What I Got Wrong About FIRE (And What I’d Fix If I Started at 40)

Forty isn’t too late. But it is unforgiving.

You don’t have thirty years to recover from bad assumptions. You probably don’t have the luxury of starting over. Most FIRE advice is written for people who began investing at 25. If you’re starting at 40, the game is different.

01

I Would Stop Chasing a Number and Start Chasing a Model

Everyone starting FIRE fixates on their number. $1.2 million. $1.8 million. $2.5 million. It feels like the entire game is getting there. It’s not. The number is a snapshot. A single assumption baked into a single spreadsheet under a single set of conditions that may not exist when you actually need them.

I spent my first two years optimizing toward a number I’d calculated based on one city, one tax rate, and one expected return. I hadn’t stress-tested it. I hadn’t run it against a bad decade. I hadn’t modeled what a sequence of poor returns in year one or two of retirement actually does to a portfolio you’re drawing down from. The 4% rule isn’t a guarantee. It’s a historical average wearing a confident costume.

A number without a model isn’t a retirement plan. It’s a finish line with no course marked.

If I were starting over at 40, I’d spend less time watching my balance and more time building scenarios. What happens if returns are flat for five years? What happens if healthcare costs double? What if I retire to a lower cost-of-living state? Those questions matter more than the number itself.

02

I Would Factor in Location from Day One, Not After I Hit the Number

This is the one that genuinely shocked me. I ran my FIRE plan through a calculator that models federal and state taxes, FICA, filing status, and the actual cost of living by location, not a generic index, but a real breakdown of what I’d actually take home and what I’d actually spend.

Same income. Same return assumptions. Different city. The target number shifted by years.

Same lifestyle. Less required.

That gap isn’t a rounding error. That’s a difference of five to seven working years for most people. Location isn’t a lifestyle preference you sort out after you retire. It’s one of the most powerful variables in the equation. Most FIRE planning completely ignores it until it’s too late to act.

Of course, moving isn’t free. Family, careers, and community matter. But treating location as an emotional decision instead of a financial variable can cost you years of working longer than necessary.

Starting at 40, you still have time to make location a strategic decision. Don’t leave that on the table.

Run your FIRE number across locations at Relocation by Numbers →

03

I Would Get Brutally Honest About Healthcare, Years Before I Needed It

Retiring before 65 means retiring before you qualify for Medicare. That gap gets almost no airtime in FIRE content aimed at people in their twenties, because for them it’s a distant abstraction. Even a modest $20,000 annual healthcare expense over a 10-year gap before Medicare is a $200,000 line item before inflation is factored in.

A family of two on a marketplace plan can easily spend tens of thousands of dollars a year in premiums alone, before out-of-pocket costs enter the picture. That expense doesn’t fade before age 65. It tends to grow.

Healthcare is the most expensive thing most early retirees forget to budget for. And it’s the least forgiving to underestimate.

I’d build it in as a fixed line item from the start, conservatively modeled with a dedicated cushion. Not as a footnote. Not as ‘we’ll figure it out.’ As a first-class part of the plan.

04

I Would Treat Sequence-of-Returns Risk Like the Actual Threat It Is

This is the concept that quietly breaks FIRE plans that look perfect on paper. During the accumulation phase, when you’re building your portfolio, a bad year is painful but recoverable. The market drops 30%; you keep contributing and buy more at lower prices. Time is on your side.

Once you retire and start drawing down, the math inverts. A 30% crash in your first three years of retirement does damage that a 30% crash in year fifteen doesn’t. You’re selling assets at depressed prices to cover living expenses. You can do everything right, save the right amount, retire at the right age, invest in the right things, and a bad decade at the wrong moment can crack a plan that looked bulletproof.

Starting at 40 means you have time to build a real buffer. A cash or bond allocation that covers one to two years of expenses. A flexible spending plan that can absorb a down market without forcing you to sell equities at the worst time. A model, not just a number.

05

I Would Stop Optimizing for Speed and Start Optimizing for Resilience

The FIRE community often celebrates the sprint. The person who retired at 32. The extreme savings rate. The tiny annual budget that somehow makes the spreadsheet work. Starting at 40, there’s a temptation to match that energy, to cut everything, save everything, and close the gap by force.

I’d resist it. Not because frugality is wrong, but because a plan built around a maximum savings rate and minimum margin is fragile. One unexpected expense, one bad year of returns, one health event, and it cracks. The people who retire and stay retired aren’t just the ones who saved the most. They’re the ones whose plans survived things they didn’t see coming.

The goal isn’t the fastest exit. The goal is the one you don’t have to walk back from.

Starting at 40, you still have 15 to 20 working years if you need them. That’s an enormous advantage. Use that time to build something that doesn’t require everything to go right. Build in location flexibility. Model different tax environments. Stress-test your withdrawals. Budget for healthcare before you need it. And before you decide you’ve hit your number, make sure you’re not just looking at a single scenario you’re hoping plays out.

A plan that only works when everything goes right isn’t a plan. It’s optimism with a spreadsheet attached.

Before you decide you’ve hit your number, run it across different locations, tax environments, and cost-of-living conditions. The result might move your timeline in either direction.

Curious how much location changes your timeline? Run the numbers at Relocation by Numbers →

If you started FIRE after 40, or learned one of these lessons the hard way, I’d genuinely like to hear your story. What do you wish you’d known earlier?