transcript

Speech-to-text transcription can look a little quirky. Please excuse any grammar or spelling errors.

Episode #626 - Retire on Fire- Rocking an Early Retirement: Henry and Lucy's FIRE Goals

“If you don't have your own goals, you'll end up working towards someone else's.”

Mel Robbins

Roger: Hey there. Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence to lean in and rock it.

Today on the show we're going to continue our sessions with Henry and Lucy and today we're going to hear about their goals, what goals they have for retirement. In addition to that, we're going to share some advice from older retirees to Henry and Lucy. We're going to do a smart sprint and we're going to talk about your words for the year. I've been getting so many emails, on this is my words for the year and this is why, along with these are words that I want to retire. Now. Today we're going to map out or, reveal what Henry and Lucy want their fire retirement to look like in the process.

ROGER EXPLAINS WHY RETIREMENT PLANNING SHOULD BEGIN WITH DREAMING BIG—STARTING WITH “EVERYTHING” BEFORE TESTING FEASIBILITY.

Roger:It's always good to start with what would everything be if you could have everything, what that would look like? And sometimes that seems counterintuitive because why set it up to where we dream everything up and then it's not possible? And a phrase I heard the other day from James Clear sort of resonated with me. It's like, why not start with magic? Why not start with the magic of everything that you want to achieve? Understanding up, front that it's likely not possible, but by doing this it allows you not to self edit yourself which could unintentionally resolve in something that was really important actually being possible, but you never actually explored it because you were trying to be reasonable and negotiated away without even exploring it. So but whereas if you start with everything knowing that it could fail, maybe expecting that it could fail, and then when you do the feasibility analysis and it doesn't work now, you're in a much better place to prioritize, to choose what's actually important to you because you put it all out on the table. But if you're say a husband and a wife and you're talking and one of you doesn't share something that might be sort of important to them because it seems silly, you know, maybe they don't want to reveal it to the other one, maybe it seems like it might sound frivolous, but really it's important if you said it out loud by saying this stuff out loud, when you get to that prioritization standpoint, you can have it all out on the table and you can still cut it, but at least you examined it and that's why we want to start with the magic. With that said. Oh, yeah. Before we get go into Henry and Lucy, if you want to join Henry, Lucy, myself and many other listeners on January 29, I believe it is on Thursday, we are going to have a live session to see what is feasible to see if the goals that they dream up today are actually feasible. Going to do all the all of this online and we're going to talk about the open enrollment for the Rock Retirement Club so you can build your own. You can sign up for that at livewithroger.com. Okay, now let's get to Henry and Lucy and what their magic looks like.

RETIREMENT PLAN LIVE

Roger: Henry and Lucy, welcome back.

Lucy: Hey, it's going to be back.

HENRY AND LUCY WALK THROUGH THEIR CORE VALUES AND HOW THOSE VALUES SHAPE THEIR VISION FOR RETIREMENT.

Roger: Okay, enough getting to know you. Let's get down to business. which actually starts with getting to know you. and the, you know, I think of this as like a thread or a chain that gets built because every dollar you have should be able to go back to enabling you to be more of who you are and want to be. Right. And if you think of values or virtues like a virtue is a universal thing. Right. Courage, et cetera, that's as universal. A value is something that you choose in your life to try to embody. And so we all get to choose the values of which we aspire to that we want to live our life by. And so I asked you two to do this with worksheets and we're not on video here maybe I always create mind maps out of this. So I'm going to share my mind map. And then I thought we could just talk about it. Does that sound good?

Lucy: Sounds great.

Roger: And then we'll. In an ideal world, your goals are the mechanism in which you live out your values. So you live a life that's congruent. Okay, so let me share my screen. I know you all listening, can't see it, but if you're with us live, I'll share it there. But this helps me. Henry and Lucy look at it together. So this is. These are the top 10. Did you guys do these separately?

Lucy: Yeah.

Roger: Yep. Okay. did you share them with each other?

Lucy: I saw his because he sent it to me to forward on but he. This is the first time he'd be seeing mine.

Roger: Okay. Okay. if you're comfortable with it, Lucy, I would share the worksheet because we're going to go over the top 10 values. Not we're not going to go crazy in depth on it, but part of there are some questions in there. What you know, what experiences brought you the most joy, what made you the most angry and frustrated. And there's a commentary in there that we're not going to go through today. But that's where the meat is really, is the backstory. And perspective is everything. So I would encourage you, if you're comfortable, let Henry read that because maybe he'll discover something you haven't shared. Although it sounds like you two have great conversations.

Henry: Yeah.

ROGER REVIEWS AND DISCUSSES LUCY’S TOP TEN VALUES.

Roger: All right, so I'm going to just read Lucy's off real quick. Lucy's top ten values is marriage. You should feel good about that, Henry. family, well, being, excellence, authenticity, fun, nature. That means outdoors, empathy, analytical, responsible. Tell me about one or two of these, Lucy.

Lucy: I mean, I guess I'll start with my number one. My marriage is, you know, we've been together for 25 years now, so more than half of our life has been spent together. So that's a really important part of, of my life. so. And that's even like looking forward towards like retirement and stuff. That's what I look forward to is just spending my time with him and just growing our relationship, which has changed so much over the last 25 years even. And I guess the other one that they kind of go hand in hand is that analytical and responsibility, like, or even, authenticity, like, like what you see is what you get. And like, I'm just always trying to like, think through things and come up with like an action plan or like, like thinking of the next thing or like trying to then also like, put myself in somebody else's shoes to like, with the empathy that, like, how would I feel if, if that was happening to me and trying to feel more for somebody else than, you know, and understand where they're maybe coming from.

Roger: Okay, okay. The analytical and responsibility is. It's probably why in your relationship you're the financial manager.

Lucy: Yeah, for sure. he hates my spreadsheets.

Henry: Lots of learning for somebody who's not good at that.

Roger: It's a yin and a yin and a yang. Right. It's like, yeah, we all have our natural strengths. Question on that, Lucy, is have you felt pressure or responsibility? Not that it's on you to figure all this out.

Lucy: I feel like I, I wanted to take that on so I don't feel like I had the pressure. I feel maybe pressure if it doesn't work out based on my plans. Yeah. but not pressure to do it. Like, I actually have enjoyed learning about all of this stuff, and sometimes feel like, man, this should have been my third career. so, no, I think that's just my nature.

Roger: Okay, so. Okay, let me ask you. I'm going to ask you one question, and then we'll go to Henry. What does fun mean to you?

Lucy: I don't like to be too serious. So, like, that's probably what attracted me to Henry, is that he was just always laughing. I loved his laugh. He was always fun and just bringing people together and just laughing and watching funny movies. I'm drawn to people that are just. Can make me laugh and just not take life too seriously. as well.

Roger: Okay. I had an interesting. I don't know if it's a revelation for myself related to that, Lucy, which was I am. I. I, think I do a really good job of not taking myself too seriously, and I think that's important. And I, I. The distinction I made for myself. But I take my life seriously. I don't want to be intentional about it, but I don't want to take myself too seriously. And those are very different things. And it sounds like, very similar to what you're saying.

HENRY TALKS ABOUT HIS TOP VALUES.

Roger: All right, Henry, we got faith, family, health, free friendship, gratitude, integrity, dependability, personal development, excellence, and humility. Which one do you want to call out?

Henry: you know, for me, you know, family is kind of more of a, an all encompassing one, and it's, it's up there at the top because it's, it's really important to me. You know, that includes, you know, Lucy, our daughter, you know, extended family, things like that. I mean, that's what's, you know, critical in your life, the irreplaceable people, in your life. So, I mean, that's obviously very, very important to me. No, faith and gratitude for me, kind of go hand in hand. You know, I, I think every day, like, what I have going on, you know, going on in my life and how things are going for me, it's pretty great. You know, I mean, to be honest, like, it's something I'm thankful for every day, all these blessings that I have in my life. So try to, you know, be mindful of that and thankful for that. And then, just the other things like personal development, integrity, dependent, they kind of all tie into just the way I was raised. Like I said, I wasn't necessarily taught about being financially responsible and frugal and things of that nature, but I was taught to leave things better than you found them and do things to the best of your ability. Because you know that that's your name on that, right? You're putting your name on that thing you've done. When people look back on the work you've done, that's, you know, that's how they look at you, you know, and that's kind of your reputation. So that those kinds of things are very important to me. To constantly make myself better, and just be that dependable person that people can count on and you know, that kind of stuff, and just strive for excellence. I heard a good quote a long time ago, probably over 20 years ago, and I can't remember who said it, but, it's really stuck with me. You do one or two things every day. You get better or you get worse. There's no in between. That really stuck with me.

ROGER REFLECTS ON WHETHER RETIRING EARLY MEANS “BURYING” ONE’S GIFTS, AND CONSIDERS HOW PURPOSE AND CONTRIBUTION CAN TAKE MANY FORMS BEYOND TRADITIONAL WORK.

Roger: I have a question related to this and the fire thing that I struggle with. I don't understand that. You do, but, you know, the story of the talons, you know, God gives a certain amount to two or three different people. One buries them, one grows them. one sort of grows them. I don't know the story specifically off top of my head. Sometimes I feel like if I were to retire, it's like, okay, I have mine. I'm just going to bury it now. Which is not a gift to the world. Do you guys think about that at all? Or do you think maybe there's. There's different ways of giving gifts to the world?

Henry: I mean, from my perspective, I think there's a lot of different ways. I mean, and I don't necessarily, especially maybe this is just me being a little cynical, but like, in this day and age, you know, you give away wealth, but you don't always know where it goes and you don't always have control over where it goes. And it doesn't always get to where it needs to go. Right. There's other ways to help out and make the world better, you know, I mean, that's, you know, fitness is one of the things that's important to me. And I do that so that I can, you know, be that person that somebody calls, help go move the chest freezer, or, you know, help somebody shovel snow out of their driveway and things of that nature. So, I mean, that's. Those are kind of smaller ways that you can make an impact on somebody's.

Roger: Life that not just money and that.

Henry: Sticks with people, you know?

Lucy: Yeah, yeah. And I think also, yeah, it's giving back your time as well. So, like, that's something that I think about when, I have more time, free freedom that I can go volunteer at organizations that I find interesting and feel like that would want to support, with my time.

Roger: Well said. So ideally, your goals should be derivatives of your values and should help you live out your values. So we're just gonna go over your goals, and you guys, did a great job on giving me data. Somebody does spreadsheets over there. so we're just going to talk through it, and I'm going to share my screen. I put it into a form, and I just want to make sure I capture it and just hear the. The perspective of the story behind a few things. That sound good?

Lucy: Yep.

Roger: Yeah. Okay, so let me get my stuff here in front of me. Lucy, you are 44. You want to retire at 47, you said. Yep. okay. And you said, how willing are you? Retired later. And you said, not at all. Is there something special about 47?

Lucy: well, it was originally, 49 for me for him to be. Oh, no, sorry, 50. And he was gonna be 51. But then as I just run the numbers after every year, I'm like, oh, we can maybe shave off some time. So then I would toggle off another year and just see. So ideally, I would go as soon as the end of this year if I could, but I don't think we're at that point yet that we need those few more years of saving.

Roger: Okay, but ideally, that's what you would do, correct?

Lucy: Yeah.

Roger: Okay.

Lucy: Yep.

ROGER TALKS THROUGH HENRY AND LUCY’S GOALS FOR RETIREMENT AND THEIR BUDGET FOR A GREAT BASE LIFE.

Roger: So this is my process. So we're, gonna. I'm gonna do it my way. If, ideally, you would retire next year, let's say if you could. Let's. If I could, let's. You know, I. You know, since, you know, this is not you doing the planning. This is me doing the planning.

Lucy: Okay.

Roger: Right. And, you know, my methodology is different than yours, and not, none of them are. Right. Let's make the assumption that you retire this year just for kicks. And if it doesn't work, fine, we'll play around with that, and that's something we'll do. But why not start with ideal, as we're doing this all with fresh eyes. Right. Because you've been in your spreadsheets for years, probably.

Lucy: Yeah. I don't know what my boss would think about that, but.

Roger: Okay, well, everybody has their own life to live. and then, Henry, you were somewhat willing to be flexible, and you said 48.

Henry: Yeah. So it would be, Because I'm a year older, it'd be at the same time ideally, but yeah.

Roger: Okay, so ideal world. It would be at the same time. How about we do this we'll say at the beginning of 2027, just so we don't freak out.

Lucy: So. Okay, one more year. All right.

Roger: All right. Well, you know, it's January right now technically, but we can play with it. So that's 49 years. So my default is Lucy lives to 94, Henry lives to 92. that is above standard longevity tables, but those are always increasing. Every year you alive, your odds get better in certain ways. So we get about a 49 year time span that we're solving for. Okay. now let's look at. All we're going to do is look at the spending side of the leisure. Okay. I'll share my screen just so we can have it here. And we'll do all this when we're live together with everybody, but just so we can have a framework to discuss it. We have the base great life, which is this number here, which is $52,690 after retirement. And you did a great job filling out. some people just swag this number. Some people, they would ask me for like 5 decimal points. Yours looks like it's, you know, your numbers as much guess at current state and then in your case, you're in one. Usually I'll break out healthcare and I haven't decided what to do there. But currently in your budget. Let me go to that page. You're assuming that it's $3,000 a year for healthcare premiums. Correct. And that's within that number. Okay. So. Yep.

Lucy: And that's expecting to use the aca, and get subsidies. That, that's why that's so low.

Roger: Right. Okay. And then depending on policy and all that other stuff, this could change wildly. So I'm just going to leave it in there for now.

Lucy: Okay.

Roger: And then later on I may change my mind about that, but for now we'll leave it there. So we have about $52,690. So would you call that a base great life or a rice and beans kind of life?

Lucy: That's our base great life.

Roger: Okay. So that has a little bit of travel, an eating out now and then, et cetera.

Lucy: Yep.

Roger: M. Okay. And then we have. Have those dang kids. so you have a daughter, correct?

Lucy: Yep.

Roger: Okay. And she is starting undergrad. Looks like next year.

Lucy: Yeah.

Roger: so $15,000 a year, inflation adjusted for four years. That is what you're covering?

Lucy: Yep.

Roger: Okay. And then you have a roof and furnace out into the future, 2040, just as a placeholder. It's good to have those placeholders there because Those things happen. Does this look accurate to you?

Lucy: Yep.

Roger: These three. Okay.

Lucy: Yep.

Roger: The base great life one interesting thing, especially on the this series that we've done for I don't know, 10 years or whatever is I think the lowest we had for somebody as a base great life was like 38,000 a year. People freaked out.

Lucy: Yep.

Roger: For that, almost had had visceral reactions to it. There is no way that they could only spend that and live, much less be happy. that is a whole psychological thing that we could go down as to reflections of our own spending and everything else. But you two, you got a teenager or almost, I guess a teenager. you got two of you. How do you make it on 52,000 as a three member household?

LUCY BREAKS DOWN HER THOUGHT PROCESS ON HER GREAT BASE LIFE BUDGET.

Lucy: I mean I grew up, growing up I didn't feel like we were poor. But looking back I'd be like, oh yeah, we were poor. We didn't. You just. I lived on a farm so you know, we had our milk and beef from the farm and like we grew up going to Aldi for shopping. So we saved on our groceries that way. I still do that today now too. So like to me I've always been like, look for a deal. Like that's how I was raised. Like you didn't shop at the front of the store, you went to the back of the store to the clearance racks, and things like that. So that's how I grew up. I was by no means a saver in my younger years. Like when I got money, I spent that money. it wasn't until after college when we were living together that that's when I started being more on the savings things. It's like, well, now we have real expenses.

Roger: So I get the attitude, I get the origin story.

Lucy: How do we do it? I don't know, I just.

Roger: What are your hobbies?

Lucy: We like to hike. So that's a pretty low cost thing to do. That's probably our, our biggest like thing just together that we do. But otherwise it's just hanging out with our friends, going over and walk, watching a movie, playing games, going out and having some drinks. so we just don't have extravagant lifestyles. We go on vacation. We have a vacation plan next year with a group of friends that we're going all inclusive vacation. So like we do, we have a vacation every year and go do things. I don't know, we just, we don't have a lot of expenses. I think what helps is that we paid, you know, we didn't buy a House that was beyond our means, and we were able to pay it off early. So to not have housing costs other than our property taxes, which are low in the Midwest, where we are, it's easier to have.

Roger: Yeah.

Lucy: Low expenses when we take that out of the equation.

Henry: Yeah. And I remember when we. We got the loan for a house and what we were approved for, and we're like, oh, yeah, we could take that much money out if we didn't want. Want to eat or drive anywhere. You can put gas in the car. Like, it was crazy back then, like, what they would approve you for. And, you know, I'm just thankful that we were smart enough to not do that.

Lucy: And we just didn't upgrade, like, get a bigger house. We only have one. One child, so, you know, we don't need a lot of space and things like that either.

Roger: There's an old phrase that I'll change a little bit. It's like, when you. In terms of buying bigger houses or nicer cars, et cetera, is like, if you own a Ferrari, it's not just the cost of the Ferrari now. You have to live the life of a Ferrari. Right. If you own a bigger house now in a certain neighborhood now, you have to live the life of people that live in that neighborhood. It just pulls you there. Now I'm a little concerned. Henry, did you get any toys?

HENRY WEIGHS IN WITH HIS THOUGHTS ON THEIR GREAT BASE LIFE.

Henry: Yes, I get things all the time. I'm actually, like, I'm very happy. I have the things that I want and, you know, want to do. I have, you know, expendable income that I can use every. Every month as part of our budget to do what I want to do with it. And, yeah, I mean, I. When I stop and think about, like, what is the only thing that I would probably say I would like to do more, I'd like to get to more Packer games. But then I look at the cost of a ticket, and I'm like, oh, gosh, it's so much more comfortable at home, especially in December, and it's hard to justify that kind of stuff, you know, but it'. yeah, I mean, I don't feel like I'm missing out on anything. And I do a lot of stuff. I have a lot of fun.

Roger: Graham, my nephew, is a fanatical packers fan, and he will be. And he's the editor of this podcast, so he will be very happy to hear this. And when they played the Lions on Thanksgiving, because I'm from Detroit, I had to jump in the pool because of that game. So, he'll be smiling right now.

THEY REVIEW DISCRETIONARY GOALS SUCH AS TRAVEL, A CAMPER VAN, HOBBIES, AND FUTURE FAMILY COMMITMENTS.

Roger: Okay, now let's go to the more discretionary spending. I'm going to share my screen again just so you two can see it. So, a little bit off. After retirement, you want to buy a camper van. That makes sense. Extra Travel fund of $15,000 a year for 32 years. I love how you have a side by side out to 2048. That's.

Lucy: Do you want to know why?

Roger: Okay. Yeah. Is there a story?

Lucy: Well, I mean, it kind of leads into some of our wishes, kind of a thing. Like, unfortunately, Henry's grandfather, passed away last year and there's a family cottage that now his parents own. And eventually it would probably get passed on to him and his sister. So it's just one of those things.

Roger: Yeah, I see it now. Okay.

Lucy: Yep. So. So eventually we'll maybe have to buy some toys if we had go down that route. But yeah.

Roger: Okay. Okay. Now I get the cottage. I'm like, wait, do they already own one or are they gonna buy one? I was wondering where that was. That makes sense. That makes sense. Okay, so that's the side by side massage fund. Love this. Henry, what is it about massages, really?

Henry: It's Lucy that is the massage queen. She, you know, she just, she's had back issues, things of that nature, and it's just, it really helps her out. And then for me, you know, just all the different things that I do, the running, the, you know, obstacle course races and stuff like that that I participate in, it just keeps me kind of still functioning. So it's just a nice thing. I mean, for me, it's. It's not as critical, I think, as it is for Lucy, but I do enjoy it. And it does help from a well being perspective.

Roger: Oh, 100%. 100%. One thing. you can put this maybe on your list or something to think about my most irresponsible. I've had a lot of irresponsible spur in the moment purchases, over the years, but one that was not because I could easily afford it was my sister and I. We were visiting together. She lives in Florida. And we were at some event and they had these really nice massage chairs. Like, they're really nice ones. And she's an equestrian and physically demanding, sort of like Henry's, races. And so we both bought one, literally. And I'm looking at it right now. I. It looks like nine years later, I'm in that thing at least once a day.

Henry: it's interesting because Lucy has looked at One of those. And we're like, would you really use it? Where would we put it?

Lucy: That's probably the only reason we don't have it is because I'm like, where would we put it?

Roger: Yes. They're not, they're not small, but they go like zero gravity. And this thing. I saw my sister when she came down for my daughter's wedding a few months ago and we were both like, you still using that thing? Oh yeah. Every day in this decade later. So I'm a fan. So, you know, I've made lots of bad purchases.

Lucy: I mean, I do have a massage table at home.

Roger: M. And then you teach Henry how to massage and then we're good.

Lucy: Yeah, well, I mean, he does nice. He supplements when I can't go to my normal massage therapist.

LUCY AND HENRY TALK ABOUT ASPIRATIONAL WISHES.

Roger: anything in this. So this category is like, this is, you know, the base great life needs are the. The have to haves. Can't mess that up. These are all discretionary. They're, you know, we're holding them with less tight of hand, year by year, et cetera. Did I capture these well?

Lucy: Yeah.

Roger: Okay. So. And then you have a lot of wishes, which is great. We have, you know, graduate, you know, if, if your daughter goes to graduate school, some money there, 40,000 cottage expenses. Starting when theoretically you or you and your sister inherit it because there'll be some expenses there, extra dining and hobbies and then cottage improvements. and then you have an, alma mater scholarship fund. You know, it looks like close to when you guys pass. This one struck me a little bit because this was like when somebody retires, a substantial gift to trail work. organization does trail work. I love that. I've donated to similar things, but that's a $50,000 gift to an organization that builds trails or maintains trails. But it was at retirement. Was that intended?

Lucy: I think that one was supposed to be in the bequests. Ah. At the end.

Roger: Okay.

Lucy: And even with that, I think our plan is kind of more die with zero. But if there's some left, that would be one place that, you know, our daughter will get whatever's left and then also some to that organization.

Roger: okay, got it, got it. Because that is one aspect of your spending that is heightened relative to somebody who's retiring at 65, say, who has a more compressed time zone time frame, is that a dollar spent today is like a butterfly wing flap that has a much bigger impact long term. Right. And so it's because the timeframes are so long and you Miss out on that. Compounding the more upfront, the bigger impact it could potentially have. Not necessarily means you don't do it, but it's just the reality of it.

Lucy: And that's. And that's the same thing with like our alma mater scholarship. because we both went to the. In college. That. That one we would like to do earlier, but it's also going to be really dependent on. Yeah. Where are we at this point in our lives with our retirement funds to be like that we feel comfortable. Yep. We can give those dollars to the college and be able to see the students that are getting use from it. yeah, at that time. Maybe it would need to be more at that time. I just know when I worked in the financial aid there, that was kind of like the minimum to start the college, scholarship fund kind of a thing. So.

Roger: And I imagine, like, with trail work, that's probably something. If you guys aren't working, the two of you would be stewards of a trailer. Yep.

Lucy: And that's one of the things on our list that we would look at doing.

Roger: Yeah. Love that. Love that. Anything that is missing in what we just covered on base. Needs, wants, and aspirational wishes.

Lucy: I don't think so. the only thing else I wanted to say is, like. And I don't know where this really comes. Maybe comes in when we get to the point of talking about our assets, but, like, we have our separate funds for college already. You know what I mean? So, like, I don't include that in our calculations for retirement. And I don't, like, include her expenses for college in our retirement plans because that money is all earmarked and that's what it's going to be used for. And so I didn't know if I really should include it here or not.

Roger: That's a good question.

Lucy: But. But I also understand, like, you have other people that are doing things. So, like, to me, it's like, I don't know where you want to. Want to throw that, I guess. And same thing with our camper van. Like that we're saving for currently outside of our retirement. Like that we have a sinking fund already for that.

Roger: So you're like an HOA that has a pool. Where an HOA that has a pool, if they're run relatively well, they will have a sinking fund for future upgrades. They're fixing the pool. You have a sinking fund for the camper, even though it's so far off.

Lucy: Yes.

Roger: Where you're building up the money.

Lucy: and that's something that if we don't have that filled out, then we want it and that wants to be part of our thing. But if we don't have it or we also have issues with our dog that like depends how long she's around. So. Because we don't want to travel with her. So I mean, it's one of those things, like we won't do that if we don't have the funds.

Roger: Okay. So there's.

Lucy: We would not take them. We would not take it out of our retirement.

Roger: Got it, Got it. So there's actually two different ways of hand. Well, there's more. More than two ways of everything. But the two ways I'm thinking of is one is to leave the. Like we'll take undergrad and the camper to leave them there. And then when we get to the assets, which is next week, we'll add the sinking funds to your assets, but attach them to that specific goal.

Lucy: Okay.

Roger: Right. That way they're seen there.

Lucy: Yep.

Roger Whitney: The second way, and this is probably the way that I would do it, the way you described it, is we take the undergraduate expenses in the camper van, we leave them in goals, but we put a dollar on them.

Lucy: Okay.

Roger: And then when we get to your assets, we'll put the sinking funds in your assets, but we'll have it not used in the plan.

Lucy: Okay.

Roger: That way they're totems to remind ourselves, but they're not factored into all the calculations and Monte Carlo's and all that other stuff. That's probably the way I would go about it.

Lucy: Yeah, I think I like that way too. So I think maybe the one thing that I would maybe adjust even under our wishes, then we have her graduate education. I think we have that as $40,000.

Roger: Yes, we do.

Lucy: For two years. She will have probably half of that still left in her 529 by the time she gets to that point. So we would really only need like 40,000 for one year, I guess if we wanted to kind of that one.

Roger: Because that would be the gap.

Lucy: That 40,000 is an actual wish. The other 40 is probably going to be there for her.

Roger: Okay.

Lucy: Anyway.

Roger: Okay. Okay. So now we have the spending side of the equation. Next week we're going to dive into the money part of how are we going to. What resources do we have to pay for this? Okay. Before. Well, one last thing. I want to. Well, before I do that, anything that you want to share that you're thinking as we go through this, as of now, it doesn't have to be in a spreadsheet I see you looking over there.

Lucy: I know. I made notes too. What are the things they talk about? So I had made notes ahead of time. no, I think we covered a lot of the things.

LUCY TALKS ABOUT HOW THEY REACT DURING UNCERTAIN TIMES.

Lucy: I think the biggest thing I want to stress is how we react during financially during uncertain times. We, we're not people who pull our money out of the market. You know, we just let the money ride and do things like that. However, we are people who will stop contributing as much. Like we won't stop our 401k contributions, but we'll stop our brokerage contributions. Like for example, when Covid hit like, like, oh, we don't know what's going to happen. He took a 20% pay cut during during COVID because of what their company was doing. And when I have that uncertainty, I kind of, I want to hoard. Hoard cash, I guess case my rainy day kind of a thing. And then at that point, once that rainy day is passed, like we can cut expenses, all that stuff. Really tighten our belts to make it through. And then if it wasn't as bad as what we thought it was going to be, well then we put the money back in the market, you know, or the money we were going to put in the market, we actually put in the market or whatever. So I think for me it's just knowing like that we are very flexible with, with our spending, that we don't. Well, our budget is low for, for people. I can make it lower. So to me, you know, to. If we had to go bare bones like we would be in the 30 thousands, as well. Do we want to do that? No. And ideally Even like that 15,000 of our discretionary annual fund, like that's something that. This is a reminder. Oh, sorry. J Ro take out recycling.

Roger: Take out your recycling automation.

Lucy: Sorry. anyway, so it's just that we. We're fine making concessions when we need to, but m. Even like the retirement or, sorry the extra 15,000 a year. We really want that to be probably every year, obviously every year if we could. But I think ideally it's going to be like every other year or you know, sometimes it'll be every year and then all of a sudden we might have some. That we skip kind of a thing.

Roger: Yeah. And that's normal. Yeah. And that's normal. Yeah. That's why like 4% rule the 25 or even guardrails. They're good heuristics when you're just doing back of the napkin planning. But they're not how people live.

Henry: Right.

Roger: It's all this variability that you talk about. And one question that I have, not so much what you're making now, but if you had to look over the last 25 years on this journey, what's like an average household income that you guys have had to get to where you are today?

Lucy: I mean, the first, probably ten years, it was much lower. Like we probably were only 100 together at that point. but then when I started my second career, that came with a large bump, in my salary and he had grown so much.

Roger: Yeah, yeah.

Lucy: So I would say at that point, average was probably 175.

Roger: Okay. okay. Yeah. Combined. Okay. Okay. Yeah. You don't need this from me. But you guys are rock stars. You know, as an old man, I want to say I'm proud of you, because you both seem very happy, very content. You've paid off a house, you pre funded school, you feel like it's viable or feasible to retire in the next few years. And we'll give you our perspective on that. But wow, you've done just a lot of little things, right. Not even from my perspective from hearing you. yes, with the money, sinking funds for the camper that's seven years out, but you've done it so consistently and it doesn't sound like you lack for really anything. So I just want to call that out.

Lucy: Thank you. Thank you. Well, I want to say thank you to you because listening to you for the last four years, for your like 10 years of, of content from you in four years, I've learned so much too. And that, that's helped me to look at things differently. and even beyond just the numbers, like thinking about some of the, the fringe things that go along with, with retirement as well, to come up with our bucket lists of things we want to do and fill our time with and stuff like that versus just getting away from work.

Roger: Yeah.

Henry: So, yeah, I think that's been, you know, that was one of the episodes that Lucy wanted me to listen to is, hey, you got to really think about what are we going to do when we retire? Because you know, you don't have, you're losing eight hours of content. Here's what kept you busy for eight hours a day, you know, if not more. And it's, that's gone now. Right. So like, what are you gonna do? And you know, I'm glad we went through the exercise of thinking of that. I have no doubts of, no problem filling that up and and looking forward to it. And you know, like I said, we started out looking at like 50, 51. Now we're down to 47, 48. And that's, you know, in part because of the things that Lucy has learned from you. So that's great. Cool.

Roger: Glad to be a small part of it. Now next week we got to look at the numbers and we got to find out what resources we have to pay for 49 years. I think I said it was, all right. I'm excited to dive into it. Thanks guys.

Henry: Yeah, thank you. Appreciate it.

WISDOM FROM RETIREES FURTHER ALONG

Roger: Last week we asked you, the listener who maybe a little bit farther along the journey than Henry and Lucy, to share some wisdom. What you're glad that you did what you wish you would have done, an approach that you took because you're maybe farther along the journey. Maybe you're in your 50s or your 60s or even your 70s. That is valuable perspective for Henry and Lucy, who are in their 40s. So again we'll have a link in the noodle email, our weekly email so you can give them a written message or audio message to help them along the way because your wisdom is really valuable. And we're going to do a lot of those the last week of the M month, but I wanted to share a few today.

LISTENER MIKE SHARES WHY HE CHOSE “FILE” (FINANCIALLY INDEPENDENT, LIVING EARLY) INSTEAD OF FULL FIRE, EMPHASIZING PURPOSE AND REDUCED STRESS.

Roger: The first one comes from Mike. Retiring early, Mike says sounded good to me at the time, but if I was honest to myself I would have admitted that part of the motivation was my own vanity. That is being able to humble brag about it to other people. It's pretty self aware. There's always an element of that. Fortunately, someone gave me a good piece of advice. Mike says we as humans have an inherent need to be productive regardless of what stage of life we are in. We are not meant to be consumers. Only if anybody goes into retirement thinking it will just be recreation or entertainment 247 they are going to be bored and disappointed. Sidebar Mike, I totally agree with you. Happy people have projects, happy people are making a difference or getting out of bed excited about something. And it can't just simply be entertainment, distraction and consumerism, which sometimes is all the stuff that we talk about because we're waiting to do some of that. But it's not the rest of our lives. And I agree with that. And that doesn't mean you have to go off and change the world. So I just wanted to share that perspective. Mike, I'm 100% with you. So Mike goes on. So instead of fire, we decided to do file F I L E Financially independent living early in other words, living a lifestyle that deprioritized money, but using money as a tool to improve other areas of our life. I was in a high pay, high stress executive job, so I switched to a new one that was about 30% lower pay but 99% lower stress. I still get to use my technical and business skills and the new job still pays very well. But knowing I can afford to quit this job any moment is extremely liberating. Mike says, my wife has been a stay at home mom for 20 plus years. So for her, file meant doing volunteer ministries, working outside of the house, supporting them with more money and time. Over the last few years we were able to use the money for many good purposes. Donating a large percentage of our income to charities, buying a vacation home on the beach, extending hospitality to friends and family, paying for college for two plus of our kids, funding their Roths, etc. Looking back, that was a much better decision than if I had just stopped working completely. Mike goes on to say, we would have been a lot, we would have been at a loss of finding meaningful and productive things to do and we probably would have too much more, would have been too much more careful with our spending. It would not have been able to afford all those things, especially the generosity to others. So my advice can be summarized as file instead of fire. Thank you. Well said, Mike. I love this idea of 30, you know, significantly less pay but 99% less stress. It's amazing how much more enjoyable working and serving and being productive is when you don't feel like you have to and that you can do it on your own terms. So thank you so much for sharing your wisdom, Mike.

LISTENER RENEE OFFERS PERSPECTIVE ON FLEXIBILITY, ONE SPOUSE STEPPING AWAY FROM WORK, AND HOW LOWER STRESS IMPROVED FAMILY LIFE.

Roger: All right, our next bit of wisdom is from Renee. Renee says listening to Lucy today resonated with me. I was unhappy in an IT job in my 30s, but unlike Lucy, I wanted to work until I was age 65. I got my first job as a teen and loved earning my own money, being productive, etc. I even loved the work I was doing. But the environment and the people I worked with was oppressive and I was not able to find an alternative position even with a great resume. The main reason for that is that I was not able to relocate. My husband had gotten a head start out of his career and made approximately twice as much as I did. So it didn't really make sense for him leaving his decision after struggling for years. Renee says, my husband and I made the decision together for me to quit my job and become a stay at home wife like Lucy had always managed our own money. But after quitting my job, I became the family cfo. I went on a strict budget since our income got dropped by a third. And believe it or not, we suddenly had more money freedom. But that is another story. My husband's career continued to accelerate, including incredible amounts of travel. It was a blessing for me to be able to manage our home life full time. I even got to accompany him on unforgettable international trips. Long story short, our lives, both personally and financially got better when I quit my job. One side effect, the stress level in the house decreased by half with only one of us working Now. Renee, I want to share a similar story where Shauna and I it doesn't really matter if it's the husband or the wife quitting, that all that doesn't matter is when Shawna retired from her high stress HR tech job. Same type of things, the stress in the entire household and the availability of both of us was just amazing. So Renee goes on. So my advice to Lucy is if fire doesn't work for both of you, maybe one of you could quit your job even today while the other works so you can continue to enlarge your nest egg and create more long term financial security. If you're still living on one salary, that seems possible. Awesome. Just my two cents. I never set out to become a homemaker, but circumstances and I believe it was God's will, she says, led me to the role. And neither I nor my husband have ever regretted it. Renee, thank you so much for pouring into Henry and Lucy. we'll continue with some of these words of wisdom that even if you're not in the Fire 40s era, it's good wisdom for all of us to think of different angles to how to approach rocking retirement, regardless what age you are.

SMART SPRINT

Roger: And we're off to set a little baby step you can take in the next seven days to not just rock retirement, but rock life. Right? In the next seven days, I want you to review the current goals, your base great life, your wants and your wishes that you have in your plan of record or whatever kind of plan that you have. So if you're married, or you have a partner, I want both of you to review them separately. Then I want you individually to write down the magic for yourself. So if you're a husband and wife, each of you write down things that if I could have everything and money wasn't an issue, these are the things I would like to do, I would like to have, I would like to experience in my life if there were no constraints on money whatsoever. Write them down for yourself and don't self edit yourself. Just write it down. Then what I want you to do is I want you two to switch. Read the other ones with a mindset of curiosity, not judgment, and just have a discussion about those things. Maybe they overlap a little bit. Maybe there's some things that you realize, Hm, I wonder if we could do that, if we could have that lake house or if we could establish a scholarship and test it. You should already have a plan of record so you can go through. What if we did buy that lake house? Is that even possible? Just play to see where you might be able to draw in a little bit more magic that you might have self edited back in the past.

WORD FOR THE YEAR

Roger: We have been getting a flood, of emails related to Words to retire. We did some of those last week. And also, hey, here's my word for the year. And so I want to share some of these. And we'll go back and forth on Words to retire and words for the year. The first one is Peter. We all tend to trend towards what is familiar and comfortable. Peter says, this year I want to focus on trying different and uncomfortable things. Change is always a little bit uncomfortable, but better than the same old comfortable and predictable habits. So Peter's word, if I recall, Peter, was different. I love that. Never had Thai food. Go try it. You're at a restaurant and they invite you up to salsa dance and you don't dance. Even the old white man's dance. Get up and try it. I love that Peter get. Try new things. Be uncomfortable. That's where the magic is. Love it, Peter.

All right, next one. Sarah. Sarah. When I made my retirement announcement last September, I realized I only had eight months to make my final impact on my team that I'd worked with for the last five years. I really wanted my exit not to be just walking out the door as fast as I could, but rather not miss a single opportunity to impact the team members. I work with many who are in their 20s and 30s and the clients we serve. I want to be a person who shows her passion for her team, her clients and her job right up to the last minute. Sarah goes on to say, but to do that right, I had to turn down the other areas of my life and really focus on my job. So that is why I have not been involved in the club recently. Sarah is a club member. My focus is on my path as I prepare for this big change I am leaving with intention. I look forward to my Next, chapter two. And I want everything to be done with intention, to be done intentionally, rather relational, spiritually, physically, using my gifts and talents, all of it. But thanks to you in the club, I have worked on what I want. The first day, the first week, the first few months of the retirement that I want. I have learned from others, thanks to the rc, that this chapter in my life can be quite impactful and I look forward to that change. I love this idea, Sarah, when you can go out proudly and not just pack up your desk and walk away. Such a wonderful way to be able to do it, especially when you work for a company that allows you to do that, which isn't always the case. And by the way, Sarah, I want to thank you for the, you and your husband, I think it was the both of you sent that very long email related to my word in danger and dealing with a merger. I shared that with Tanya. It was wonderful and we're bringing that kind of spirit. and thank you so much for that wisdom.

All right, everybody, next week we are going to count the resources that Lucy and Henry have to pay for the magic that they dreamt up today because we got to rub it against reality to see what is possible. So I hope you have a wonderful January and I'll talk to you next week.

The opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual. All performance references are historical and do not guarantee future results. All indices are unmanaged and cannot be invested in directly. Make sure you consult your legal, tax or financial advisor before making any decisions.