For those of you who have been on the savings side of FIRE, or FIRE'd already, and experienced some sort of high-expense emergency, has it changed your outlook at all? I like to think that I try to come up with a lot of contingencies, but some stuff can be surprise no matter what. For those of you that have experienced this (think house burning down, someone getting seriously injured, major level health scare) have you changed allocations, decided to work longer, increased your FIRE number?
Going through a bit of this right now and I'm wondering if my FIRE number needs to go up to plan around a larger unknown than I originally anticipated.
How have health scares or other emergencies changed your FIRE outlook?
byu/AcceptableQuarter554 infinancialindependence
Posted by AcceptableQuarter554
12 Comments
Personally, if in the US, medical insurance is absolutely necessary before FIRE. If the ACA subsidies disappear, all insurance will get more expensive. Not really knowing your situation, yes, plan for higher medical experiences. We were fortunate in that we were able to FIRE about 10 years earlier than “normal” retirement because we could continue with the group plan of my old employer until we reached Medicare age. The uncertainty was relieved some, but it definitely got more expensive every year. And, in all honesty, we would not have FIREd if we did not have that insurance.
I am not quite FIRE yet (If the market doesn’t tank in the next week I’ll officially be FI when I do my monthly spreadsheet update) but I plan to manage those risks in retirement the same way I’ve been managing them while I’m working.
Part of that is just having a healthy emergency fund which I’ve started growing as I’ve gotten closer to retiring. I am a bit behind on that because I shifted over to filling my HYSA thinking I was a couple of years from FI but then the markets went bonkers and I got there much sooner but I’m still putting all my new money into savings instead of the taxable brokerage.
Another part is that I’m modeling my FIRE target with very conservative numbers. That means that I could draw a big lump sum once or twice and that would increase my SWR a bit but still give me a pretty high probability of success (assuming I don’t get hit with the perfect SoRR storm of a HUGE unavoidable expense at the bottom of a market crash early into retirement). I also have the ability to flex my spending a bit.
For the other stuff:
My house is insured. A house fire would have a big impact because I know that insurance doesn’t usually really make you ‘whole’ again but we can easily manage.
Our health is also insured. My healthcare assumptions in retirement are based around out of pocket maximums so an accident or major illness would suck but at least I’m planning to be able to absorb it financially. Often the bigger impact of a major health event is that it means you can’t work anymore and that risk goes away in retirement.
For a lot of people, health scares are a reason to FIRE or otherwise stop working sooner and on their own terms, not later. Just from the examples and framing you gave, it sounds like you’re approaching it entirely from the other direction. That’s not ‘wrong’ by any means, but it’s something to consider.
Most “FIRE” people already build buffers into almost every aspect of their plan. And most end up working “one more year” for a few years even after they hit their number. I don’t think finding a whole new category to build another buffer in would be worth the effort. You have an emergency fund for a reason.
One of my favorite activities is hiking and I’m about 8 months from retirement. Earlier this month I hurt my knee and I’ve been unable to walk for any long distances (longer than a few blocks). While I work my way through doctor visits and PT sessions, I’ve been thinking about how we tale our health for granted until something happens. My vet, who is very wise, said this injury will make me appreciate my recovery when it does happen.
my mom’s death from unexpected cancer within a 6 month period in her mid-fifties reset my entire sense of priorities in life. Suddenly, life was too precious to stress myself out unduly about things like work and “achievement”. My career became just a way to provide for my family (and if I enjoyed it along the way, even better), but I stopped tying my sense of worth to this. It has changed my entire approach to life. I was pretty neurotic before, but much more relaxed now. And I focus more on what will make me happy now, rather than postponing all the little hedonic joys to a future day. Of course it is a balance, but before my mom’s death I was miserly in the present, and I didn’t realize how much joy that was robbing me of.
From a financial perspective, I take health insurance (and other types of insurance) seriously. My mom’s cancer treatment was multiple hundreds of thousands of dollars (covered by insurance in the end, so out of pocket it was only a few thousand, though my dad spent many teary-eyed hours fighting with the insurance company over some of that). Beyond that, I try not to worry about it. I think it is great to look these big risks in the face and have a plan to mitigate them. Maybe that looks like working 1-2 more years to have an extra cushion, or pay for the fancier insurance.
I’m retiring at the end of this year, roughly 4 years later than hoped because my daughter got an aggressive cancer 9 years ago as a teenager. It was literally a bomb going off in my life.
I was out of work for 3 years to ~~care for her~~ spend over 100 hours per week saving her life, with no income replacement because there is no paid parental leave in the US, FMLA is a joke at best, children don’t qualify for social security disability, and you sure as shit don’t get unemployment for caregiving.
Her cancer cost us out of pocket between $250-$300K ($3Million + before insurance) and like 85% of childhood cancer survivors she is permanently disabled from treatment so the bills continue to rack up. She is in her early 20’s and still financially dependent on us. She will most likely live independently, but is delayed compared to her peers and will take longer to launch.
But we walked away with our house, our retirement, our marriage and our child alive without declaring bankruptcy which is fairly unusual for cancer families. That was only possible because we had a healthy stash and lived well below our means at that point. FI saved us.
Basically – worked longer, increased FI number to reflect more costs associated with daughter.
I was introduced to FIRE in 2015, started actively working towards it in 2016/2017, and then was diagnosed with MS in 2021. Needless to say, my outlook on FIRE and future plans had to be adjusted. My view on what is important also changed. If anything, the diagnosis made me want to achieve FIRE more. I looked at our numbers and realized we would need to increase them for future medical expenses and potential life changes.
Additionally, I tried to set myself up now so that if my health status were to change significantly, my family would be ok. I got a term life insurance policy that would cover the balance of our mortgage, living expenses, and allow my spouse to take some time off and not immediately have to return to work. We also refinanced our mortgage when rates were still low, so that way I knew my spouse would be able to afford it alone on their salary in case I had to stop working at some point.
While we have made good headway on our FIRE journey, we’re still not quite there. I don’t know how many “good” years I have left, so every moment now is valuable. I’m torn right now between finishing our FIRE plan and not wanting to waste whatever time I have left sitting in an office doing work I’m not passionate about. Unfortunately, I don’t have an answer for that one yet. For now, I just try to focus on what I can do today to make sure my family will be OK and what I need to do to extend those “good” years.
I’m still towards the beginning of saving, but my husband has advanced cancer at 30. I was always so frugal and would stress about spending and eating out, and extras. Now, I don’t. If he wants to get takeout or go out to eat, or buy some expensive groceries, I don’t care. It’s important that his quality of life is comfortable and I need him to eat (there was a month where he couldn’t eat and lost tons of weight and was so weak).
And I try not to sweat the small spending, even though it adds up, and we aren’t saving what we should be, it’s something I worrry about less. We also lease new cars (Hondas, nothing fancy) that I never would have thought of getting, but we got good deals and he needs to be comfortable. We have weekly cleaning help, otherwise would just be bi weekly.
I also would like to make more money, with my bonus I’m not reaching $100k. However, I have a great remote flexible job, with good benefits and I carry my family on my insurance with decent costs. With all that, I cannot get another job right now because I need the flexibility and health benefits.
My dad survived a major heart attack this year at 63 and my father in law was diagnosed with leukemia at 67 in February. Thankfully both are doing very well now, but 2025 can go and fuck right off (we also lost our dog suddenly this summer). It absolutely highlighted the importance of staying on top of my health (started going to the gym again) and that I will NOT die at my desk at 65 like my grandfather did. While it didn’t drive any significant shifts in our financial behavior or timeline to FI, it has cemented our plan for the RE part of our journey. We will pull that cord when we hit our number and enjoy our 50s and 60s to the fullest.
My father died of cancer at age 59.
Before that, he got pushed out of his long time corporate job in his mid 50s.
When I got my first after-college professional job, I looked around my office for all the 50-something employees. Except for VPs, there pretty much weren’t any.
Seeing this first hand motivated me to start saving a lot from the very beginning of my career.
I graduated from college right before I turned 27.
Retired shortly after I turned 56.
When people tell me I’m overbudgeting for healthcare because the premium for a bronze ACA plan is whatever, I just think to myself “oh you sweet summer child”. It’s like these people have never hit an out of pocket max before.
I want a plan with a good network. I do not give a fuck how much it costs, I need the good network. I am not going to my area’s worst run medical group when the shit hits the fan, I’m going to the fucking Mayo Clinic. If I have to work an extra year or two to afford that health plan, then so be it. If I have to move to get a plan with a good network, then I will.
I don’t think most people look at the details of their healthcare plan until they have to. And then they come on here to complain that it’s a scam because this, that, and the other wasn’t covered and now they have a $30k bill. Most of those ACA plans in my area have absolute shit networks, mostly places I wouldn’t even consider going today for anything more than a routine checkup or flu shot, and they are HMOs so yo have to get a referral for every little thing. Only one covers Mayo, and there’s no guarantee that one will stick around because it’s relatively new, so we are probably looking at moving.