4 Simple Tips To Retire Early

Create Your Custom Early Retirement Strategy Here

Are you ready to master the art of early retirement? We're here to guide you on how to make your money work for you, revealing the secrets behind a successful early retirement. Through real-life stories, we shed light on the importance of having a well-rounded financial plan, as well as the potential pitfalls of retiring without one. We also delve into the significance of maintaining good health before and during retirement, providing insights on how to strike the right balance between work and personal well-being.

Ever wondered if you're over-reliant on your 401k for your retirement fund? In a lively discussion, we expose the potential downsides of solely banking on your 401k and the immense benefits of diversifying your retirement funds. We empower you with expert advice on various retirement strategies and the importance of seeking professional help when it comes to retirement planning. Plus, we take a deep dive into the habit of shifting retirement goalposts, continually postponing retirement for the next bonus or financial milestone. Tune in for an enlightening conversation packed with invaluable tips for anyone considering early retirement.

Create Your Custom Early Retirement Strategy Here

Ari Taublieb, CFP ®, MBA is the Vice President of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients navigate the nuances of an early retirement.

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PS: Before anyone decides to move forward with our services, I want to ensure we're the best fit to help you reach your goals and I personally have the first conversation with you.

Transcript

Speaker 1: 0:00

In today's episode, I'm going to go over four things that you need to make sure you are thinking through if you want to have a successful early retirement, and I'm going to give them to you right now. Number one is not having a financial plan. Now, that goes without saying. But you don't want to retire early and then be kicking yourself later going, hey, why didn't I work six more months or one more year, or two more years or five more years or whatever it is, so you can retire with confidence, and you know it by now. But there's two people out there, people that retire early, people that retire early with confidence, and I have a few people that I'm working with right now in their seventies, who retired early, but they didn't retire early successfully. I mean, they weren't able to spend what they wanted to spend and they wish they'd worked a little longer. And, trust me, you only want to retire once. That's number one. Number two is start prioritizing your health. Today, most people wait until they retire, and I get it. Some of you are going, hey, I'd love to do that, but my job just doesn't allow me to do that with work and family and this and that I can't do it. And I'll say what if you took a job that paid a whole lot less but still showed you were on track, would you do it? And they're like, maybe I just don't have time to even think through that. I'll say let's explore that. So whatever you need to do to start prioritizing your health, good luck quantifying that throughout retirement. I can tell you right now my clients that are retired just told me I wish I would have prioritized my health earlier. So that's number two.

Speaker 1: 1:16

Number three and this is a very common one that people overlook is not asking for help. Too many people go. I'm going to go at this retirement and I'm going to do it my way. And they don't ask a friend or a coworker or someone they look up to why they retired and especially what made it successful. So, whether it's listening to podcasts where people talk about it or simply asking people you care about very closely and saying, hey, is it important to you that I retire? I have a client and I'll give you this story later, but I have one client that talked about they want to redate their spouse again because it's just been so long since they've done the traditional date nights and they want to just get to know them better, and I love that. And too many people, in my opinion, go through life and they're simply and this is just from what my clients tell me are simply in that traditional path of I'm just going to keep working because I've been told to work or I've been working for 30, 40 years and the concept of not working just seems really, really weird. So that's number three.

Speaker 1: 2:09

The number four and in my opinion, this is the biggest and all of these four points I'm going to go through in more detail, but I know a lot of you are busy people, so I want to give you the answer right away, in case this is all you're listening for. That's okay with me. Number four and this is, like I said, the really big one in my opinion is moving the goalposts back. Too many people say, yep, once I have 500,000, I'm going to retire once I have a million, 2 million, 5 million and it's a concept because we're all hardwired to have goals and say I want to reach X amount, which I get, and I'm okay with that. I focus on goal planning, so I like it, but I need to make sure you're not simply saying, yep, I'm going to wait for that next bonus one more year, yep, just six more months and I'm going to retire.

Speaker 1: 2:49

And then you don't, and you wait six more months. Then you go well, markets aren't exactly where I want and you know this tax thing's not going to really align, so let me just keep going. And you keep going. And then later it's five years and you go hey, why didn't I prioritize my health? Because I know you guys don't speak with people like I am all day, every day, and a lot of the conversations I have are not rosy, and what I mean by that is none of us know how long any of us are going to live. But then there's the health. Today and some people come to me and they can't wait to travel and do all this fun stuff. They get hit with a really scary health event and it's not fun, but that's the reality and we need to plan for it. And I don't want them saving and saving and saving and having five, 10 million bucks in their seventies going. Why didn't I consider retiring earlier? Why didn't I at least plan to see what I'm on track for Now?

Speaker 1: 3:33

Sometimes I, like a listener submitted this question and I really like that they submitted it. They go, ari, in your podcast sometimes you make it seem like you have to retire early to be successful and to be happy, and I was like, okay, that's good feedback for me, because that's not the message I'm trying to relay here. The message I'm trying to relay is I want you to know the earliest time you can retire. If you love what you do, keep working. If there's another job that you say you know what pays a whole lot less, but it would keep me stress free, or should I say, let it will be less stressful so you can focus on other things, I'm all for it. I just want you to do more of what you want to do, and some of you, you love working and you just want to optimize your money. Quite simply, you don't want to get crushed in taxes, and some of you are coming to me for that, and I'm cool with that. Okay, so, as you can tell, I try to speak in a language that resonates with all of you.

Speaker 1: 4:22

Most of you have heard my dopey jokes. In fact, I'd say 90% of you are like yep, ari, we get the dopey jokes. You're starting to repeat them in podcasts. I'm going to repeat them less, but I'm going to give you this one real quick, okay. So if you haven't heard it, if you're a new listener, welcome, because you're going to hear a lot of the jokes and the old listeners can tell you.

Speaker 1: 4:37

But I went to a doctor a few weeks ago and the doctor said Ari, you have X issue. I said great. Then they started explaining it to me and you know, not great is in great news, but like, great, I understand it. And then they started talking, and they started talking more and more and now I'm not understanding it. And then I told the doctor I said, hey, doc, that sounded great. I think you think that sounded great, but I have no idea what you just said, so I need you to tell it to me. Like I'm five. And he's like, okay, got it. Same thing here.

Speaker 1: 5:05

There's all this fancy language and there's legitimate language in my industry called goalpost planning, where there's people out there that want to retire. They're in a good spot but they can't do it because they think a little bit more is going to put them in that dream spot where they can now accomplish all their goals, and then 10 years goes by and they go. Why didn't I consider retiring earlier, when I had more time with my spouse or my kids or you name it. So hopefully that's some helpful insight there. Now I'm going to go through these four in more detail, but I first want to go over the review of the week. Now, I know I just did five plus minutes going through this, but I was just excited to tell you guys these. Now I'm going to go through the review of the week and then we're going to explore these in more detail, give you some more ideas, and it's going to be awesome.

Speaker 1: 5:44

So this is a review that comes from Tiffy Tennis, who says thank you so much for this podcast. I've been listening for a while now and I've never reviewed. However, today I am reviewing, mostly because I was so excited to pull up my app and see I didn't have to wait until Monday for an episode. I've truly learned so much from Ari and I'm in the process of listening to all of the unplayed episodes he mentioned today about real life, early retirement, successes and failures, and I can't wait to hear those. I'm a couple years out and don't want to do it wrong. Thanks so much for taking the time to make these and if you haven't had time to listen to these, do yourself a favor and get on it.

Speaker 1: 6:15

Tiffy Tennis, thank you so much for leaving the review. I appreciate it more than you know, because a lot of people are identifying what podcast to listen to. There are so many financial podcasts out there and it really helps when people are able to read reviews and see what's the vibe of this podcast, because some people turn it on and they go, hey, this is exactly what I was looking for. I like this. Other people want to talk in great detail about standard deviation, about covariance, about all these measures of variability, fancy, fancy financial stuff, which I love, and so I like listening to those podcasts. But I know a lot of people don't want to listen to those podcasts, so I want to make sure those that are listening are getting the information that they are looking for. That's why I do this. So hopefully this has been helpful and Tiffy Tennis love the review. So thank you for that.

Speaker 1: 6:58

Now let's hop back in today's episode. Once again, I'm recording this on the Apple Podcast app, but if you want to see my face, go through this with some examples and fun stuff on the screen, go to YouTube and you'll see my other videos. So number one is that financial part. Are you in a good spot to retire early. Now this is going to maybe not blow your mind, but blows my mind, okay, some people come to me and they already retired early and they didn't even have a plan. They just thought they were in a pretty good spot and they just went and retired early and they're going to hope it works out.

Speaker 1: 7:25

And for a lot of you it is going to work out because you just have a lot of assets. Now you know you could do better, but we could always do better. We all know there's things we could do better, but that doesn't mean you don't have to do it. So it's not a bad thing. And some of you are more laid back. Some of you are like, hey, I just want to make sure I do it right. I don't want to go tell my boss that I'm quitting and then regret it six months later, so I don't want you to have to do that either. Now, as I'm looking at planning, I really want to invite you, and some of this is going to sound a little woo, woo, okay, but I promise I'm telling it to you for a reason.

Speaker 1: 7:52

My clients right now are saying Ari, please go tell your listeners, don't just wait to spend money. Please, while you have your energy and health, go travel, go make these experiences worthwhile. Now I don't think someone can actually go do that unless they know that they're in a good spot to spend. So, dialing in your finances and making sure you're not leaving anything on the table, that's where you want to begin Now. Once you have your finances in order, you feel like you have a good plan. That's when you want to start to go. Wait a second. Okay, what on earth am I going to do? Because you are going to be retired and now all of the finances work out. And that's not even half the battle. Now you actually have to find out what's your purpose in retirement.

Speaker 1: 8:30

So my two quick stories here, which I've given in the past. I know, but it feels like it's been some time. One client came to me and they are I can't wait to golf when I retire, say great, go golf. Then six weeks later, they called me up to the Ari what do I do? I don't know. What do you want to do? They go well, I just hurt my back golfing, and now I don't know. And so they were like I'm not only not bored, I'm not fulfilled. And so what did they do? They went back to work, and they went back to work even though it wasn't a job that allowed them to prioritize their health, but their identity was in their work, and so I don't want you to not think through it before you retire. That's not a bad thing. This client listening probably right now, he knows that he went and did this and he's okay with it, based on his situation and we've explored it together.

Speaker 1: 9:07

But for you listening right now, I want you to at least think through, even if it's very elementary, what are some things you want to do, and some of you are like Ari, I don't even need to know that. I've got my long list. Tell me, financially, when can I do it? Say, great, makes my job easier. But a lot of you are going nope, I've worked for 30, 40 plus years. I have some thoughts of stuff I want to do, but I just don't know if that's going to actually make me fulfilled. I know it can fulfill my time, meaning it'll fill up my time, but not fulfill my time. So there's a difference there.

Speaker 1: 9:35

Now let's go to the next one. Next on my list is really that concept of health and not prioritizing your health. And I know this because when you download my ebook, I ask all of you guys to tell me what are things you're excited to not worry about anymore. And some of you will say a boss or a deadline or commuting. And I put all of that into the health category because anytime you are spending thinking about your boss or commuting or whatever it is, that is time that you are not focusing on your health. And sometimes focusing on your health is just not working hard, and some of you are just hardwired to only work hard. You know pedal to the metal all the time. That's not going to lead to success in retirement.

Speaker 1: 10:15

If you do that, you're going to burn out and then all of a sudden be like, hey, now I'm in my 70s, 80s and I just don't have the energy to do what I want to do Now. I wouldn't believe that unless my clients told me that. So I'm not just telling you this, to tell you this or to scare you. I just have clients telling me I'm so glad I spent a whole lot of money when I was in my early years of retirement where I had my energy and health, and other people telling me, hey, I don't want to spend money now because I just don't want to run out later. So I hear both sides in the only way, once again, you go back to the finances. You see what position you're in Now. If you're in a spot where you can spend a ton of money and prior to your health and you love what you're doing, great like you can skip this point. I'm going over. These are all just different options.

Speaker 1: 10:57

I want to give a few every episode so that at least at a minimum you're taking away one that makes you think even 1% differently and hopefully 1% more confident. So that's number two is prioritizing your health, and it's really hard to do. So some of my clients say, hey, what are some ideas? And some ideas that my clients brought up with me that have resonated with other clients are things like ClassPass. So ClassPass is an app that you can go and try Pilates or try yoga or try whatever it is, and you don't have to sign up for a year membership or a month membership. You can just go do one class and see how you like it. So some clients have enjoyed doing that and it puts you in a different part of town because you're simply going. You know what I'm going to do a Pilates class and you're not naturally going to go to one part of your city just because how could you end up there unless you're seeing a friend or a restaurant or whatever it is, and this is an excuse to get to a different part of town. You end up walking around there. You see something else you like. Part of this is just exploring what opportunities are out there. Another app is Meetup. So Meetup is M-E-E-T-U-P. A lot of my clients like that because they retire early and they want friends and they want to go to museums with other friends.

Speaker 1: 12:01

And especially if you're single or you're divorced or you're widowed, you want to make sure that you are meeting with other people like you or you're moving to a community, and so this is why I love planning. I don't love taxes for taxing. I love the concept that you could say, wow, I'm in a better spot than I thought financially. I'm going to move to this community where there are other people just like me and I'm just going to have a happier life. Yeah, my portfolio is going to be smaller, but I'm still in a great spot, and so don't get subject to this. I need 2 million or 3 million or 5 million. That's what I talked about last week. Don't keep moving the goal post back. The goal is not to die with the most amount of money. If you have specific legacy goals where you want to leave X amount to kids, great, go leave X to kids, but make sure that you're not leaving 10 million plus dollars behind because you don't get any extra points for dying the richest person at your funeral.

Speaker 1: 12:46

So number three is staying active. In my book, I want you active. I want you thinking about oh my gosh, I'm going to retire. What can I do to put myself in the best position possible? So active in my mind is you are actively going. How much do I need to contribute to my 401k, to my Roth IRA, to my IRA, to my brokerage account?

Speaker 1: 13:06

A lot of you know the term house rich, cash poor. I mentioned it last week. But that's my parents. They've saved and invested really well and then they go. You know what expenses come up. Life comes up, just naturally. Stuff comes up because we're humans, we're not robots. Spending had to occur so that we could do medical bills and all this fancy stuff that was required. So fancy is not the right word Important stuff. And my parents know this and they like that. I talk about this on the show because they say, yep, we don't want people that you're talking to working in your seventies, just like us. So they're in Malibu, they have a home. It's worth a lot of money. However, they don't want to leave the home. It's a beautiful area. They love where they live. If you know Malibu at all, they live in Point Doom. So they love where they live. But they're working, and they're working in their seventies because they had a few bad advisors.

Speaker 1: 13:48

And most of you know my story by now. But I grew up in Malibu. I grow up around undisciplined wealth, a lot of wealth, but people not optimizing. So I'm growing up, going hey, it feels like people are just throwing money away all the time at needless things. Now, sometimes that's the truth, other times it's not the truth. And what I did is. Growing up, I found out, okay, what do I want to do? And so I worked at all these different companies, determining, hey, where do I want to end up? And I was an insurance company and then a financial firm that did you know traditional financial planning, and I'm like, hey, there's got to be a better way to do this. And so Seeing my parents go through a lot of bad advisors made me go. I want to be one of the good ones, so that's, of course, why I love to do what I do.

Speaker 1: 14:24

Bringing the point back to how much do I need to save, actively thinking through am I in a good spot? I don't want you to be house rich cash poor or qualified rich cash poor. What on earth does that mean? That sounds like something I've never heard before. That's because it is, and I made it up, and so if you look it up on Google, maybe there's something for it. In fact, I'm just gonna look right now while I'm on the line with you guys, but I doubt there is Qualified rich cash poor. Now there is, and oh, there isn't. Okay, so it's official. I've been saying it for a few weeks now, but I'm looking on Google. It's just house rich cash poor. Asset rich cash poor. That's probably the closest, but I call it qualified rich cash poor because someone came to me and this was some months ago.

Speaker 1: 15:03

They had about 4 million bucks and it was in a 401k and they wouldn't retire early and they hated what they were doing and so they kept maxed out their 401k, because that's what they've been told their whole life. And then all of a sudden they were like I want to retire, what do I do? And they were not 59 and a half once again. So they couldn't take from that 401k. They couldn't do a rule of 55. They couldn't do anything Meaning. If they wanted to take some funds, they were paying the 10% penalty plus ordinary income taxes, on withdrawing those assets, and they didn't want to do that, even though they were in a good spot. Now, it wouldn't have been fun to pay 10% on 4 million, as you can imagine, but it's actually only on the amount you take out. So it's not exactly that. But, as an example, if they wanted to take it all out, you'd be paying a big penalty.

Speaker 1: 15:43

So why am I telling you this? I don't want you to have an amazing 401k. I want you to have an amazing plan that tells you here's how much you need in your 401k, in your Roth IRA, in your IRA, in your brokerage account, which I nickname as the superhero account. So your brokerage account a lot of terms out there taxable account, brokerage account, joint account, individual account they all mean the same exact thing, which is you don't get any tax benefit as you put dollars in. However, you do get total flexibility. So when you take the money out in the future assuming you've held it for more than a year you get long term capital gains treatment, which is taxed better, meaning it's more preferential. You want this over ordinary income taxes in 95% of cases, so a brokerage account keeps your income really low and what's awesome about it is it allows you to do things like Roth conversions and other strategies I talk about on all my podcasts. So, hopefully, some insight there.

Speaker 1: 16:37

Please, yes, be active and finally, go ask for help. There's no shame in asking for help. I'm asking for all of your help. I don't really know what you guys all want to hear. I have my clients telling me yep, ari, do more of this. I want more stories. I want more on tax planning. I want estate planning. You don't do enough insurance. I want to do podcasts just like this for very, very long time and I have no intention of ever stopping, and now I'm past the three year mark and I love doing this. I want to make sure you guys are getting the most valuable insight, so keep submitting those questions when you want to work with us and our team.

Speaker 1: 17:09

A lot of you know this, but we want to help as many people as possible Retire early, and we specialize in that. Not everyone does so. If you're coming to me at 30, going, should I start a 401k, I'll say, yeah, you should, but don't pay us to do that. Go, educate yourself, get some general guidance. It's not worth the fee. More often than not, it makes sense to pay us when someone has a million plus dollars, because that's where we can justify our fee. So I want to make sure.

Speaker 1: 17:32

If you're reaching out, going, hey, am I going to get value from working with you guys? The answer is I don't know. The second answer is let's find out. So our process is designed to show you if we can help. And if financially we can't add significant value I'm not talking incremental value I'm the first person to say please don't pay us, it doesn't make sense. At the same time, if we can show you there's tremendous value through our planning, I want to make it a no brainer. So I don't let anyone move forward with us unless they're excited. If they're like, yeah, I feel like I should do this, but I'm just not sure. It's not a priority for me right now, I say great. When it's a priority, then reach out because we don't want to waste your time. So I'm not saying this to be mean. I'm saying this because your time is valuable. If this is a priority for you and you're going, yep, I want to make sure my strategy tells me where on earth income is going to come from when I retire. Great, awesome reason to reach out. If you're going. I know there's benefits to Roth conversions and donor-advised funds and all this fancy tax stuff and harvesting, but I don't want to do it or I don't want to look into doing it. Another awesome reason to reach out. If you're going. You know what? I just want a strategy that connects all the pieces. Another reason to reach out A lot of you are coming to me going.

Speaker 1: 18:33

Hey, I actually like my advisor. They've done a great job, but I don't know if I'm going to get passed down to someone else in the future. So a lot of people are reaching out to us because we're young and we want to be with you the next 30, 40 years. So we're young, but we have the experience because most of us have all been at the really big firms. We saw what it was like and we saw the fact that you just can't do your best work. So sometimes not sometimes the majority of people that do come to us they're coming from Fidelity and Vanguard and Empower and all the big firms out there, but they're not getting the custom guidance. Meaning maybe there's some investment guidance, a little bit, but they're not getting custom guidance for when to do a Roth conversion, what's the exact allocation, when can you retire, how much can you spend, what's the most? And that's the difference is it's the tax, the estate, and then finally, not promising it and my clients know this.

Speaker 1: 19:22

But right now we do everything in-house except tax prep. So someone's coming to us. They want to trust, draft it, and they want a will and they want medical directives and power of attorney. We help them get all that set up at no additional cost. If you go to some estate planner they might charge you three, four thousand bucks to get that in order. And if you have a ton of rental properties and multiple businesses, I like hiring an attorney. It makes sense. If you're not, I don't love doing it. I'd rather save you the cost but get you the coverage you need. So we help people get their estate plan set up. We do the tax planning, we do all the forward-looking tax projections for our clients, and tax prep is something that we hope by next year we have in place as well, because a lot of you are going, hey, I've kind of, my advisor gave me a little bit of guidance on tax stuff, but then I have to go communicate that to my CPA and then sometimes stuff gets lost in translation or stuff just doesn't happen, or I just don't want to worry about it not happening correctly, and so that's why we want to coordinate everything, where everything will be in-house and we are your one stop shop solution for everything and your financial needs. So think about it like your financial quarterback.

Speaker 1: 20:21

Hopefully this episode was helpful, giving you some insight more to an early retirement. That's my goal Every single episode. I want you more confident about the fact that you are going to be in a position to retire early. So if you don't love what you do, there is a light at the end of the tunnel, I promise you. My clients say, ari, I wish you told me that earlier, because it just it makes it easier to save and invest, to keep adding to that 401k.

Speaker 1: 20:41

Some of you are a year out, some of you are six months out, some of you are three, five, 10 years out. There is a light at that end of the tunnel, and sometimes that light is not traditional. I mean, some people think it's really bright and you're going to get there and it's going to be awesome, and then it's what am I going to do for fulfillment? Or, oh my gosh, do I really have enough to spend what I wanted to spend, or did I under project? So, making sure you have a plan dialed in and the earlier you do it, I promise, the easier it is to go to work every day, because you then know you're doing it because you want to, not because you have to, and there will be a day where you can spend time doing what you want to do and sometimes, once again, that's still working, just a different type of work or maybe on your own terms. So hopefully this episode was helpful. Once again, if this was, please do leave a review. It helps more people find the show.

Speaker 1: 21:22

I want to help as many people as humanly possible retire early and if you want to work with us, go to the link in the description and you can see how to apply to do just that. Thanks, guys, love you. Thank you for listening to another episode of the early retirement show. If you have a question that you want answered in a future episode, you can always go to my website, earlyretirementpodcastcom. That's earlyretirementpodcastcom, and you can go ahead and submit a question that I'll look to answer in a future episode. Thank you all for listening. Please do rate it, review it and share it with someone who you think would benefit from this information. If there's anyone out there that you know, I certainly appreciate it and I will see you all each week. Hey guys, it's me again. If you're smart about this, nothing in this podcast should be construed as financial, tax or legal advice. Consult with your tax preparer or financial advisor before taking any action. This podcast is for informational purposes only.