The realm of finance seems to be an area where lots and lots of very unethical things may be technically legal (at least until laws are passed to stop it). Some of the crap that Wall Street did leading up to the last recession would be good examples of unethical behavior that wasn’t outlawed quick enough.
Possible tests of ethics in financial transactions…
Are you sure the other party involved is OK with you doing it and would you tell them that you’re doing it?
Is the other party involved naive, ignorant or hapless such that you’re taking advantage of them by doing it?
I wouldn’t feel bad selling someone a new car for full price with over priced rust protection. as long as I was upfront about the costs and didn’t lie about what rust protection does.
It would be unethical to slip the rust protection on the contract without telling them and amending the bill with a bogus lie about “dealer delivery charges” or such.
It would be amoral to sell a full price new car with over priced addons to a man with dementia who has come in every day this week and bought a new car and trade in the new car he bought the day before.
The counterparty does sort of matter. With the government, my relationship with them is clearly defined by laws, I want whatever I’m entitled to under the law, no more and no less.
But other stuff is more defined by custom and etiquette. No way am I going to stand on a corner spare changing or accepting private charity without actual financial need, even if I could technically get away with it.
Thanks Calwatch for the blog links. Added them to my reader.
What’s so crazy about it. If you quit after 10 years, but don’t reach retirement age for another 35 years, 50% of your contributions used to calculate your benefit will have been eaten away by inflation (assuming 2% inflation per year).
If you only start contributing 10 years prior to reaching retirement age, now we are talking.
As a government worker who doesn’t get Social Security I’ve made sure to make at least one full quarter every year in self employment income (usually a few days consulting although the last couple of years I’ve been doing some Lyft driving). Although my pension will be offset through the WEP I’ll still get a small amount, and that will freeze my Medicare premiums for life due to the hold harmless provision.
Perhaps a bit of hyperbole on my part. I just remember my surprise at discovering how I could qualify for, what I viewed as, a large benefit with only (relatively) minimal work effort. I’m pretty confident the 40 quarter rule was not designed and included in the law with us early retirees in mind. Nevertheless, it was a wonderful and unanticipated gift for me as I did my planning all those years ago.
Kudos for a great title. I only saw her when flipping through channels, but that few seconds helps me to better imagine her on fire.
It’s not as good as a deal as you think it is (unless you assumed you’d get nothing and just found out that you might).
If you add up all the money you (and your employer) paid in, and what you’ll be getting out (inflation adjusted and assuming the benefit calculations won’t change) you’ll roughly get back what you paid in. Essentially you provided an interest free loan. If you contributed as a high earner (made it past the first “bend point” in the SS formula), you’ll get less than what you paid in, if you are low earner (are within the first bend point) you’ll come out slightly ahead.
Good post. I’d like to be able to tell you a tale of my overwhelming financial sophistication and generally commanding intelligence across the board way back then. But such stuff would be a tall tale indeed. I did my best. But I struggled when younger against a family, and personal, background of know-nothingness where money was concerned.
It was many years before the internet. I had no rich family members to whom I could turn for guidance. Only had small-town libraries which provided me limited help at best.
Point is I was about as far away as you could imagine from concerning myself with getting my SS money back. I never even realized the issue existed. But I was VERY happy to discover I needed to work only 40 quarters to collect SS in the first place. This because I was smart enough to know that, with early retirement, any income source in the “out” years would help me make it.
Truth is, looking back, I probably did not save up enough money to ensure a prudent early retirement. I certainly didn’t have the kind of dough Suze recommends. But as I mentioned up thread, my health was also a factor. My job, which paid well, was also a high stress pressure cooker. I had angina too often and went to the doctor for that situation. I had optical migraines far too often. Following retirement I have had angina only one time in all the years. And frequency of optical migraines is VASTLY reduced. I now get more than enough sleep, something I view as important for good health. And I today live a stress-free life.
Bottom line, for me at least, it was definitely worth the risk of perhaps retiring before I had sufficient funds saved up. And I’m grateful for the (albeit small) SS and pension payments I receive each month. I absolutely LOVE being retired, and I have from day one and for many tens of years. Looking back and given opportunity, I would certainly follow the very same course of action all over again.
WSJ covers some FIRE issues and profiles.
bummer, behind paywall but I got the gist of it from the title. I guess this means a lot of NPR station will get quite a bit of death windfall
Thank you for posting such a good article, so on topic here!
Yes, the WSJ paywall is off putting. I cannot post a link which will give you xerty’s entire article for free. But I can tell you how I was able to read it for free:
This is in Chrome. Mouse over xerty’s link as shown in his post. Right click and choose “Copy link address”.
In a new browser tab or window type: www.outline.com/
Immediately after the slash, leaving no spaces, paste the link address you have copied from xerty’s post. Hit return and you will be able to read the article in its entirety without cost.
I found the entire article fascinating. Had no idea what I did so many years ago had become such a popular course of action for young people. Cannot say as I blame 'em, of course. FIRE always made sense to me. The article helps me to feel less unusual . . or weird. Course I cannot relate to the generations mentioned there. I’m a silent generation member myself. No sense mentioning my cohort in the article so many of us being, uh, well . . . frankly being dead.
FWIW I strongly believe the woman in the article is going in quite light at only two million. This unless she continues to have income in her “retirement”.
For WSJ, just try searching for the title or the url plus “WSJ”, and then click the link from google. Lots easier.
It’s sort of funny to me that many of the early retirees interviewed in the article are, guess what, still working as FIRE bloggers.
Many FIRE’s in their 30’s or early 40’s have passive income to sustain their retirement with extra income. That helps reduce the inherent risks of retiring so early. They’re not completely “retired”, more that they can retire from their normal jobs to do side gigs of their choice.
That’s the thing that FIRE in your 30’s bloggers don’t completely share, that you can retire from your JOB but still need passive income. People think you can just live off your savings and retire with no issues but for those on FIRE, you usually still have passive income from somewhere, even if that means time invested in a blog, RE or other. At least, those are the FIRE’s we hear about.
I think that is true in some cases certainly. However, from the detailed accounts I have read, not all are like this. If you check out some of the forums, you will see some detailed stories. Many are truly retired.
There are also others who do not blog but have real estate. That is bringing in income so their money can grow. That method works well too, it seems. Personally, I do not want to be a landlord or property mgr.
But do not write off the value of owning land. Land can offer benefits to FIRE participants. For example, sometimes you buy land and then years later valuable substances are discovered on, or beneath, your land. And you end up collecting royalties while needing to do no work at all.
Trust me, worse things can happen to a retiree. On this I speak from personal experience.
I think for at least a fraction of them, this is the FI part of FIRE where you become free to do something you enjoy rather than a job you need to keep doing to keep getting your paycheck. But yeah it was odd to see most of the people interviewed basically now earning their paychecks from their FIRE blogs. Not really retired in the usual sense IMO.
Some of them make a lot of money with those blogs, others make token amounts. It becomes a LOT easier to switch careers and pursue something you’re passionate about once you are financially independent. Then any income from your new gig is just gravy.
It’s sort of true for me as well. I don’t have a real side hustle, but a little time invested in travel hacking and MS pays in travel I couldn’t afford otherwise. An extra 10 of 20k makes a big difference.
And of course, a WSJ article isn’t a random sample. Of course, they’re going to interview people with blogs first. They were the easiest ones to find