Will You Run Out of Money or Time? FI Advice From a Hospice Doctor

What can conversations with the dying teach us about the secret to financial independence? In this episode, Eric + Jason are joined by Jordan “Doc G” Grumet, a hospice doctor, podcaster, blogger, and author. Topics discussed include the mirage of wealth, living meaningfully, and Jordan’s experiences eight years post-FI. Irrespective of your own retirement journey, you won’t want to miss our conversation. See below for links to Doc G’s book as well as the show notes.

Show notes may be found below the video


Show Notes

Essential Background:

  • Did you know we’ve spoken to Jordan in the past? It wasn’t on Two Sides of FI, but rather on Jordan’s own Earn and Invest podcast. Here’s a link to the episode, which was a really fun one for us and also represents the first time we were a guest on someone else’s show as Two Sides of FI! As you’ll find, Doc G is a very skilled interviewer. In our conversation, we talk finances and how they relate to purpose. We also explore whether it is money that solves our problems. Did you ever think that everything will be okay once you are financially independent? In our conversation, we push back on this narrative.

Taking Stock: A Hospice Doctor’s Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life (also available as an audiobook) is Doc G’s recently published book. As you can readily glean from our conversation in this episode, this text contains pure gold. It’s not at all a traditional FIRE book – and this is precisely why we found so much value in it. As a hospice doctor, Jordan Grumet has a unique front-row seat to the regrets of his dying patients. And the stories he relates in this book will remind you to take stock of life now, before it is too late. Please do check it out and recommend it to those in your life!

Not familiar with hospice and want to learn more? This post from The Hospice Foundation of America is a great resource. Stated simply, hospice is medical care for people with an anticipated life expectancy of 6 months or less, when cure isn’t an option, and the focus shifts to symptom management and quality of life. The site is a wealth of information, including guidance on how to access hospice care and selecting hospice providers.

For links to all of Jordan’s content, including the Earn and Invest podcast and his DiverseFI blog, be sure to check out his website.


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

FIRE and Holding Cash – What We’re Doing

How much cash in your portfolio is enough – or too much? In this episode, Eric + Jason discuss the idea of holding cash allocations pre- and post-retirement. Topics covered include emergency funds, the temptation to invest in a down market, bonds, and building cash reserves. Join us as we discuss this essential retirement topic.

Show notes may be found below the video


Show Notes

Essential Background:

Bucket Strategies are a topic we’ve covered numerous times on the show. If you’d like to learn more, we’d recommend the article “How To Build A Retirement Paycheck“.  This is the first of three great posts on Fritz Gilbert’s (The Retirement Manifesto) implementation of this approach. The other two articles in the series are linked here too.

Equity Glidepaths are a type of dynamic asset allocation plan often discussed in retirement planning. In Karsten Jeske’s words, “if we start with a relatively low equity weight and then move up the equity allocation over time we effectively take our withdrawals mostly out of the bond portion of the portfolio during the first few years. If the equity market were to go down during this time, we’d avoid selling our equities at rock bottom prices. That should help with Sequence of Return Risk!”. He covers glidepaths in Part 19 and Part 20 of his Safe Withdrawal Rate series of blog posts.

Interest rates on savings accounts are always a hot topic when thinking about holding cash – particularly when these far trail the rate of inflation (i.e. cash losing value over time). As an example of how quickly things can change, the interest rate has already doubled in the few months since we originally recorded this episode. Today, there are banks offering 2% interest on high yield savings accounts!


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

Do I Wish I’d Worked One More Year?

With all of the volatility in the market, should you delay retirement by a year? A viewer asked Jason if he would feel more secure had he worked another year or two before retiring early. In today’s episode, Eric + Jason discuss that question and the merits of considering “one more year”. Join us as we discuss this idea and the reasons you might consider that option, what Jason would have missed out on if he had worked longer, and the value he found in retiring when he did.

Show notes may be found below the video


Show Notes

Essential Background:

  • For context on what Jason has been up to since retiring early in June of 2020, don’t miss our episodes discussing his early retirement milestones. The first, What I Learned in My First Year of Retirement is foundational to understanding his RE experience. Not everything went smoothly as you might expect. Here Jason discusses what’s changed, what’s been better, what’s worse, and – importantly – has it lived up to his expectations.
  • A few months ago we published a year two update titled My New Life: Two Years After Early Retirement. In this episode, Eric traveled to California to shadow Jason and find out what his FIRE life is like nearly two years into early retirement. We learn how Jason fills his days, hear his concerns pre- and post-FI, discuss the merits of part-time “fun” jobs, and the reality of finances. It’s interesting to compare this video to the one-year milestone for sure!
  • In today’s episode, Jason talked about his long (five weeks, not seven – he misspoke!) family vacation as one of the most important things that happened since retiring early. Jason discussed this trip as a part of How We Travel: Pre + Post Financial Independence. In this video, Eric + Jason compare notes from their two respective sides of FI and their recent vacations: 7 days for Pre-FI Eric and 5 weeks for Post-FI Jason.
  • Many people claim they’ve achieved financial independence (FI) yet they fall prey to repeated “one more year” extensions. In our experience, this is often due to a lack of confidence in their financial strategy. In Have Enough to Retire (Early)? 10 Steps to Make Sure we discuss ways you can prepare for this key decision, and proceed with confidence.

Jason’s milestones blog posts are perhaps the easiest way to understand what his journey has been like since retiring early. In these articles, he discusses candidly what he’s felt, experienced, and achieved in the two years since he left his career behind. As he + Eric talked about in today’s episode, it’s almost inconceivable for him to imagine not having had these experiences. If there’s a specific topic you’re seeking, don’t miss this list of all his blog posts to date.

The One More Year Syndrome is a blog post is a post by Fritz Gilbert from Retirement Manifesto. In this article, Fritz discussed why “one more year” made perfect sense for him. Perhaps just as interestingly, this post also collects the thoughts of many other familiar voices from the FIRE community on this topic. It’s definitely a worthwhile read. On a related note, if you haven’t seen our interview with Fritz, be sure 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!


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

Don’t Let the Cost of Healthcare Break Your Early Retirement Plan

Calculating the cost of health insurance is a complicated and stressful exercise when you’re retiring early. Hear Jason’s experience with his first full year using the California ACA Exchange and learn how Eric arrived at his budget of $350K, his worst case scenario. We discuss how to choose a plan, ACA subsidies, differences by state, and other alternative options. If you missed our earlier healthcare episode, be sure to see the link below in the Show Notes.

Show notes may be found below the video


Show Notes

Essential Background:
If you missed our earlier healthcare insurance episode, “Healthcare is my Second Highest Cost in Early Retirement”, it’s a great one to review. In that video, we were joined by a career HR benefits expert, and covered a huge diversity of topics – unlike the ACA focus here. We talked about Medicare, COBRA, Long Term Care, prescription drug coverage, among others.

In this episode we mentioned a number of useful resources primarily for US residents seeking healthcare that we’d like to share with you. Note that many apply whether you are on a FIRE path or traditional retirement age.

Healthcare.gov is the best starting point when it comes to information about Affordable care Act (ACA or “Obamacare”) plans. In many cases, you will be directed to a state-run plan with its own website, but this is not always the case. Presently, a number of states have federally-run, state-federal partnership, or federally-supported plans. Where there isn’t a state exchange, you’ll see options and apply for coverage directly from healthcare.gov.

Choosing a metal tier is an essential part of selecting an ACA plan. This chart from healthcare.gov explains the details of the Bronze, Silver, Gold, and Platinum options available. Importantly, the plan categories are based on how you and your plan split the costs of your health care. As Eric mentioned, they have nothing to do with quality of care.

ACA plan subsidies are a topic we spent some time on in the episode. Many on a FIRE path plan on having incomes well within the limits where cost-reducing subsidies apply. Typically, as long as your household income is below 400% of the Federal Poverty Limit (FPL), these apply. When you investigate ACA coverage options, information will be provided on your eligibility for these based on the income information you supply. Importantly, in 2021 and 2022, provisions of the American Rescue Plan (ARP) legislation made further improvements to eligibility, eliminating so-called “subsidy cliffs”.

Obamacare Optimization in Early Retirement is a great Go Curry Cracker article that goes into extensive details on ACA optimization, for those ready for a deeper dive. It’s worth noting that this is just one of a number of good ACA-related articles on GCC, which you can access via this tag.

States where Obamacare plans cost the most in 2021 is an interesting post from Policygenius that digs into the diversity of plan costs across US states. Some states have much higher average costs by plan, so this is a key factor worth investigating when considering where to live if you will rely on ACA plans.

Healthcare Sharing Ministries (HSMs) are an option of interest to many. We’ve decided they weren’t for us, as they’re not bound by the same requirements as true insurance plans. That said, this page seems to be a reasonable starting point for high level information on a number of options available. If you have interest in these plans, be sure to dig deeper. Many user stories are available online via Reddit and other sources. For information on the potential downsides of HSMs, we found this recent John Oliver segment very eye-opening. Caveat emptor, friends.


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

What the FIRE Community Gets Wrong – Talking with Karsten Jeske (and our follow-up conversation!)

Note: This post has been updated to include our episode with our follow-up conversation, in which we we review our take-homes from that conversation, and react to comments and feedback we received about the episode with Karsten.

What would you do if you ran out of money in retirement? It’s hard to imagine a scarier outcome, and yet many on the FIRE path may be at risk for this if they get their portfolio withdrawal rate wrong. In this episode, Eric + Jason talk with Karsten Jeske, the creator of the Early Retirement Now blog. Known by many as “Big ERN”, he is an economist who is well known to the FIRE community for his extensive work in characterizing safe withdrawal rates (SWR). In this episode, we dig into Karsten’s free, powerful SWR Toolbox, and discuss topics including the downsides of FIRE calculators, 100% stock portfolios, the bucket strategy, why dividend investors are wrong, and his own post-FIRE life. If you’re interested in FIRE, you can’t afford to miss this information-packed episode!

Show notes may be found below the videos

Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.

Conversation with Karsten:

Follow-up episode:


Show Notes

Essential Background
One of the key dangers underpinning the importance of safe withdrawal is Sequence Risk (sometimes called Sequence of Returns Risk). Sequence risk is “the danger that the timing of withdrawals from a retirement account will have a negative impact on the overall rate of return available to the investor” – for example, starting withdrawals in a period with several years of severe market underperformance. This is a topic we’ve discussed before but for those new to the topic, check out this post from Investopedia.

Key Early Retirement Now Content
We referenced a number of Karsten’s blog posts from Early Retirement Now in this episode. Below you’ll find links to that content, along with the main landing page for his SWR series. You’ve got enough reading to keep you busy!

But first a little guidance: given Karsten’s extensive knowledge and expertise on these topic areas, his approach employs analysis which some may find unwieldy or even a little overwhelming. Don’t panic! Skim the math and stick with the text, and you’ll find that it’s not essential to fully comprehend all the analyses to understand the messages being delivered.

The SWR Toolbox: This is the free, downloadable tool that Karsten developed and which we discussed in this episode. Part 28 is the post where the revisions to the original calculator are described and the latest tool is linked. To see the history of this tool, you’ll need to go back to Part 7 of the series.

  • Safe Withdrawal Rate series: This is the landing page for the SWR series for which Karsten is best known. However, it’s also a 53-part series (now; it will surely grow). So we recommend following the guidance he provides about how to get started. You might begin with a topic of interest found below or listed at this landing page rather than diving into the whole series – though it’s a great read if you have interest in going through the whole thing!
  • Equity Glidepaths are a type of dynamic asset allocation plan often discussed in retirement planning. In Karsten’s words, “if we start with a relatively low equity weight and then move up the equity allocation over time we effectively take our withdrawals mostly out of the bond portion of the portfolio during the first few years. If the equity market were to go down during this time, we’d avoid selling our equities at rock bottom prices. That should help with Sequence of Return Risk!”. He covers glidepaths in Part 19 and Part 20.
  • Dividend stock strategies are commonly touted in the investment community, yet are seemingly poorly understood. We talked about this idea in our episode, and Karsten has written several great articles on the topic: Part 29, Part 30, and Part 31.
  • How often should we rebalance our portfolio? This key topic is addressed in Part 39 of the SWR series. Rebalancing isn’t a panacea for sequence risk, but it’s certainly an important element to consider. As we’ve discussed previously, being consistent + avoiding market timing is essential.
  • Is it crazy to hold 100% equities until retirement? Eric asked this question in response to his portfolio moves earlier this year to change his allocation to include 30% fixed income (Two Sides of FI episodes: Part 1 and Part 2). See Part 43 of Karsten’s series for further detail on his position, expanding on what he said in this episode.
  • Bucket Strategies is a topic we’ve addressed before on the show, including our conversation with Fritz Gilbert (The Retirement Manifesto). In Part 48, Karsten tackles this topic as well. In the episode, Jason also mentioned an article by Michael Kitces on this.
  • Inflation is certainly a topic on everyone’s mind at the time this episode was recorded. In one of his more recent posts (Part 51) Karsten digs deep on this topic. Is what’s currently predicted for the inflation path within historical norms – and is our withdrawal rate modeling at risk? Read on to find out…
  • The Retirement Income Style Awareness (RISA) assessment was discussed in our follow-up episode. This tool, by Wade Pfau and the team at Retirement Researcher, came from research performed on individual styles, risk tolerance, and other factors, and is aimed at deriving a personal retirement income strategy. Fritz Gilbert at Retirement Manifesto posted a nice write up on this last year, which we’d recommend. If you’re interested in learning more about this assessment, check out Wade’s book: “Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success”.
  • Bonus: If you haven’t had enough yet, we’d recommend Part 26: “Ten things the ‘Makers’ of the 4% Rule Don’t Want You to Know”. It’s written rather tongue-in-cheek, while still being packed with the insight we’ve grown to expect from Karsten’s style of writing. We touched on some of these points in the episode but there are a bunch more not covered that are very much worth reading.

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

Download Our FREE Portfolio Rebalancing Calculator!

In our episode titled “Stock Market on FIRE: What We’re Doing in a Downturn”, Jason mentioned a spreadsheet that he uses to track his asset allocation and to model rebalancing. So many of you have asked for a copy of this, that we decided to up the ante – we’ve created an improved standalone calculator that we’re making available for free to our Two Sides of FI viewers. This calculator provides a convenient mechanism to enter and track your asset allocation, flag when any assets exceed your allocation targets, and model any rebalancing that may be needed. It’s really easy to use as you’ll see in our introductory video:

Would you like your own FREE Rebalancing Calculator?
Please fill out the form below to request a copy:

NOTE: Two Sides of FI will NOT share or sell your information with 3rd party sites. If you are a new subscriber to Two Sides of FI you will receive several emails, including one to confirm your email address.


You can find information on the tools we mention in each episode along with additional information in the Resources section of this site. To navigate to this material at any time, just click the menu button at the top of any page on the site.

We Each Hired a Flat Fee Financial Advisor. Was It Worth It?

Here’s what we learned by hiring a financial advisor for a fixed fee of $1,000. Rather than pay a costly ongoing assets under management (AUM) fee, we wanted to test out this increasingly popular fee-for-service advisement model. We each hired the same fee-only, advice-only advisor to evaluate our portfolios and answer our questions. We share how we found this advisor, what the process was like, the specific questions + answers we had, and who we think could benefit from such a service.

Is this the right option for you?

Maybe.

Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.


Show Notes

Essential Background:

How do you find advice-only planners? Below you’ll find two resources. Please note that Two Sides of FI has no relationship nor do we receive any compensation from either.

1) XY Planning Network was mentioned in this episode. 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

2) Cody Garrett, CFP and advice-only planner from Measure Twice Financial, recently shared this list on Twitter. As he described it, “these 11 advisors provide comprehensive financial planning without any expectation, obligation, or even the option to manage client investments. Options for project-based, hourly, or ongoing.” You’ll note there is overlap between these resources, which makes sense. But this is the list Cody shares with prospective clients, so one can presume there’s been some personal vetting.

As we discussed in the episode, the advisor recommended some actions that we elected not to follow. Note that this doesn’t mean it was bad guidance, we just determined it didn’t fit our plans at this time.

Our lists:

Eric:

  • Increase emergency fund to 3 months living expenses.
  • Consider a more conservative stock/bond mix given retirement timeline of 24 months.
  • Increase umbrella insurance coverage to cover entire net worth (complicated to procure given two teenage drivers in Eric’s household).
  • Purchase disability insurance (Eric considers them to be self-insured).
  • Contribute to a medical flexible spending account. (Not actually that ‘flexible’ as unspent balance disappears annually which requires knowing your medical expenditures in advance).
  • Consider a SPIA (single premium immediate annuity), or a rising equity glide path to cover sequence risk early in retirement. (Still evaluating).
  • Consider a HELOC (pre 62) or, HECM (at age 62) to access home equity as a buffer asset. (Possible point of leverage in the future).
  • Consider a Cash Balance Plan for Eric’s business (Eric researched, chose not to proceed given costs to set up + unpredictable nature of annual revenues).

Jason:

  • Increase umbrella insurance coverage to cover entire net worth.
  • Evaluate needs for long-term disability insurance. (self-insured)
  • Re-evaluate your need for long-term care at age 50 or sooner. (self-insured)
  • Pay off the mortgage (Jason researched and elected not to proceed).
  • Consider flood and earthquake insurance (former doesn’t apply, have evaluated latter previously and elected not to proceed).
  • Consider utilizing additional risk management strategies (SPIA or rising equity glidepath, and HECM once you qualify at age 62).
  • Re-evaluate partial Roth conversions as Affordable Care Act(ACA) subsidy rules change, and/or once you become eligible for Medicare at age 65 (or earlier) (deferred for now)

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

Stock Market on FIRE: What We’re Doing in a Downturn

You’re on a FIRE path and the markets keep falling – what do you do? In this episode, Jason + Eric revisit the topic of market downturn, and candidly discuss their pre- and post-FI moods in this turbulent time. Join us to learn what they’re doing and thinking about right now as Jason nears the two-year post-FI mark and Eric contemplates pushing his 2024 FI date back. Topics discussed include rebalancing, how to monitor portfolio performance, moves we are making now, and feeling down about FIRE.

Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.


Show Notes

Essential Background:

Two studies on rebalancing were discussed in this episode, both of which we’d recommend. Here’s a link to the Vanguard article as well as the one by Michael Kitces.

Personal Capital is a commonly used free tool for tracking your various investment accounts, understanding your asset allocation + rebalancing opportunities, and monitoring your net worth. PC has simple to use account linking to make it a more automated experience. Give it a try risk-free!

Our Asset Allocation + Rebalancing Calculator provides a convenient and easy mechanism to enter and track your asset allocation, flag when any assets exceed your allocation targets, and model any rebalancing that may be needed. Jason mentioned a spreadsheet he uses in this episode, and this tool is an improved version of that which we’ve now released for all Two Sides of FI viewers to use.

Never pay taxes again? In this episode we referenced this article from Go Curry Cracker, in which they discuss how with $100K of income they are paying very little in taxes. Much of this comes from the 0% capital gains limit, but there are other considerations as well.

Tax Loss Harvesting is a concept we’ve discussed on the show before, but haven’t dug into deeply. This Investopedia article is a good summary. 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.

The Wash-Sale Rule is critical to keep in mind, particularly when looking at opportunities for tax loss harvesting. This article from Investopedia provides good background on the topic along with supplying several examples. It’s important to know about this rule and ensure you understand the implications of buying and selling (whether intentionally or automatically via dividend reinvesting).

Passive income through option writing is part of Karsten Jeske’s (i.e. “Big ERN”) passive income generation strategy post-FIRE. This link will take you to the first article in the Early Retirement Now series, which also has a directory of everything he’s written on this topic across a series of articles.


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

My New Life: Two Years After Early Retirement

Wondering what a day in the life in early retirement is like? Eric travels to California to shadow Jason and find out what his FIRE life is like nearly two years into early retirement. We learn how Jason fills his days, hear his concerns pre- and post-FI, discuss the merits of part-time “fun” jobs, and the reality of finances.

Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.


Show Notes

Essential Background:

  • Did you see our earlier episode called “What I Learned in My First Year of ‘Early Retirement'”? Our most popular video to date, this installment captures Eric + Jason’s discussion about the latter’s lessons learned in year one of RE.
  • How did Jason + Lorri decide where to relocate post-FIRE, and what are Eric + Laura considering for their own next steps? If you missed our two-part series on “Where to Live”, be sure to check it out here: (part 1 and part 2).
  • Talking With Our Spouses about FIRE” is the first part of our conversation with our partners on the show (part 2 here). To get the full picture of what Eric + Jason’s FIRE paths have been like, it’s essential to hear from Laura + Lorri as well.

Jason has been blogging since he left his career nearly two years ago. Part of that has included a series of milestones posts, in which he captures how he’s feeling at various points in time post-RE. At this link, you’ll learn more about what that journey has been like over the past two years.

What I’ve Learned From Two Years of Retirement is a great post by Fritz Gilbert @ The Retirement Manifesto, on his own experience in RE. No two FIRE journeys are the same, so we think it’s highly informative to learn from others’ paths too.


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

If You Want Financial Freedom You Can’t Ignore This (Parts 1 and 2)

We avoided estate planning for a long time; here’s why you shouldn’t. Without an estate plan, you’re giving over the control of what happens to all your assets to others. In part one of this two-part series, Eric + Jason talk about what they did to – finally – get their respective plans in place. Topics discussed in this episode include the elements of estate planning, why people delay + how to get started, living trusts, and taking care of your heirs. Don’t be like those who put this off “until they’re older”: join us now for the first episode of this two-part series.

Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.

Part 1

Part 2


Show Notes

Essential Background: If you’re not familiar with our family situations, check out our earlier videos where we’re joined by our spouses (part 1 and part 2), and the recent episodes about our kids (part 1 and part 2). Note that each is a two-part series, and separate links are provided for all videos.

Estate planning FAQs: After viewing these videos, you’ll be better equipped to ask deeper questions about your own estate planning needs. We found this resource from the American College of Trust and Estate Counsel (ACTEC) to be really helpful. All of the high level topics discussed in our series are covered here.

What is a trust? This Investopedia article is a good starting point for clarification on the different types of trusts and other pertinent details. This is a subject where it’s easy to fall down a very deep rabbit hole, and having a good foundation first is always helpful. Be sure to research the particulars of your state or country as well, as things differ substantially.

Advanced care planning is an essential element of estate planning, and one we touched on in part 1 and expand upon in part 2 of this series. Thinking through your own preferences can be difficulty, but planning for them is vitally important.

Umbrella Insurance is among the most important (and least expensive) tools available to protect your assets. These policies sit on top of your existing liability coverage (auto, home, etc) and extend it. To learn more about umbrella policies, check out this Investopedia post.


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