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 | Nick Vega is a money reporter at CNBC Make It. You can follow him on Twitter at @atNickVega. | | |
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The concept of early retirement has grown in popularity in recent years, especially thanks to the FIRE movement — an acronym for "financial independence, retire early." The lifestyle sees prospective retirees earn and save as much money as they can so they can leave the workforce before retirement age. But if you ask Jim Cramer, host of CNBC's "Mad Money" and Investing Club, retiring early is a mistake that many will live to regret. In an interview with CNBC Make It's Mike Winters, Cramer says that most people who attempt FIRE underestimate not only how much money they'll need, but their lifespans. "A lot of people are betting against themselves," Cramer says. "They're betting against how long they'll live." |
Unforeseen costs may derail early retirees' plans, Cramer says, warning that they may not be factoring in unforeseen medical expenses that can accompany the aging process. "Did they ever think at all about what happens when they're 66? They get the Medicare, they get the Social Security... but I'll tell you something, you can get crushed [by medical bills]," he says. On top of unplanned expenses, Cramer says that people may find their needs changing as they age. They might decide they want to give gifts to their children, for example, or spend more time taking trips to visit family. "A lot of people make a judgment. And the judgment is, 'I'll always be able to afford'" retirement, he says. But for many early retirees, "you won't." You can read Winters' full story here. |
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