How to address the “what if” scenarios of early retirement

39 thoughts on “How to address the “what if” scenarios of early retirement”

  1. You are so much better planned than 99% of Americans, I agree with your choice to “choose the fun route.” An early retiree’s planning horizon is many decades. Things will change – for the better and the worse. You can’t think about the whole timeline now. As you say, flexibility is key. For our part, we are employing a “three buckets” approach: 1) three years cash for the short term; 2) five years 50/50 mix of conservative stocks & bonds; and, 3) the rest in a 70/30 mix of growth stocks & some bonds mixed in. In addition to some real estate & a pension – we feel like our overall portfolio will give us the flexibility we need.

    1. Sounds like you guys have an excellent approach to your cash situation. You keep a little more cash than we do – nothing wrong with that at all. A little cash and a lot of flexibility puts you in the position to do just about anything necessary to make this whole thing work, and work well. 🙂

  2. As you said, it is impossible to ever plan for all the what ifs in life. What ifs are nothing more than a crutch that people use to explain why they shouldn’t do something, especially if it goes against the grain.

    If you are able to be flexible, you can react and adjust for anything that comes up. I believe both of you have taken more time to plan than most people and I have no doubts that if something were to come up (fingers crossed they don’t!) that you will be able to adjust to what you need to do.

    1. Absolutely spot-on, Thias. Many do use what ifs as a crutch for why they “can’t” do something, but at some point, if we want it bad enough, we need to take the plunge. Setup reasonable countermeasures if things don’t go right, but in the end, it’s my view that you just gotta do it. Life is way too short to spend it working even an extra DAY in an office for some nameless corporation. It’s just too short…

  3. I agree that the person with the ability to retire early isn’t someone who will likely be devastated by an unexpected bump in the road. The way I see it for us, “worst case” is that someone, at some point, has to go back to work for a while. If you’ve already experienced tons of travel, freedom, and fun before some highly unlikely string of events leads you to need a job again…so what? You just had the sabbatical of a lifetime. You obviously have marketable skills if you can retire early!

    I don’t see this happening. But it would certainly be preferable to working nonstop for the next 30 years!

    1. Hey Kalie – yup, going back to full-time work is definitely our worst-case scenario as well, and we will do everything in our power to make sure that doesn’t happen. But like you said, if it does happen, at least I spent the last X years/decades doing what we love. 🙂

  4. As a worrier by nature, this is something I battle every once in a while (the idea that something may go wrong). But then I take a step back – and maybe a deep breath – and remember the ways we can counteract the negative event:

    1. Two years cash available
    2. Ample emergency fund on top of two years cash
    3. Return to work (full- or part-time). I’d hate to do it, but ya gotta do what ya gotta do!
    4. Reduce expenses
    5. Downsize (planned on it anyway….may accelerate if necessary).
    6. Etc, etc.

    The point is you probably have more options than you think to balance out the black swan events. Plus the only option is to work full-time for (many??) more years to see IF something bad happens. I don’t know – seems kind of depressing to sit around anticipating the worst all the time.

    Build some reserves and contingency plans and then live your life!


    1. Amen to that, John – build a reasonable contingency plan and then go out there and do whatever makes you happy. The truth is things will happen regardless of what our contingency plan is, and it is funny what opportunities our circumstances tend to open up for us. 🙂

  5. The whole “What If” scenarios pop into my mind more often than I like. But I have been able to fairly quickly remove them just by thinking – if I was to get cancer, I would rather have had a couple years to spend more time with my family, then to continue working full time and have my kids only know the busy, stressed-out version of me. Or if something happens like a huge market crash – I know I am not too good and think too highly of myself to work a cashier job somewhere for a year or two. I just hope none of these bad scenarios happen in the first 2 years – just so I can have a taste of freedom!

    I also plan on creating a super-duper emergency fund… maybe in a CD or something. But just maybe 6 month expenses that we hopefully never have to touch. That will be my security blanket 🙂

    1. I agree, Mrs SSC – if something does befall us, I’d much rather have years and years of FUN to look back on rather than having regrets that we didn’t do it sooner. That would be truly awful.

  6. We can never totally guard against what ifs, but you’ve done such an incredible job anticipating some possible curveballs. As a highly anxious person by nature, it’s really easy to let what-ifs hold me back. Sometimes I think the most powerful what if we can ask is, “What if this actually goes according to plan? What am I missing out on by worrying about things not working?”

    1. Thanks Penny. I think when we realize that “life happens”, it gets easier to manage these what ifs. And truthfully, the answer is almost always the same with me. “I’ll fix it”. We aren’t robots, here! 🙂

  7. I spend a lot of time thinking about what could go wrongs. In reality, everything can go wrong. But the probability of something going wrong should be taken into consideration, as well as mitigating factors associated with it.

    A positive attitude will help you persevere no matter what happens however.

    If markets go nowhere for a decade, and you eat 1/3 of your money by 2027, you can always find some P/T temp work. Even if you spent your entire nest egg in 25 – 30 years because none of your investments provide you with any returns for 25 – 30 years (this is a ridiculous example I know), you will be able to claim some SS at the end of this period and you will be fine.

    You can also move to a lower cost of living area since you are more mobile (or will be in less than one year). There are so many places in the world where you can live pretty well, and spend much less than what you spend in the US. I think that many people forget how lucky they are – anyone earning over $30K/year is in the 1% of the world. There are places in the US (like small university towns in the MW) where cost of living is not that high either – and there is a lot to do too.

    If you have a rare and expensive disease, you have health insurance/ACA to cover a big chunk of it. If ACA is not going to pay for it, then chances are that you would have been in a bad place even if you continued with your current work lifestyle, so this should not be put into the comparison for work vs retire early. I wonder how hard working people who work minimum wage jobs survive if they get sick? People need to be addressing that real issue, rather than your situation in my opinion.

    I haven’t even talked that you can earn side income if you monetize your site for example or if you write a book or if you write for some publications or if you decide you want to advise people on how to achieve retirement goals etc. ( and I came up with those after one second of intense brainstorming)

    So I think the odds of success in your plan are in your favor…Either way, that RV looks cozy. So I will be checking up on your adventure plans as they unfold.

    1. Thanks DGI – you hit on an important element. If things get bad, we can move abroad to save some serious cash. We’ve already discussed places like Thailand and Costa Rica as possible destination spots. We’d like to visit those areas anyway even if our investments skyrocket.

      It’s true – we should never ignore the what ifs, but we also can’t be held back by them, either. We do what we feel is reasonable, then jump in. 🙂

  8. It’s not possible to cover all the what if’s in life. All you can do is prepare and open to the different scenarios. If you’re worried about all the what if’s, then you’ll probably never go outside of your home. Low expenses and have some money set aside will allow for many different options.

  9. As the wise con said:

    You either get busy living, or get busy dying…

    Life is full of what if’s. It’s a conscious choice whether you focus on the negative or the positive. I’d rather focus on the positive. It’s more fun, and makes the negative that much easier to deal with when it happens.

    1. Exactly right, Jack – I always like to think positively in every situation that I can. Even when things go wrong, there is generally something that you can take from it and apply elsewhere in your life. Experience is one of those things! As we know, we don’t learn by succeeding. We learn by failing.

  10. Fantastic post, Steve! It’s easy to ask all the “what ifs” about our non-traditional life plans, but no one ever seems to ask them about working full-time until traditional retirement age.

    What if one of the health disaster scenarios (hit by a car, cancer, whatever) happens while I’m working full-time, and I never got to live out some of my dreams?

    What if by the time I reach traditional retirement age, I’m not capable of pursuing some of my more physically active dreams? What if my eagerness to explore unfamiliar places and eat weird foods and sleep in uncomfortable places has faded, and I can no longer comfortably and affordably explore those parts of the world?

    To me, those are the much more depressing questions. And if the financial markets collapse and we can’t afford FIRE life anymore, there’s still no scenario in which I’d be happier having lived with the status quo.

    1. Very well said, Matt – this is fodder for another post. To me (and you as well), there is more “what if” risk in keeping a traditional lifestyle and potentially missing out on the things that you truly want to do. What if you get cancer at 40 or 45? What if you get paralyzed? The last thing that I’d want is to have spent my entire productive adult life in an office before that happens!

  11. I agree with you in how you look at any unexpected health problems. Part of the reason why I want the option to retire early is in case I end up with health problems in my 50’s. The last thing I’d want to do is work and I’d rather focus on getting better. FIRE puts you in the position to better handle something like that.

    1. Completely true, Kate! Sometimes, the “what if” scenarios end up happening, and the last thing that I’d want is to have regrets if those things do. I want many years of adventuring under my belt to look back on, damn it! Life is too short for decades of office work.

  12. Great article. Early retirees truthfully are the last people who folks should worry about. Hoping to be there not long after you all, though will be living in our modest and nearly paid offhouse close to the water in San Diego.

    1. That sounds like an awesome place to live, Liz – San Diego is beautiful. It ain’t cheap, but it sure is nice. I would love to spend some time out there once we start traveling. 🙂

  13. Huh, funny that people bring up so many what-ifs inre: disease and disability. Because my between the two of us, my husband and I have about 7 chronic health conditions, two of which are pretty debilitating. And I’ve never wondered whether someone going for early retirement has thought those contingencies through.

    Why? Because if you’re in a position to retire early, then you have financial backups in place. A number of them. Otherwise, you wouldn’t have felt safe retiring so soon.

    The stock market argument, by the way, is ridiculous. It’s been around for more than a century, and it’s always recovered. Eventually. It also always dips. Eventually. As long as you have plans for and a realistic outlook on both scenarios, you’re fine.

    Yes, anyone can get sick. But speaking as someone with a disability, that’s nothing you can plan for, and it’s certainly nothing to keep you from your dreams. The best thing you can do to guard against the kind of stuff the comment was referring to is to have good insurance and try to stay as healthy as you can. Beyond that, it’s a crap shoot. So you have contingencies in place like where you’d live if severe disease struck. (Arguably, the RV living would come in very handy there because you could move to wherever offered the best treatment and/or support network of friends and family.)

    1. Thanks Abigail for your comment – yeah, the ability to move around whenever it’s required is a huge benefit, I think. But in the end, like you said, a realistic outlook on life and a reasonable lifestyle is all that’s required to get started. And we are flexible people, so if things don’t go quite as expected, we fix things, even if that means some part time work every now and again.

    1. Thanks PE, me too. I have a feeling that in those situations, have a full time job and a big house is the last thing that I’d be concerned over. 🙂

  14. “It’s interesting. I find that the what ifs in life only seem to matter when early retirement is the subject. Most people don’t possess a fraction of the emergency savings that my wife and I do, but yet, it seems to be early retirees like us who get the majority of the what if questions.”

    This is the nail on the head for me. Getting questions about “what ifs” and all of these can be applied right back to the person asking the question. I mean the point in search of FI, is we find ourselves in very what ifs and more status normal as the savings and wealth increase.

    1. Thanks Steven. It is an interested phenomenon, probably because most people assume that if you don’t have INCOME, then you don’t have money. Of course, that isn’t true. 🙂

  15. It is SO TRUE that early retirees do seem to get a rather ridiculous amount of scrutiny, especially considering how much most of us have over-planned and over-accounted for things. (Sure, we might have different interest rate assumptions and different levels of risk tolerance, but how many people in the general population have even projected these things out? How many people actually know how much they need to save every year to reach their goals?) You don’t mention insurance, but I assume you plan to have lots of that, which counts for a ton, too. And with your status of “professional blogger,” you won’t even have a resume gap, so you can always work again if you must. 🙂

    1. Thanks for your comment, ONL, and good point about using “professional blogger” as my status. The resume gap won’t be there anyway! Or, “Photographer” would work the same way.

      “How many people in the general population have even projected these things out?” – my thoughts exactly.

  16. Steve,

    Man, some of those comments on that forum post are brutal. It always boggles my mind why people feel the need to tear down others and their goals. Like you mentioned, it feels like people are so quick to jump on the “what if’s” of early retirement, yet 76% of America lives paycheck-to-paycheck with no emergency fund. Makes no sense.

    I think your response to all those comments is fantastic though, taking it with a grain of salt and letting them help you re-analyze your situation. Always great to take an opportunity to learn and consider other possibilities that we may not have originally seen. Even if some various “what if’s” happen, you guys have a lot of savings and tons of options! Congrats on the recent Airsteam purchase!

    1. Thanks Matt. You hit the nail on the head regarding paycheck-to-paycheck living. I am much more interested in their what if scenarios rather than an early retirees. They know how to manage their own money. What about those who don’t?

      Appreciate the comment!

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