Causes of Early Retirement Failure

[Ego]

What causes (or could cause) a person with the intention to retire early to fail?

Let's make a list.


Things that actually happen to people today or happened in the recent past that caused their plan to retire early to fail. For instance, your grandparents were on the path to early retirement but then.....

Example: Risky investment or divorce.

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Future changes that may cause early retirement failure.

Example: Global warming or war

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Non-financial causes of early retirement failure.

Example: Fear of pulling the trigger that naturally increases with age.

[jacob]

Are you specifically looking for "failure to" or also "failure after" such as "insufficient savings", "boredom", "lack of internally generated structure", ... ?

[7Wannabe5]

Getting knocked up.
Ex-spouse goes AWOL and doesn't pay child support.
Business failure.
Close relative with who you reside becomes extremely mentally ill and ends up in jail.
Parent requires extended care.
Notice from the city to move your camper/residence.
Sued by tenant for black mold.
Motorcycle accident.
You end up with custody of your grandchild.

[Ego]

@Jacob, both, 'failure to' and 'failure after'.

This was motivated by the parents thread. It is hard to plan for things that not many people have experienced. There is plenty of research on why traditional retirement fails. There is zero research on why early retirement fails. In part because nobody really thinks about it.

[2Birds1Stone]

So many reasons I have seen over the last 5 years across the different ER websites (MMM, E-R.org, etc).

1) costly ongoing health issues that are not covered under ACA/Medicaid/ETC
2) familial responsibility
3) partnering up with someone less economically successful
4) deciding to start a family, thus requiring different geographical location, housing, etc
5) boredom (some people just have no clue what to do outside of work)
6) legal trouble (lawsuit, etc)
7) realizing they do not want to live on $X/yr and going back to work to inflate lifestyle

Great thread idea.

*the link in your OP is currently broken.

[Stahlmann]

...

[sky]

What is ER failure?

Being forced to do something you don't want to do because of lack of money?

Losing your bundle of gold?

Losing the monthly income that you are accustomed to?

Being required to work to pay for food and lodging?

Not having enough money to do or buy what you want?

[Jason]

Lack of patience which could lead to over aggressive investing. Just getting greedy I guess. It was tangentially addressed in this thread. The loss of an accurate assessment of one's investing ability.

viewtopic.php?f=3&t=10523

[Jean]

Communist government seizing your property?

[Jason]

JLF actually has a "Why Do So Few Succeed" link on the homepage.

"Communist government seizing your property" was #3 on his list, right behind "You Are Abducted by Aliens" and "The Airplane You Are Traveling In Gets Caught in Time Warp and You Land in 1929."

[Ego]

What is ER failure?

Good question. I guess whatever the wannabe early retiree defines as failure. If they went back to work because they wanted to, then no failure.

[Laura Ingalls]

I knew that the existence ACA or similar was a key point in ER sucess as we had 20 years between our semi-early, semi-retirement and the existing Medicare age. The last employer sponsored health insurance we had was cost me 3k a year, my employer 13k a year and had a 6.5k deductibles. I can not pay 22.5k a year for healthcare and stay retired. I could for a year or two till I found something else but not til 65.

So far this hasn’t been an issue. It does cause me to stay up to date on current events . With each passing day the window shrinks. I have five years until I have access to retirement health insurance benefits from a previous employer but I would pay the whole cost (currently about 10k a year and 5k in deductibles). Not my first choice but better than no coverage and simpler than establishing Costa Rican residency.

[Scott 2]

I'm a failure to retire. Contributors:

Live near family in more house than I need. Haven't been willing to let it go.
Earning and saving more than I ever have. It's hard to walk away.
Spouse developed significant medical issues, impacting earning potential
Concern over stability of individual health insurance, especially in light of medical issues
Work gives me relationships with really smart people and interesting problems. Finding that outside of work is hard.
My current job is good - decent pay, relatively fun, high autonomy, comfortable hours and working conditions, etc.

I imagine I'll still be an early retiree, but it's likely I'll still be working at 40. I relaxed spending substantially in an effort to make being employed as fun as possible. It's pretty good right now.

[classical_Liberal]

Reference back to the ERE indicator thread/Wiki. Most "failure to RE" situations, at least conceptually, are a direct result of that indicator dropping significantly if early RE becomes realized. IOW, 1.0 doesn't feel safe enough for those of us used to 2+. Brilliant quote on this subject from J+G in my journal.

Haha, in this way ERE is a curse. When your reference group is people who are drowning in debt and working six figure jobs just to pay the interest on their next credit card payment, you think you're a fucking financial genius when you have a few grand in the bank and quit your job with no prospects. When your reference group is a dude who literally wrote (part of) a book on peak oil and retired in his 30s from a post-grad job, all of the sudden anyone with less than a few hundred grand is irresponsible and probably going to die.

Failure after, there are literally endless potential scenarios, including Independence Day alien threat. To focus on real examples, by far, the most common is someone who wants ERE/FIRE because they have a very particular itch to scratch. Common examples are full time child rearing, self employment/passion work, slow travel, etc. After successfully scratching this itch, they realize they have an additional 40 years of time to fill. They usually end up reintegrated into the economy in some various fashions through the years. This is of course by choice, so it may not be a failure. Technically, I suppose this could be a "failure to" because they never really needed as much financial capital as they thought.

[SustainableHappiness]

Personal failure would go into category 1:

Had a baby -> Decided other things were more important.

This also led to a failure to the commit to the slow travel plan DW and I created until another opp presents itself (contingent on us not dying). Not adventuring is more an immediate regret than finding a better career instead of pursuing ER.

- Being too conservative is something I see holding people back from pulling the trigger, so if they feel bad about themselves or their situations because of that, that's a source of failure. I guess that's where the rats in the pubmed article come in.

[Jin+Guice]

Personally, I think "failure to" is far more terrifying than "failure after."

[Frita]

Another failure-to-retire here (Actually, I consider myself in the figuring-it-out category.)...

Factors:
• I am not ready to give up working in education.
• DS is still in school, four years until graduation, and needs the stability of staying in place.

[Laura Ingalls]

Personally, I think "failure to" is far more terrifying than "failure after."

I hear you brother. Retired folks can go back to work. Massive piles of unspent money won’t bring the dead back to life.

[sky]

Currency devaluation
Inflation
Market collape
War loss of home/savings
Theft of savings
Fraud loss of savings
Business failure -> investment loss
Incarceration
Lawsuit settlement/damage payment
Uninsured fire loss of home and property
Uninsured medical expenses

[unemployable]

I've written about this before, but are most of these these actually failures?

Call the catastrophic event (war, gamma ray burst, election of Bernie Sanders, what have you) Event X.

Persons P and Q are the same age and have similar jobs with similar pay. P quit his job in 2010 to ERE. Q stayed at his job and has an income/expense profile that precludes him from retiring.

Now in 2020, Event X happens.

I would sure as hell would rather have been P than Q for those most recent 10 years. Q's just as screwed as P is but has nothing to show for it. For most of the scenarios mentioned, how is Q better off now?

I think a true failure on P's part would have to result from some specific action P took post-ERE. Such as:

• an asset allocation (80% bitcoin bought at peak, say) that let to failure when a more traditional 60-100% stock portfolio would've done fine

• a catastrophic event localized to the place P moved to that directly affected P (earthquake, tsunami, terrorist attack)

• a health impairment directly attributable to a pursuit P undertook during ERE (climbing accident, fat from too much TV, poked in eye by knitting needle)

In other words, failure is localized, and must include an evaluation of the opportunity costs of not EREing.