3 Tips To Retire On Your Own Terms

I'm probably not gonna stop , but it would feel nice . Now , there's a wide spectrum there , but what I'm going to talk about today is how can you retire on your own terms , because the last thing you want is to be working , because you have to be working , which no one wants .

But really is where someone I'm not saying this would happen to all of you or that it's happened to many of you , but it's happened to a few of my clients and it's not fun when all of a sudden , boss changes and all of a sudden now you've worked for someone for 10-15 years the politics of the office , what have you ? It's just different .

And now you're like look , I don't know if , financially , I can retire . I don't know if I really want another job at another company because I've been here for so long or I've just got that reputation that I want to uphold and I kind of like the work I'm doing , but the environment I don't love .

And what happens is now , all of a sudden , you're really working because you're forced to , and then sometimes I've seen it where people go retire anyways and they're not retiring on their own terms .

They're just retiring because they don't like the situation at work and they feel that they might be able to get away with it , and then maybe in a few years they find something else that helps bring in more income . You don't wanna do that . It just does not make for a successful retirement .

So I'm gonna talk today about how to retire on your own terms , and no one of you said Ari , it's really simple . If it's just not working out with your boss , you just go horrible boss's style on them . Get a few friends , take out each other's boss . I go a funny concept , but no , don't do that . Okay , so I had some funny clients .

Now I'm going to walk through this with you . There's one comment I want to make at the beginning , though , and this is that term that I talk about called recreational employment , which is the fact that I believe most of you actually like working .

I just think , whether it's the work you're doing now or there's something else out there that you're going to find more fulfilling and you're wondering can I actually do that or do I actually need to work at all ? The difference here versus what traditional retirement looks like is retire 65, . Two kids , white picket fence , die at 95 .

That's not the majority of people I'm talking to . The people that I help are between the ages of 50 to 65 going . Look , I don't know how much longer I need to keep working . Definitely don't want to retire too early and run the risk of going back to work wishing I worked two more years so I actually could have done everything I wanted to do .

But I don't know how much longer is too long , and I talked to a lot of people that do what's called a goalpost planning . It's not a real term . I made it up where people go oh yeah , I'm about to retire , just give me six more months . Oh yeah , one more bonus , two more years , I'm almost done .

And then five years go by and then their spouse goes hey , I thought we were going to spend more time together . So what's going on here ? I thought we were going to take more trips , I thought that we had enough money , and now you're saying we need $10 million , and before we had 5 million and that wasn't enough and how much is enough ?

And that , how much is enough ? That eats at a lot of people . So I'm going to walk you through a few ways to think through retiring on your own terms , even if , technically , you're still working , because I view my life like I'm retired , because I'm getting to do everything I want to do and I love it .

And some of you are like , hey , it's the same with me . Others of you are going no , I'm truly working because it's a paycheck and I don't know what else I would do .

So , with that being said , if you don't know already , my name is Ari Taublieb , I'm a certified financial planner , I'm the host of the Early Retirement Podcast that you're listening to right now , and I'm the vice president here at Root . So this comment that I want to reference comes from James Chavez5723 , who made the following comment .

He said Ari , I cannot emphasize enough how much work changed for me when I cut my hours in half . I always thought I would retire early , but currently I'm okay continuing to work .

This is a gigantic trend that people come to me and do not think that they're going to say they go , no , no , no , ari , I'm just telling you , financially , make sure I'm not going to run out of money . Then they see that , then they believe it , then they understand all of our what-if scenario testing all the tax , the withdrawal , the healthcare and go .

You know what ? I am okay and I think I was just stressed because , financially , I thought I had to be here . Now that I know I am truly here every day because I want to , maybe I'm not going to work on Fridays . Maybe I'm going to tell my partner or my clients that , hey , I'm now going to continue working with you , but it's in this different capacity .

And if you have a job that has flexibility , well , you're the dream client of mine because now in early retirement can look really creative . And the example I share here is a client that came to me and they said you're not going to be happy , I'm only going to bring in 30,000 this year . And I said I'm over the moon .

And they're like well , I'm confused because you told me when I was bringing in 350,000 two years ago that wasn't enough and I said it wasn't , I was not happy . Then they go . Then what changed ? I go . Well , now your portfolio is at a really healthy position . I don't need you to save more money Every time .

You're bringing in 30,000 this year , that's 30,000 less that I need to send you from your portfolio , which will let that keep growing and compounding Versus . If you were bringing in 300,000 , you wouldn't be able to spend time with your family . And at this point I need you investing really well .

A few years ago , when you didn't have enough investments , I needed you to be saving and investing a ton , because if we invested really well , it wasn't going to hold the same weight as you saving more . And so now they're in the opposite spot .

In the same way , when a child comes to me and they're all focused on returns , I say , hey , don't worry about your returns , just max out your 401k . But your parents because I talk to a lot of children of clients I'll say parents , you guys are in the opposite spot . You having $2 million get a 10% return . That's $200,000 .

So you maxing out your 401k is nice , but it doesn't hold the same weight . So in this example here , I don't even want you to just think about it , because I don't believe in the following that I'm going to say .

But I'm going to give you some insight here , because a common phrase is just practice retirement and once you get there , you're going to be good . Hey , that sounds good . I want to practice retirement , but I don't know if I'm going to run out of money . So I really can't think about how I'm going to fulfill my retirement until I'm actually there .

So the point of this , and why I'm bringing up this comment from James Chavez and why I like it , is not asking you to know the future , I'm asking you to go . Okay , if I really knew financially I did not have to keep working , would I be doing what I'm doing right now ? And if the answer is yes , then great . If the answer is no , still great .

You could still be working . But now what I need you to do is get really intentional on your financial strategy so that that can become an option . So now I want to get into the real three ways to retire on your own terms . Like , how do you really think through this ? So what I'm going to do now is so everything that .

So I've been sharing my screen just so you could see that comment there . So , once again , all of this on the podcast app going to continue to post all of these here . If you want to listen on YouTube , you can , of course , see that there . So the reason that I have that early retirement academy , which many of you are already enrolled in .

But I want to mention it because some of you are going look , I want to know if I can retire early , but I don't know . And what if I get unlucky ? And what if markets don't perform well ? What if it turns out inflation is way higher ? What if healthcare costs go up ? I will tell clients .

I want to run the most in-depth what-if scenarios , not to increase your anxiety . Some people go do you just do this for fun ? I go no , I don't do this for fun , I do this . Well , I do everything I do for fun . Yes , but I'm doing this because I want to make sure that you go whoa .

So if , like , all of these things happen and I'm like so unlucky , I'm still going to be okay , I go yes , and they're like great . And then I'll also say look , this is why you don't want to retire early , even if you're thinking next year's the year , because what if all these expenses occur at once ?

So I'm going to go through , I'm going to tell them to you and then I'll give you logic behind each one . So the first one is retirement timing . I'm going to pretend right now this is the same exercise I would do with a client . I would say you can retire tomorrow . What does it look like ? And most clients go well , I don't know .

I kind of have a project I got to wrap up . I say I would retire tomorrow , but not actually tomorrow . I would say , okay , when would it actually happen ? And they go , you know , probably six months , probably a year . I'm not going to just leave my team out to dry . Like I'm a good person , I go okay . Other people go , could care less about my company .

I have no ties here . Get me out of there tomorrow , I'd be happy to do it . So really ask yourself , like if you were to retire , what would that even look like ? Because I want you to just even mentally start to go okay , what would the timing based on my circumstances look like ?

Some of you are like , hey , I'm a physician , I would turn it off tomorrow . Others of you go look , I'm part of a big sales team and that would take some time to tamper off .

It doesn't change the financial planning projections , but what it does , it allows you to go okay , I'm going to retire on my own terms , because a lot of people will go yeah , I'm going to retire 20 years of service . You know I started January , I end in January . It's kind of nice . So , yes , you can do that .

But I would rather a client come to me because I'll have clients say , hey , what's the most optimal time to retire this year ? And more often than not , the answer is at the beginning of the year , because if you retire in January , maybe you get some bonus payouts and PTO . So January , maybe you get some bonus payouts and PTO , so incomes come in the door .

You can still do conversions and planning that are often required for the rest of the year , versus if you retire in October , which is still okay I'm not saying don't retire , don't work three more months , so it's slightly more optimal .

But if you do retire in October , more often than not , there's just not a lot of planning opportunities that might exist that year . And 2025 is a really important year . So next year , because tax brackets are going to be changing more than likely in 2026 when they sunset . So 2025 is a big year .

So if you're listening right now like thinking , hey , I think I retire in the near future , you're going to want to start thinking about doing it sooner than later because of tax reasons . So number one , number two this is a big one .

I thought about putting this as number one , but number two is what I need you to prevent in an early retirement is a big mistake . Where you retire early , we're paying for healthcare , we're paying for travel , maybe we're doing a remodel . At the same time You're like , hey , I don't have those 401k contributions I'm doing anymore and markets go down .

If you have like five or six things that go against you in the first year of an early retirement , it's a fancy . There's a fancy phrase in our world that advisors use just so we get to feel smart , called sequence of return risk . Which is what if you get unlucky and you retire , markets don't do ? Well , you've also got added expenses .

Well , that might not mean you're not okay . It just might mean you're not gonna be able to spend what you actually want the rest of your life . So I don't want you to get unlucky and have luck determine the quality of your retirement because of that while you're still working .

More often than not , clients come to me and go yeah , you know , I'd like to spend 15,000 a year on travel for vacation , and I say no , you won't . And they go well , you're wrong , you don't . You might spend 20 the first five years , then maybe five in a year and then maybe 15 the next year .

And if we knew that you wanted to spend , like guaranteed , you know , 30,000 a year on travel . Have a ton of fun the first three years , but then after that you're like look , my health's just not going to be in the spot , it's going to be , or my spouse isn't going to be . So we're just not going to be able to spend on travel the same way .

I mean , maybe we buy a new car instead or do something , but we're just not going to spend the same degree . Well , that might be us targeting a Roth conversion year in four years . That might be us targeting a charitable distribution . It might allow your advisor to do heavy tax planning based on your circumstances , desired spending and things like that .

So ultimately , I just want you always to feel you're in control . There's a lot that you're out of control of . It's not up to you oftentimes how markets are going to perform . You can determine how well you invest , but you can not determine the outcome in a single year .

You can determine your savings rate , but you can't always determine what your employer is going to pay you . So there's things that are not in your control . Well , what's in your control ? You can run what-if scenarios . You can determine how much spending you'd like . I do not . I mentioned this in the past . I do not want you to go .

I think I could get away with spending $6,000 a month in retirement . Retirement is not about getting away with anything . Retirement is about going . What would I love to do and how do I make that happen ?

And sometimes it's working three more years and me being the mean guy that says I want you to do it and at the same time it's me saying look , this is the year to go retire .

You've pushed it back for two years because of the bonus , because you have hesitancy or regard what you're going to actually do in retirement , because of health care , and you have the pieces to make it happen and you're never going to feel 100% confident because no one can guarantee anything .

And before I let someone really go retire , I don't really say let someone because it's their choice , but before I ever give them my green light I'll say , hey , I need you to think about it like a business .

I need you to understand your portfolio is a baby , it is a human baby and there will be times where that baby's like I need to be fed , I need to nap , I need yada yada . There'll be other times where it's like , look , I'm passed out , okay , and I don't want to be bothered . And so the point here of the baby story is your baby .

The best way to think about it is imagine now it's not a baby , but it's a business and your business is doing well . You might go buy more equipment , you might go hire more employees . If your business is not doing that well , you're probably not going to do those things .

Most people take 10,000 a month in retirement every month and close their eyes or their number and they hope it works out okay . I don't recommend hope as an investment strategy . So when that baby needs to be fed , you might not even might you're going to be like , look , I need to feed it , to shut it up because it's hungry and it's crying and yada , yada .

And I'm only dealing with that right now because I have a friend who has a baby and I told them this example . I go it's kind of like having a portfolio and they're like of course you would relate this to finance and I'm like look , if your portfolio is doing well , I might want you to take extra that month and go enjoy retirement .

If your portfolio is not doing well , I might say , look , this is not the month to take extra income from your portfolio , and here's why . Here's what we're going to do instead . If that baby is still crying , you might go look , I need to feed it , I just need to .

But if that baby is sleeping really smoothly and there's no issues going on , you're probably not going to go out and just say , hey , let me try to feed it right now . That wouldn't make any sense , but a lot of people do that just with their portfolio . They're still taking out income when they shouldn't or they're not taking out enough when they should .

I will do both sides of those coins . So hopefully this is a helpful episode , not baby's analogies , not a perfect one . The business one's a little better . But I'm only trying out new stuff because you know I'm always trying to think what stories might resonate , so hopefully this was helpful .

Guys , if you want to retire early with someone , please share it with them . I have two options , excuse me to work with us , so you can work with us and our team directly . That is our holistic , ongoing , proactive planning where we do everything for you . It's all taken care of Now .

There's a wait list for that , so you can get on that wait list and fill out an additional questionnaire . If you want to get moved up the line , there's a $2 million minimum because that's where we see we can add value . If you don't have 2 million , but you still want help , you still want to run all the what if ? Scenarios .

That's why I have my academy and you can go ahead and enroll in that right now in the description calls , not for a few months with us . I recommend enrolling in that so that you get to start playing around with your own figures , and then we refund that cost to you if , of course , you end up working with us .

So hopefully this was helpful and I'll 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 , 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 .