Pros and Cons of AI in the Workplace: A Balanced Perspective
February 13, 2025
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Things have changed a lot in the last five years, and to counter it or prepare for other changes, people have begun imagining their retirement. This has led many to the FIRE movement, where people aim to retire before 50.
Prioritizing retirement, especially early in their career, is a good move for anyone. Still, how feasible is the FIRE lifestyle? Read this short article compiling top publications and experts’ point of view.
Everyone is trying to join the FIRE lifestyle, but what is it, and is it achievable? Investopedia’s Alexander Kerr wrote a long-form piece going over the basic concepts of this movement, the types of retirement, and how to achieve it.
The core idea behind the FIRE (Financial Independence, Retire Early) movement is reaching retirement at an early age, way before traditional budgets and retirement plans usually allow. The idea is to save up nearly 75% of their income to reach their goal as early as possible and ensure a life with little or no work.
“Depending on the size of their savings and their desired lifestyle, this requires extreme diligence to monitor expenses and dedication to the maintenance and reallocation of their investments.”
There are three main types of FIRE methods: Fat, lean, and barista. Fat is for the person who wants to save more than the average worker but not to reduce their standard of living; this strategy focuses on career advancement for a high salary and smart investments. Lean is all about saving as much as possible, even if this means having a far more restricted lifestyle. Barista is a mid-point, where the idea is to save a lot to eventually quit their 9-to-5 but not work altogether.
Now, if you’re asking, “How can I retire early with financial independence?” there are three steps according to this method:
· Build a sturdy emergency fund
· Invest wisely
· Review your FIRE number
In an article for US News published just a couple of weeks ago, Julie Pinkerton has a sobering perspective on the early retirement dreams of many. She argues that though the idea of early retirement is enticing, for many, it is nothing but a pipe dream that flourished during the pandemic.
The pandemic allowed many office workers to get away from their offices and sign up for different types of income, from the gig economy to even having multiple jobs at once. Once the return-to-office mandates started, this flexibility was slashed, leaving them with no additional income and, thus, less opportunity for bigger savings.
“Retiring early is […] about asking the right questions reflecting the clarity of purpose, disciplined investing, and meticulous planning that will make or break your goals.”
Things have changed in the last five years, and many have adopted a DIRE strategy: delay, inherit, retire, expire. Now, many steps of this are not something one can plan for, and, more accurately, don’t rely on an individual’s actions. Here are five questions to consider to plan for your retirement, no matter the method you choose:
1. What will retirement look like?
2. How much do you spend each month?
3. How will your expenses change when you retire?
4. Do you have additional sources of income?
5. How will taxes and inflation affect your plans?
Eric Simm wrote an essay for Yahoo and Business Insider chronicling his road to financial freedom before the age of 50. His experience has given him a particular perspective that makes him wary of the FIRE movement.
He speaks from a privileged standpoint, especially as he climbed into high-earning roles early in his career. Still, his criticism of the FIRE lifestyle holds ground. His whole idea is that careful planning for the future is necessary, but maybe being free from the grind doesn’t mean being completely free from work.
“To achieve FIRE, you must save a lot of your income during your working years.”
His main point is that there must be a lot of planning early on. The 4% rule for FIRE says that people will only withdraw 4% of their savings for retirement per year. The problem is that inflation is hard to predict, and knowing what retirement will look like or even need is hard when you have never retired.
Simm considers that a good retirement needs three types of capital: financial, human, and social capital. Human capital refers to the knowledge you gather through your career, hobbies, and side hustles. Social is all about the goodwill that you accumulate.
In the end, he concludes, having money in the bank should not be the only thing you’re worried about what you will need for a financially free life.
The FIRE lifestyle may be too good to be true. People had a unique chance during the pandemic, which they might have been able to extend further, but as the cost of living rose and inflation remained high, things became more difficult. Now, this doesn’t mean that people should just give up or that they shouldn’t give this method a chance; quite the contrary. Maybe retiring at 50 is a bit of a pipe dream, but they should plan for retirement.
WHAT DO YOU NEED TO FIND?
