The FIRE math is straightforward: save aggressively, invest consistently, and build a portfolio large enough to sustain your lifestyle indefinitely.
But between your first spreadsheet and the last withdrawal lies decades of complexity. Tax laws change. Markets surprise. Healthcare costs compound. And the assumptions baked into any long-term projection eventually collide with reality.
This isn’t an argument against planning. It’s an argument for understanding what DIY FIRE planning can and can’t do.
The rules keep changing
One of the biggest blind spots in long-term financial planning is the assumption that today’s tax rules will remain stable. They rarely do.
The past several years have brought significant changes favorable to early retirees. The SECURE Act of 2019 and SECURE 2.0 in 2022 pushed required minimum distribution ages from 70½ to 73 (and eventually to 75 by 2033). The One Big Beautiful Bill Act in July 2025 made lower individual tax rates permanent, raised estate tax exemptions to $15 million per person, and increased the SALT deduction cap to $40,000 through 2029. New provisions allow deductions for tips, overtime, and seniors, though these expire after 2028.
These changes have generally benefited FIRE planners. But expecting them to continue ignores the fiscal math.
The federal government ran a $1.8 trillion deficit in fiscal year 2025. Federal debt now exceeds 100% of GDP and continues to climb. The Congressional Budget Office projects debt reaching 118% of GDP by 2035 under current law, with deficits averaging well above historical norms. Interest payments alone now exceed $1 trillion annually.
Something will eventually have to give. Whether through higher taxes, reduced benefits, inflation, or some combination, the recent changes may not survive the next fiscal reckoning. A FIRE plan built on the assumption that 2025’s tax rates and exemptions will hold for 40 years is betting against the math.
Healthcare mistakes can be costly
For early retirees, healthcare represents one of the largest and most unpredictable expenses.
Fidelity’s 2025 Retiree Health Care Cost Estimate found that a 65-year-old retiring today can expect to spend approximately $172,500 on healthcare throughout retirement, and that figure doesn’t include long-term care. This estimate has more than doubled since Fidelity started tracking it in 2002.
The problem for early retirees is even more pronounced. Leaving the workforce at 40 or 45 means facing two to three decades of healthcare costs before Medicare eligibility, plus ongoing uncertainty around the Affordable Care Act marketplace.
The enhanced ACA subsidies introduced in 2021 have now expired. According to KFF, average marketplace premiums rose by approximately 75% in 2026 with the return of the “subsidy cliff.” For early retirees whose income hovers near the subsidy eligibility thresholds, this creates significant planning uncertainty around withdrawals, capital gains timing, and income management.
The behavioral gap is real
There’s a well-documented phenomenon in investing called the “behavior gap,” which is the difference between investment returns and investor returns. Despite what the market does, individual investors consistently underperform due to poor timing decisions driven by emotion.
Dalbar’s 2025 Quantitative Analysis of Investor Behavior found that equity investors underperformed the S&P 500 by 848 basis points in 2024. In a year when the index returned over 25%, average equity investors earned roughly 16.5%. This marked the 15th consecutive year of underperformance.
It’s easy to assume you’re immune to these behavioral pitfalls. But the first bear market after you’ve stopped earning income feels different from every bear market you experienced while employed. Watching your portfolio drop by 30% when that portfolio is your only source of income for the next 40 years tests even the most disciplined investor.
This is the essence of sequence-of-returns risk. Research from MIT Sloan indicates that approximately 77% of final retirement outcomes can be explained by returns in the first ten years of retirement. A poorly timed downturn early in retirement can permanently impair a portfolio’s ability to sustain withdrawals. Understanding this intellectually doesn’t prevent the panicked decisions that arise when it’s actually happening.
The investing risk many FIRE plans ignore
Many FIRE planners default to low-cost index funds. They’re popular and easy to access. But indexing comes with its own risks that are easy to overlook.
The S&P 500 has become increasingly concentrated. A handful of mega-cap technology companies now represent a significant portion of the index’s total value. When you buy an S&P 500 index fund, you’re not getting 500 equally weighted companies. You’re getting a portfolio heavily tilted toward whatever sectors and stocks the market has recently favored. This concentration creates correlation risk that can amplify losses during downturns.
Thoughtful investment management can address this. A portfolio of carefully selected individual stocks, chosen with valuation in mind, can protect against concentration risk. The goal is to build a portfolio with lower correlation and more balanced exposure across sectors, company sizes, and valuation profiles. For someone whose retirement depends on a single portfolio performing well over 40 or 50 years, reducing concentration risk is paramount.
The unknown unknowns
Perhaps the most significant limitation of any long-term plan is the difficulty of anticipating what you don’t know to look for.
Consider Social Security. The 2025 Trustees Report projects that the retirement trust fund will be depleted by 2033. At that point, incoming payroll taxes would cover only about 77% of scheduled benefits. Congress will likely act before then, but no one knows what form that action will take: benefit cuts, tax increases, means testing, or some combination. For early retirees counting on Social Security as part of their long-term income, the uncertainty is significant.
State tax residency rules have become increasingly complex as remote work has changed where and how people live. Medicare rule changes can affect healthcare costs in ways that ripple through your entire withdrawal strategy. The interaction between Social Security benefits and other income sources involves optimization decisions that depend on variables you won’t know for years.
There are coordination issues between accounts that require integrating tax planning, investment management, and benefits optimization. Some examples include when to convert traditional IRAs to Roth, how to sequence withdrawals across account types, and how to time asset location decisions. Each individual decision might seem straightforward. The value a professional brings is planning how they interact.
What this means for your planning
A good FIRE plan isn’t static. It adapts to tax law changes, market conditions, healthcare policy, and the unexpected. The longer your retirement horizon, the more these factors compound.
For some people, building in larger safety margins is enough. For others, working with a professional who specializes in FIRE planning and investing makes the difference between a plan that works on paper and one that holds up over decades.
If you’re within a few years of your FIRE target, or already retired, it may be worth a conversation.
Wondering whether your approach has gaps? Start here. Four quick questions to see if we might be a good fit.
