I have some case studies with clients that have $20 million and I have case studies with clients that have a million dollars . This is different . Today is going to be a real case study . I begged this couple to come on the show , but they're uncomfortable with it .
In the future they might come on or be willing to come on , but I want to tell you guys their story . They are retiring early with $500,000 . They are just not your traditional couple . So I think it's really powerful what they had to say and there's lots of things I want to share .
They said that I could explain the situation and they might come on in the future . So hopefully this resonates enough that we can get them to come on if they are willing to . Of course , there's no pressure , but I beg my clients that have awesome stories to either let me share them or say , hey , come on the live . I've brought on my clients in the past .
If you are watching this on YouTube , you can click this right here to hear me talk to my current clients .
These were clients that wanted to retire early as well , but were unsure if they could do it because of their assets and different things like that , and they are more than happy right now , and then if you want , of course , to see some more in-depth case studies , because you go , yeah , I have 2 million or 5 or 10 or 20 . I've got all those as well .
Today's a different spin . So welcome back , as always , to the podcast . I love getting to do this , but I rely on your feedback . So if you have questions or things you want to submit for me to answer , go ahead to my website earlyretirementpodcastcom slash , submit your question and you will be able to go ahead and do so .
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So this couple has $500,000 in liquid assets . I'll explain . They don't have a mortgage . I'll explain more about their finances in a second , but the overall message that I hope you take away today , if I had to pick one , is it's about lifestyle in retirement . Now , how cliche does that sound ? That's like going to the doctor and they go .
You know you should be more healthy . You're like , hey , that's great . Like what should I eat based on my blood type and what I'm looking for , and you get my point . That was a bad example , but you get it . So this is what I'm going to go through today . I'm going to show you the case study .
So if you're on YouTube , you're going to be able to watch me show you the variables and how it being on different programs . So , with that being said , programs really ages me right there saying that it's like you're going to put the program on the TiVo tonight . Only some of you guys will know that reference , but anyways .
So if you don't already know , this is all for fun , educational , informational content . I try to be as helpful as I can and I love this . This please , please , be smart about this . Don't go execute some strategy just because you heard it on a YouTube video or a podcast . And my name is Ari Taublieb , if you don't know . I'm a certified financial planner .
I'm the host of the Early Retirement Podcast and these are some important disclosures . Please be smart about this . None of this should be construed as financial advice , educational , informational purposes only . With that being said , let's hop in .
So this was a couple that reached out years ago and this individual I'm not going to say his name was a really nice guy and he was not financially literate like a lot of you are and that's not me being mean and he explains this .
But he did not grow up talking about money consistently and he's an awesome person You're going to learn why but he didn't grow up going yeah , I'm going to max my Roth IRA out . Tell my kids about compound interest . That wasn't his world . His world was about working hard , save money , try not to spend money . That's kind of the extent .
So there was not a lot of investing going on . Now , very nice couple . I'm going to show you and explain their assets . But this is a couple that when we talked about their goals and how much they want to spend , they told me they want to spend $3,500 in retirement . Guys , they want to spend $3,500 in retirement .
So I said , hey , are you telling me $42,000 a year is all you need ? They go yeah , well , we don't have a mortgage . I don't even know if we would need $3,500 . I said , okay , tell me more about this , because some of the people I speak to say they couldn't retire without spending 20,000 a month .
And some go yeah , I don't need 20,000 a month , but 10 to 15 , don't need twenty thousand a month , but ten to fifteen . You know that's gonna let us live the life we want to live , want to travel , want to have fun , and I'm all about encouraging that .
But it's interesting when I come across a couple like this , because what I don't want you guys to do and this is what I was worried about talking to this couple is I don't want them going . Oh yeah , we're retired but we're kind of walking on eggshells here because we're not really spending what we want to spend .
And the easy fix not always fun , but easy is keep working and keep working . And so I told this couple hey guys , I think if you're willing to keep working , you can certainly spend like forty five hundred to six thousand a month if you want to do this . And they go hey , like respectfully I don't think you're hearing me Like I don't .
I don't know if thirty five500 a month is what I'm going to need and he said tell me more . And they're like , to be honest , we're not big travelers , we like to camp . We believe our child should have to work hard . Because we had to work hard . We want to support them . But we're now in a spot where we're comfortable .
Social Security , we know in the future is going to help us from an income perspective . We've been paying into it for a long time . One I like you guys .
You guys are cool because you're transparent with me and it's refreshing because I selfishly , like personally , I get lost sometimes talking to people with $10 , $15 , $60 million , $100 million , who are like oh yeah , I just cannot believe about this tax issue with RMDs and my estate planning issue , and isn't this horrible ? And I kind of get into it with them .
I go you're right , this is horrible . Like look at the tax liability you're going to get Now we can fix it , but we got to do X , y , z . And this guy's like that I'm talking to right now would be like hey , why is that guy worried ? Like we have plenty of money , we're going to be fine . That guy should be grateful . Like he would talk like that .
And I'm like this is refreshing to hear . Like Costco and they live in Oxnard , california . I am allowed to say that I asked them that we go to Costco to shop , we like to camp , we're very simple people and we're going to have social security between both of us .
It doesn't come in for a few years , but they want to turn on as early as they can at 62 . That was not my recommendation , but when they first came to me , that's what they wanted to do and I was like , guys , I totally get it . You turn on Social Security . Less needs to come from your portfolio . That's meeting a lot of your living expenses .
They grew up going look , we're going to pay off that mortgage as fast as possible . We don't like debt . They did not do the comparison of , hey , should we maybe just pay down the minimum and invest the rest , because that was not even on their radar , excuse me .
And then , just to better understand their assets and situation , they have a home , um , a very small home . Okay , they rent . They rented for many years . Then they got a home and they worked for a certain family and so now they own a small piece of land , but 340 000 very small in oxnard , if you know what that will get you , um .
And then their investments about 545 000 . They have 45 000 of it in a brokerage account the superhero . They have 413 000 that's inherited and then they have 87 000 in their 401k and a little over 100 000 in cash .
So their net worth is approaching a million dollars and they were very clear about which they wanted to spend in retirement and their biggest concern was health care . And they're like , well , that's kind of what we're up against and I feel like by the time Social Security gets turned on , that's going to help out a lot .
So they were putting a lot of effort into Social Security . Social Security , I said guys , I do think Social Security will be there , maybe not to the extent you think so , but that's a different conversation . And so we modeled out hey , what if Social Security was reduced ? How would that change their plan ? And it was significant .
It opened their eyes , but they weren't like , well , I'm just going to keep working any longer . So for this couple , they have 550,000 liquid assets today and they saw what they were on track for , which , when we did planning , was at 90 to have about two and a half million dollars .
They never thought they'd have a million dollars and because of that , their whole mindset is very different to a lot of you sometimes refreshing , sometimes different . So I just want to share it , because in a previous case study I had brought up a couple . I forget exactly how much money they had .
I think it was about $2 million and they wanted to spend 7,000 a month . And then they wanted to take vacations and get massages , and go first class and pay for kids , grandkids , and do a lot of stuff , awesome stuff that I want you to do If that's important to you . Let me be clear . I'm not saying don't do those things .
I personally don't want to live on $3,500 a month . I probably want to be in the $8,000 to $10,000 a month range . That's me . Some of you guys might be way more , some might be way less , but I want you to really put weight into this expense number because it's really easy not mad at any of you guys but it's really easy to go .
All right , tell me about the Roth conversion and yeah , yeah , healthcare . Tell me about that . And then , by the way , what's the withdrawal rate we're going to use ? And hey , don't we need a trust or a will and medical directives ? And oh , by the way , when it comes to insurance , how much do it ?
And it's the financial things that we want it , because that's in our control . We can try to limit the umbrella insurance , but you know it's also in our control how much we spend and that's the biggest variable that impacts your retirement . Now , if you have $5 million , how much you spend can be , of course , a lot larger .
But don't make the mistake of just trying to go right to optimal harvesting and conversions and , admittedly , things that I like talking about , which makes it difficult for you as a listener . But I encourage you to really sit down and think about your dream spending . Dream Like . I asked this couple to dream and they were like mad at me .
They're like what am I gonna do with $3,500 a month ? Like I don't even know what I would do . I said okay , you really are dreaming . I can tell Others of you are like look , that $3,500 a month is like I could maybe spend that in a week . So I need 12,000 a month .
Good , I'd rather you spend 12,000 a month and enjoy your retirement than retire tomorrow at 40 and spend $3,500 a month . It's all about perspective .
So I'm sharing this just as a refreshing taste , and I have a couple that really gave me great perspective by saying Ari , when I have required distributions that start at 75 and they force me to take up more money than I'll ever need , that's when I know I made it , because it will tell me essentially I did too good . Now , yes , do I want to pay taxes ?
No , like I want to limit the amount I pay in taxes . But it also told me I'm in a good spot . Same thing with this couple here . What you can see is from 58 to 63 in this example , their investments decreased from 745,000 to about 700,000 . So I asked them if that worried them .
They said no , because , look , it's going to rise way back up when Social Security is helping out , and they had great perspective . Now some of you guys are not going to collect Social Security at 62 . Some of you want to wait until 70 . Some of you want to wait because if something happens to you , you don't want your spouse to get the larger amount .
Social Security is another conversation I'll do my next video on . But this is really refreshing where , if you have $500,000 , you're wondering , hey , could it happen ? It could and it could actually happen earlier , if some of you out there go . I know there's someone called Mr Money Mustache . If you don't know him . He was on a recent TEDx event .
He has a podcast as well and he always talks about the FIRE movement and he personally lives on 35,000 a year and has been retired for many , many years . He believes that you don't need to keep up with the Joneses , and it's really easy to do that Now . I'm of the belief that you should dream big .
So I'm not one of these guys like , hey , you should retire early and spend $3,500 a month . That's not me , and I actually struggled in the conversation with this couple , which is why I want them to come on so you guys can see me struggle and how the conversation occurred , because it is recorded . But they don't want to release it and I don't blame them .
All good , but the real thing here that I hope you take away is your expenses matter and they change over time . So if $3,500 a month was your base , like hey , that allows us to live . What about dreaming ? How often are we buying new cars ? What about healthcare ? What about insurance ? How much do you want to leave children with ?
When I told this couple they would be leaving their one child with $2.3 million , they were like huh , I don't know . They were like so uncomfortable because they never thought they'd even have a million dollars . They go well .
I don't want them to like not work hard , but I also don't want them to , just like you know , feel bad and now like , start spending like crazy , so like they were uncomfortable because they never thought about it . So the questions I would encourage you to ask yourself and your partner is truly I would start with how much do we love spending ?
Don't retire too early and go ah , we could get by on eggs and top ramen . Don't do that . So how much would you love spending ? For a lot of you it's going to be $10,000 a month and then you're going to want an extra $30,000 a year on vacations , but probably not forever , maybe the first 10 , 15 years .
Then add in new cars , then add in how much you want to give to kids , then add in legacy goals . So really dive into the expenses . That's going to really help your retirement . Then use a projection software like this one or anyone on the internet . I like this one because it integrates everything the taxes , the education , the estate , the investments .
It really does a good job , but there's lots of good ones out there , so I'm not married to this one . If you , of course , want to work with us on an ongoing basis , a lot of you , I know , are like what do you mean ? This couple works with you . You know $500,000 .
I go look , there's a lot of people that we work with that joined us four or five years ago and we're not like , oh , you can't be a client anymore , it's just new clients . $2 million the current minimum . We hope to decrease that in the future .
We do offer the software and tools like this in the meantime to be able to play around and once again , our goal is to decrease the minimum . So hopefully this video was helpful . Once again , drop in the comments below if you guys have any questions on this , but hopefully this was helpful If you're on the podcast app listening to it . Hope it was insightful .
See you guys next time . Thank you guys . 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 . 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 .