Early retirement: What happens when the unexpected occurs?

Financial independence and early retirement – known as the FIRE movement – requires devotees to relentlessly save, tirelessly work, and aggressively invest to free themselves of a full-time job by their 30s, 40s, or 50s.

Despite their best-laid plans, what happens when life happens to these FIRE adherents?

Setbacks such as divorce or an unplanned pregnancy could mean surprise expenses in the tens of thousands of dollars that may require a budget overhaul or new stream of income. An ill-timed crash in the stock market could undo years of meticulous saving and investing, extending the months or years until early retirement.

An unplanned pregnancy can disrupt carefully laid plans to early retirement, like it did with Rachel Jones. (Photo courtesy of Rachel Jones)
An unplanned pregnancy can disrupt carefully laid plans to early retirement, like it did with Rachel Jones. (Photo courtesy of Rachel Jones)

“Things will happen…beyond your control,” said Emerald Sparks, a financial strategist from Middletown, Ohio. “It’s not enough to say you want to retire early. You need to know you have the right amount of money.”


Here’s how three FIRE followers got back on track after a life-changing event.

Family matters

Sometimes the biggest joys in life means you must readjust your goals.

For Rachel Jones, 31, an unexpected pregnancy meant she had to tweak her path to early retirement, a goal that emerged three years earlier after reading the popular FIRE blog, Mr. Money Mustache. Since then, Jones and her husband set their eyes on retiring at 40 with $2 million. She has also started her own personal finance blog called Money Hacking Mama.

Then came the pregnancy.

Putting a second child in daycare, along with her two-year-old son, would mean paying an extra $8,740 a year, said Jones, who works in higher education administration.

“You hope for the best and prepare for the worst,” she said.

For Rachel Jones, an unexpected pregnancy demanded she tweak her path to retirement. (Photo courtesy of Rachel Jones)
For Rachel Jones, an unexpected pregnancy demanded she tweak her path to retirement. (Photo courtesy of Rachel Jones)

To compensate for these additional expenses, Jones and her husband, a certified public accountant, have changed their budget for next year. Now they save about $6,391 a month. But she expects that to go down by $1,700 a month after the baby is born.

Jones, who also has an MBA degree, will continue freelance writing as well as host business workshops on the side. Her husband is also keeping an eye out for new opportunities.

They’re still set on retiring in 10 years by saving $2,375,000, a bit more than their original goal. They have already saved $660,246, more than a quarter of their new goal. If anything, she sees her setback as an opportunity.

“Life isn’t all bad,” she said. “There’s also silver linings that are happening.”

Market crash

When Sam Dogen entered investment banking in 1999, he immediately knew he didn’t want to spend his life at the office. Fresh out of college, he was already working 12-hour days. But there were other things – like writing – he’d rather do in his free time.

“Every single night from the very first month of work, I had this incredible sense of urgency to not work forever,” Dogen said. “I was just thinking to myself: ‘I can’t survive multiple decades.’”

He started saving half of his salary with the vision of becoming financially independent. Even as his salary climbed after a promotion, he still maintained his strict saving regimen. By 28, he was saving 80% of his after-tax income, while pursuing an MBA on the side. He held a diverse portfolio ranging from real estate to stocks.

Sam Dogen lost nearly a third of his net worth in the 2008 financial crisis.
Sam Dogen lost nearly a third of his net worth in the 2008 financial crisis. (Photo courtesy of Sam Dogen)

He was on track to retire by 40 with $5 million when the stock market crashed in 2008. As his investments soured, Dogen’s net worth dropped $700,000, falling by almost a third, despite saving 50% to 60% of his income for a decade.

“I was thinking to myself: ‘This is devastating,” Dogen said. “I couldn’t afford to take care of my family.”

Instead of abandoning his goals, Dogen doubled down.

From 2009 to 2012, he socked away 75% of his after-tax income and started a blog,, to make sense of it all. Today the site provides passive income for something Dogan loves – writing. He eventually negotiated a severance package in 2012, a major boost to his finances.

“I truly believe that severance package bought me five to six years of freedom,” he said.

Splitting up

It was July 2017 when Cori Carl was separating from her wife. The pair had been working towards early retirement, but those plans came to a halt as they worked out their divorce.

“And like the lyrics of a country song,” Carl said, “our cat died at the same time.”

While the transition was amicable, Carl had to sell her condo to her ex-wife at a minimal profit under their divorce terms. They agreed to list their investment property – a loft in Toronto – that also doubled as their passive income stream.

“It was pretty scary to see my careful financial plans all fall through,” said Carl, who was making $45,000 as head of a nonprofit at the time. “I was worried that I would need to leave a job I love for one that pays more and provides benefits.”

While her divorce seemed like an initial set back to her financial goals, Carl eventually discovered a silver lining.
While her divorce seemed like an initial setback to her financial goals, Cori Carl eventually discovered a new path. (Photo courtesy of Cori Carl)

While waiting to close on the purchase of a new apartment in Toronto last year, she traveled to New York to take care of her sick parents.

As she struggled to find a sublet there, a friend recommended house-sitting. Two months into it, she realized – as unconventional as it was – this could be a permanent living situation and help her increase her income.

“People talk about the sharing economy, they talk about Airbnb or Uber.” Carl, 35, said. “With house-sitting, people are going away for two weeks or six months and they want someone to stay in their house and water their plants – for free.”

Carl rented her new apartment and traveled to cities such as Washington, D.C., where she could house-sit at no cost and expand her organization’s network. That helped her get back on track to financial independence.

“My budget is ridiculous,” Carl said. She doesn’t pay for housing and doesn’t have a car. When traveling from New York to Boston or D.C., she takes a $20 bus. She considers herself financially independent already, despite her setbacks, which she says people shouldn’t fear.

“So many people have started over so many times,” she said. “If you can do it once, you can do it again.”

Dhara is a writer for Yahoo Finance. Follow her on Twitter @dsinghx.

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