Early retirement is a dream for many investors, particularly those in the “financial independence, retire early” (FIRE) movement. It requires aggressively saving and investing in your 20s and 30s to be able to retire decades earlier than most.
But workplace changes brought on by the pandemic have put a new lens on early retirement. For some, no longer having to commute to an office every day or the ability to do your job from any location has made work more attractive.
“The pandemic has opened our eyes ... to a new way of working,” says Amin Mawani, an associate professor at York University’s Schulich School of Business, which may lead to the FIRE movement losing some momentum in the aftermath of the pandemic. “If you can work from home, and home can be anywhere, it gives you a lot more options and a lot fewer reasons to quit,” he says. “Why give up income if you don’t have to?”
FIRE proponents say the movement isn’t necessarily about planning to stop working entirely, but about reaching financial independence and working as much or as little as you want to, in a job you enjoy. Some who have reached financial independence with the intention of never working again have changed their minds, realizing there is worth to work that goes beyond a paycheque.
It happened to Eric Chang of Lethbridge, Alta., who reached his FIRE goal five years ago at the age of 31, after saving and investing a large chunk of his annual income from full-time jobs in marketing and management consulting. He lived off the dividends as well as income from some investment properties and e-commerce companies he set up. But after a few months of being retired, Mr. Chang got bored and eventually depressed doing little more than spending his days cooking meals from scratch, exercising and hanging out.
“People talk about a mid-life crisis. I was experiencing a quarter-life crisis,” he says. “My entire purpose before was to work hard, so I can make enough to have the freedom I wanted. Then I had the freedom, and I didn’t have a purpose for it. It was painful for a while. I didn’t know what to do with all of that time.”
In hindsight, Mr. Chang admits he didn’t have a plan for when he retired but also liked to work; he just needed a job with purpose. Today, he’s a coach who helps people invest in real estate and “have more financial stability in their lives.” His work is inspired by the FIRE movement, which he views as “not an event, but more like a lifestyle and mindset.”
Schulich’s Mr. Mawani says many people who retire early should consider the possibility they may want, or even need to work again – either for the money or personal fulfillment.
“Having meaning to life is often accomplished by having a blend of work and leisure and going back and forth between the two,” he says, “not just going to one extreme and staying there.”
Christianne Hammond, a former federal government worker, and her husband, Jeff Hammond, who served in the military, reached their FIRE goal just before the pandemic started in early 2020 when she was 34 and he was 42.
They had spent years saving more than half of their income, investing it and making some money buying and fixing up properties and selling them. The plan was to quit work and travel across Europe and Asia for five years before eventually finding a place to settle down and run a bed and breakfast while she taught yoga and he became a scuba diving instructor.
However, the pandemic had other plans, leaving them in lockdown in Greece for months and derailing the rest of their travel plans. The sheltering in place in a foreign country also gave them a lot of time to think about their next move.
“Maybe it is the pandemic and just being around your spouse all day, every day, but I found myself over this past year wanting to work. Not every day, but just something to keep myself preoccupied,” she says, adding she also missed her colleagues and clients back in Ottawa.
Ex-pat living has also been challenging, she says, including getting travel visas, dealing with immigration and living in places where you don’t speak the language. “That’s the not-sexy part about travelling the world that nobody really tells you about.”
After about a year and a half away, the Hammonds are planning to move from their rental house in Crete back to Ottawa this fall to pursue a more hybrid FIRE lifestyle. She will teach yoga and pursue a part-time career as a health and financial coach, while her husband takes on some casual work in areas he’s passionate about.
“I don’t think either of us will ever work full-time again,” Ms. Hammond says. “But it’s good to keep busy and for the social aspect as well.”
“The retiring early part of FIRE is completely optional and I’ve recognized that it is vital for my mental and physical well-being to have an activity, whether that is work, volunteering or having passion projects.”
Ms. Hammond says the FIRE movement encourages people to save money, invest early and benefit from the power of compound growth in their investment portfolio. “There’s no downside to the FIRE movement,” she says, and scoffs at any suggestion that it means making extreme sacrifices to survive. “It’s just being very conscious about your spending.”
She also believes many thirtysomethings who achieve their FIRE goals will wind up working again some day, in some way. “I don’t think it’s realistic for most people to say they’ll never work again. What else are you supposed to do for the next 50 or 60 years?” she says. “You can only go to the beach so often.”
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