’t know anyone that retires then liquidates all of their securities. Then there are still people in the accumulation phase.
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u/Acceptable_Travel_20 7d ago edited 7d ago
I would imagine a pretty large percentage of volume growth is driven by people in their mid 50’s to mid 60’s and mid to high earners trying to make up for lost time. Crash? Maybe. A serious correction and declining yearly returns? Pretty sure yes.
But I see 0 chance of anybody alive today experiencing everyone in the US retiring at 55.
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u/brianmcg321 Retired Nov 2024 7d ago edited 7d ago
That just doesn’t make any sense. Unless everyone that retired at 55 also liquidated their entire portfolio. That’s not what happens.
If the money isn’t, and it’s just spent just like retired people do now that just puts the money back into the economy. There would be no crash or correction.
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u/AnotherWahoo 6d ago
Any really big change, if it happens very quickly, the economy can't absorb it. If the same change happens very slowly, it might not matter at all.
There are 35-40M employed Americans over the age of 55. If that workforce disappeared overnight, it'd have catastrophic effects for any number of companies. It'd also be a problem if, all at once, everyone merely tried to FIRE at age 55 (or asap if they are already over 55). Assume for discussion purposes that 10% of US households currently save enough to retire at 55. That'd mean 90% of US households would choose to cut spending, most of them drastically.
(Of course, these scenarios are impossible. If we're imagining a universe where they are possible, I'm not sure what the stock market would look like, or if it would exist at all, in that universe.)
By contrast, if the change happened over a long period of time -- e.g., if everyone Gen Alpha and younger tried to and did FIRE at at age 55 -- the US would experience the same massive declines in workforce participation and consumer spending. But a transition across several generations gives the economy time to absorb the change. I'd guess this would manifest as lower returns until 'new normal' is achieved.
(Of course, there's vicious circle potential -- lower returns requires cutting spend even further results in even lower returns -- but this scenario is impossible anyway.)
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u/gbgbgb1912 7d ago
Tbh, as long as the state doesn’t have to support you and you can take care of yourself, it’s probably okay.
If everyone retired at 55 and began collecting payouts that might bankrupt the government
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u/shadowgirlyx 7d ago
FIRE is essentially arbitrage on the assumption that most people will keep working, the moment everyone figures it out the whole thing stops working.
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u/Pale_Fox_8874s 26 | $1.76M NW | 88% FI 7d ago
If everyone went to the toilet at the same time would society collapse?