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

My Biggest Recommendation Before You Retire - Please Do This

• Ari Taublieb, CFP®, MBA • Episode 241

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Dreaming big and being intentional about planning for retirement can be the difference between merely surviving and truly thriving in your post-work years. 

• Retire TO something, not just FROM something 
• Test-drive your retirement dreams before committing fully, like renting in a new state before buying
• Be honest about how retirement will change your spending habits and social dynamics 
• The first few years of retirement are critical – don't be too frugal when you have health and energy 
• Spend generously on things you truly value and remain frugal on things you don't care about
• Put your retirement dreams into financial planning software to see if they're achievable 
• Consider what would feel worse – spending too much or having regrets at 85 about not spending enough 
• Dream big and think intentionally about what will make retirement fulfilling

Before executing any strategy discussed in this episode, please consult with your financial advisor, tax preparer, or estate attorney. This content is for educational and informational purposes only and should not be construed as financial advice. Submit questions at earlyretirementpodcast.com for consideration in future episodes.


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

Speaker 1:

This is my number one biggest recommendation to all of you who want to retire early. Even if you are retired, this will be applicable. So this is going to be a story. Some of my episodes I'm going to go heavy on a financial analysis, on a case study. That's not this episode. So if you're like, hey, this style of going through a story, yeah it's cool and I see you're excited telling the story, but it's not for me, that's okay. I have tons of other episodes that are really heavy on the financial analysis, technical side, but this is not going to be that episode. So I just want you to be aware of that.

Speaker 1:

The reason I'm bringing this up is because I had a client and my client said hey, ari, I'm really not happy with you. I said, okay, you know what is it I did. I want to make sure I can fix the issue. They said, well, you helped me retire early, but, as you know, we're very stimulating people. It's hard for us to find friends, and so you know what are we supposed to do? I said, hey, wait a second, are you upset that I do not have a best friend for you? I helped you retire early and now you're mad. And they're like, kinda, now they're starting to half joke at this point, but I was like, hey, like what are you guys going to do in retirement? Like we talked about it and they were like, well, you had us fill out the sheet where I'll ask people to fill it out to talk about, okay, if you were to hurt your back golfing, then what are you going to do? Because most people are like I'm going to golf or I'm going to spend time with family, and then their kids are super busy, they out with them, they hurt their back golfing, and now they're like you know, I actually kind of miss my coworkers. I really don't know what it is I'm going to do. So my point here I want to make sure whoever retires early, whether it's you or a friend or a neighbor, you're retiring to something, and that's a phrase we talk about in our industry a lot, so I hear it all the time. But then I was thinking about it. I'm like I don't know if all of you guys know this phrase. If you already know it and you're listening on the podcast app, good for you. If you don't, though, it's this concept of okay, you're retiring from waking up early, you're retiring from a bad boss from politics around the office. What are you going to retire to? Are you retiring to volunteering? Are you retiring to freedom and some of these things?

Speaker 1:

People will just say I can't wait to retire and I no longer have to worry about that smelly coworker. Now, that's a joke, obviously. But some people are really serious and they go hey, I'm really trying to retire to my health, because right now I can't prioritize that because I'm too busy. But what I find a lot of people do is they're kind of lying to themselves. I'm not saying you're doing this, but that's kind of what happened in this case.

Speaker 1:

So this couple that I work with, they're really smart people. They're like we're going to retire and we're going to travel, and they were kind of banking on that Meaning if they didn't travel, they're like, well, that just doesn't even make sense, like that's what we're going to do. And they were like we're going to do slow travel and we're going to love it and we're going to be in Montenegro and then we're going to go to I forget all the other places, but they told me they were excited about Montenegro. So that's what stuck in my head, because I thought it was a country that I was like I haven't really heard that being a popular country, but maybe I'm just out of the loop there. My point, really, they were like we're going to travel. Now I'm not saying all of you need to have backup plan A through Z, but what I'm saying is can we get really intentional before you retire?

Speaker 1:

And the common stories I'll tell are I have one couple that's like I'm going to retire and I'm going to move to Hawaii. And I said if you move to Hawaii and you buy a home, I'm firing you. And they're like really, I'm like no, not really. But like don't go buy a home, like first see if you want to live there. And they're like we already know, like stop wasting our time. And I said okay, just like Airbnb it for a month. And they're like okay, and they I never heard from them.

Speaker 1:

And then, about six weeks after their supposed move or trip because I once again didn't hear from them, I hear from them. I said, hey, guys, I got to know what happened. Did you buy a home or did you not? And they said we loved Hawaii. And that was all the email said I said, okay, they loved it. I was wrong. Good for me to learn a lesson. Maybe they should have bought a home. They replied two minutes later. We loved Hawaii period Not forever, was great for six weeks, glad we didn't buy the home. I'm like okay.

Speaker 1:

So the point here is, maybe if they bought the home they would have also been happy. But can we try out things? And that's all the message of trying to say, because a lot of you are really good savers and you have a lot of money and the reason you have a lot of money is because financially, you are very good with optimizing how much goes to a 401k and a superhero and you save a healthy amount. I don't want you mad at me when you're 80 with $10 million going. Why didn't I buy a bigger plane?

Speaker 1:

Now, the plane example is a silly one, but I'm using that because I had a live show done about a month ago, not done. I hosted it and I had someone come on and it was a really nice couple and if they're listening right now, you guys know who you are. And they had about what was it? 3.2 million in a 401k. There was an age gap between them, so 57 and 46, I want to say maybe 48. I think it's 57 and 48, because it's a nine year age gap, and then a million dollars in a brokerage account. And they are pilots the woman, michelle, who's super nice. She is a pilot for Delta. And then Mike, the husband. He is a pilot, but kind of semi-retired, still working, and they make a healthy income today and they want to buy a small plane worth about $300,000, and they're like we want to fly with our kids, who are also pilots, like what a cool family.

Speaker 1:

And I said the real risk here, guys, is that you don't buy a bigger plane and you look back going we could have really enjoyed it. And what if, god forbid, you guys were to ever go down in a certain, which hopefully never occurs? But if something were to happen, are you gonna go wow, we're really glad that we just did the most optimal Roth conversion strategy to move x amount of dollars to no. No, you're gonna be so glad you bought a bigger, assuming you're in a financial position to do so. So I'm not asking you all to go. Oh my gosh, I'm going to have no regrets because I'm going to be so on it with before I retire. I'm going to do the purpose analysis and the worksheet honest with yourself and say, okay, I'm probably going to want to go out to eat a lot more because I'm going to have more time. I want to plan for that, in my analysis, before I retire.

Speaker 1:

Because I see and that might seem like a simple example, but I'll see people who go yeah, I'm going to spend 5,000 a month on retirement, just general expenses, and a thousand a month that's going to be travel and going out to eat. And then their friend is like hey, I'm retired too, can I come with you? And they're like, absolutely. And then sometimes that friend, you're hanging out with them and you can just feel, hey, why aren't they doing that? One more activity and we signed up for three facials. They only signed up for one. Like, maybe financially, they don't have the means to do it. So I had a couple where this happened which is why I'm bringing this up, this example and they didn't pay for the facial of their friends which is so reasonable, by the way. But they could feel the vibe was weird and they're like we know, we have the financial means to do it, we just don't want it to be weird.

Speaker 1:

Now, I'm a really transparent person, so if I had the means to do it and this is not me tooting my horn, it's just who I am. I would say hey guys, it's going to feel really weird. I'm about to pay for your facials. You're probably wondering do I have the money? Do I not have the money? Not your problem, I'm over the moon to do it. Thank you so much for being part of this trip. I'm happy to do it and I expect nothing in return. And if you, you know, make jokes about this or that, like great, so like, that's how I'll communicate.

Speaker 1:

Some people are like, hey, I'm not saying any of you need to do that, but I have a friend that does not make a lot of money and it is really fun for me to travel with them. I pay for them to come on my trips. They are very frugal, naturally, so if they were some big spenders, would I bring them on my trips? No, because, like one, I probably wouldn't want to hang out with them in that case. But they are not someone that's spending for the sake of spending. They're just like look, we're really frugal. And he's like I'm cool if I come or if I don't come, and I'm just like, look, my life's going to be better if you do come, in my financial means allow me to bring you on this trip. So I want to do that. So I'm asking all of you just dream. That's all I'm saying. That's the whole point of this.

Speaker 1:

My one recommendation is dream big and you might go. You know what? I dreamt really big. I'm going to Super Bowls every year, I'm going to buy a new car every five years and then your plan might say you will be on track to run out of money at 80. Okay, maybe we're dreaming big and then we're going. I still want the Super Bowl, but I don't want the cars.

Speaker 1:

But the biggest mistake is people will go buy a home in Hawaii and then they're like it turns out I didn't love Hawaii, take a huge financial hit and the rest of their time is very different. Or, on the flip side, people are so frugal, they're saving really well into their 401k, ira, roth, hsa, they're doing all the right financial things, and then they're 85 and they're like hey, yeah, I do have a lot of money now, but like I should have spent way more when I was in a good spot, when I had my health and energy, and that's the really tricky part about this. The tricky part is the first few years of retirement are the most important, because if you can get through that time when there's health care, when there's travel, when there's home remodel, when kids are in college, if you can get through that, then it's like you're in a really good spot. Social security is now helping out. Maybe there's inheritance. It's less of. Oh my gosh, the portfolio has to take on the entire role. On the flip side, if you do completely what I just said and go, I'm going to be really careful not really enjoy my life to the fullest because, once again, I don't have social security yet, I don't have inheritance. It's all up to my portfolio. You'll probably have too much money. So where's that balance? Well, that's what good planning is all about. So I'm saying today my big recommendation please do dream, please don't retire and go. Yeah, so like we retired, but like we didn't really plan for the fact that we're going to have more time and we're going to want to do more activities and so we're going to spend more money.

Speaker 1:

Some of you and I have another client, and then I'll finish my story. Here they are, and I'm just thinking of them in case, if you're listening on the podcast app, you can't see my eyes, but if you're on YouTube you can see me and I'm looking off to the side. I'm trying to think of this client's name. Oh, it's blanking on me.

Speaker 1:

Anyways, this client, they are big RV people and they were like hey, we're going to buy an RV for $60,000. It feels really weird because we never buy used cars, it's not really in us, but we want this certain RV and we're going to get it anyways. I said, okay, good Cause, they're playing aloud for that. But I was like, hey, honestly, you guys tell, told me a while ago you're naturally frugal. You don't really spend on a lot of things Most people spend on. Your finances allow you to do this. Like, I think you should buy this $85,000 RV. And they're like all right, I've never spent $85,000 on anything in my life. And I said then it's going to feel weird, but you should still do it because your finances allow for it. And then you're going to be so happy because you're going to have the RV with the built-in.

Speaker 1:

You know, like, you know what are they called? I don't think there's a name for it, but you guys know, when there's those things in the wall, obviously called cabinets, but I'm trying to think of drawer is the word I'm thinking of. And you know, when you push back the drawer and instead of it snapping and making a hard, loud noise, it will do like a soft landing, like that the drawer that if you were to pull out, you know, like at home I don't have this, but I have been to houses that do have this and you go get a fork and then if you slam the drawer too fast it does a big clunk, not a big deal. Okay, but this couple's like we've always wanted these like soft landings of our drawers and we didn't have that in our home and we don't want to remodel the home and we could get it in this RV and it was like an extra 12 K for that. And they're like that's stupid, we don't need that. And I was like you're right, you do not need that, you should get it because you just told plan allows for it. Now, if that meant you doing this soft landing of the drawers would mean that now you don't get to take three more trips or help out a kid go to college, then yeah, that's probably not worth it to you. Like let's think about that trade-off. But we went through their plan. They were able to do everything they wanted and more.

Speaker 1:

And so I'm like, hey, this is going to feel weird. It's almost like like I have never bought a first class ticket. I don't have it in me. I'm like I'm going to wake up there. I'm, I sleep on planes anyways. I don't really care, I don't. I would feel worse getting off the plane, even if I had the financial means to do this. I would feel worse getting off the plane knowing I just spent $8,000 to arrive in New York when I could have spent $500 and I wouldn't have known the difference. And I would rather stretch before and after the plane when I get home at the hotel or home, home home in LA, do some yoga. I'd rather even pay for a massage or a physical therapy appointment for 200 bucks to go. Okay, now my body feels great because I know the chairs kind of suck.

Speaker 1:

So my dad is the opposite. He's like I would never fly anywhere. That's not first class, because when I was a child I never got to fly first class, like most children. But he loved it. And he's like I wake up and I am renewed, I'm ready to explore the city. So I'm like it's a great thing. My dad pays for first class because he wakes up and he's like let's go tackle the city. If we and I went to London with my dad, if we got to London and he's like my back hurts and now I'm tired because I didn't sleep and we lost the first two days of the trip because of jet lag and just not feeling well, well, that defeats the purpose.

Speaker 1:

So the point is just spend really healthy on things you love and be really, really stringent Is that the word frugal on things you don't care about. I'm not a wine guy. I know a lot of people love wine and spirits and it's just not my thing. I spend a lot of money. I go to a specific physical therapist that works on soccer players. I spend $240 for that one session every hour. I love it, I'm excited to pay it. I'm excited all week. I'm over the moon. They're teaching me things that I know a traditional physical therapist would not teach and I'm over the moon to do it. So that's my guilty pleasure is I get physical therapy appointments and I'm not even injured at the moment, which is another miracle.

Speaker 1:

So all of this to say, guys, please just dream big, think intentionally, if you are going to retire at some point which is literally all of you if you're not already retired, don't retire and go. Yeah, we can kind of get by. I think we could do it. It's like no think of things you'd really love to do. Plan it out, put it in the software that I talk about, the Academy. See it with your eyes, because if you just write it out, that's not really doing the full exercise. If you write out, for example, I'll do mine with big soccer guy. If you don't know already, I want to buy a soccer team. That is something I want to do Now. Maybe I will buy it and then I won't like it and I will need root to grow a lot bigger if I want to buy a soccer team. But let's assume that occurs and in 10 years I can buy a soccer team and I can make sure my kids I still want them to have some skin in the game, because I just kind of believe in that financially, because I had that and it really helped me. I felt it drove me.

Speaker 1:

But my point here is I would think of more things like that and I'd write them down. And if I just like put them, wrote them down, I'd be like, ok, cool, that's not helping me get confidence. I can do these things. I put them in the software and I can see. Ok, if I get raises to this degree and I want to be able to spend these things, here's what I need to see happen.

Speaker 1:

Excuse me, I know you guys just literally heard me burp. There. I have a new podcast editor, so I'm not going to tell them. I just want to see if they catch this. Okay, so I'm about 15 minutes in.

Speaker 1:

This is going to be funny for me. Maybe not for all of you, but you just heard me burp. I just had a blueberry smoothie, which you're probably thinking. Why would that make you burp? But Jewish digestive system has its own magic. Okay, so hopefully not too much of a visual, but regardless, let's see if they catch it, guys, and if they don't catch it, you can email me and go Ari, did they catch it? Well, actually, now that I thought about it, you won't know, because if this goes out and they never caught this, then that would be that. In fact, I'll probably delete this, unless they completely ignore everything, and I can tell they don't actually edit the podcast and they're literally just taking the audio clip and posting it because I tell them to edit it, Make the audio sound perfect when I say certain things, and if I do that, one P like this, it sounds weird on the microphone. So, hey, could you try to minimize the volume on that? This was a long, one minute rant. But my point here let's see if they catch it and if, if they do catch it, you'll never heard anything I just said, and if they don't catch it, you'll hear this and you'll probably be laughing with me. So that is it. That is it.

Speaker 1:

Go, put your numbers in the software. See, okay, what am I on track for? If you're a current client working with us at root and you're like, hey, I just needed a reminder to dream big, yeah, dream big, talk to your advisor about that in more detail. Hey, I was thinking about getting a second home. Hey, I was thinking about helping kids with college. Hey, I was thinking about actually as weird as this sounds starting a new business.

Speaker 1:

How much could I afford to lose to start this new business? I have the and this I already said last story like 12 times today, but my true last story is a wonderful couple and this guy I think I've told this before, but this guy was like, hey, are these going to sound really bad? I'm like nothing sounds bad to me, go for it. He goes how much money could my portfolio support to essentially support my wife who might start a business that's more than likely to lose money? And I'm like, wait a second, are you asking me like, if your wife's business like doesn't do well, like how long would that last? And they're like, yeah, that's exactly right. I said, okay, based off your plan, like you could allocate another 4,000 a month to this business and that's not going to dictate whether or not you're going to be okay or not. And he's like that's awesome, cause I really don't think this book idea is going to work. But she's so excited and I don't know if it did work, but I do know that they are still receiving $4,000 a month in addition. So I assume they're either love and life or they didn't tell me and it's going to IPO soon and they're like we don't want Ari to know about it because he's going to want a piece of it. No, that's not what they're probably thinking, but anyways, that IPO, initial public offering for those of you who don't know the acronyms that us financial advisors will say, so we get to feel so smart.

Speaker 1:

There's so many out there and I do not like when advisors do it, because it's like just speak in a way we can all understand. The latest one internally is someone said hey, ari, don't worry, bau, I'm like BAU. What the heck does that BAU, I'm like. So do you guys know what that is? Business as usual. Okay, I'm like BAU. There's new ones every day. Now I sound like a real boomer saying that. Anyways, that is it for this podcast episode, not my traditional episode. Hopefully it was helpful. See you guys next time.

Speaker 1:

Thank you all, as always, for listening to the early retirement podcast. I love getting to host these shows and make different content for you guys every single week. I've not missed a single week in years and that is because I love getting to do this. Now, please be smart about this. Before you actually execute any strategy that you see me talk about or hear me talk about, should I say Please talk to your financial advisor, your tax preparer, your estate attorney, please be smart about this. None of this should be construed as financial advice. This is for fun, educational, informational purposes only. Once again, just quick disclaimer here. Guys, please be smart about this. Appreciate you listening, as always, and you can, of course, submit a question on my website, earlyretirementpodcastcom. If you, of course, want me to address a specific case study or topic. I will not promise I can get to it, but I respond to every single person and if I find it will be helpful for a lot of people, I will absolutely make an episode on it, at the very least give you some insight. That's it, thanks, guys.