Welcome back to the Early Retirement Podcast . Today we are going through a fun article that my client sent me and they told me this helped them in their early retirement . And they told me not to say their name for security purposes , but it's John . No , it's not John , I'm just kidding .
But this is going to be a fun episode and it's an important one , because if you have enough money to retire , great . That's a piece of the puzzle .
It doesn't solve everything and there's a point where you have plenty of money and go look , maybe I don't need 10 million , maybe if I had 3 million or 2 million , I could retire , spend more time with family and friends and do what I actually want to do in retirement .
So I want to show you a few statistics that were really cool in this article might make you think a little differently when it comes to an early retirement . Once again , if you don't know , my name is Ari Taublieb .
I'm a certified financial planner , I'm the host of the early retirement podcast that you are listening slash watching right now , and I'm the vice president here at Root Financial Partners . Now , if you're listening on the podcast app , this is not going anywhere .
Some of you guys have sent me a few notes going hey , are you only doing the YouTube channel now or is it what's happening ? I go everything's going to keep posting to the podcast app , per usual .
That's a lot of your just daily routine weekly routine , should I say and then I'm going to keep posting to YouTube as well , because I like making content there where you can actually see it and some people resonate with that more trying to help you all out .
So this article comes from a really cool company and you can see in the upper left here or you can just listen to what I'm going to say . It's called Barking Up the Wrong Tree , which I just thought was a cool name , and the title of the article we're going to go through is how do you have a happy retirement Four secrets from research .
The reason this video is titled podcast three is because I only think three of them are worth noting . They're all good , but three big ones . Here's the first one and I am quoting this and you can see they discuss exactly this in the article . So I'm going to link the whole thing if you want to read it .
But they say healthy retirees in the first year of retirement rate their overall quality of life slightly higher than those who are still working . So just slightly . Very quickly , somewhere between years one and two , retirees hit a low point and they just start crying . It just doesn't stop .
No , they don't cry , but they are sad and in large part that's because they're like I just worked a job for 20 , 30 years and now I really don't know what I'm going to do for purpose and fulfillment .
That quality of life , as they say here , beginning in year three , starts to recover , but only slowly , and it's not until they are eight or more years into retirement we finally see their ratings improve to when they were still working . That's powerful . Now I can also give you real guidance of someone not fun but important to hear .
This was today when I'm recording this . On Wednesday , so Monday , I was speaking to a new client and they were upset that they had $3 million and I said listen , I don't know why you're saying that . I don't hear that often that someone's upset that they have $3 million , but tell me more . And she said you're missing it .
I have a bad degree of sciatica and I want to travel in retirement and now I don't think I'm going to be able to do that to the extent I'd like I said , tell me more . She said well , I feel like I could have done everything I wanted to do and more with $2 million in retirement .
So I've been working the last four or five years thinking I just don't know if I have enough . When now I realize I do have enough , and now I've got this health issue , I don't know if I'm going to get over . So I'm thinking of all of you out there who are like I can never have too much money .
I get that and that's , by the way , how most of us feel . Oh , I could always do something to find more money , but there truly does become a point where you do have too much , and that example should illustrate that . So a few stats that I want to illustrate here .
75% of pre-retirees believe they will find their lives satisfying in retirement , but only 54% of retirees had that experience . I actually thought that was an encouraging stat when I read that the first time . Some of you are like what's encouraging about that ? Less people actually find satisfaction than they initially thought .
This is still a good amount of people that do enjoy their retirement , so that to me is actually encouraging . No-transcript that come to me , reach out going . I want to retire early with confidence financially , make sure I'm there and then purpose . I'll figure all that stuff out . And then what happens is the following .
You can see here they in fact , for many , after the first two years of retirement they experienced something similar to a mild depression weakened self-esteem , loss of direction , loss of purpose , much reduced levels of motivation and open-mindedness . They might be a Manchester United supporter , just kidding .
I'm a soccer fan , okay , so if you guys watch English soccer games , that's what I'm talking about here . They go on to say this , which I think is relevant Nobody mentions the existential crisis that comes free with your senior discount . I just thought that was a good quote .
They go on to say , sure , sitting around in a robe all day is fun occasionally , but wear it every day and you're not enjoying life . You're slowly turning into a sad velour Hopefully I'm saying that right Ghost haunting your own house . So lots of things that they talk about in this article . I'm not going to bore you to death with all of them .
Some of them are really important stats . The biggest thing I tell people if I'm trying to give them confidence , is do not expect your retirement to be linear . My pet peeve is when people do the following and I am very transparent about this , as with most things .
And someone came and they said Ari , I think I could get away with spending $6,000 a month in retirement . I said , I know you pretty well and I looked at your plan and I think you could get away with even less . And they're like okay , maybe I could do it . I think maybe you're right . I said , but I don't want you to .
Retirement is not about getting away with something . You want to get away with something . You want to get away with a great plan . Go work 30 more years till you're 90 . Your plan will look great . Look , that's not why we're doing this . The goal is to go . How early can I retire and not run the risk of running out of money ?
That's the balance we need to think about . So I think this is a good example . I want to illustrate this with something a client told me and James a while ago . James is the founder of Root , for those of you who do not know .
So we're talking about what are called required minimum distributions with a client , which is when you're going to have to take out a certain amount of money from your pre-tax 401ks , iras , things like that . Now they were like , hey , I see that you're worried about this , but I'm not that worried . I was like , why Don't you want to save on taxes ?
They go , yeah , but , to be honest , you're telling me that I'm gonna have to take up more money than I'll even need . And I'm like , yeah , that's why we need to save you on taxes . And they're like , no , I think you're missing the point . I all I heard you say was I'm not gonna run out of money , I'm gonna have too much money that I'll ever even need .
I said , oh , that's an interesting way of looking about it . So , like dogs and Halloween costumes , for most of human history the concept of retiring was about as plausible as time travel . You didn't retire from anything , you just worked until you died or incapacitated by a tragic scythe-related accident while harvesting wheat for your feudal lord .
Look , I try to keep it lighthearted and fun here , okay , so that's why I wanted to illustrate this . This whole concept of a retirement is new . In addition to an early retirement , some of you might need income for 40 or 50 plus years that concept . That's why I don't love the traditional 4% rule . That are designed for a retirement of .
You know retire at 65 , die at 95 , live 30 years , two kids , white picket fence . It does not apply to you . Could you do it and could you maybe be okay ? Sure , most of you don't want to be okay . You want to optimize . So the third one that I wanted to illustrate here is is and I really like the way they said this is to go .
You didn't leave your job when you retired . You didn't . You left a whole ecosystem that , for better or worse , gave you life structure . Most of you guys not all of you , but most of you guys you know went to elementary school , then middle school , then high school , then maybe college , then got a job , maybe some stuff in between .
Take a gap year , you go travel , and now there's the first time that you actually have to create your own curriculum , and that is not easy . And some people go yeah , it's just gonna be like a light switch , like , look , I'm stressed right now at work and then I'm going to be not stressed , I don't have to work .
But the timing of this is really important . Some people make this mistake . They go oh , I need some sort of plan , so I'm going to travel , and then they go . I don't want to travel , and if I do travel . It's in a different stage of mind than I thought Others of you truly are like no , I do want to travel . So let me give you a few stats .
Here they go . The problem is , most people do not make plans . Even if they say they do , fewer than four in 10 people put even a moderate amount of effort into it . The mistake I see people make is they put tons of effort into oh my gosh , what's the right asset allocation . Oh my gosh , should I convert to the 22% bracket or 24% bracket ?
And look , that's my job . That's what I love . My job is to do these things so you can live your dream retirement . A big stat here . Not fun , but important . According to a 2017 Generations Ahead study , a solid 62% of us are more afraid of running out of money in retirement than of , you know , death . Let that sink in .
More Americans are afraid of living than dying . If this isn't the most on-brand example of 21st century neurosis , I don't know what is . So I'm going to link the whole article in here Lots of great stats , lots of hobbies , lots of ideas and things that you can get social and enjoy your retirement .
I'm going to link it below , but just wanted to give you this insight , because I had a client that told me that this really shared some helpful things for them . And if it makes you all out there think 1% differently about your retirement , that's why I do this stuff Once again . If you're looking for holistic planning , a few options for you .
Number one is you can enroll in the Academy , get access to the software , start playing around with the tool . And for you , number one is you can enroll in the Academy , get access to the software , start playing around with the tool , and then , of course , we have our full service working with us on an ongoing model .
Please , please , please , be smart about this . Please know everything today , educational and informational purposes only . See you , guys next time . 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 . 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 . Please be 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 .