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Do early retirees need life insurance?

More people are joining the FIRE (financial independence, retire early) movement. Here’s how life insurance can help you protect your family as you save for early retirement.

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You may not have to wait until your hair turns gray to retire early. A growing number of people in their 30s and 40s aim to save at least half their take-home pay so they can pursue their dream lifestyles sooner rather than later.

This Millennial-fueled community, known as FIRE (financial independence, retire early), takes radical steps when it comes to saving, spending and investing. But what about life insurance?

Well, it depends on what kind of early retirement you want and which FIRE follower you ask.

Here are some radically different life insurance perspectives from some of the leading proponents of early retirement.

Mr. Money Mustache shuns life insurance

Peter Adeney, the popular early retirement blogger known as Mr. Money Mustache, has no use for life insurance.

“Insurance of all types – car, house, jewelry, health, life – is a crazy field swayed by lots of marketing, fear, and doubt,” he wrote in a 2011 blog post.

When some of his readers expressed worries about not leaving enough money to their kids if they were to die expectedly without life insurance, Adeney, a software engineer who retired in 2005 at 30, doubled-down on his critique: “Sure, a life insurance payment might protect a survivor from financial hardship – from having to work harder to earn their own money. But is such hardship something to run from? I’d argue that hardship and struggle are the building blocks of a happy life – and that survivors with life insurance payments could easily end up LESS happy than survivors who had to build up their own wealth without insurance.”

Financial Samurai wishes he had more life insurance

Not every member of the FIRE community dismisses the value of life insurance, especially when it comes to the financial well-being of their children. In fact, some would have liked to buy more when they were starting out.

“One of my biggest regrets now is not getting more life insurance when I was in my early 20s and 30s,” said Sam Dogen, the 41-year-old creator of the personal finance website Financial Samurai, who retired in 2012 after a 13-year career in finance.

Dogen did have group life insurance through his employer that provided four times his base salary. But when he left the corporate world at 34, that employer-provided life insurance coverage ended. It was tied to the job. At age 35, Dogen took out a 20-year, $1 million term life insurance policy to protect his family.

Term life insurance is a simple way to provide for your loved ones in the event of your death. It guarantees a financial payout, called a death benefit, to your family in exchange for regular monthly premium payments, in the event that you die during the coverage term of the policy (common term lengths are 10. 15, 20 or 30 years). For example, a 35-year-old man in excellent health can get a 20-year, $1 million Haven Term policy, issued by MassMutual, for less than $41 per month.

Dogen’s perspective on life insurance shifted when his son was born in 2017. “It’s like some evolutionary change. You want more financial protection because there is someone totally helpless who you love more than anything in the world. And if you’re gone, it’s the worst tragedy for them,” he said.

Lifestyle and taxes play a role in why Dogen wants more life insurance. Unlike many members of the FIRE community who are based in low-cost cities, he lives in pricey San Francisco.

Mad Fientist insured until he could self-insure

Brandon, a former software developer who retired in 2016 at 34 and blogs anonymously as the Mad Fientist, sees life insurance only as protection against financial catastrophe.

“When I was still working and we had a house and a mortgage, I had a really cheap life insurance policy through my employer,” Brandon said. “It wasn’t that big, maybe two times my salary. But it was enough that my wife wouldn’t have to worry about selling the house right away.”

Once he gained financial independence and headed to early retirement, he dropped the life insurance policy because he felt he had enough savings to self-insure against any future risks in retirement.

“You have to look at your situation and think about ‘what happens if I die, is my partner or my partner and my kids going to be fine?’ If not, you probably need insurance,” Brandon said. “For a lot of people in the FIRE space, they have a nest egg that can take care of almost anything that happens in retirement.”

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Find the life insurance that’s right for your early retirement

Just as everyone in the FIRE movement takes a different path to early retirement, the same goes for life insurance.

Mr. Money Mustache didn’t bother with life insurance, taking the risk on himself. Mad Fientist used group life insurance until he thought he had enough money to protect his family. The Financial Samurai bought a 20-year, $1 million term life insurance policy to cover his anticipated needs, but wished he had more as his family grew.

Not sure exactly how much coverage you need? Use Haven Life’s life insurance calculator to make the decision easier.

It’s not just easier life insurance, it’s an easier life.

Learn about the perks that come with being a Haven Term policyholder.

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Tom Anderson is Haven Life’s editorial director.

The various views of those proponents of the FIRE movement (Financial Independence, Retire Early) discussed here are their own and do not necessarily represent the opinion of Haven Life Insurance Agency. Haven Life offers this as educational information only and does not endorse the views, strategies, companies, products or services discussed here.

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About Tom Anderson

Tom Anderson is an award-winning financial journalist whose work has appeared in CNBC.comKiplinger’s Personal FinanceMoneyMonocle and Wired. He was a 2008-09 Knight-Bagehot Fellow in Economics and Business Journalism at Columbia University.

Read more by Tom Anderson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit:

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