Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

3 Easy Steps For Happiness In Retirement

• Ari Taublieb, CFP®, MBA • Episode 213

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Could the key to a happy retirement be more than just financial security? 

Discover the often-overlooked emotional and psychological dimensions of early retirement that can make all the difference. We explore surprising research findings showing a dip in life satisfaction post-retirement and reveal how it can take years to regain your pre-retirement quality of life. Through a compelling client story, we demonstrate the potential dangers of focusing solely on wealth accumulation, especially when unexpected health issues arise. Learn why aligning financial goals with personal well-being is crucial for a fulfilling retirement experience.

We invite you to become part of our conversation by submitting your questions and feedback through earlyretirementpodcast.com. Your interactions are vital, and sharing our podcast can help others navigate the complex landscape of early retirement. Don't forget to rate and review us to help spread these valuable insights. While our discussions are rich with information, remember to consult with financial or tax professionals before making decisions based on our content. This episode offers thoughtful exploration and practical guidance for planning a satisfying post-career life.

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Ari Taublieb, CFP ®, MBA is the Vice President of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.

Speaker 1:

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.