If we’re not already in a recession, we may soon enter one due to aggressive trade policies that are fueling tremendous uncertainty. As companies and consumers pull back on spending, millions of jobs could be lost, trillions in stock market wealth may disappear, and inflation could persist\u2014potentially ushering in a stagflationary environment.<\/a><\/p>\n If you\u2019ve been thinking about retiring early in this environment, you might be hesitant to give up your steady W-2 paycheck. I completely understand. Your investments have already given up some gains, and you\u2019re fearful we may retest the lows or worse. Our politicians, most of whom are extremely wealthy, can endure financial losses to pursue their ideologies far better than the average person.<\/p>\n Given the rising risk of a recession, I wanted to share my perspective since leaving the traditional workforce in 2012. You could argue we’ve already experienced two recessions since then\u2014one in 2020 and another in 2022. <\/p>\n The truth is, whenever the stock market drops significantly, it can feel like a recession, as fear and uncertainty<\/a> take hold. The other truth is that a recession can be over before you know it. Let\u2019s hope for the latter this time around, with a rebound in stocks well before the economic data shows two consecutive quarters of GDP declines.<\/p>\n Let\u2019s explore how early retirees tend to feel during recessions and how they cope. I\u2019ll also share some of my personal thoughts and actions. For context, I began writing about FIRE (Financial Independence, Retire Early) in 2009\u2014during the depths of the worst recession of our lifetimes\u2014as I searched for a way out from a career in finance.<\/p>\n Without steady paychecks, early retirees rely heavily on their investments to survive. So when a bear market wipes out 20% or more of a retiree\u2019s stock portfolio, the fear becomes palpable.<\/p>\n The first step in a downturn is to\u00a0lower your safe withdrawal rate\u00a0<\/a>to help preserve capital. The second step is to\u00a0cut spending\u00a0to align with the new lower withdrawal rate. And the third is to\u00a0try and earn supplemental income, ideally doing something enjoyable.<\/p>\n Every retiree fears having to go back to work, often due to pride. They worry others will view them as failures<\/a>, especially those who scoffed at early retirement in the first place. But in my view, trying something audacious and risky isn\u2019t failure, it\u2019s positive exploration.<\/p>\n It takes discipline to save aggressively and invest consistently for years. And that same mindset helps early retirees survive recessions. If needed, they\u2019ll eat rice and beans, and find ways to earn to make ends meet.<\/p>\n My fear peaked in March 2020, when the S&P 500 plunged 32%. I had a three-month-old daughter and an almost-three-year-old son to care for. We pulled our son out of preschool for 18 months and relied heavily on grocery and food delivery services for the rest of the year. For months, I\u2019d wake up naturally by 4 AM as my protector instinct kicked in.<\/p>\n I seriously considered getting a full-time job to boost liquidity. But with hiring freezes and lockdowns, that wasn\u2019t an option. All I could do was\u00a0reduce spending\u00a0and\u00a0keep writing. Luckily, at the end of 2019, I was offered a book contract by Portfolio Penguin to write Buy This Not That<\/a><\/strong><\/em>. Writing became my salvation as I had something professionally to focus on for the next two years.<\/p>\n Ironically, that recession turned into an unexpected tailwind. Traffic and revenue on Financial Samurai grew as more people searched for financial help while working from home. The value of online businesses rose<\/a> because they couldn\u2019t be shut down by the government. This was a classic example of the\u00a0benefits of diversification and persistence. Sooner or later, something unexpected happens\u2014good or bad. <\/p>\n If you retire early from a traditional job, make sure to pursue something meaningful you truly enjoy. Watching TV or playing golf all day sounds fun at first, but it gets old fast and isn\u2019t sustainable long term. <\/p>\n One of the biggest mental challenges for early retirees is staying retired<\/em> during a bull market. When everyone around you is getting rich at work or launching startups, FOMO hits hard.<\/a><\/p>\n But during a recession, that pressure fades. Instead, you may feel a quiet relief that you\u2019re not missing out as much. You might even feel a bit smug that others are grinding away for little reward, especially when share prices are dropping and business growth slows.<\/p>\n If you care about your\u00a0Return on Effort<\/a>, the best time to do\u00a0less<\/em>\u00a0is during a recession. Conversely, the best time to hustle is during a bull market.<\/p>\n Of course, that relief can be overshadowed by anxiety if your portfolio takes a big hit. Even if you\u2019ve got enough, watching years of gains disappear in months is never easy. Please focus on having the appropriate stock exposure<\/a> that matches your goals and risk tolerance.<\/p>\n Living in San Francisco, my biggest FOMO these days is missing out on the AI boom. Many AI workers my age are landing multi-million dollar pay packages as companies like OpenAI, Anthropic, and others raise massive sums of capital. To stay competitive, giants like Google and Meta are boosting compensation too.<\/p>\n What keeps me grounded is the reality that I probably wouldn\u2019t be able to land a job at one of these tech companies anyway. As consolidation, I\u2019ve invested around $500,000 across various funds focused on private AI companies<\/a> to gain exposure. Plus, owning San Francisco real estate<\/a> is another way I\u2019m positioned for potential liquidity events tied to the AI industry.<\/p>\n So on one hand, I do envy those holding plum 7-figure roles in AI. On the other hand, I once consulted at a startup and only lasted four months<\/a> because I disliked the commute and endless meetings. <\/p>\n Below is my Fundrise Venture Capital<\/a><\/strong> dashboard, where I first invested $153,000 in 2024. I plan to invest another $50,000 this summer and then reassess every year. The more I invest in AI companies, the less FOMO I feel.<\/p>\n Given how much effort it takes to retire early, it\u2019s hard to sit still while your net worth is declining during a stock market crash. Many early retirees look for ways to earn income doing work they enjoy, both for financial and psychological security.<\/p>\n Personally, I try everything I can to\u00a0prevent our net worth from going down\u00a0during tough times. After all, the first rule of financial independence<\/a> is: don\u2019t lose money!<\/p>\n That said, this defiant mindset can hurt your well-being. Instead of letting go, you often become more stressed during a recession, checking your portfolio constantly and trying to hedge downside risk by sometimes selling or shorting at bad times. If you were truly content with your finances, you wouldn\u2019t feel so pressured.<\/p>\n This is why it\u2019s so important to\u00a0review your worst-case retirement scenarios. You can create various retirement scenarios with Boldin<\/a><\/strong> or ProjectionLab<\/a><\/strong>. I use both and they are excellent retirement planning tools. <\/p>\n The earlier you retire, the harder it is to find playmates. When I left work at 34, I had trouble finding tennis partners in the middle of the day. Eventually, I started hitting with a 55-year-old retiree and a college buddy who worked remotely.<\/p>\n But during a recession, that changes. Layoffs increase, and some of your working friends may suddenly have more free time. Your\u00a0social life may ironically improve<\/em>\u00a0as a result.<\/p>\n On the flip side, if the recession is deep, too many layoffs can lead to crowding. Public facilities and courts may be busier than usual. Even private clubs can feel packed given wealthy members can ride out the downturn easier.<\/p>\n If you had a choice, as an early retiree, you’d rather have more people working in order to have more freedom during the day. The people taking up the pickleball court while \u201cworking from home\u201d can create envy, making you wonder whether you should do the same.<\/p>\n Recessions can create doubt, especially when your wealth drops and fear creeps in. But amid the volatility, you\u2019re reminded of\u00a0why<\/em>\u00a0you chose to FIRE<\/a> in the first place\u2014freedom. Freedom to be with your family, wake up without an alarm, be a full-time parent, travel, and pursue your interests on your terms.<\/p>\n Even if your net worth drops by 20% or more, your time is still yours. In a downturn, when stress levels rise across the workforce, the intangible value of freedom becomes even more apparent. It becomes easier to endure financial loss when you still have control over your time and mental space.<\/p>\n I worked through the 2008\u20132009 Global Financial Crisis<\/a>, and it was the most demoralizing<\/em> period of my career. Every quarter brought another round of layoffs\u2014people I knew and respected were suddenly gone.<\/p>\n Our compensation was slashed, and we had to work even harder, driven by the fear of losing our jobs. For two years straight, walking into the office felt like walking on pins and needles. We never knew if that day would be our last.<\/p>\n Looking back, I\u2019d much rather be retired during a recession than working through one.<\/p>\n Recessions force creativity for survival. Whether it\u2019s renting out a spare room, selling unused items, taking on consulting work, driving for Uber<\/a>, or monetizing a hobby, early retirees often find that they’re more resourceful than they imagined.<\/p>\n You already beat the odds by retiring before 65. So you likely have the mindset, discipline, and tools to adapt\u2014maybe even thrive\u2014when circumstances change. And sometimes, you stumble across new opportunities that bring income and joy.<\/p>\n Financial Samurai would not have launched in July 2009 if it wasn’t for the global financial crisis<\/a>.I would have kept putting it off because the financial rewards from work were too good to walk away from. But the trade-off would have been poorer health, more stress, and less overall happiness. I\u2019m also not sure I would have had children, as I was too focused on work to even consider starting a family.<\/p>\n One of the best reasons to retire early<\/a> is the opportunity to experience greater happiness sooner. This sense of happiness\u2014or perhaps more accurately, deep satisfaction\u2014is priceless. Below is how I describe the happiness by age chart if you retire early.<\/p>\n When the markets are down and anxiety is high, it’s common to reflect on your life choices\u2014especially if much of your identity was tied to your career. Without the validation of a title, paycheck, or steady upward trajectory, a recession can amplify feelings of doubt.<\/p>\n In addition, if you\u2019ve spent years focused on saving and investing to retire early, you might tie your self-worth more closely to your net worth than the average person. As a result, when a recession takes a toll on your wealth, you may feel more down than someone who isn\u2019t as financially focused<\/a>.<\/p>\n But this also presents a valuable opportunity: to redefine your identity beyond work and money. Whether it’s being a present parent, a community volunteer, a hobbyist-turned-creator, or simply a curious soul, you’ll be pushed to answer a deeper question:\u00a0Who am I without my career and wealth?<\/em>\u00a0The earlier you answer this, the more fulfilled your early retirement will be, recession or not.<\/p>\n With the latest downturn, I\u2019ve felt more moody but less afraid. I\u2019m less afraid thanks to a bigger financial buffer than I had in 2022, but more moody because I should\u2019ve known better than to invest near top valuations.<\/p>\n As a personal finance writer, I can’t help but check the markets daily. I was playing tennis at 10:30 AM the other day and still found myself checking stock prices during changeovers\u2014like an addict. Meanwhile, my relative gets to focus on her art and stay blissfully unaware of the volatility. I feel trapped by my obsession.<\/p>\n I need to diversify my interests, but I tend to go all-in on everything\u2014writing, investing, poker, tennis, fatherhood. Maybe I should pivot Financial Samurai into a health and wellness site. Nah! Who needs washboard abs at 47?<\/p>\n During recessions, friends and former colleagues may reach out for financial advice, job leads, or just emotional support. You become a source of wisdom because you\u2019ve already made the leap and survived market turbulence. Even if you\u2019re not actively trying to lead, your actions and lifestyle become a guidepost for others trying to navigate uncertainty.<\/p>\n The more you share your story\u2014both the wins and the losses\u2014the more others benefit. And that can add a new layer of meaning to your retirement. In times of fear, being helpful can be healing.<\/p>\n One of the most rewarding parts of running this site since it began in July 2009 has been letting people know they\u2019re not alone during tough times. There\u2019s something powerful about recovering together. Sharing hardship strengthens our bonds and makes the journey more meaningful.<\/p>\n One of the most unexpected joys of publicly sharing my personal finance consulting page<\/a> has been connecting directly with Financial Samurai readers over video. Until this year, I\u2019d never promoted the service\u2014it’s not even listed on my homepage\u2014because demand can be overwhelming.<\/p>\n That said, I\u2019m currently running a special promotion through\u00a0Friday, May 9, 2025. If you order\u00a055 hard copies\u00a0of my new book,\u00a0Millionaire Milestones: Simple Steps to Seven Figures<\/a><\/strong><\/em>, you\u2019ll receive a\u00a0bulk purchase discount\u00a0and<\/em>\u00a0a\u00a041% discount\u00a0on my standard consulting rate. Plus, you\u2019ll get to keep all the books\u2014perfect for gifting to friends, family, or colleagues.<\/p>\n Every conversation leaves me inspired. I\u2019m blown away by the businesses you\u2019ve built, the courage you\u2019ve shown leaving jobs or difficult relationships, the discipline you\u2019ve applied to saving and investing, and the thoughtfulness behind your financial goals. I also have deep empathy for the challenge of building wealth while raising children. Talking with readers is the \u201clast mile\u201d that reminds me my writing might actually be helping someone.<\/p>\n So thank you to everyone who\u2019s signed up already. For those interested in personalized feedback, you can just fill out the bottom of this form<\/a><\/strong> and I’ll get in contact within 48 hours with instructions. I look forward to speaking with many more of you. <\/p>\n Although early retirees are typically well-prepared for a recession, fear and anxiety don\u2019t magically disappear after leaving the workforce. This is especially true if you have little ones depending on you as DUPs<\/a>. The stress can be immense. <\/p>\n But here\u2019s the good news: recessions don\u2019t last forever. Historically, they\u2019ve ranged from six months to two years, with an average length of about 10 months<\/strong> since World War II. <\/p>\n So if you’ve stress-tested your retirement plan and it still holds up under a worst-case scenario, retiring during a bear market<\/a> might actually be the\u00a0ideal<\/em>\u00a0time. Why? Because after the storm passes\u2014as it always does\u2014the economy and your investments are likely to recover, making it that much easier to stay retired for good.<\/p>\n So now you have a sense of how you might feel and respond if you retire early and a recession hits. The final question is: will you find the courage to make the leap if you truly have enough money to live freely?<\/p>\n If you’re a retiree, I’d love to hear how recessions have impacted your finances, lifestyle, and mental well-being.\u00a0Do you find it harder to navigate a downturn as a retiree or as someone still in the workforce? And when the economy takes a hit, what kinds of adjustments\u2014if any\u2014do you make to stay on track?<\/em><\/p>\n If you want to retire earlier, grab a copy of my new book:\u00a0Millionaire Milestones: Simple Steps to Seven Figures<\/a><\/strong>.<\/em>\u00a0I\u2019ve distilled over 30 years of experience into a practical guide to help you become a millionaire\u2014or even a multi-millionaire. With enough wealth, you can buy back your time, the most valuable asset of all.<\/p>\nWhat A Recession Is Like For Early Retirees (FIRE)<\/strong><\/h2>\n
![\"History](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/recession-and-market-crashes.jpeg\")
<\/figure>\n1) You Worry That Early Retirement May Not Be Sustainable<\/h3>\n
My Personal Fear During the Pandemic Crash<\/h3>\n
2) You\u2019ll Feel Both Relief and Anxiety<\/h3>\n
![\"\"](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/IMG_2760-634x500.png\")
My FOMO and Relief<\/strong><\/h3>\n
![\"Fundrise](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/Fundrise-Financial-Samurai-Venture-2025-Dashboard-728x461.png\")
<\/a><\/figure>\n3) It’s Hard To Do Nothing And Take A Beating<\/h3>\n
4) You\u2019ll Find More People to Play With<\/h3>\n
![\"The](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/05\/IMG_2764.png\")
5) You\u2019ll be Reminded That Freedom is the Ultimate Goal<\/strong><\/h3>\n
6) You\u2019ll realize you\u2019re more adaptable than you thought<\/strong><\/h3>\n
![\"The](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/Retiring-Early-Brings-More-Happiness.jpg\")
<\/figure>\n7) You may question your identity and purpose<\/h3>\n
Too Much of My Self-Worth Is Tied Up in Money<\/strong><\/h3>\n
8) You\u2019ll Become a Mentor, Whether You Know It Or Not, Which Will Enrich Your Soul<\/h3>\n
The Surprising Benefit of Personal Finance Consulting<\/strong><\/h3>\n
Thankfully, Recessions Don\u2019t Last Forever<\/h2>\n
Order My New Book: Millionaire Milestones<\/h2>\n
![\"Millionaire](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/01\/mm-top-new-release.png\")
<\/a>