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What If the (Almost) Worst Happens?

Lots of folks have taken the Road Less Traveled Challenge! Check out the links to their posts… and maybe do your own!

I don’t think of myself as a worrier, but I am definitely a “hope for the best, plan for the worst” kind of person. Planning for the worst has just always been wired into me. I wrote a will when I was 22, despite having no assets and a negative net worth… and you know I got weird looks at work when I asked coworkers to sign as witnesses. (Note to self: maybe just ask friends next time.) I’m the dork who has not only put together an emergency plan for natural disasters (ready.gov has a great guide on how to do one, if you’re inspired), but who also has well stocked “go bags” strategically located around the house and in our cars. And I’m only comfortable with our early retirement plan because we have about a dozen contingencies in place to cover us in case things don’t go as we hope they do — those include everything from renting out our house to earn more income to tapping into our 401(k)s early, which we hope we never need to do.

But I’ve recently realized that I tend to focus on worst case scenarios in my planning, and think less about the sub-worst level stuff. Like I’ll have a detailed plan for what we do if our house burns down (fire season has begun in the mountain west — this is not a far-fetched scenario), but spend less time thinking about what happens if we need to, say, spend half of our annual budget on a major home repair. Or I’ll think about what happens if one or both of us dies — admittedly a prospect that is less terrifying now that we know we’ll get to leave behind a big bequest (anyone else find this to be true as well?) — but not think as much about what happens if one of us should get seriously injured or become chronically ill.

For his part, Mr. ONL tends to be in the “we can handle anything, and we’ll figure it out” camp, which is reassuring, but also doesn’t replace the desire to plan plan plan for someone wired with the planning compulsion. So today we’re taking on some of these tough questions, as we like to do, rather than brushing them away with the “it’ll be fine, we’ll find a way” answer.

OurNextLife.com // What If the (Almost) Worst Happens? How will we adjust our early retirement plans if bad things go down?

One of my favorite things about planning for early retirement is that it almost forces you to be optimistic. In ensuring that your money will last long enough, you assume that you’ll live a really long time. You let yourself dream big — maybe bigger than most people dream — because there’s now an actual possibility that you might really do some of this stuff you’ve been thinking about. And you optimize your finances in a way that makes it impossible not to be stoked a lot of the time. That’s why we think that the journey to early retirement is worth something huge even if we never actually achieve ER, because there’s So Much to be happy about.

But early retirement doesn’t replace the randomness of life. Bad things big and small can still happen, and while we feel as prepared as we can be for the big bad stuff, it’s the medium bad stuff that we’re now thinking about. The stuff that isn’t a game ender, but could be a game changer.

Related post: Planning for a Long Life and Planning for the Worst // Our Estate Planning Approach

Our Almost Worst

While we can’t anticipate everything  — not because I haven’t tried! — these are the “almost worst” scenarios that would most drastically impact our early retirement plans.

Mobility-Limiting Injury or Disability — Starting with the one that would  be most life-altering for us, given our plans to pursue a constant stream of outdoorsy passions in retirement. As I shared early on in the blog, I have a major disability in the family which I may still get, though every passing symptom-free year is a very good thing, and I’m only a few years away from being in the clear. And all the activities we do — skiing, climbing, cycling, etc. — come with risk of injuries. We are extremely conservative when it comes to risk-taking, and we try not to make dumb decisions, but there’s no way to erase that risk completely. So let’s say one of us loses the ability to do all the outdoorsy stuff — what then? I think Mr. ONL would take it harder than I would, since most of his life goals are now built around outdoor pursuits, whereas I have tons I want to do that requires zero mobility (reading, writing and studying languages are top of that list). So some life goal realignment might need to happen. And we’d almost certainly move — our two-story house would become highly impractical, and honestly, we’d probably leave the mountains if we couldn’t ski much anymore. No need to put up with the cold winters if we’re not able to get out there and enjoy them! There’s a beach town we especially love, and that would be the first place we’d explore as a new home.

Chronic Illness — We both have autoimmune disease in the family, and I already have one of them, so this is not a far-fetched scenario either. On one hand, being early retired would make it a lot easier to have a chronic illness, since we wouldn’t have to worry about how it’s impacting our work. But we would have to be extra diligent that we’ve got excellent health coverage — right now that would be through the ACA, but if the ACA goes away or changes significantly, we could find ourselves going the expat route to get better care abroad. Or we could foresee the possibility that the healthy one of us goes back to work in some capacity to get great health insurance in the U.S. Depending on what the health condition would be, we might also find ourselves needing to move. We’re lucky that our mountain town has a hospital, but we’re clear-eyed about the limitations of rural health care. So that’s yet another motivator behind our focus on prioritizing our health: so we can stay put where we live now!

Almost-Major Financial Setback — It’s hard to know what kind of setback this could be — major and sustained market crash? major home repair not covered by insurance? — but this is one area where we feel like we’ll have options. We plan to maintain an emergency fund in cash in retirement, just like we have now, and we’ll have that long list of contingency options (selling our house, selling the rental, going into bare bones budget mode, liquidating part of our 401ks, etc.). And, of course, to reduce the likelihood of something like this even becoming a setback in the first place, we plan to stay heavily insured throughout our retirement, and are glad we recently added an umbrella policy to provide additional liability coverage.

Family Member Needs Major Care — We thank our lucky stars every day that three out of our four parents have military pensions, and so we don’t ever need to worry about them not having an income. But there’s still one parent on shaky financial ground, and of course extended family could need help of some sort. Though we’ve already helped pay for a small portion of care for an elderly relative, purchased our rental property to rent to  a relative, and made a personal loan to another, we’ve decided we don’t want to have any more financial entanglements with family. So we’ll be first in line for moral support and in-person help, but we’ll be assessing financial help differently in the future. Of course, we feel strongly that money is worthless if you don’t use it to help those most important to you, so this one could be more of a play-it-by-ear situation.

Divorce — We’ve taken to saying to each other — jokingly, but not really — “If you want to divorce me, you have to do it before we retire.” Because the truth is that divorce post-retirement would put us both in a financially unsustainable position. And while we could probably figure out a way to go back to work if we were only a year or two into retirement, every passing year thereafter would make it exponentially harder to recreate an income that would put us each, separately, back on the FIRE path. Fortunately, we don’t plan to get divorced! And we feel strongly that our marriage is our most important asset. But if it happened in spite of our best intentions and attempts to fix things? This one stumps us more than all the others, because it would be disorienting on every level. We’d have to sell the house, split up our assets (no prenup, so close to 50/50), and then hope that we’d each get enough out of it to keep living something like an early retired lifestyle, though in a lower cost of living place than where we live now. Honestly, we’d probably each end up moving in with a parent, at least for a while, and after regrouping a bit, would face the challenge of trying to find work despite having a big employment gap and being behind on skills because of that gap. Knocking on some very wooden wood in hopes that this one never comes to pass. Fortunately, this is the one we have the most control over, and we’re committed to keeping our marriage 90 percent awesome, and always working on the stuff that’s not awesome.

What’s Your Almost Worst?

I’ve talked to several folks about this recently, and have realized that while we all tend to have similar definitions of worst case scenario, “almost worst” is a lot more varied and personal. What is your almost worst? And have you thought about how you’ll change your plans if those medium bad things happen? Let us know in the comments.


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70 replies »

  1. You are very practical! Although many people hate thinking about the (almost) worst, we still have to be practical and plan for it. Or at least have a plan should the range of worst happen. We may not have thought through the list of worst… but we still plan to have an umbrella and prepare ourselves for anything.

    The Green Swan

  2. I remember hearing somewhere that homelessness is always just two crises away, so I use that as my “worst case” and things like job loss, lawsuit, divorce, major health issue as my “almost worst.”

  3. This is going to be a horribly depressing comment, BUT having lived through two elderly relatives needing extensive care for years (and years and years) I know the one thing that was a big bright spot in the entire process was that my mom and I both had the flexibility to be there and help out in terms of time spent with them. (Mom because she was self-employed, me because I was a university student, haha.) Luckily, it was far less about finances (thanks, Canada) but I think that might be a positive upside to the family-member-needing-major-care situation for you two – it will likely give you great peace of mind and heart to be able to spend time helping, instead of spending money, if it’s required!

    But also, as a fellow planner, I just adore everything about this. This reminds me that I need to get my act together and get a will in place!

    • I’m seriously happy for you that this all happened in Canada, because I saw this, too, with my grandmother. And let’s just say that it’s much, much worse in the U.S. (Shocking, I know.) But how wonderful that you had time and flexibility to spend time and help out! That’s pretty priceless. And yes, get that will in order! Think of it as a favor to the ones left behind. :-)

  4. This is the first time I’ve seen a post where a FIRE blogger considers that it may not be so easy to “just go back to work” after years of being out of the work force. Maybe it’s because I’m older and it’s harder to just “get a job somewhere else”. I work in IT, so, after several years of not working, my skill set would be seriously out of date. I’m a planner like you are, so I like to think about all the what-ifs too.

    • Haha — we should talk more often! I’m making it my mission to debunk that crazy idea that you can always just pick up where you left off with your career, especially because the times when retirees will likely need money (market downturns) are the exact time when the job market tightens. So I think going back to work should not be anyone’s first line of defense in ER. Frankly, I think it’s something that women are more used to thinking about, because it’s always harder for us — men have never faced wage gaps and discrimination based on the notion that we might at some point need to take maternity leave.

      • I’ve noticed a tend over the past five years or so that there are more ‘involuntarily’ retired bloggers. Unsurprisingly this includes those with medical issues but it also includes those who, around 55, were downsized or had a business fail during the recession and were unable to find substantial work again. This used to be more of an issue for a woman returning to the work place after being a stay-at-home mother but it’s become relevant to older men as well.

      • So true! We’ve noticed that as well, along with the mismatch in the data: A high percentage of people report that they plan to work until age 67 or never retire at all, and yet the average retirement age is 62. So plenty of people are being forced to retire ahead of schedule, and we should all view that as a wake-up call that we might not have control over when we’re actually done working.

  5. We were just discussing some worst-case scenarios recently. It’s definitely scary if we spend too much time pondering situations over which we have little to no control (major illness, accidents, etc.). Taking care of our finances and our marriage (love that you point to a strong marriage as a key to your financial security) is how we keep the anxiety at bay. For us, we consider care for an elderly parent a high probability, so if we ever move and buy a different house, we’ll likely take that into consideration. There’s a lot up in the air with that. Of course the unknowns can be daunting at times, but they also provide motivation for seizing the day, reaching FI, and living our best life now. So that’s the positive side of it all!

    • I feel strongly about that marriage point. We all know that health problems are a major source of bankruptcy, but a divorce would destroy our finances much faster, and there’s no “divorce insurance.” :-) Plus, you know, it’s way more fun to be happily married than unhappily married! And, couldn’t agree with you more that all those uncertainties can be great motivation to hurry up and save already!

  6. First off, I love your planning for the worst – I’m a big planner as well and it drives my wife batty sometimes. :-)

    Your “almost” worst case scenarios, though depressing, are valuable to think about. We haven’t done that, but it all comes down to the “ya never know.” Life can throw punches at any time and you need to be ready for them.

    My almost worst case scenario that I’ve started to think more about is my parents. They are getting up there in age and have no real financial sense – or money for that matter. They paid off their mortgage a few years ago and so randomly decided to buy a $100k RV to use twice a year. Why only twice a year you ask? Because they don’t have money for it so they need to work until they die to pay for it. Planning for the future has not been a strong suit for them so I’m not really looking forward to their old age.

    — Jim

    • Planners of the world unite! :-) Yeah, parents can be a real source of stress! Especially if, like yours, they are both aging AND making very questionable financial decisions. It sounds like you’ll be retiring before yours at the rate they are going — I’m almost certainly going to retire before my mom, too, for similar reasons — not quite as bad as the $100K RV, but close!

      • “I’m almost certainly going to retire before my mom, too” This is such a first world statement! Not being disrespectful or judgemental, I’m in the same boat but I literally get so sad when I picture myself free and financially untethered while my elderly mother continues to toil away to support herself. I know she’s made her choices and I have to chart my own course, but I can’t imagine being truly happy knowing I could have worked longer/harder to help her retire too. It’s probably a cultural thing, but can you maybe share how you manage to say something like that (and its not just you, it seems a common phrase in the FIRE community) so casually and, seemingly, painlessly/guiltlessly? (That’s the kicker for me: the pain and guilt!)

        BTW, I love your blog so much. Just discovered it, but I’ve been binge reading like a fiend and have learned so much. If you’ve already addressed this elsewhere, sorry to dredge it up again!

      • Then again, if my mother paid off her house and got an expensive RV in instead ending up n even more debt… Might be irritated enough to overshadow the guilt part!

      • Sigh. Sadly, none of us can make decisions for others, much as we wish we could! I’d LOVE for my mom to retire ahead of us (she’s our last parent still working), but she’s stuck with the situation she’s gotten herself into, despite lots of advice in different directions. I know that we’ll end up helping her later on, and that’s the best we can do or say at the moment. I don’t say any of this without pain, just with a healthy dose of realism. At a certain point you have to treat people as adults capable of making their own decisions, you know?

        And thanks so much for the nice note! It’s so awesome that you’re reading some of the old stuff. :-)

  7. I agree with Des on this one. My father has advanced Alzheimer’s and needs extensive care. My mom is still doing it at home with some outside help, but this could be quite a long term situation. My husband is also 8 years older than me and is likely to need care before I will. We have talked a lot about what we want that care to look like (for either of us) and are working on a plan to fund that as well. Not fun topics to discuss but a great feeling of relief once the plan is done. I love that you dive in to these topics with everyone and let’s just all hope for good results from our plans. And yes – you folks need to get wills, health care proxies and powers of attorney in place. We put that off forever…

    • I’m so sorry to hear about your dad, Vicki. I’m sure that’s an especially tough thing to deal with for everyone involved. :-( I’d love to know, since you’re thinking about this: are you guys considering long-term care insurance? We’ve discussed it a few times here, and are definitely considering it, but have gotten flack from readers for that. ;-)

      • Thanks so much for your thoughts. That’s a great question about long-term care insurance. My family has always been against insurance – so our plan is to “self-insure” with paid off real estate. We are older than you though – (49, 58) so that is a big factor too.

  8. It is so important to think about what our lived realities could look like. The majority of people eventually have a disability. The majority of people live in homes with accessibility issues. Part of my plan for purchasing a condo is that it has to be something I can age in. I want to be in a building with an elevator in case I’m ever mobility impaired. I want it to be easy to maintain for the 70 year old version of ZJ so that she is not overwhelmed by her stuff or her cleaning habits.

    Kudos to good planning.

    • Wow — way to think ahead! When we bought our current house, we definitely thought about wanting a bedroom and bathroom on the main floor instead of them all being upstairs, but we didn’t think enough about all the rest of it, including how hard our place would be to clean and maintain. If we do end up downsizing, that is for sure something we’ll give more thought to, as you have!

  9. A very serious topic for this lovely Wednesday morning, and one I think about frequently. I was recently discussing “what if” scenarios with a relative here for a visit who was alarmed at the amount of work being done to the house (siding repairs, water damage work, yard cleanup), and concerned for both of us that we’d taken on too much of a fixer upper in retirement. She asks what my plans were, specifically concerning not just the house but my life, should Mr. AR die or become incapacitated. We revisited my current game plan, which in the event of his demise consists of leaving the home without selling it, and paying to maintain it as a vacation home for the family if that’s a financial feasibility. I would significantly reduce possessions and most likely rent a small, easily sustainable apartment somewhere, and hopefully do some traveling. But what if Mr. AR were seriously ill and required expensive, long term care? We could stay in this house with in home care for a while, but we would have to move our assets to an irrevocable trust in order to qualify for most assistance programs, or just burn through them at an alarming rate until we qualified. Should either one of us require institutional care, we would most likely be forced to sell the house and live together in a facility that allows it. Divorce is not an issue (or an option), so I don’t dwell on that, but I do think about managing a large, high maintenance house by myself (or having Mr. AR in the same position), and I doubt it’s practical unless a family member wanted to move in and help out with care and expenses. Failing that, we may end up selling out of this place in the face of a life altering diagnosis for either one of us. He is already facing mobility issues as a result of a progressive, irreversible autoimmune disease, so we’ve discussed the issue many, many times, but we don’t really look at other scenarios. My father developed Alzheimer’s, and the impact it had on retirement plans was staggering. My mother now suffers from dementia and will probably end up in assisted living, as did my MIL. Of our four parents, three required or will require expensive, long term institutional care, so it’s a real possibility for one or both of us, and a frightening one at that. Beyond holding onto our assets and keeping up our medical coverage, all we can really do is maintain our health and stay as physically and mentally active as possible. Market fluctuations and natural disasters don’t really alarm me, but a health related issue that robs either myself or Mr. AR of our personality, sense of humor, memories and dignity? That’s what keeps me up nights.

    • You guys are closer to these big, tough questions, but they keep me awake at night, too! My grandmother had the spend-down-the-assets problem that you describe in her last few years, and it was so sad that the goal was to get her onto Medicaid, which meant that every dollar of her hard-earned savings went to her long-term care until she qualified. It sounds like you have a bunch of backup plans in case of a health catastrophe, though, so that’s a huge positive. None of us want to face a health problem that reduces our quality of life, but the stats say that many of us will. :-(

  10. I agree that the “just get another job” is EASY to write about, but after being out of the industry/full time work for a year or more, that along with age would make it a bit tricky. Fortunately, if I wanted to go back to oil, I could use the kids as an excuse, and even murmur about the downturn, following dreams, etc… :)

    I think my almost worse would be physical or mental capacity diminishment, like early onset alzheimers, MS, or whatever else. Short of that is the divorce scenario. Like you pointed out, once we both pull the trigger, it’s way more messy to figure out and would hose everyone involved. Not that we’re planning on that or heading down that path, but man, hearing a couple of people talking about their divorces recently made me even moreso appreciate not being in that situation. That would be my ER/zombie apocalypse worst sscenario. :)

    • Do you think you really could go back to oil after a gap? We think about this, and while Mr. ONL *might* be able to go back to his line of work, I would get obsolete in mine FAST, and that option would be off the table.

      And sounds like our fears are similar! All that capacity diminishment is scary stuff. And divorce, yeah. How about this plan: Don’t get divorced. :-)

      • I do believe that I could most likely get back into oil after a gap. It’s not unusual in this industry for geo’s to leave, return, etc… I’ve worked with a lot of people that have taken gap years for kids, health, burnout, and then returned. Also, most of the people in the industry that are older than me have been forced into “gap mode” at least once during their career. The ones that could afford it, laid around their pool and enjoyed the time off before looking for another gig, and the ones that couldn’t afford to do that, found other work, typically outside the industry. I may not get on with a major, or even large independent, but I would be wanting something different and would try a way smaller company than I’m used to.
        I think also that during these downturns a lot of people that get let go, or even just start questioning their passions leave the industry for good. Mrs. SSC for example, and a handul of other friends and ex-colleagues are gone and don’t want to come back. So, oddly enough there becomes a shortfall in some experience levels that’s hard to find once downturns run their course.
        Maybe not, and it may be ahrder than I imagine, and I hope to not find out, but I’m pretty confident I could weasel my way back in if need be.
        Plan A would be following your advice and just not get divorced to force that return to work option, lol.

      • Well that’s awesome! You have lots of examples of people who’ve come back, so there’s clearly precedent, which is great! Reading your examples made me realize that I have *never* worked with or known of a single colleague who had so much as a sabbatical or career change. So yeah, kinda cements my feeling that I can’t go back once I leave. Oh well… the plan is not to need to! :-)

  11. For me, the “almost worst” would easily be to spend my entire life being single. It’s not the actual worst because being single has it perks and offers a lot of freedom, and there are worse things, like becoming homeless or bankrupt, but I feel like there’s a lot to be said about experiencing life with a partner, of course it’s quite easy to wonder that from afar.

    • I totally get that, TJ. I don’t know that I would be pursuing FI if I were single — well, for one thing, it would be a lot harder financially to pursue it as a single person! But I get wanting to have someone to share that time with, and just the desire not to be lonely — most people will be working when we have our time free, so we don’t expect to be surrounded by friends at all times in retirement. Knowing we’ll be together in it for sure makes the whole vision a lot more fun! I hope you find an awesome partner to share life with! :-)

      • Exactly! There are times when I feel “what’s the point”? when the path to FI feels like a lonely path. And now that that I have a decent chunk of assets, and the other person may as well, the topic is always a bit awkward when they’ve never considered the freedom that saving allows. I recently met a woman who had spent a year in Costa Rica, and when I asked her, “do you wish you could do something like that again?” And she was like “sure, if i was independently wealthy!” This was someone with a more prestigious job title than me, and presumably more expenses to go along with it.

        But it’s not like being financially ignorant and going into massive debt would be any sort of fun alternative (and it’s not like doing that would even be a guaranteed path to not be single!), so I’ll just keep on trucking along…

      • Yeah, I still think pursuing FI has no downsides for you. :-) And I think that people can change financial habits within reason. So if someone is responsible with money but maybe has a higher rent life than you, that isn’t a reason to write them off if you guys click — half the FIRE bloggers, including us, started as bigger spenders than we become once we saw the light. :-)

  12. To me, the worst case scenario is *anything* that forces us back into full-time work, back into a life where we generate very little – if any, satisfaction out of the effort that we put into our tasks, day in and day out. To me, that’s worse than a disease. In fact, I might go as far as to say that it *IS* a disease. After all, it’s something that you definitely don’t want, is tough to shake, and plagues you each and every day of your life until you’re eventually “cured”.

    I don’t know if there is an “almost worse” for us. We’re either enjoying our lives or we aren’t – through anything that we deal with…health, finances, whatever. If we can’t fully enjoy our lives where ever we happen to be, that would suck, and at that time, it suddenly becomes the worst case scenario.

    • So interesting how different people’s “almosts” are. Obviously you know we don’t love working and can’t wait to top, but going back to work would definitely not top my almost worst list as it would yours. (Though maybe needing to work and not finding something that pays enough would be up there for me!) But I definitely know where you’re coming from, and we feel that urge to quit as badly as you do! :-)

  13. Thanks for this post. These are all scenarios we should consider before biting the bullet. I am pretty much convinced that I would not be able to re-enter the market in my field(something about being over 40, a women, with kids, in the sciences.) Likely, I would have to invent a new career.

    • Same here! I could definitely not get my current job back after a gap of more than six months or so. Things change so rapidly — it would be impossible to keep up without doing it every day. I’m sure there would be some new career I could invent, as you said, but it would take a lot more legwork! So we don’t take quitting lightly. :-)

  14. Mr. Smith and I had some trouble recently. I think a lot of it had to do with the fact that I was working so much, that most of the household stuff fell on him and I wasn’t giving him much attention. You’re absolutely right that marriage has to be a top priority.

    I actually found myself thinking about what a disaster divorce would be for our finances. We’re finally starting to feel a change in momentum when it comes to paying off our debt and saving for semi-retirement. Divorce would negate so much progress towards our goals. It’s easy to think about spending more time together once we’re not working full-time, but there are many necessary elements to building our future besides making money . . . like maintaining a strong and healthy marriage.

    • I’m glad you guys were able to get past that rough patch — we’ve all been there, what matters is that you got through it. I wish more people would talk about how marriage isn’t something any of us are instantly good at, no matter how much we love our partner. It’s a skill or a set of skills we have to work at and learn. So good for you for doing that. But yeah, divorce would ruin many of our plans and financial foundations!

  15. We were meeting with our financial planner this week for our annual check-up and he said the financial challenge he likes to pose to people is “could you be happy on half of your savings?” If you can answer yes, you are probably more than ready financially. On the health factors – those are huge challenges that anyone can face, regardless of their journey toward FIRE.

    • Good to know that’s the bar that some planners use — we would not *enjoy* making it work on half, but we could do it. So that’s nice to know. And yeah, though this is obviously a money blog, and one where we talk about finances first, health is very much our actual, in real life top concern!

  16. A number of important things that others have commented on such as will, trust, power of attorney – we have covered. Umbrella insurance is on the to do list.

    Agree with Mr. FS comments in that many things can only be planned for so much and that often it will require sufficient finances to deal with the unexpected, which hits us all at some point. The SWR of course becomes critical, savings/investment “buffer” must be carefully understood but these are not for further comment as it relates to this post.

    I worry that the well being of our family will be as strong as ever. Will our young kids handle the adjustment in two years? How will they react to two parents not working as they go through their school years? Will our parents/siblings/ friends fully understand what we are doing and why? Will they worry too much about us? Will I ever stop worrying so much?!?

    As a natural born worrier, I fight the battle constantly and come back to a quote that was shared with me some time ago. Think it was originally attributed to Dale Carnegie.

    “Remember today is the tomorrow that you worried about yesterday”

    Good to keep all of this in perspective.

    • What a good quote, maybe from Dale Carnegie, for all the worriers of the world! You’re right that there are a lot of financial aspects to plan for that help with all this stuff, in addition to estate planning. And it’s interesting to see your unique spin on the “almost worst” — focusing more on how FIRE will affect your kids and your relatives.

  17. I’d never read about your father’s health problems before, so I’m glad I finally caught this part of your story. It definitely adds context to your early retirement plans. I think our worst case would be serious health problems with our kids. That could get expensive quickly, but being in position for one or both parents to not be working and able to care for them would be optimal.

    • Thanks for going back and reading that old post! :-) And yeah, that makes total sense for your worst case — I’m sure as a parent, the thought of something happening to your kids is what keeps you up at night! But as you said, so much better to be in a position to deal with that with one or both parents at home!

  18. Question: Does your umbrella policy cover your blog? I was recently threatened by a lawsuit for defamation (which ended up fizzling) for things I wrote in my blog. Have you thought about this use case?

    • Good question! I talked to our insurer about this when we got the policy, and they said that we would be covered as of now, since the blog isn’t monetized and isn’t its own business entity. If we did monetize in the future, how we treat it as a business entity would impact whether our umbrella insurance covers it. Do you have umbrella insurance, and do you know if it would have covered you?

  19. I was both touched and saddened by the story you shared about your father. Let’s hope they are able to find a cure for this soon.

    Life has so many twists and turns that it’s understandable that the *unknown* can cause so much anxiety. One of the main reasons why we decided to go on the journey to achieve FIRE is because we already know that we may be facing some health obstacles. When I was born, I was diagnosed with a degenerative lung disorder. In fact, I have one lung that didn’t fully develop. My whole life I’ve had doctors tell me that my lifespan will be “much shorter than most”, and by the time I reach 20 I will be on “full oxygen”. Well, I’m 43 now and my lungs are just as strong as they were at birth (for me, that is). I guess what I’m trying to say is that you should always think positive when it comes to what *could* go wrong. If I listened to these doctors, I would have given up on my health a long time ago and I would either be in a wheelchair, on oxygen, or six feet under, but instead I got angry and decided to give my medical condition and my doctors the middle finger (figuratively speaking of course) and refused to go on disability. The way I see it, we will need to save a lot for retirement because I plan on living until I’m at least 100!

    Stay positive and hope your plans work out for the best! :) Mrs. FE

    • WOW. So inspiring to hear how you’ve beaten the odds! I completely admire how you’ve stayed so positive and chosen to reject the prognosis they gave you. I definitely think medicine doesn’t know everything, and often those predictions are just flat wrong. And sometimes they might be right for most people, but they’re wrong for those who choose to defy the odds. You’re my hero today. :-)

  20. These are challenges we all may face regardless whether we reach FI or not. Definitely something to think about and have some sort of plans in mind.

    • So true! This stuff is all FI-agnostic, though being early retired will make it harder to tackle some of these challenges if they come along, like divorce. All the more reason not to do it! :-)

  21. Worst case scenarios are always a scary thought but for me, I really worry about long-term health issues/problems, especially because I have a young child. I want to be here for her always!! :)

  22. Long term care costs are no joke, and the future of health care before Medicare eligibility is worrying.

    We also have the issue that right now a lot of our income projections are based on rentals. However, we have to be healthy enough (I say we, but I really mean my husband) to do the majority of any repairs and maintenance so that the rentals are actually profitable. If he loses that ability, the rentals become a cost rather than an income stream.

    • Amen to all of that. We would love nothing more than certainty on the health care front… it’s so hard to plan when our projections right now are basically a guess. And you’re raising something I hadn’t thought about before, that there’s a high level of very specific risk on rentals, that you need to be able to maintain them yourselves to keep them profitable. But since we’re landlords, too, albeit with just one property, that makes total sense to me! You’re right that only one or two farmed out repairs a year could make the difference between profitable and money pit! Good luck keeping things in the black! :-)

  23. I’m definitely in the “we’ll make it work” camp like your husband. This is partly because I don’t think either of us will stop working completely for a while.

    As Kalie mentioned above, severe injury to or death of one of our kids would pretty much be worst case, probably emotionally more so than financially.

    On a different level, a major repair to home or rental property, which we may be facing soon, would be a big hit.

    • I can only imagine how horrible that thought must be, of something happening to one of your kids. Knock on wood that they grow up safe and sound! And yeah, a major home or rental property repair could mess up our plans for a year or two, too! We could weather that, but we’d have to hunker down for a while to make up the difference.

  24. I was financially ready for retirement, not early, but on time when my grandson was born .
    It became obvious to his parents and I that he was going to need special help in pre school. Our district did not agree . They suggested we wait a year until he got worse and then they would then approve his placement in an early intervention nursery.
    Obviously this was not something we were going to do.
    Our state university has an excellent ‘inclusion’ pre- school with a variety of great therapies and some incredible people. They accepted my grandson and we were thrilled…sort of. The cost was $90,000 per year. ! Since his parents were grad students I paid his tuition…deep breath!
    I am so glad I did. He flourished there .It was exactly where he needed to be… and I, still working. I am very lucky because I am self employed and love my work,
    All this though is to say I think we can consider the future and try and make reasonable choices and good plans…and then life happens.

    • Holy moly, that’s a lot of money to shell out. But so admirable that you did! We’re huge believers that money is not worth much if you can’t use it to help those you love, and you did exactly that. :-) But you’re so right that best intentions and planning only go so far, and life does indeed happen! Good for you for making what must have been a tough choice and staying so positive about the sacrifice it required on your part. I’m so happy to know that it all came with a wonderful outcome for your grandson!

  25. I think that with a sufficient buffer, chronic illness or disability onsets would be far easier to deal with if you’re already retired! No finangling doctors appointments around work schedules, etc.

    One of the (many) positive things about saving so much before getting married is that, assuming that a pre-nup is set up correctly, divorce really doesn’t seem like that big of a deal. One of the negative sides of that though is that I’m not sure I would want to ER on my own, so having separate assets doesn’t really help us *both* get to FI and will mean that the one of us with fewer assets will take longer to get to FI. Will the other just wait for them to retire? Or what? The next five years of our lives will be really interesting. Will we end up agreeing on not having kids? Will we get married? Will we move or stay in the condo? What will we do when we reach FI?

    • Oh, so true! If I do end up disabled, I’d much rather not have to try to manage that plus work. But knock on wood! :-) You’re in such a different situation financially before marriage than we were, and I think you’re right that it’s different as a result. Divorce would be a deal-killer for us — neither of us would be FI solo right now or even by the time we retire — so we’ve agreed that divorce is off the table. But I agree that your situation opens up a whole bunch of other questions! We agreed years ago that we’d both quit at the same time, and I generally think that’s the right way to go to avoid resentment — but that’s just us. As for the rest of those big decisions you guys have to make, I can’t wait to follow along. :-)

  26. You hit on many of the things that I also worry (or think) about how to mitigate. Disability insurance is a big one. We have life insurance, but we’re still working while our kids are relatvely young. So having a plan in place if one or both of us were to become disabled is a big concern.

    • Do you get disability coverage at work? We both have it, and are super thankful for it, knowing we could replace at least most of our income if we couldn’t keep working. Disability insurance isn’t something we’ll carry after we retire (there will be no “income” to replace!), but would love to know more about how you’re thinking about that in your big picture planning!

  27. High-five for being a planner! My boyfriend sometimes hates me for having/needing a plan for everything. I think he and Mr. ONL should high-five for being come-what-may-everything-will-be-okay kind of guys. I mean, I have an ’emergency bag’ that has important things in it, just in case. At least I know I won’t have down time if I need to evacuate the house right away. Ha!

    Our almost worst case scenario includes both of us losing our jobs. I think we can still live a comfortable life if either one of us becomes unemployed but not if both of us. We’ll probably be okay for a few months but more than money, I think we’ll both be affected psychologically. Another one for me is when my father’s health deteriorate. I honestly don’t have a plan for this, although I know I would want to help him when this happens.

    • I don’t think I get a high five for being a planner since it’s never been a conscious choice, and sometimes it feels like a curse. ;-) Haha. But if you have an emergency bag packed, then something tells me you understand! I can definitely see how a dual job loss would be hard to deal with both financially and emotionally. Knock on wood that that never happens for you guys! (Or “touch wood.”) ;-)

  28. Unfortunately bad things do happen and we can’t live expecting everything will turn out fine. That’s awesome that you plan for all these worst case scenarios. If nothing happens, great, but if something happens you’ll be prepared.

    While my wife and I both have life insurance and have a decent emergency fund in place, we definitely need to better prepare for other bad things to happen. We haven’t done a will yet, which I know is uber important now that we have a kid. That’s something that’s on the to-do list.

    • I don’t know if we can ever be *fully* prepared, but I’m definitely a believer that we’ll be better equipped to handle bad stuff if we’ve at least thought through what that might mean ahead of time. But knock on wood that we face as few of these things as possible — and same for you! :-) The fact that you have life insurance and an e-fund put you ahead of a lot of folks, but especially given where you live, a full emergency and evacuation plan would be good. And do that will now! So important for parents!