Finding FIRE after 40

Don't dismiss the FIRE movement because you're approaching 50. It's never too late to make good decisions with your money.

In 2018, I was a technology operations manager, a financially rewarding but often soul-eating profession. I was one of many men and women, recognizable by the bags under our eyes, our sometimes listless demeanor, and random deep exhaling when we read a text or email. When I stepped away from the cubicle, some of them asked me “How on earth are you doing this? I’m nowhere near retirement!” This article is dedicated to my compatriots still missing in action on the battlefields of corporate information technology.

It’s not too late

“Hey kids, come check out these sea shanty videos on TikTok!”

“Good job, pop. Those were popular two years ago.”

I guess I’m always a bit late to the party. Songs, TV shows, technology - you name it. If you’re a reasonably informed person, and you ask me if I’ve heard, seen, or used the latest new thing, there’s a good chance I’ll have no clue what you’re talking about (but I’d love to discuss it with you in about three to five years).

When I first discovered the financial independence/retire early (FIRE) movement, I was already 46 years old. Most of the FIRE content creators, my mentors on this journey, were in their twenties and thirties. I felt like I had missed the boat; that it was too late. At this point, it would have been easy to just dismiss the entire movement and continue living my life on autopilot. Financial independence was something I should have pursued ten years ago.

Ten years? That is a pretty common timeline floated about in the FIRE community. “Save and invest 65% of your income every year, and after about ten years, you can ditch that cubicle”.

Ten years?!? I was already 46. I had already spent 30 years of my life on the hamster wheel. And I was in a job where I increasingly struggled to find motivation and meaning. I was burned out and cynical. I was weary of the layer upon layer of administrivia and bureaucracy that large corporations have such an affinity for. The prospect of working another ten years while simultaneously living off a fraction of my income - gag me with a spoon.

Editors note: For the young reader, Allen doesn’t realize that no one has said “gag me with a spoon” for at least 30 years, and even when popular, it was the lexicon of teenage girls in the valley. He insisted on keeping it in the article, but feel free to substitute “I can’t even” in its place.

On a positive note, in ten years I would only be 56. With many Americans working into their seventies, I still considered that a win. Also, I was in the prime earning years of my career and our family wasn’t exactly devoid of assets. We weren’t starting at zero. Maybe it wouldn’t take ten years after all. Was it really too late to upend our entire lifestyle and focus on financial independence in our mid-forties?

The answer, of course, is no. It’s never too late to make good decisions with your money.

Our strengths after 40

Looking back, we had a lot more going for us than we originally thought. And that is my message to the fifty-something person who thinks they will never be able to retire:

You have more going for you than you think.

There is no substitute for investing and compounding your money in your twenties, but if you’ve managed to remain gainfully employed for a majority of your working life, there are advantages unique to the aspiring retiree in their forties or fifties.

Your social security benefits are bigger

At 46, we had already been in the workforce for a very long time. Social Security uses the top 35 years of income to determine benefits, so our eventual payout will be higher than someone with just a decade on the wheel.

Don’t get me wrong, I would love to be part of the latter group making all the right moves in my twenties, but a hefty social security benefit is a nice consolation prize.

We plan to take Social Security at age 70. This maximizes our monthly benefit and gives us additional time to roll over money from our standard IRAs to Roth IRAs as tax efficiently as possible.

You can register and logon to ssa.gov and use their estimator and earnings report to help you estimate your future benefit.

But Allen, my Financial Advisor tells me not to count on Social Security; that politicians are coming for it and it will eventually go away.

Yes, I’ve heard that too. Financial advisors are supposed to be good at math. Politicians are definitely good at math, and I just don’t see them yanking the primary income source away from the largest and most consistent voter demographic in America.

Your retirement time horizon is shorter

We’re now 50, and frankly, we have fewer retirement years than someone who retires in their thirties. We don’t need to fund a 60-year retirement. That’s just math. A shorter time horizon means there is a lower probability that we will run out of money before we run out of time.

Now is the time to really think about the second act of your life and the experiences you want to have.

You’re likely worth more than you think

We changed employers several times over the years and had multiple legacy retirement plans floating about. It sounds silly, but we didn’t pay attention to our retirement accounts all that much. This actually may be a good thing. Investments were automated, and we never made it a practice to roll our legacy retirement accounts into our current employer’s plan.

It was money that was out of sight, out of mind. In fact, it took a bit of work to figure out how to log in and view those old accounts. Consequently, we underestimated our net worth for years. When we finally took stock of our situation, we found our combined assets were larger than we thought.

Calculate your actual net worth, and track it quarterly. You have no idea how close you are to retirement without this number. It might be time to consolidate those old employer retirement plans into a self-managed IRA.

You’re probably finally tired of buying crap

In our mid-forties, we were fed up. Fed up with an overflowing garage that couldn’t fit our cars. Fed up with closets full of clothes that were barely worn; a kitchen full of gadgets. We were tired of filling our house with stuff.

We aren’t minimalists. We have things. But as we have grown older, we have learned that experiences matter much more to us than our stuff. We celebrate Christmas, and truly the only thing we want is time with family, a decent glass of wine, and good conversation. When we were younger, we were naturally more impulsive. At 50, we just find it easier to not buy things.

By the time you’re 50, you have likely bought a lot of stuff over the years. It’s time to shift your money toward experiences and crowd out those impulse buys.

Whether you aspire to retire early or not, it is never too late to start being more intentional with your time and money.