There are lots of great blogs and websites that describe the FIRE movement (a few are linked here) but none really address FIRE from a military standpoint.
So, let's start with the basics.
FIRE stands for Financial Independence Retire Early. It's a movement sweeping financial circles, especially among Gen X and Millennials, as we realize that Social Security isn't going to be around for us to retire on. And if we aren't waiting on Social Security (which kicks in around 65)....why wait for retirement at all? I mean, we all hope to be spry and energetic at 70, but wouldn't you rather golf all day when you're 50? Travel the world when you're 40? Ski or mountain-bike or raise your kids full-time when you're 35? Financial independence -- the ability to not HAVE to work a 9-5 (or 0730-1630 for us military types) -- is the dream for all of us someday. And the crazy thing is that you don't have to come from money (or win the lottery) to make it happen sooner than you think, even and especially in the military.
Broadly, FIRE breaks down into three basic principles:
(1) Maximize your income
(2) Minimize your expenses (live below your means)
(3) Save/Invest like crazy
The idea that weaves these basics into an actionable plan is identifying "your number" -- that is, the amount you need to have saved to be able to live the lifestyle you want in retirement. Figuring out your number is all just math, which we'll get to HERE. But your number provides a goal that makes early retirement a concrete thing you can work toward, save toward, and eventually achieve.
So what about the military?
Ok, so last post I ranted just a little that our culture in the military can make it difficult to think about your financial future, partly because we get used to hardship and sacrifice and partly because so many of our expenses are taken care of (think: healthcare) so we don't think about them or plan for them after we take off the uniform.
BUT, there are a lot of things about military culture that actually make FIRE easier for us. Here are a few:
Ability to Sacrifice.
That tolerance to hardship that I critiqued last post? Turn it to something positive. Part of FIRE is living below your means. For some FIRE acolytes, that means sharing tiny apartments, walking everywhere, eating ramen or PB&Js, forgoing (gasp) Starbucks, and shoveling every last penny into investments. If some of this sounds familiar, that's because anyone who's deployed or gone to Ranger school or survival training has done that and more. We've got "embracing the suck" down to a science.
Living below your means will always feel like a sacrifice -- after all, why keep your old car when the new LT just showed up with a shiny new truck? You COULD afford one too.... Why eat at home when you know you can afford to eat out every night? Why rent the smaller house and make the kids share a room when your BAH can get you the McMansion?
Now, not all of FIRE is sacrifice -- we've been completely comfortable wherever we have lived over the years, and even having a nice home can be an investment in FIRE. But the bottom line is that military families are comfortable with hardship and familiar with sacrifice for a greater good. So nipping a few dollars off the budget with the goal of spending all day, every day with your loved ones once you leave service.... that's an easy sacrifice to make.
Mission and Goal Oriented.
Even more than a tolerance for lean living, military service teaches us all about discipline in the pursuit of the mission. Whether it's keeping quiet on night patrol or staying awake in class, discipline is key to success. And the whole notion of strategy -- selecting a desired end, identifying the ways and means to get there -- is literally our day-to-day business. Thank you, Clausewitz.
Now translate this to FIRE. Sticking to a budget requires discipline, especially when challenges (like that LT's new truck) abound. Just like physical fitness or staying in shape for PT tests, the discipline you've developed from military service will help you stick to your FIRE strategy. And developing that strategy -- finding your number (ends) and the budget/income mix to get there (ways/means) should be intuitive. After all, we servicemembers are nothing if not mission oriented :)
Unique Military Programs.
The list of FIRE-related programs and policies unique to the military would take way too long to list here....that's why there's a whole blog! Between laws (GI Bill, tax loopholes and exemptions, SCRA), policies (VA loans, TSP, annual raises, bonuses, military retirement), and general opportunities (PCSs, deployments, Reserves/Guard, military discounts) there are a host of ways being in the military makes FIRE achievable.
That's not to say it's all rainbows and lollipops. The rigidity of the military pay system means that you won't ever be making life-changing money and the frequent military moves mean your spouse (if he or she is a civilian) has a 98% chance of being un- or under-employed. That can make FIRE more difficult. But the bottom line is that your standard FIRE blogs (and standard financial advice) won't touch the unique nuance of military life. There's a lot to navigate in your quest for financial independence. That's why we're glad you're here!
Military Retirement.
Probably the most interesting and relevant aspect of military FIRE is the military retirement system. As one of the last pension systems available in this country, it is a HUGE boost to your ability to retire early. In fact, military members are pretty familiar with the idea of retiring early from a job -- most of us can "retire" from the military between the age of 38 and 42. Most of these folks plan on a second career in the civilian job sector. But what if you didn't have to? What if 42 could be your real, no kidding retirement? Well, the pension system makes this a much greater possibility.
For those not under the pension system, the new retirement is called BRS -- the blended retirement system. Though a little more complicated than the simple 20-year pension, BRS also facilitates early retirement. We'll cover than it more depth a little later. But either system should be factored into your early retirement plans.
So, to wrap it up, being in the military can actually make FIRE easier -- your mental mindset, habit patterns, mission orientation, and access to a ton of amazing programs and benefits (including military retirement) all set you on the road to successful retirement. It's taken us years to learn about all of these and put them together for an iron-clad strategy. Hopefully you can benefit from our experience and get on the road to your own financial independence!
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