How to Refactor Your Finances - An Interview With a Programmer Who Retired at 34

Charles Treichler on March 06, 2019

For the uninitiated, FIRE (or just FI, or FI/RE) stands for “Financial Independence/Retire Early.” FIRE adherents live frugally and save as much as... [Read Full]
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While I admire the FIRE movement and am actively pursuing it to a degree, I worry that its adherents in the United States fail to consider health care costs. If you assume you will stay healthy throughout your adult life, FIRE is not that hard to achieve. In other countries with universal health care this is not a concern. In the USA, however, a single hospitalization can lead to hundreds of thousands in bills. Imagine saving your $1M by age 40. You then retire to live comfortably on $40k/yr. At age 55 you fall down the stairs and break your hip. If you have been paying insurance premiums for the past 15 years on your $40k annual budget, your insurance sucks. High deductible means you would be on the hook for most of the bill for the ambulance, the ER, the hospital, the anesthesia, the surgery, and the rehab. Easily $100k in expenses. But then you get an infection and require more surgery and more rehab? Or maybe you develop a blood clot and get a pulmonary embolism? These ICU stays are going to be at least that much. All of a sudden you've burned through 4-5 years of planned spending in one year. You're only 55 but you've been out of the workforce for 15 years. Your earning potential is minimal.

I know this is ancillary to the point of the OP, but just something that bugs me every time I see a discussion of the FIRE movement.


Insurance sales-person right there. Don't question if you'd have more time to challenge said unjustified system, just say "they'll be sorry"


You're only 55 but you've been out of the workforce for 15 years. Your earning potential is minimal.

Nonsense. Most programmers would continue to code regardless of having a paid job, so you'd have 15 years of side projects, plus at least 10 years of experience in a market that has been under constant inflation despite innovation and productivity ratings higher than any industry I'm aware of.


High deductible has a annual payment cap, generally much lower than 100000.

But say you did have to pay 300,000 or more. In those 15 years you likely did not spend the 40,000 a year and thus you saving will grow some.

When you pay off your medical bill, you may not have your 40,000 to spend each year so you cut back a little. Maybe take on a lower paying job if you are worried about it. Then eventually get back to FI.

The consider the alternative. You are working 75,000 a year and you spend it, you have some savings for retirement and you have a large medical expenses with insurance paying 80% you owe 200,000 of the 1,000,000 medical bill. Now you need continue work to pay the medical, living costs, and you are much worse off then the one who follows a FI plan.


You've misunderstood my issue with the FIRE movement, but your argument is still specious in that it assumes spending even less than what was a predetermined minimum. If one's goal is FIRE and can reliably live on less than that, then that person would simply have reached FI even earlier.

My issue is that healthcare costs are inevitable, unpredictable, and largely ignored by the movement. I'm not arguing against the concept of living as frugally as possible in your indentured servitude so as to end that servitude sooner. I'm arguing that true financial independence in a country that does not provide universal healthcare coverage requires far more in assets than what any FIRE plan I've read ever mentions. Because the likelihood of costly healthcare needs increases with age, they are most likely to occur when it is too late to "cut back a little...take on a lower paying job ... get back to FI." Again, my only argument is that many of the bars for FI I see (such as passive revenue from investments of 40k) make no allowance for this issue. If your annual expenditures in good health are $40k, plan for a lot more to avoid being surprised by a 2-week ICU stay, 4 week inpatient rehab stint, and 6 weeks of outpatient rehab or worse permanent need for assistance either through home health aids or nursing home placement.

I suppose you could be right. This article is the first I heard of FIRE so I haven't read any plans. That needing medical prevents cutting back other costs.

But I thought I still covered the medical because they are supposedly have high deductible insurance so the 300,000 seems unlikely to actually be the cost.

Couldn't find a laid out plan so I searched for the specific issue and it seems they have reasonable answers to things.

Yes my concern is somewhat exaggerated but the solutions posited in that article are:

  1. Spend thousands flying around the world to get cheaper healthcare -- probably a wash unless you already built travel expenses into your budget;
  2. Spend $700/mo (about 20% of the 40k/yr budget);
  3. Get insurance through your working spouse -- not FIRE.

My concern is only for folks planning to retire and stay in the USA. Healthcare is not something you might need, it is something you will need at some unpredictable point in some unpredictable amount.

You had me going at first, but after going back to the article I realized that isn't what they were suggesting.

"she took a job after he retired). Should they need to self-insure in the future, Mr. Jensen would likely use a health care cooperative like Liberty HealthShare, as other FIRE adherents have"

So never mind, I'm out.

Cool, I'm not sure how the health share plan that requires a commitment to a faith-based lifestyle and still costs 15% of the 40k/yr budget contradicts my point, but yeah we're done.


I guess it's all about probability here, There's a lower chance of all those things happening. Imagine you die just when you're about to FIRE?


I work in healthcare. Unexpected serious illness is much more common than you seem to believe.

Really? What's the probability here? 1 in 10 people? 1 in 3 people? Like I said, It's a game of probability and hope :)

Hope is not a strategy. My only point is the target of $1-2M is far too low in the USA. Especially as the vast majority of people are going to require healthcare services at some point. Those exceptions are largely tragic early deaths.

In the absence of universal healthcare, those costs are huge. So the FIRE community should either advocate for adoption of universal health care, or recognize the target number needs to be much higher than simply .

Again one can argue that what ever number you chose isn't high enough becaue many things can go wrong. What if the US economy crashes and the currency get's devalued? What if youre target was $5 million and you constantly have emergencies that burn away the capital?

It's really a game of probability and hope. How you can chose how safe you want to be but you can never be safe enough in my opinion.


Nice to hear of the success of a fellow Tar Heel!

One nit to pick, as I see this a lot:

There have been a lot of different studies about what level of income makes you happiest, and the last thing I read was something like $75k a year.

I hate it every time someone uses that $75,000 figure. What you can get for $75k varies widely across the world and across time. The life you can live in SF for $75k will be much less luxurious than in a smaller city for the same amount. And because inflation is a thing, $75k may eventually be a pittance for anybody. Just quoting a random dollar figure feels so click-baity compared to discussing the underlying economic concept of diminishing marginal returns. There is no one universal dollar figure that signifies maximum happiness; it must vary by place, time, and the desires of the person earning it.


I feel like if you moved to a different country, like say the Philippines, $35k a year for two people would be overkill. If you ever try something like that, I'd love to read about it in another post of yours. Loved the post btw!


Great post! I’ve sort of been doing this before I ever heard about the FIRE movement.

I’m not worried so much about retiring early. I want the financial independence.

We are way to obsessed with consuming and “things”. Things will never make you happy.

If you have debts evaluate the debt snowball and free yourself. Pay yourself first.

Step off the Hedonic treadmill (look it up) people!


In my country 75k net dollars equivalent in a year would be pretty high, and of course pretty much unreachable for a programmer. But I agree it would be more than enough to be "on FIRE"; if we talk about net incomes even 40-45k would be okay and guarantee financial indipendence.


Same here, it would require a salary of 150k$ a year, meaning 12,5k$/month which is unheard of, no matter what kind of developer you are.


Great post. I agree 100% with this: "You might as well just start buying your freedom. You're buying more options, and that makes your career and working life a lot more fun."

I will try to get more into this FI FI/RE thing.


The question at the end - happiness is an inside job is the answer :) you have to train your mind for sustainable happiness!


Thanks for spreading the good news. I just recently found the ChooseFI podcast, and thus Brandon and all the others FI figures. I'm on the good path now, and spread the news to anyone who seems interested.

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