Retire early? Forget ‘FIRE’ and follow ‘CHILL’ | Fidelity UK

^{Source: The Fidelity Global Sentiment Survey 2023}

The views in such surveys are obviously a perception. Knowing how much you need is difficult to calculate because there are so many unknowns: how much you’ll spend in the future, how long you’ll live and so on. In the age of final salary pensions, these headaches were solved by actuaries employed by your employer. Today, it’s your headache.

This makes us anxious. Have we saved too little? Better do more. And more. A common response is goal setting – clear the mortgage at 40, get a pension pot of £500,000, ‘better to be on the safe side’.

Such precise targeting might work for some, but it comes with the risk of damaging side effects. If it descends into compulsion and obsessiveness then living for now is entirely replaced by living for the future. And perhaps that becomes a permanent state, and the future never arrives.

The stakes have never been higher, given demographic trends. I wrote previously that there’s a good chance I’ll live to 93 (a one in four chance), or even 97 (a one-in-10 probability). The 100-year life is a growing reality and one that demands we reshape our approach to retirement. And it can be positive.

If we can work for longer, then funding our old age becomes infinitely easier. Many people don’t like their job, or the hours, or the commute. A solution for younger generations is to plan their lives with optionality – route some of your investments into flexible pots, such as ISAs. You then give yourself the option to retrain to a new career in your 40s or 50s, and perhaps more than once – to find something you love. Or you just want to take a break – a three-year mini retirement to travel, so you have the stamina to continue working longer. It’s worth reading this thoughtful post from a 25-year-old on how she is thinking about this.

Why it’s helpful to ‘CHILL’

Work can maintain engagement, keep us all sharp, as well as maintain social connections and even a sense of purpose. The ideal employment and employer would keep alive these beneficial attributes while giving you more time to pursue the things you love.

This is the antidote to the FIRE movement. I’m calling it CHILL: Career Happiness Inspires Longer Lives.

Don’t get me wrong. I understand 100% that we have a saving crisis. Too few people invest and too many people invest too little. We need the under-saved to embrace long-term investing, and the potential it has to unlock a better future for them. But it is best done gently and not held too tightly.

Alongside a savings crisis, we also have a mental health crisis, in part driven by financial dysmorphia. The solution is more education such as our retirement calculators, and those offered across the industry offer solid help. Those willing to pay the extra may consider financial advice if it’s the only way they’ll sleep at night.

Either way you’ll never work out exactly how much to save. Save what you can, what is sensible. And think about ways to extend your working life. Join the big CHILL.

This article was originally published in This is Money

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