Volatility is back and it can really change your retirement situation. You've probably heard of Monte Carlo simulations. Some people don't like Monte Carlo because it mostly relies on the past just as so many other tools we use to forecast the future. We understand that concern, but we still like it as one of the tools in the toolbox.

For those in retirement or very close to it, a 15% decline in the stock market over just a few short months can be gut-wrenching. This is of course why so many of us in the personal finance industry beat the drum of diversification so often. But what about people who have 20 to 30 years until they will need the funds from their retirement accounts? Should they really worry too much about month to month and even year to year gyrations in the stock market?

This is a family of five in North Carolina. The couple are in their late thirties and have effectively stopped working full time--and plan to keep it that way. They earn income from their web site and a few other sources, but it’s nothing like the 9-to-5 office-job money they used to make. In typical FIRE fashion, they worked hard at high-paying jobs for a short period of time (about 10 years), saving a huge portion of their income, and then . . . stopped. And started blogging about it and attracting media attention.

The concept of choosing where to put your money is not new. But with today’s do-it-yourself technology tools, it has become easier to calculate just how much you can save by implementing a better asset location strategy.

We're conflicted about FIRE. On the one hand, frugality is an underappreciated and powerful thing. A movement that inspires people to save money, consume less, and lead a more conscious life--what could be bad about that? Getting off the hamster wheel and spending more time living? That sounds pretty good.