The One Thing You’re Overlooking In The FIRE Movement
The Financial Independence Retire Early movement offers tools and tricks for helping people retire early. Here’s how saving as a married couple could help you get there faster.
The online FIRE (Financial Independence/Retire Early) community is teeming with tools, tips, and tricks to help fast track those on the path to early retirement.
One topic is sometimes overlooked: the boost that FIRE movement followers get from being in a relationship, thanks to economies of scale, employee benefits, and tax laws that favor couples.
Working with your partner to optimize your combined finances can mean shaving years off your FIRE journey. It might even mitigate the effects of the gender gap.
As an enthusiastic follower of the Financial Independence/Early Retirement (FIRE) movement, you might have already implemented enough of the recommended life-hacks to retire 20 years sooner than your peers. But if you’re married, have you considered the additional benefits it might serve your FIRE movement dreams?
It might seem an odd question to pose to a community better known for penny-pinching and travel hacking than for relationship advice. However, the numbers don’t lie: it’s much easier to fast track your journey to financial independence when you’re part of a married couple. The reality is that not everyone’s plans involve marriage.
With that being said, let’s explore what all of this might mean for you.
How To Retire Early: Marriage Counts
Your efforts to implement the myriad ideas from an ever-expanding FIRE knowledge base have earned you significantly greater financial security. Kudos! But does being married help you retire even sooner if you have a partner who also follows the FIRE movement?
The answer is probably yes. Here are a few examples to illustrate why that is so.
- Leveraging travel rewards has always been one of your favorite FIRE movement hacks. If you and a spouse were in it together, you could multiply the benefits by sharing companion tickets, free hotel nights, and airport lounge privileges. You could even combine points to redeem rewards sooner.
- You scoured the FIRE movement blogs to root out the best deals and negotiation strategies for gym memberships, cell phones, TVs, wholesale clubs, homeowners and auto insurance, and other expenses. As part of a married couple, you can take this up a notch by combining accounts to obtain a volume discount.
- You traded in your leased, gas-guzzling SUV for a reliable, used, low-MPG hatchback circa 2006. You house hacked your way down to virtually no mortgage payment. Just think how much more you could save if you and your better half shared that car, house, and related expenses like insurance, utilities, and maintenance.
- You chose your financial services providers after a detailed cost/benefit analysis. As part of a married couple, your combined account balances might qualify you for higher interest on savings or lower costs on investment products. Since two can live almost as cheaply as one, you might get by on a smaller emergency fund, which can free up cash to invest for potentially higher returns.
- You took pains to pick the best of your employer’s health care options. Unfortunately, you work for a startup with limited choices. If your spouse has big company benefits, you could save thousands by leveraging the health insurance, free food, or Health Savings Account offered there.
- The same goes for retirement benefits. Suppose your partner’s 401k offers a full complement of solid, low-cost investments while yours is laden with low performers charging high fees. Disproportionately shifting contributions there could bring your FIRE date in by years.
- As a couple, you double your odds of being entitled to valuable benefits like employee assistance programs, dental, vision, and life insurance, stock options, and deferred compensation. And don’t forget employee stock purchase plans. Even if your better half doesn’t have the cash flow to leverage this potential source of free money, you might!
- Your side hustle nets a healthy income, all of which you contribute to your solo 401k. Bringing your spouse into the business means increased earnings, plus the big potential tax break that comes with another solo 401k.
Unfortunately, whether it’s the tax code, employee benefits, or discounted services, society is set up to typically favor married couples in financial matters.
Single women are at a particular disadvantage, according to The Atlantic, which estimates that married women could save upwards of half a million dollars over a lifetime versus their single counterparts.
While not the most effective strategy against income and social inequality, women who are both married and following the FIRE movement are perhaps closer to making back what’s lost in the gender gap.
Be wary of tying the knot “for the wrong reasons.”
Does that mean you should dash to the altar with the first romantic prospect whose employer fits the bill for comprehensive health insurance?
Definitely not. Combining money and matrimony is a notoriously tricky business, and that’s no less true in the FIRE community. Forums are rife with tales of free-spending spouses derailing early retirement dreams–and sometimes marriages.
As we can see, it’s not all rainbows and unicorns for FIRE movement couples.
Despite this, there’s no denying that married couples who are on the same page about FIRE can likely find more opportunities to make the most of their money.
Early Retirement Without Legal Marriage Benefits
If you’re unmarried, there’s still some good news: some of the same strategies that allow married couples to optimize their lifestyle can also work for FIRE movement followers who aren’t married.
Are you in a relationship but have no plans to officially tie the knot? Many employers extend benefits to employees’ domestic partners. Providers of investments, insurance, phone, and many other services sometimes make discounts available to unmarried couples who both do business with them.
You needn’t be married–or even romantically involved–to take advantage of the economies of scale associated with sharing a home, car, food, and other big expenses. If your best friend, sister, or housemate wants to use their rewards to fly you for free to Hawaii, the airlines don’t have a problem with that.
Summary: FIRE Up Your Relationship(s)
You’ve invested countless hours mining FIRE movement resources for life-hacks that can help accelerate your path to financial freedom.
But for committed couples, don’t discount a big opportunity much closer to home: the advantages of being in a marriage. Married couples who aspire to FIRE together might find themselves at their destination sooner than if they did not take advantage of all the benefits offered to them.
How would you like to get started?
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