I'm not the grandparent poster, but I share the same thought.
The ~4% SWR for FIRE assumes that we'll see sustained growth in equities markets, because that's what we've seen before. But the data really only goes back to the early 20th century (the data from the "Trinity Study" looked at the period from 1925 to 1995).
I agree with you that people in the FIRE camp will still be far better off than the average person. But to me the terrifying scenario is retiring at 30 and then running out of money at 60 because the 4% rule didn't work out.
I suppose if someone performed exactly as in the study(fixed withdrawal rate, adjusted for inflation, no variations), but surely if yields flattened you'd be able to recognize it sooner than when your nest egg is nearly depleted. That might mean returning to work in your 40s or 50s part time or full time to fill the gap, but again you're no worse off than the average worker who was working all those years anyways.
It definitely is justification for those people to make sure they build in a buffer though since its unlikely they'll be able to immediately return to their peak salary before retirement.
If you're in tech, things are changing so rapidly I don't think it's realistic to walk away for 15 years and then be able to come back and get hired as a practicing, competent engineer, unless you've been keeping up on personal projects in the meantime.
If someone walked away 15 years ago, what would they have missed if they decided to come back today?
I honestly can't think of anything fundamental. Mobile and single page web applications, for example, became popular in that time, but those only brought back the same patterns we were already accustomed to on the desktop, not some brand new paradigm that someone from 15 years ago could have never imagined and cannot contemplate now.
Perhaps you might have to spend a week or two catching up on the specific keywords used by the popular framework du jour, but that's not a hurdle in any meaningful sense.
Granted, someone from 15 years ago coming back to an "Agile" shop will run right back where they came from, as fast as they can, wondering what on earth we are thinking the whole way.
Worst case it's a year of a crash course to learn almost anything in enough depth to be proficient, even if not quite an expert. With the base in programming or electronics, it would take even shorter time with a well designed course.
What would justify a year long crash course, assuming you have a functioning memory? I still cannot think of anything that has actually changed, in a fundamental way, over the last 15 years.
To me hyperinflation is the real nightmare scenario for FIRE. In a hyperinflationary environment your retirement stash can go from infinite to > 1 year in less than a year.
Presumably a FIRE person would be sitting on assets that act as significant hedges against inflation. It wouldn’t be fun but they’d be in a better position than most.
I would argue that the real nightmare scenario is that the rules of the game or government policy are radically changed by fiat. For example, effectively nationalizing private retirement accounts in some fashion to backstop public pension systems like Social Security (which has been floated in the US at various times). A lot of FIRE plans are predicated on retirement accounts existing in something like their current legal form over the next several decades. I am skeptical.
You can't hedge against inflation if it is caused by a collapse in production of the thing you want to buy. E.g. farm workers start a civil war against land owners (think Zimbabwe) and now there isn't enough food for everyone.
You will do better than people who own nothing but your wealth won't last forever.
Yeah, that's the issue. Hyperinflation usually involves large increases in the prices of basic necessities (food, utilities, gas, physical security, and shelter if you don't own your home) and collapses in the price of financial assets. Except for the most hardcore leanFIRE types who are into subsistence living off the land, that's usually levered the opposite way from most retirees.
Being able to count on your own labor and having skills in industries related to fundamental survival are key in hyperinflationary economies. You can't count on the financial system remaining intact in any usable form. Most FIRE plans are about leaving the labor force to live off of returns of capital, though.
Hyperinflation is a nightmare scenario for everyone.
FIRE presupposes having non-liquid asset base, such as actually owning the place you live in, means of transport and potentially the tools you use, first.
The ~4% SWR for FIRE assumes that we'll see sustained growth in equities markets, because that's what we've seen before. But the data really only goes back to the early 20th century (the data from the "Trinity Study" looked at the period from 1925 to 1995).
I agree with you that people in the FIRE camp will still be far better off than the average person. But to me the terrifying scenario is retiring at 30 and then running out of money at 60 because the 4% rule didn't work out.