January 2023 – Two Sides of FI

January 29, 2023January 29, 2023

My Next Phase of Early Retirement Won’t Include This…

Year two in early retirement was very different for Jason than year one. It’s common that the honeymoon stage of retirement is followed by disappointment and a search for meaning. In this episode, Jason and Eric discuss a recent project Jason abandoned and what stage of retirement they think he’s in. You’ll hear his approach to guarding his free time, what Eric fears most about retiring early, and more.

Show notes may be found below the video

Show Notes

Jason took his blog down, but an archive of all his posts is available for those interested. At the same page you’ll see an option to subscribe, which will ensure you are updated of any future writing or projects he takes on.

Essential Background:

How has Jason’s post-RE experience changed over time? To learn more about that, you won’t want to miss our two prior milestone episodes. The first is about his first year post-RE, “What I Learned in My First Year of ‘Early Retirement’ ” (our most popular episode to date), and the second is “My New Life: Two Years After Early Retirement”, following his second year, and Eric’s trip to California to chronicle his experience.
Back in 2021 we released a two-part series about FIRE regrets, which was our response to posts on the topic we found on Reddit. Part 1 is about pre-FIRE, “How NOT to FIRE”, while Part 2 covers post-RE, “Retired Early and I Hated It”. This is our only episode filmed with one of us remote (Jason was traveling with his family) so you’ll note it looks a bit different!
Speaking of blogging, did you see our interview with well-known FIRE blogger, Fritz Gilbert from Retirement Manifesto? If not, you’ll definitely want to check out “Retirement Is Nothing Like I Thought It Would Be“. It’s one of our most popular episodes to date for good reason!
In this episode, Eric makes references to how Jason has changed with age, and how he’s learned things about him he didn’t know growing up. For more on the history of our relationship, you won’t want to miss our first episode, “Our Financial Past and our FIRE Present – Two Sides of FI“. This is where it all began for the show!

Robert Atchley’s Six Phases of Retirement was an important element of our conversation in this episode. While not the original 1976 manuscript, the article linked here is a good summary of the concepts Atchley wrote about. If you are interested in the original text, “The Sociology of Retirement” is available from Amazon. On a related point, this blog post from Can I Retire Yet by Chris Mamula is a good deep dive into the six phases. It’s a worthwhile read.

You can find information on the tools we mention in each episode along with additional information in the Resources section of this site.

January 15, 2023January 15, 2023

My FIRE Budget Didn’t Account for This

Are you worried about neglecting to budget for key expenses in early retirement? Even if you put good effort into creating your FIRE budget, it’s easy to miss some very important items. In this episode, Jason and Eric discuss these commonly forgotten or underestimated expenses, including healthcare costs, taxes, dealing with inflation, and more.

Show notes may be found below the video

Show Notes

Essential Background:

Have you seen our two prior episodes on healthcare? The first, “Healthcare is my Second Highest Cost in Early Retirement” captures our comprehensive conversation about retiree healthcare that we had with an HR benefits expert. The second, “Don’t Let the Cost of Healthcare Break Your Early Retirement Plan” picks up where the first episode left off, digging into ACA subsidies, selecting plans, and considering the total cost of care.
In today’s video we touch on the topic of supporting family members including adult children. This isn’t the first time we’ve touched on the topic of our kids. In fact, we put out a two-part series of episodes on issues relating to children in the past (part 1 and part 2).
Towards the end of today’s episode, we talk about the utility in consulting with fee-only financial advisors. if you missed our earlier video titled “We Each Hired a Flat Fee Financial Advisor. Was It Worth It?” you’ll definitely want to check that out. This link will take you to the show notes for the episode, which includes a link to the video as well a number of associated resources.

Budgeting for lumpy or future, unplanned but eventual expenses can be tricky but is also essential to do. This article on Fritz Gilbert’s (Retirement Manifesto) own approach is a great resource to get started. In this method, he budgets for large spending down the road (like a replacement roof for a home) via sinking funds. Have a look at this and see what you think about his approach.

XY Planning Network was mentioned in this episode as an option for finding a fee-only financial advisor. As described on the site, their member advisors ascribe to fiduciary and CFP® standards, earn no commissions, and require no minimum assets. They have convenient filters to allow searching by advisor specialities, including those with FIRE experience. Many work under multiple fee models, including advice-only, which can be a good source for one-time consults without any

Required Minimum Distributions (RMDs) are an IRS-mandated specific sum of money that you must withdraw from traditional IRAs or an employer-sponsored retirement account each year. This article from Fidelity provides a simple introduction to the topic. At the time we filmed this episode, RMDs were required to begin at age 72. However, the recently passed Secure Act 2.0 will raise the age to 75. This article from Kiplinger covers this change and other revisions to RMDs you’ll want to know about.

What are the longest US runways? Well, it turns out that Bangor Airport doesn’t make the list after all. However, according to Wikipedia it is “the first major American airport encountered by airliners approaching the United States from the east and the last for airliners heading towards Europe. It is more than two miles (3.2 km) long and an uncluttered airspace, it offers a place to land in case of bad weather at an airplane’s destination, bomb threats, or passengers who prove unruly or are discovered to be on the TSA No Fly List.” So the runway there is still really long and pretty important!

You can find information on the tools we mention in each episode along with additional information in the Resources section of this site.

January 4, 2023January 4, 2023

Finding My Way in Early Retirement: A 30 Month Check-In

What is early retirement really like? In this episode, Eric checks in with Jason two and a half years after he left his career behind. They discuss his recent financial moves, the impact of inflation, how Jason spends his time, and what’s truly important to him.

Show notes may be found below the video

Show Notes

Essential Background:

Do you have a copy of our free Rebalancing Calculator? This simple tool can help you make your own decisions about buying and selling in order to rebalance your portfolio. This is the calculator that Jason referenced in today’s episode.

How has Jason’s post-RE experience changed over time? For that, you won’t want to miss our two prior milestone episodes. The first is “What I Learned in My First Year of “Early Retirement” (our most popular episode to date), and the second is “My New Life: Two Years After Early Retirement”.
Jason’s investment policy statement (IPS) defines his cash holding + generating practices. For more discussion on the topic of holding cash, you’ll want to check out this earlier episode on the topic.
In late 2021, Jason left the services of his financial advisors. This was an important step on his post-RE financial journey, and the linked episode covers a lot of ground on the value he found and how that changed. For the conclusion of that story, you’ll want to see this short video that followed.

Buying Treasury Bills and Notes at your brokerage is one of the financial moves we discussed in this video. This article by Harry Sit (“The Finance Buff”) is a really great summary of how you can do that yourself. The well-written post goes through all the details and includes walkthroughs of the process at each of the major brokerages.

Tax Loss Harvesting is a concept we’ve discussed on the show before. This Investopedia article is a good summary of the topic. In brief, TLH is an approach by which investors can sell an asset at a loss, reducing the total amount of capital gains taxes due from the sale of profitable investments. You can then use the sale proceeds to purchase a similar asset or security, maintaining your asset allocation.

CAPE-Adjusted Safe Withdrawal Rate – We talked about this idea in the episode without much explanation. As background, we interviewed Karsten “Big ERN” Jeske previously about safe withdrawal rates (SWR) – this is definitely content you will want to check out if you haven’t before! Subsequent to that conversation, Karsten wrote several blog posts concerning a new “better” CAPE ratio. This first article introduces the concept, while the next: “The 4% Rule Works Again! An Update on Dynamic Withdrawal Rates based on the Shiller CAPE – SWR Series Part 54” dives into details on how his Safe Withdrawal Rate calculator now can use this factor to model withdrawal rate in retirement.

The Series 65 Exam is “designed to qualify candidates as investment adviser representatives. The exam covers topics that have been determined to be necessary to understand in order to provide investment advice to clients.” If you’re interested in more information on this test and the curriculum it covers, you’ll want to check out this link. Here’s the Kaplan exam prep course that Jason has been taking.

You can find information on the tools we mention in each episode along with additional information in the Resources section of this site.