My Take On FI/RE

I retired from Unilever at 58. At the time that was considered early to hang up my skates.

Since then a lot has changed in my former work world. The factory I worked in for years has closed and been torn down. The products I worked on were sold to a new company – along with the other factory I worked in. Even this venerable Research Laboratory in Vlaardingen Netherlands has been sold and some parts of it moved to a new Dutch location. Most of my former colleagues have joined me in retirement. And so it goes.

Another retirement wrinkle that has surfaced since I left the workplace is something called FI/RE. This stands for Financial Independence / Retire Early. And it’s quite different from the early retirement I went through in 2004.

The principles of FI/RE are simple enough. First you get a high-stress high-reward job, probably in the Financial or Information Technology field. You then proceed to live like a monk, saving 70% of your salary in low-cost ETFs or index funds making maximum use of your TFSA and RRSP. After you have accumulated a million dollars or more, you can declare FI. At that point you live off the capital, quit the high-stress job and either RE or move on to something more interesting for the rest of your working life. Many FI/RE types write books or blog about their experiences. RE is something that happens to you in your 40s.

FI/RE seems to be largely a Millennial thing though. It would never have applied to me as a leading-edge Boomer. First of all both Maria and I did OK in our careers but were never in the high salary bracket. We both had formal pension plans that weren’t designed to kick in till at least 55. TFSAs didn’t exist during our working lives, nor could we put a lot in RRSPs because of the Pension Adjustment applied to us.

As far as living like a monk, we had a child to bring up and educate. We lived beneath our means I suppose – but there’s no way we could have saved the sums the FI/RE folks recommend.

By and large, I enjoyed my working life up until my late 50s. I don’t think I would have wanted to do the FI/RE dance thank you.

If you had started your working life in 2009 at the pit of gloom in financial markets, you’d probably have done quite well saving for FI/RE. If you started now with markets doing as well as they are you better count on saving more and spending less.

The current generation of workers isn’t as lucky as we were, having a decent pension plan to rely on. Maybe that’s why saving for FI/RE is so appealing to them. Let them try; at least there’s the TFSA now. But honestly, I don’t see many of them retiring after 20 years in the workforce.

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