Are you on track for early retirement and financial independence considering the pandemic?


By Victor E Gersten, M.S., CFP® | October 9, 2020

For many, financial freedom means being able to coast with little concerns through tough economic times. But the pandemic and uncertain economy can stir anxieties about leaving the workforce for those planning to retire early, including those who have plenty of savings.

The Financial Independence, Retire Early Movement (FIRE) is focused on this. If you are unfamiliar with FIRE, it’s a movement that promotes the idea of saving a large proportion of your earnings in your 20s or 30s so that you can retire in your 30s or 40s. To develop an enormous investment portfolio so rapidly, the adherents use a mix of high earnings, dramatically reduced living expenses, and other techniques.

But the coronavirus pandemic has undoubtedly driven more than a few members of the FIRE movement into a speed bump. Various professionals within the movement have reported financial uncertainty and income volatility, giving them reasons to rethink their financial independence approach and early retirement. Doctors and lawyers, in particular, weren’t left out in this unfortunate category.

Retirement Planning

How has COVID-19 affected doctors financially?

The financial repercussions of the pandemic were unforgiving on doctors. As some lost long-term contracts due to reduced patient numbers, other physicians have confirmed having their hours cut. Some even reported missing incentive bonuses and night differentials.

A study conducted in April 2020 found that 97% of medical practices have negatively impacted, financially, directly, or indirectly linked to the pandemic. It also reported a drop in patient volume by 60 percent and a 55% decline in income since the onset of the pandemic, leading to many facilities having to layoff or furlough employees.

Medscape’s 2020 physician compensation report explains how COVID-19 has impacted physician income: “Practices document a 55% decrease in revenue and an average 60% decrease in patient volume since the start of the COVID-19 crisis.” The report also states that in March 43,000, healthcare staff was laid off.

How has COVID-19 affected lawyers financially?

America’s lawyers and law firms face tremendous financial difficulties with no apparent end to the economic crisis soon. The effect of COVID-19 on the practice of law can be felt most strongly in the courtroom. Overall, with trials delayed, depositions canceled or rescheduled, and deadlines extended, there are fewer cases.

The pandemic has virtually eliminated the urgency that usually drives the practice of law. Similarly, people have been reluctant to hire lawyers in the short-term. Such disruptions and slow-downs present a revenue concern.

Litigators and attorneys handling contingency cases are among the lawyers most adversely affected by the pandemic. Critical operations, such as writing letters and briefs, are still taking place. However, no depositions, hearings, or convictions can occur as long as the courts and administrative offices remain closed. Adding to the legal problem is that many litigants no longer feel compelled to resolve their lawsuits, with courts closed, hearings canceled, and the pandemic showing no signs of stopping soon. The longer the pandemic persists, contingency lawyers and their companies, who only collect their fees when cases are resolved, face growing financial uncertainty.

COVID-19 has also sidelined law firms specializing in corporate mergers and acquisitions. Most of their clients are waiting for the pandemic and the economic meltdown to subside before making any significant financial decisions.

Can you still attain FIRE amidst the pandemic?

However, many FIRE adherents are hitting back amid significant danger and adversity. The economic and stock-market downturns caused by the pandemic of coronavirus and election year was the first test to their strategy for them. “We fail to plan; we do not plan to fail,” it has been said over and over, but the need for a financial plan, a financial framework has never been more needed than now.

Financial Planning focuses on the theory that investing to get to retirement and buying properties along the way is not always the best approach. Indeed, financial planning takes a comprehensive financial picture of your life where it determines when to invest when buying property and how much of each. Thus, making an overall financial plan linked to your ultimate financial goal. This approach utilizes strategies around taxes, estate planning, insurance, investing, and budgeting to ensure optimal maximization of each client’s available resources.

The challenge for many followers of FIRE now remains on increasingly relying on their devotion to frugality, substantial cash reserves, and cutting costs rather than utilizing other optimizing techniques such as financial planning.

With the limited resources available, and the uncertainty posed by the pandemic, there is a need to modify your money use and investment plans to remain on your journey to financial independence and early retirement.

  1. Behavioral Finance

Behavioral finance investigates how our decision-making is influenced by emotional, social, and cognitive parameters. To achieve FIRE, behavioral finance insights can help you make improvements that can make a significant difference in your acts.

  • To inspire yourself to act accordingly, often remind yourself of what can be achieved by taking action or losing by not doing anything.
  • Point out when you are doing the right thing. This will drive you to take similar steps in the future.
  • Envision what you want to be doing in 5, 10, 20 years. Visualize your retirement to help you resist temptations that can derail you. Consider the long-term benefits.
  • Track your expenditures. Check your banking records, online subscriptions, credit card statements, and take note of precisely what you spend money on and whether those transactions are essential or justified. The majority of us are surprised to learn how much we spend.
  • Be more mindful of your spending, guided by the ‘value’ principle. Insist on only buying products that add value to your life.
  • Hiring a financial professional to help you stay disciplined, diversified, and balanced in your investment journey is essential. Let the following example sink in for a moment: if you invested $10,000 in 1999 in the S&P 500 and did not touch it, it would have grown to $30,000 by the end of 2018. In contrast, missing out only on the ten best-performing days during those 20 years would have cut your return by half. To learn more about this click here
  1. Financial planning

Once you have controlled your spending, it’s time to analyze and compare your net income. This effort to maximize resource use by employing a systematic approach to manage your expenditure is referred to as personal financial planning. Subtract from your income the mandatory fixed expenditures and then alter your discretionary expenses as appropriate.

  • Consider your housing costs. Is this a place you can afford to rent, but not to buy? This is a common trap. If you cannot afford mortgage payments in a similar apartment to the house you are living now. You may be living outside of your means
  • Consider driving a fuel-efficient car and a one you can afford. Is your current vehicle a lease? Would you be able to afford this car’s monthly payment if you buy it over 3-4 years? If the answer is no, you may be living outside of your means.
  • Consider switch to affordable phone services. I switched a few years back from ATT to Tmobile. I now pay about 50% of my former bill per month, and the best part is that Tmobile has no fee on internet services while I travel. Before the pandemic, I was used to traveling at least once per month to Mexico and a few times per year to South America, Europe, or Asia. I have saved hundreds of dollars since I made that switch.
  • Lower your tax liability by taking advantage of your tax-deferred, tax-free, low-taxed accounts such as your Roth and Traditional 401(k) and IRA. Also, 457, 403(b), IRA HSA, SEP, SIMPLE. Remember, you can house stocks, fixed income, cash, real estate, gold, cryptocurrencies, and many other types of assets in these accounts
  • Reduce your home bills, including cable and online subscriptions. It is essential to do an annual check-up on monthly subscriptions and bills. Many FIRE folks like to simplify. I found adding a solar panel to my house was going to be an excellent long-term investment. I did the numbers, and it would pay off in 7 years, so I did it. I am thrilled as I got a tax credit a few years back, and I no longer need to worry about my local energy company playing ever-increasing energy rates.
  • Increase your income and consider adding multiple income streams by making the best investment decisions. While employed fulltime, think of opportunities to add additional income. Maybe it is building a tiny home in your backyard to rent it, perhaps consulting via or many other platforms that allow lawyers and other professionals to find clients online.


Financial Plan

  1. Use of a Certified, Fee-only financial planner

Last month I finished working with a couple who could not figure out how they were having cash flow issues with a household income of over $250,000 per year. After careful analysis and a financial plan, we discovered that some of the problems had to do with holding bad investments (real estate and a business partnership), costing them money every month and threw them at $2,500 negative per month. After we implement my strategies, they will save $10,000 per year in taxes, and instead of being $2,500 negative every month in cash flow, they will be positive over $2,500 every month. That is the importance of creating a financial plan and a financial framework.


It is no longer finding a financial advisor nearby; with the use of technology, we can use the internet the find the most qualified advisor who works specializes in working with people just like you.  A common question is: How does someone find competent advice?  The problem is that many out there with names such as “financial advisor,” “financial planner,” “retirement planner” can we tell who is the most qualified and working in our best interest. Here are four easy questions you should ask the financial professional you seek advice from:

  1. Do you and your firm as fiduciaries for your clients? If so, will you put it in writing?
  2. Are you licensed to be able to receive compensation from the sale of financial products? If so, what are the products?
  3. Are you a CERTIFIED FINANCIAL PLANNER professional? Learn more about the CFP board here
  4. Are you a fee-only financial planner? Learn more about fee-only planners here

Here are the answers you want to hear:

1)         Yes and yes      2) No    3) Yes  4) Yes

At Gersten Financial Planning, we love to hear your questions or concerns about retiring early. We know financial independence and early retirement is unique for each client.



None of the FIRE adherents maintains that the pandemic can wipe out the movement, notwithstanding the pandemic’s obstacles. However, it does highlight the risks associated with early retirement and relying on your investments and cash reserves to last you a certain period of time without a proper financial plan or framework. The pandemic’s impact on the economy has resurrected the notion that there are vulnerabilities that need to be resolved. If you have questions about your financial plan, your investment portfolio, or how to get started, contact us