Playing with FIRE

I took a VERA (Voluntary Early Retirement Authority) from the federal government in 2025 because I wanted to, but, most importantly, because I could. ¹ 

VERA is pretty nifty.  If your agency offers it, employees over the age of 50 with at least 20 years of service can retire immediately with full benefits.  Full benefits encompass several things, but the biggest are: 1) an unreduced federal pension with annual cost of living increases (COLA) forever and 2) the ability to stay on the federal employee health plan (FEHB) forever.² It’s a great deal. 

Generally, to qualify for those retirement benefits, regular FERS employees like me have to reach 30 years of service and their MRA (minimum retirement age) which is 57 years old for anyone born after 1970 like me.  Under that formula, I would have had to wait until early 2030 to qualify. 

I liked my job quite a bit, but nevertheless, a few years ago I started to know exactly how many years I had before I hit full eligibility.  This didn’t mean I’d be out the door the very next day, but it’s always nice to know that you could press the “eject” button at any time after that point.  That’s why hitting full retirement eligibility is fun. And freeing.  One of my FBI colleagues referred to it as getting “KMA” status. The K stands for “KissAs it turned out, my friend KMA’d in 2025 also.  Of note, FBI and other federal law enforcement employees have a sweet deal where they reach their full retirement eligibility earlier.  Of course, their pension is less with fewer years served.”. The M is for “My”.   

So. In February, my national security-related agency offered VERA to employees over 50 with at least 20 years of service.  You had to leave by the end of 2025.  This was exciting news — I wouldn’t have to wait until 2030 to retire.  I could retire in 2025, 5 years early.  After much number crunching and pondering with Mrs. Anysecondnow, I applied for VERA and got approved.  (I was not nervous about approval. I think just about everybody was getting approved in 2025.)    

As my departure approached, I spoke to several colleagues that were also VERA eligible who told me they would love to take the offer and leave, but could not because of financial pressures.  Those pressures were either house payments or kids in college (or kids soon to start college).  Usually both.  

We did not have those financial pressures.  Or, more precisely, those pressures were far less in our case.  The reason they were less in our case was a result of family financial habits that matched up well with FIRE principles.  To be candid, we made some of these decisions before I’d ever heard of FIRE.  But when I discovered the movement it made sense to me.  

FIRE this, FIRE that, what is it?  FIRE stands for Financial Independence Retire Early.   I’m going to just quote a streamlined version of the Wikipedia entry here: 

The Financial Independence, Retire Early (FIRE) movement is a personal finance phenomenon characterized by high savings rates and aggressive investment, with the goal of accumulating sufficient assets to cover living expenses without traditional employment. The movement gained traction among millennials in the 2010s, spreading through blogs, podcasts, and online communities.

Participants in the FIRE movement typically seek to reduce expenses and maximize savings, building investment portfolios intended to generate passive income. A common framework advocated within the community involves spending less than one earns, investing the surplus, and minimizing debt. The most frequently cited savings target is based on the 4% rule, introduced by financial planner William Bengen in 1994, which suggests that a retirement portfolio equal to 25 times annual expenses can sustain long-term withdrawals.

FIRE has been a thing since at least 2010 and, yes, there are a number of promoters on the Internet.  Mr. Money Mustache might be the most well-known. He’s almost certainly the most entertaining.   But I’ve also read or followed Go Curry Cracker and Financial Samurai (a fellow W&M grad) among others.  Or you could lose a day of your life in this Reddit thread.

Just like Harry Potter and Hogwarts houses, you can find yourself in certain FIRE categories:

Ditching the 9-5 M-F workforce while in their 30s or 40s and forthwith existing on savings and side hustles (often their blogs) seems to be the shining goal of many FIRE enthusiasts.  The FIRE movement did not really exist while I was in my 30s and retiring that early wasn’t in the cards for me and my family.  I didn’t even start working at my first, and only, real job – government attorney – until I was 29. 

But we were following the principles the whole time.  Spend less than you earn and sock away as much money as you can.  The less you spend, the more you save, and the earlier you can retire. Or, more precisely, do what you want to do without feeling beholden to a job. Read some Mr. Money Mustache and it’s hard to resist the gospel of slashing your spending and having fun doing it. Kill Your Grocery Bill or Get Rich With Bikes  are just two of his many diatribes against excess spending. MMM can be extreme, but he’s not wrong.  

Food, for example. I can make a tasty lentil soup that provides 8 persons-worth of meals.  It’s easy to make and costs maybe $2-3 in ingredients.  And it’s spectacularly healthy, especially compared to a typical restaurant meal. Do that sort of thing in your daily financial life, over and over throughout the years, and you will save thousands of dollars that can go into savings and start compounding interest. 

The First Big Thing.  My family’s biggest money saver is the wee townhouse we bought years ago and never moved out of. It’s 3 floors, not quite 1200 square feet.  No garage, unfortunately, but it has a great (small) roof deck. Twelve hundred square feet is perhaps 55% of the average American home size.  

We almost moved around 2010-11 to get more room and I’m glad we didn’t.  After a few refinances of that purchase, we have a low interest rate on a decreasing mortgage. Home equity loan? Never. ³ 

One more thing about smaller houses.  The lower mortgage is only the start of your savings.  Nearly every other house related thing is also cheaper.  Insurance, property tax, maintenance, utilities, especially heating and cooling.  Cleaning.  The savings are immediate and cumulative.  By the way, this principle operates the same way for German cars v. most other kind of cars.⁴     

The Second Big Thing.  College costs – current or impending – was the other huge differentiator between me and many of my colleagues.  Their kids were frequently going to or planning to go to expensive colleges, often out of state and/or private. Honestly, even a relatively cheaper, in-state, college can be shockingly expensive when you add up the costs over four years.  

In contrast, our daughter attended local community college for two years to knock out her general education classes, figure out what she wanted to major in, and gain confidence for a four year college.  Missions accomplished. Two and a half years later when she started at a four year school, she had the maturity and confidence to handle college classes and schedules with ease.

In Virginia, as in most other states, if you do well for your two years of community college you qualify for automatic admission to any public four year Virginia school. It’s a sweet deal. Our daughter also still lives at homeIncidentally, living at home to attend a local college is common in the rest of the world does. Nor do families or students go into massive debt to go to college in other parts of the world. In America, that’s just accepted. It’s also accepted that most colleges are luxurious, with fine student living, extensive and delicious dining options, and, often, extraordinary sports facilities and sports coaches earning many multiples more than the highest paid faculty member. This is unheard of outside of the U.S. Make no mistake, I think the U.S. is a remarkable and unique country. I’m a proud American. But I feel that some of our institutions – colleges and healthcare, for example – have gone seriously awry in the last half century. It’s not normal but we often don't realize it. (which saves us a ton more money) and will graduate with the name of her 4 year university on her diploma.⁵ 

In sum, our college costs are a fraction of what many of my colleagues are paying for their child’s college life.   

Interestingly, when I tell other parents about our daughter’s 2+2 college arc and the resultant modest costs, nearly every one of them says what a good deal that is and everybody should do it. Honestly, I’m not sure they all mean it. Or perhaps it sounds nice in concept for some people, but their are own kids sure aren’t doing it.  And that’s fine. But some of those parents are truly envious.

One colleague in particular would lament to me repeatedly about how he wanted his HS senior daughter to do what our daughter was doing.  But his daughter, for unknown reasons, had set her sights on a private CA college and Mom decided she wanted it for her daughter. This issue became the source of much discord in their home. ⁶

Look, I get it.  If I had a kid who could get into Stanford or Princeton, I would love to send them there.  Then I’d sigh contentedly as I put that Ivy League school sticker in the corner of my car windshield and try to casually drop “yeah, my kid’s at ____ fancy school” into as many conversations as I could.  Can’t put a price on that, can you?  

Well, you sort of can. Maybe not a specific price, but part of that price might mean you can’t take a rare VERA offer because you can’t afford your child’s college costs and your mortgage without your full time salary. 

Power of Spending Less. With our savings from cooking at home often, buying and selling stuff on Facebook Marketplace, not buying new cars, riding my bike a lot instead of driving, using accumulated award miles for flights and hotels, and 101 other things  here and there I hasten to add that while we are frugal, we have plenty of fun. Date night dinner out every Friday. Fun vacations. Heck, I bought a (used) Audi at one point. Some FIRE advocates would not approve. , we max’d out our retirement accounts for about two decades.  After fully funding those, we shoved more savings into taxable mutual funds which we’ll able to access without IRA age restrictions.

Our financial position is not solely because we saved a lot.  Like everyone else invested in the market, we’ve also benefited from a mostly uninterrupted bull market run since the 2009 Great Recession.  But you’ve got to have the money in the market to benefit from that bull market and the magical compound interest.⁷  

Our spending patterns are not superior to other people. We’re not full on FIRE, for sure. Every family has to balance and value many factors. Clearly, my colleagues, while still working every day at the office, get value from their decisions. They are thrilled to have their kids in prestigious schools and I’m sure they enjoy their bigger, nicer houses.  Just because I value those things less and can choose to take a VERA early retirement, doesn’t mean they made the wrong decision.  

Yet, while it’s not a competition, I have to suspect I might be a little happier than some of them these days! Not going to work every day and exploring new opportunities is pretty fun.

I will tell you what was the most fun though: having low enough expenses and sufficient built up savings — relative financial freedom, if you will — that we could take the VERA offer.

1. VERA, unlike the 2025 Deferred Resignation Program/Fork in the Road/Elon Musk’s e-mail/whatever you call it, is an existing statutory authority.  (Call me a traditionalist, but whenever possible I like my major life transitions involving hundreds of thousands of dollars for the rest of my life to be based on a statute, not an e-mail.) Under the VERA statute, agencies can designate, with reasonable justification, categories of employees as eligible for VERA. OPM must approve the proposal.  ↩︎
2. The COLA (cost of living adjustment) doesn’t kick in until age 62 for regular FERS employees like me. So if you retire before 62, you have to wait for the COLA. That hurts, but it certainly isn’t a deal-breaker. ↩︎
3. We only have one kid, so I will acknowledge that helps in terms of all of us fitting into our house. But we were close to adopting another child and were prepared to squeeze in one more without moving.  Sadly, the adoption fell through a few days after the birth.    ↩︎
4. I know what of what I speak. I got a nice deal on a used 2014 Audi S4 with a manual transmission. I probably won’t ever own a better engineered car in my life.  But insurance, repairs, taxes, everything related to this car, cost me.  I sold it last year and used the proceeds to buy outright a used Mazda 3 Turbo which is also fun to drive (but no manual!) and cheaper to own.) ↩︎
5. She might even end up having leftover money in her 529.  Which can be transferred to me or my wife for education costs or, get this, converted to a Roth IRA for our daughter. That’s fantastic.  I’ll probably do that.  ↩︎
6. My colleague eventually left federal service and took a less enjoyable but more lucrative government contractor job to pay for the college costs.  ↩︎
7. We’re lucky, but I don’t think we’re rich. I mean, I was a government lawyer and Mrs. Anysecondnow worked various part time jobs. We’re not buying vacation homes or investing in hedge funds over here. But our (FIRE) financial habits keep our expenses low, we have savings, and that reduces financial pressure. ↩︎