Here’s our latest interview with a retiree as we seek to learn from those who have actually taken the retirement plunge.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview was conducted in July.
My questions are in bold italics and their responses follow in black.
Let’s get started…
GENERAL OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am 55 years old and my wife is 53 years.
We have been married for 15 years.
Do you have kids/family (if so, how old are they)?
I have a daughter from a previous marriage, and she is 25 years old.
We are very proud of her in so many ways. She graduated from college two and a half years ago and is financially independent while working for a large consumer goods company in the South. She has been promoted twice, and she is starting to grow her earnings as a young adult.
As you would expect, she is having fun in life, learning how to be a professional and experience living in a new city. She lives 1,200 miles away from us and is doing very well both personally and professionally.
What area of the country do you live in (and urban or rural)?
We live in a major urban city in the Midwest and love the downtown vibe / culture.
Is there anything else we should know about you?
I am Millionaire Interview 235 and my interview was published two years ago.
I am also a Mentor on ESI other website called Millionaire Money Mentors (MMM).
I enjoy helping the Members of MMM out by sharing some best practices on earning, saving and investing. I enjoy answering their questions and assisting them in their financial independence journey. I have also learned from this MMM website from other Mentors and the Members.
At the end of day, I feel blessed in life and want to share any knowledge and experiences with others so they can also achieve their life goals. Feel free to read my MI-235 interview and the terrific 43 comments from the interview.
RETIREMENT OVERVIEW
How do you define retirement?
Retirement means something special to me. It is the start of a beginning and not the end of something. My personal mission statement is to help provide my family a life that includes emotional and financial security, love, education, and fun. Retirement is a big part of my personal mission statement.
After reading many books on retirement and asking this question to my friends, I was surprised to hear the different meanings of retirement. Even a few of my closest friends think retirement means sitting on a couch and watching TV all day. When I heard that, it made me feel sad as they had no clue what retirement could be and saw it as the end of the line instead of the start of a new beginning.
My vision for retirement is a compelling call to celebrate the journey of life. My quest is to seek the best path and embark on what I want to learn, experience, and leave as my legacy. Additionally, I believe that it is not about what’s next, it’s about what’s now.
How long have you been retired?
We started our early retirement just over two years ago in May 2020 when I was 53 years old.
Is your spouse also retired?
Yes, my wife is also retired and she started it at the same time so we both have been retired for over two years.
I like to joke with her that she needed to work two additional years since I am two years older than her and I worked two more total years than she did. She just smiles and says, “No, I am retiring when you do”. Marriage is great and funny at the same time.
What was your career and income before retirement?
I worked in the Medical Device industry for 30 years as an Executive for a few Fortune 500 companies running the commercial operations in the Midwest.
My wife enjoyed working in Social Services for over 20 years.
Our pre-retirement income was $393,000 (mine $313K and wife $80K).
Why did you retire?
We both retired voluntarily. We were both blessed in many ways as we enjoyed our jobs and had terrific careers at each of our companies. We determined that we had achieved everything that we wanted to do in our professional careers.
So why retire? Our personal goals were starting to outweigh more than our professional goals. Once we took the appropriate time to evaluate our situation, we quickly came to the decision that we wanted to start our early retirement.
We evaluated this big decision for many years. We were comfortable with our net worth and understood our budget / spending plan. We determined that while 53 and 51 may be on the early side of retirement, our personal goals and dreams were something that we wanted to pursue full time.
This was a big decision that we made. This was not something we took lightly. We planned out our retirement day four years before announcing our decision to retire with family, friends, and of course our employers.
PREPARATION FOR RETIREMENT
When did you first start thinking seriously about retirement and when did that turn into a decision to do it?
We have always worked closely with our Certified Financial Planner (CFP) with our investments and also reviewed / updated a comprehensive financial plan each year. We met quarterly with our CFP to review our portfolio, asset allocation, what is working, not working in our portfolio and discuss the current economy. The financial plan allowed us to track our progress annually in achieving our personal financial goals.
We started our initial thoughts of when to retire ten years before our retirement. We were never big followers of FIRE (Financial Independent Retire Early) movement, although we did believe that the FI part of the equation was something we needed to achieve in life in order to have the retirement we wanted to live.
As mentioned earlier, our work was getting in our way from doing what we wanted to do in life. We had some personal goals and dreams to fulfil. Once we knew we were within reach of our Financial Independence goal, we decided that four years from that point, we were actually going to retire. It was one of the most liberating and memorable days that my wife and I have shared together.
What were the major steps you took from deciding to retire to developing a plan to do so?
The major steps were broken down into two parts: Financial and Non-Financial.
For the financial part, we would meet quarterly with our CFP to monitor and review our investment portfolio so we could make some minor course corrections as needed. We spoke directly on what was working and what was not working so we could make some adjustments to fix concerns.
Some of these items included the following:
- Reviewing our current asset allocation
- Re-balance if necessary
- Review the actual individual investments
- Once we retire how does the accumulation phase differ from the deaccumulation phase
- How would we secure our income by drawing down from our portfolio for our income needs, etc.
We believed that our comprehensive financial plan was the road map to success and retirement. This plan allowed us to see where we were winning and what we needed to work on in order to achieve our retirement. We updated the variables each year and then measured ourselves from the results to our desired outcome. We would do it every year in July. This was always an in-depth conversation with our Certified Financial Planner.
Another important step we took was discussing how we were going to live our lives in retirement. In other words, what did the non-financial side of the equation look like for us. What were we going to do to be happy and have a purpose in life?
Personally, I believe that life revolves around 6 fundamentals includes: Faith / Volunteering, Family / Friends, Health, New Experiences, Exploration / Vacations and Financial. I wrote a Life Plan that would include these 6 aspects of life and specific details under each one. Each goal was written with specific, measurable, attainable, realistic and timely action items.
Here is a high-level overview:
1. Faith / Volunteering – making this world a better place
2. Family / Friends – the most important people in my life
3. Health – continue to improve my health
4. New Experiences – never stop learning and challenging myself
5. Exploration / Vacations – travel is the spice of life
6. Financial – basic fundamentals that will keep our personal finances sustainable
I have posted a more detailed version of my Life Plan on ESI’s other website call Millionaire Money Member (MMM) and you can read the terrific 32 comments if you are a member. The name of my article on MMM is called: “What are you doing in retirement (or plan to do in retirement if you are still working) to ensure your happiness and have a purpose in life?“
What did your pre-retirement financials look like?
Assets values at pre-retirement:
- Tax Deferred Assets / IRA’s: $2,011,000
- Taxable Assets / Brokerage: $1,159,000
- Cash: $201,000
- House – paid off: $385,000
Total Net Worth: $3,756,000
Assets values two years into Retirement:
- Tax Deferred Assets / IRA’s: $2,732,000
- Taxable Assets / Brokerage: $1,305,000
- Cash: $191,000
- Tax Free Assets / Roth IRA’s: $126,000
- House – paid off: $432,000
Total Net Worth: $4,786,000
We are fortunate and blessed to have no debt of any kind over the last seven years.
What was your overall financial plan for retirement?
We were lucky here in the sense that we have been tracking our spending over the last 25 years prior to retirement and had a budget that was updated each month. So it was easy to determine our retirement spending. We started with a cash flow analysis and determined what was necessary, fixed and variable.
We rolled over our 401k’s over to Schwab Intelligent Portfolio Premium service which allows for low-cost ETF’s and unlimited Certified Financial Planner services. We keep our Tax Deferred / IRA and Tax Free / Roth IRA in these accounts. These are robo accounts with CFP access. It’s cost effective compared to other financial service companies and we like the idea of a CFP who can build a relationship with and contact any time at an office close to our home. Their online services are easy to use and so far, we are comfortable with this strategy. We have approximately $2.9M is these accounts and pay $30 / month for these services.
We also have a Wealth Management / Private Client relationship with Charles Schwab which is an actively managed basket of 20 stocks plus other ETF’s and mutual funds as part of our passive income strategy to be used later on in our retirement. We keep our Taxable Assets / Brokerage in these accounts. We have approximately $1.3M and the expense fee is 0.4% to actively manage. FYI, the current Schwab rate for this service is 0.8% but we were grandfathered in at the lower rate since we have had this type of account with them for the last 15 years.
This above fee is a bit higher than I would normally agree to but the accounts have done well to date and someone else can ensure we buy and sell stocks with no commissions and manage the tax implications much better than I would attempt to do. Finally, through wealth management / private client service, I do talk with a CFP every quarter to review all Schwab accounts including the Brokerage, IRA and Roth IRA to get a good macro view on all our accounts.
Did you make any specific moves to prepare your finances for retirement?
Yes, we decided to downsize our house a year before we retired. We were living in a four-story row house style townhome in the city and moved to a condominium in a mid-rise building in the same neighborhood in the city where we lived prior. Our daughter was on her own living out of state so we did not need all the room as before. Also, while our last home was paid off, we did benefit from our property taxes dropping 40% when we moved into our new home.
In terms of shifting our assets, we have always had a growth model portfolio that is made up of 75% equity, 15% fix income / bonds and 10% cash. Since we retired early at 53 years old, we believe we needed to expect to be around for another 40 years so shifting our assets to a more conservative model portfolio: 45% equity, 45% bonds and 10% cash would not work for us given the long term we would be living life in our retirement.
I am sure we will shift our portfolio towards a more conservative model over time as we age.
Who helped you develop this plan?
For the last 25 years, we have had our investments with the Charles Schwab company.
Our relationship of service has evolved over this time period. As mentioned before, we have 75% of assets (IRA and Roth IRA) in robo type accounts called Schwab Intelligent Portfolio Premium, and we have 25% of assets (Brokerage) in Wealth Management / Private Client accounts. This hybrid type of relationship with 2 different services has allowed us to leverage low cost and maintain professional services like a CFP to do our quarterly portfolio reviews.
Schwab has helped us with many different financial goals such as saving for a house, paying off the house early, saving for retirement, taking advantage of a 529 plan for our daughter’s college that we started when she was born, determining how and when to pull income from the portfolio. They also provide in person and webinar educational programs like Risk Management, Estate Planning and Tax Planning that would help me understand our evolving personal needs. Finally, having and using a compressive financial plan to navigate us through our ever-changing life events was critical to help us be successful in our financial independence.
Charles Schwab believes in using not just anyone that calls themselves “financial advisors or consultant” but actual Certified Financial Planners (CFP). The standards are much higher for a CFP, that requires being a fiduciary or acting in the best interest of the client. I cannot stress this point enough as I thought all the titles or certification were the same when they are not.
I have also enjoyed reading books on personal finance and blogs like ESI over the years. I remember when I was in my late 20’s and early 30’s when I would go to a coffee shop on Saturday mornings to read personal finance magazines like Kiplinger, Money, Barron’s, etc. to build my investment knowledge. It is a commitment that takes persistence, patience and time to build your personal finance acumen.
Finally, a close family friend started mentoring me after I graduated from college. He would share basic fundamentals of personal finance so we could discuss them. He introduced me to dollar cost averaging, compounded interest, 401K’s with matching benefits, Employee Stock Purchase Plans (ESPP), executive compensation like Stock Options / Restricted Stock Units, importance of diversification, different degrees of asset allocation, etc. He allowed me to ask any type of questions without judging me.
What a lucky person I was to have this resource when I was starting off in life on my own. I am starting to introduce my daughter to these same principles and best practices for personal finance. It is all about paying it forward.
What plans did you make in advance to leave your job?
We planned to leave our jobs four years before we retired. Since we were both leaders in our organizations, we felt it was important to give a 3 months notice to our employers.
We both shared this news with our employers in early January in 2020 so we could retire on April 1, 2020. Well, Covid hit us all in late March 2020 so each company coincidentally asked us to delay our retirement by 1-2 months.
Since we enjoyed our jobs, our careers and the companies, we felt delaying our retirement date by 6 weeks to help navigate the organizations to a safer and more stable place was in everyone’s best interest.
What were your pre-retirement concerns (financial or non-financial)?
With regards to the financial side, I was confident in our pre-retirement planning that we would be in good shape. However, having to live in a period of unknown healthcare coverage was certainly something that I wanted to get my arms around.
With regards to the non-financial side, I was not sure exactly how this would be for us. We are both happy people with a purpose in our lives. I read several books on this topic to help me transition on what to do and how to manage my time now that I was not flying around every week in a different city like when I was working.
How did you handle deciding on and paying for healthcare?
This has been an ongoing question that we do not have 100% figured out.
We used COBRA for the first 18 months in retirement. We then started using Affordable Care Act (ACA) or Obama healthcare for our healthcare. We had BCBS before retirement and have BCBS in retirement so the type of insurance did not change but we are obviously paying more since we no longer receive the company provided benefit.
Fortunately, my wife and I are healthy so we do not need to go see physicians very often. I budgeted $25,000 a year for all of our health care needs (premiums medical, dental, vision as well as for our out-of-pocket medical expenses, deductibles and medications).
So far, this system is working for us.
We are always open to other ideas if other ESI / MMM readers have suggestions.
How did you tell your family and friends of your plans?
We started sharing the news with our family and friends over the Christmas holiday prior to our retirement in May 2020.
We told our employers in early January once we announced to our family and close friends.
The plan was to retire and then have a big blow out party in the summer, similar to a wedding reception. Obviously, covid did not allow us to have this big retirement party.
THE ACT OF RETIRING
How did you ultimately retire?
Great question, I had this all planned for three months before April 1.
My work team was going to travel to my city so we could do a proper good bye send off for a final in-person meeting, go to a MLB game, out for a first-class dinner and visit the bars for a fun night out on the town.
What went well?
The majority of it went well.
I received several phone calls from people I worked with over the years from different companies and lovely emails congratulating me on the early retirement news. Many of them could not believe I was doing this at 53 years old and several of them mentioned how jealous they were.
A few even mentioned that they have not started to save for their future which was surprising and sad to hear.
What didn’t go so well?
Covid lock downs started two weeks before our early retirement planned date. Our companies asked us to postpone our retirement departure for 6 weeks so we could help during this transition process. We both felt loyal and wanted to help out our organizations.
Needless to say, I never had the big blow out work party and MLB baseball good bye party or even the large family / friends personal party that we were planning. While we were disappointed, we kept it in proportion that we were very lucky to retire when we did in our life stage so there was no purpose being upset for not having our work parties or personal parties for our retirement.
Instead, we had our formal good bye meeting via a Zoom call which felt a bit sterile instead of flying everyone in for a face to face good bye party.
How did you ultimately find the courage to do it?
This really was easy for me to pull the trigger and never thought courage was needed.
My company had a meeting for senior leaders in January so I decided to notify my manager on the last day of this meeting one on one. Since he lived 1,000 miles away from me and I would rarely see him in person, it was more professional and appropriate to do this in person at this meeting.
At no point did my wife or I have a “one more year syndrome”. I believe this was because we started planning our retirement date four years out and were properly prepared.
RETIREMENT LIFE
How was the adjustment, especially the first few months after retirement?
The first six months felt like a honeymoon and freedom similar to when you were in school as child and started your summer break. It was physically and mentally relieving. It felt odd to not have to read / respond to emails, return phone calls, have meetings, project deadlines, prepare analyses for work or wake up at 4 AM for 6 AM airplane departure.
The last ten years, I was flying every week for work so some days I would wake up in a hotel bed not sure what city I was in…LOL.
We immediately started going to our health club daily. My wife is still going 6 of 7 days per week and loves it.
How is retirement life now? What do you like about it and what do you dislike?
Retirement is fantastic and we both love it. We like the freedom to choose what we want do and when.
We try to be intentional by having structure activities in the morning, unstructured time in the afternoon and doing activities that are fun and good for our health. At our club, I play tennis two days a week year-round and just started pickleball a year ago. I play golf once a week and can do this 8 months out of year.
The only thing I dislike about retirement is that I did not retire earlier. Seriously, we are blessed to be in the position. Yes, we worked long and hard for over 30 years so it is nice to do what you want to do in life.
It is a first world problem. If I complain about something, it does not feel right. We are fortunate and blessed in so many ways.
Now as an early retiree not working, I no longer have the work-life balance challenge. My wife and I are active in our health club, we hike in state parks or forest preservice weekly. We have a weekly date night and search out new experiences for us together to do as well as individual interests to pursue.
What do you do with your time? What does an average day look like?
I feel my schedule is busier now than when I was working. I am involved with 4 different non-profit organizations.
I am on a board of Big Brothers Big Sisters and also mentor a 16-year high school boy from a single parent household.
I am an advisor for a Big Ten University Fraternity chapter house that was being reestablished and this is their initial year back to campus. It has been fun working with the college students who serve on the executive team (6 total).
I help out at a local food pantry once a week where I deliverer food to people in need.
I also joined our Home Owners Association (HOA) for our condominium building. We are a self-managed HOA that only has 8 units in a boutique building so it is manageable to do the necessary work that needs to be completed both on the operational budget and the capital improvements.
During retirement, I also started refereeing high school soccer games for boys and girls. I grew up playing soccer and was a college athlete so helping young people officiate soccer games is a blast. While the pay barely covers my gas money, I do it because it is fun and enjoy watching soccer games. I average of four days a week in the spring and fall as a soccer referee.
What are the major activities that fill up your time in retirement? Are there any new ones you’re planning to try?
I have a Life Plan that drives my decisions on how and where I spend my available free time. Working out is a morning activity most of the days of the week. I try to get to the health club at least 4 days a week. I enjoy reading, bird watching, gardening, sailing a boat, and taking multiple vacations with my wife.
I am planning to join a chess club where I can play online or in person a few times a week. The chess club has a way to evaluate and coach you so you can get better. I hope to start this in three months when my schedule opens up a little.
What is your social life like?
My wife and I are blessed with a great group of friends. We know most of them from a private health club in the city. We play tennis and pickleball year around with many of our friends. We have met some great people at this health club and the club is all about working out as well as hosting social events. We take advantage of both of them. My wife works out at least 6 days a week doing exercise classes (i.e., Body Pump, Barr, Boxing along with Tennis and Pickleball).
My wife and I are foodies so living in a major city that has top rated restaurants with international food offerings is fantastic.
We do a weekly date night to continue to invest in our marriage and each other.
We stay close to several of our college friends, high school friends, and former work colleagues.
Looking back, what would you have done differently?
I would try to eat healthier. I love red meat and grilling a steak a few times week is a treat. I am trying to improve my diet by putting better food in my body.
For example, I am trying to eat smaller portions, more vegetables, seafood, chicken, turkey, etc. While my blood pressure is not elevated, I am watching this area of health by taking my blood pressure every morning after waking up and before my morning coffee. I would also like to lose 15 pounds so the above is a great way to continue to help my over health.
Was there any emotional impact from leaving the workforce?
This is an interesting question. I have been in leadership roles for the majority of my working career. At my last company, I hired 10 of the 14 direct reports that worked for me. These were all terrific people that were “high potentials” that achieved their goals. While I miss the people, I do not miss the stress or the heavy travel schedule of 2-3 nights a week when I was gone.
I stay connected with a handful of people from work and occasionally go out for a bite to eat.
The reality is I get my emotional impact from my family and friends. My family is extremely important to me so I take advantage of not working where I can talk with them more frequently each week and we can go visit them more than we could since we all live in different states. If I had to worry about vacation days or PTO, I would not be able to see my family as often as we do now.
I am close with 5 high school guys that live in another state that I can drive to once a quarter to attend one of their monthly poker games. We meet up once a year with wives to go a concert. This year it is the Red Hot Chili Peppers and we can’t wait.
My college friends and I were in a fraternity at a SEC university and I enjoy seeing them 2-3 times a year. One of our boys’ trips is to a resort town where we boat, golf, go-karts, swim in the lake, etc. for a long weekend. Nothing is better that having an adult beverage talking to a brother about sharing different phases of life and being there for your friends when they need you the most.
What surprises (financial or non-financial, good or bad) have you had since retiring and how have you handled them?
On the financial side, I found that when you are retired you no longer pay high taxes like you did as a high-income earner for a corporate company. Two years ago, when we had no W2 income any longer, we started to converting at least $100,000 / year of our IRAs to a Roth IRA. The strategy here is that while our tax rate is low, it is better to pay the low tax rate now and benefit from the tax free down the road when we may be in a higher tax rate.
We started doing this Roth IRA conversion two years ago and will continue doing the same amount or more each year for another eight years. This is a no-brainer to me especially while our tax rates are low until 2026 when they go back up to the old tax rates. Roth IRA conversions may be a tool that you may want to consider if it makes sense in your tax planning strategies.
On the non-financial side, I want to read more. I love reading all types of books including biography’s, self-help, personal finance, history, war and philosophy. While in principle I have a lot more time now on my hands, it seems like I have too much on my plate to accomplish everything so the reading has fallen off more than I would like. I would not have mentioned this if the question was not posed to me.
What are your future plans?
Last summer I joined a boat club and learned to sail on one of the Great Lakes. I am certified on a 26-foot Chris Craft sailboat with 2 sails and love it.
I go out sailing 1-2 times a week in the spring, summer and fall. It is a fun activity for my wife and I to take friends on the lake to enjoy this new hobby.
This year, I am learning to sail a larger 30-foot Catalina sailboat that has more toys and allows us to have more people can join us.
I also started gardening last year for the first time. I have never done this before and learned a lot while having a blast. I started my second season so look out!
I consider myself an above average cook that specializes in grilling on the BBQ grill. I want to take some cooking classes to build out my knowledge and try some new types of cooking for us to enjoy. The research for the new experience has begun and I will probably start this in October.
RETIREMENT FINANCES
How has your financial plan performed compared to what you had estimated before retirement?
Knock on wood, everything has performed as expected and no surprises so far.
We had a great bull market the first 2 years of retirement followed by a bear market the last 7 months. I suspect we are going to be in a recession in early 2023.
Surprisingly, I never get overly excited when the market is way up or when it is way down. I know from experience and education that we have growth bull years approximately every 2 of 3 years looking back at the last 125 years. The key for us is to follow the compressive Financial Plan that we started over 10 years and update it each July. We diversified our assets into 75% Equity (bucket 1), 15% Fixed income / bonds (bucket 2) and 10% Cash (bucket 3).
If the market is growing, we pull income from equity. If the market is down, we pull income from cash. This simple bucket approach system has worked for us regardless if the market is up or down.
I have friends that lose sleep if the market is way down and actually sell the equities which I think is crazy. I take the market in stride and never lose sleep regardless if the market is growing or declining. We are in this for the long term and invest accordingly without drastic changes.
Can you give us some insights into your post-retirement spending and income? How much do you spend annually and on what? And where does the income to pay for your spending come from?
Here is our Annual Expense Budget / Spending Plan:
- $72,000: Credit Cards: Dinning out, vacations, cloths, shopping, groceries, health club & uber
- $25,100: Healthcare medical, dental & vision: insurance premiums, out of pocket & medications
- $21,000: Income Tax – federal & state
- $7,200: Property Tax – home
- $5,100: Condo HOA fee
- $5,000: Sports tickets – NFL season tickets, some MLB & MLS games
- $2,800: Insurance – auto (1), home, umbrella & rider for wife’s wedding ring
- $1,800: Utilities – Gas and Electric
- $10,000: Misc. items & Cash
$150,000 Total Expenses per year or $12,500 per month
In regards to where does our monthly income from, I have never believed in annuities so I draw our monthly income from our diversified portfolio. As stated before, we use a 3 bucket (75% equity, 15% fixed income/ bonds and 10% cash) approach. If the market is growing, we pull monthly income from equity. If the market is down, we pull monthly income from cash. This simple bucket approach system has worked for us regardless if the market is up or down.
How are you handling Social Security, required minimum distributions, tax issues and the like?
We have not looked at SS yet or did not do any type of analysis yet for SS.
I suspect we will start SS at 67 or 70 years old depending on our health and life expectance.
We are only 55 years old so we are 17 years away from RMD’s.
We pay quarterly estimated federal and state taxes.
Did you return to paid work? Why or why not?
No, we did not return to work and do not plan to. We are blessed to have prepared for this fun phase of our life so financially there was no need to go back to work.
Also, our personal goals are outweighing our professional goals. We are living our dreams in retirement. My vision for retirement is a compelling call to celebrate the journey of life. My quest is to seek the best path and embark on what I want to learn, experience, and leave as my legacy. It is not about what’s next, it’s about what’s now.
Because of this, returning to paid work is not in our future.
Did you find it hard going from being a saver to a spender?
I give ESI a big plug for his blog on this subject. While Earning, Saving and Investing is easy to talk about, it can sometimes be hard to do at times. I actually loved saving and watching our portfolio grow over the last three decades. We have always believed in hard work and were ambitious to be promoted while making a good earning at our companies. Since we both grew up in a modest fashion, it was easy for us to live well beneath our means so we could save a significant percentage of income for our future.
Investing was a continued learning skill set. I enjoy personal finance and even started an Investment Club with a few of my close friends. We discuss different financial topics each month on a zoom call. The mission is to educate each other by rotating the monthly speaker in a monthly zoom call where we review and discuss various financial topics.
I would say it is not hard to go from saver to spender, however it is a new way of thinking about how to manage your portfolio.
Looking back, what do you wish you knew in advance?
I wish I knew how hard it was to manage your day, week and month.
That is one of the reasons why I created a Life Plan for myself six months after I retired. This tool helps me to manage and prioritize my time on new experiences and the things in life that are most important to me. I update this Life Plan each month just like I do with my monthly investment portfolio report and my budget / spending report.
What advice do you have for those wanting to retire?
Everyone wants to focus on the financial side of retirement. I understand that and I believe that is important to make sure you are able to retire. But for the most part, this is the easy part when deciding if you can retire or not. Either you have the net worth or you do not to determine if you can retire given your spending plan during retirement.
The hard part is the non-financial side of retirement. In other words, where is your happiness and purpose in life going to come from? I encourage people to think long and hard about this part. As my father used to say frequently, this is a good problem to have.
There is a great book “Keys to a Successful Retirement: Staying happy, active and productive in your retired years” by Fritz Gilbert and I bought it on Amazon for $11. Yes, I am suggesting anyone considering retirement to read it as it walks you through step by step on the non-financial side of retirement.
Best of luck with your retirement. I love it and wish everyone the same. Expect the best as attitude is everything!
The Crusher says
Congrats on your extremely well planned early retirement. Thanks for sharing so many details.
All that you have accomplished is remarkable!
Soccer Rules / RI 38 & MI 235 says
Thanks Crusher for your kind words. I wish you the best of luck on reaching your dreams.
ol70 says
Congrats on such a successful transition to retirement! Be very careful with your sailing hobby. I did the exact same thing when I retired on the Great Lakes having had never sailed a day in my life, then decided to take more training in the Caribbean. Loved it so much that 8 years later the wife and I have chartered by ourselves all around the world from the South Pacific to Scandinavia & have 5,000 sea miles under our belts. The places we’ve been take your breath away and no cruise ship can ever take you there. To make matters worse we love it so much we are having a custom sailboat built for us to go slowly explore the world. First world problems!
Soccer Rules / RI 38 & MI 235 says
Ol70, I love your sailing boat stories. Yes, it is definitely a first world problem. Love this sailing passion myself myself and always learning something new when I’m out on the water.
That’s terrific that you’ve taken this hobby and turned it into a major experience throughout the Caribbean and even to build your own boat. Very impressive and hope you continue taking on new experiences with your life. Best of luck!
D says
Sailing knowledge sounds like a great problem to me. My husband and I will be taking our first sailing lessons later this winter. Thanks for the insight about the cruise ships compared to sailing yourself. We hike everyplace we travel and are in awe at the incredible sights and experiences we have. Keep enjoying your adventures!!!
Dan Murray says
Well done.
Soccer Rules / RI 38 & MI 235 says
Thanks Dan. I wish you best of luck going after your goals.
MI#43 says
Very interesting read. You guys are obviously in a bit of a league of your own with your high net worth. But the life plan is of particular interest to me. We are about to take the jump next year. We won’t have the resources to do all that you do, but we will be fine if we budget and plan travel, and major expenses. What I like about the life plan is how you have lots of activities to fill your time several of which are giving back to the community. Wife and I plan on doing the same.
Soccer Rules / RI 38 & MI 235 says
Thanks MI#43 for your kind words. As you know the ESI philosophy is easy to discuss and understand however hard to execute. But once you master these three critical fundamentals it’s amazing on how your wealth can grow.
Thanks for your comments on my Life Plan as well. I wish I could tell you that it was natural and easy to complete. It was hardly that and was something that evolved in the first 6 months of retirement. The book I referenced in my post “Keys to a Successful Retirement” by Fritz Gilbert was key for me on creating and executing my life plan that involves my non-financial goals that I wanted to do achieve in retirement. Those six fundamental pillars that I outlined in my post are my true focus in life. By creating my life plan and achieving the specific goals that I’ve listed, I have a purpose in life and be happy in retirement.
I encourage you to read this book and good luck on creating your own life plan. Best of luck on reaching your goals.
ChuckFL says
Thanks for sharing your story! We are 58 and 57 and have been retired for a few years. We decided on the same asset allocation as you did, 75/15/10. This may seem aggressive, but will allow growth for the long term. If you have a large enough portfolio, the 10% cash will cover several years of withdrawals, which should be long enough for the market to recover from a downturn.
Soccer Rules / RI 38 & MI 235 says
ChuckFL, very true on your comments. Thanks for sharing.
jennifer S says
Thank you so much for this detailed roadmap of your retirement. My husband and I are about to pull the trigger this year and your situation is very similar to ours and I’ll be leveraging your blueprint to build our plan. I’m personally struggling with the shift to spend and like how you are pulling assets in different markets. Makes sense. Interesting that you are taking advantage of COBRA and just budgeting 25K for medical insurance and health costs. We plan to do the same. There seems to be a lot of concern from those retiring early about healthcare, but, if it is part of the budgeted plan, then it shouldn’t be a burden. We have looked at the medishare plans, but just want the absolute piece of mind that any medical issue will be covered. Glad to see others down the same path. Enjoy your well planned and earned retirement.
Soccer Rules / RI 38 & MI 235 says
Hi Jennifer, Thanks for your kind words and glad our post will help you in different ways. Yes, the healthcare cost is definitely more money than we would like but as you said, it is what it is so budget for it accordingly. Wish you and your husband the best on coming over the Retirement side. Lots of fun!
Fritz @ The Retirement Manifesto says
Thanks for the shout-out on my book, pleased to hear it was helpful on your journey!
Soccer Rules / RI 38 & MI 235 says
My pleasure Fritz. I am so confident in your book that I am by 14 copies over the last two years to give to family and friends that are in the process of retiring. Fantastic book and love following your blog as well.
Clay says
I’m a similar age, when you say “While my blood pressure is not elevated”, what range are you in? Did your blood pressure change after you retired? Blood pressure is the one health stat I wish I could get consistently better, rarely I’m in the green (under 130/85) , more typically amber or even red (just over 140/90).
Soccer Rules / RI 38 & MI 235 says
Hi Clay, I started tracking my blood pressure 21 months ago in March 2021. I retired almost a year earlier in May 2020. My blood pressure is good at 126 / 81 so I am not sure if it was higher, same or lower when I was working prior to tracking my results. I can tell you it has been constant over the last almost two years so I will take that as a good sign. Best of luck with your health and future retirement!
Hal says
You may want to reconfirm that the $30.00 per month is accurate….its always a good idea to annually review total internal expenses and trading costs incurred aacross your entire relationship that are rarely disclosed in the asset management industry.
Soccer Rules / RI 38 & MI 235 says
I agree with you Hal that an annual check up is always good to make sure you are getting your service, level of work requested and paying the correct fees for your personal financial needs. After reading your question about reconfirming the fee structure at Schwab for their Schwab Intelligent Portfolio Premium (SIPP) service, I found that we pay $30 per month that is charged quarterly for this advisory fee and can meet with a CFP anytime we want. FYI, I meet quarterly with mine to review our portfolio. I found out that there are no transaction, no commission, no trade fee’s or even no fees to rebalance. However, Schwab did say that while they use only ETF’s (Schwab, Vanguard, etc.) that there is an underling fee of 0.2% on average for all ETF regardless who is managing it. While this is a small fee, I wanted to thank you for asking me this question so I can provide this additional information. As mentioned before, I am extremally happy with Charles Schwab level of service for the last 25 years. Thanks for the suggestion and wish you the best of luck in your future.
andrea says
Great read. When you said you taxes will go up in 2026…why?
Soccer Rules / RI 38 & MI 235 says
Thanks Andrea for your kind comments.
In 2017, congress passed the Tax Cuts and Jobs Act (TCJA). This legislations reduced taxes for many people and corporations. However, without further legislative action, the tax cuts are set to expire at the end of 2025 and 2026 tax rates and tax brackets will be higher for most households. Planning ahead for the TCJA expiration could increase your financial security and there are stops you can take now to reduce your future tax expenditures.
Best of luck to your future!
Phillip says
Congrats on your retirement!
I’m curious about your first expense line item:
“$72,000: Credit Cards: Dinning out, vacations, cloths, shopping, groceries, health club & uber”
Can you give a rough break-out of how much you spend in each category? I’m trying to budget our own retirement and love reference points. A little more detail would really be appreciated.
Soccer Rules / RI 38 & MI 235 says
Thanks Phillip. We are blessed and do not take anything for granted as early retirees.
You ask a good question. I pulled numbers from our actual 2021 spend, but the overall credit card total spend changes each year on these 7 categories. For example, we are vacationing more this year so that category will rise in our 2023 budget. I am embarrassed to admit how much was spent on eating out, as some people may call us foodie’s; although I hate that term as we are lucky to live in a world class city with all types of food cultures that we take advantage of even at a higher cost. We never go to chain restaurant’s as they are against our idea of outstanding dining experiences. I am also embarrassed to tell you how much we spend annually at our private health club including tennis lessons. Sorry for not being more specific as everyone spends differently on these type of discretionary expenses. Your expenses will vary depending on the cost of living expenses in your city as well as what your priorities and passions are.
What I will suggest to you is to combine and review your year-end summaries for your credit cards. This will help you identify specific percentages based on each category. I encourage you to follow your own expenses over the last three years to see your baseline expenses for these types of expenses. Wish you the best of luck in your future.
M180 says
Thank you!! Really appreciated the detail and full plan behind your retirement. Inspiring…
Soccer Rules / RI 38 & MI 235 says
Thanks M 180 for your kind comments. I look forward to reading your Retirement Interview when you retire. Good luck in your future!
JTC says
Hi Soccer Rules-
I really enjoyed this look back of yours. I am 58 and recently took an early exit from Corp hell (horrible leadership, company being sold, etc.) – I now have been managing the 12 rental properties we have (a side gig I built over the past 10 years). We are in a different situation than you as we still have two boys in college. But we have plenty of financial resources to cover it – however it still has an emotional toll of writing those big checks while not having a paycheck (though it basically true that the rentals provide me with a about $11k a month net of fees/expenses) so sort of still have a paycheck.
Most notably, it’s the non-financial aspects that you so accurately point out that has been hard to get my head around (to the point that I am thinking about going back to work in some form). Most (actually all) of my friend group is still working and therefore not available to do stuff with. Also, I have not been able to come up with an elevator speech about “what do you do” when asked at cocktail parties. Feel awkward saying I am retired – as I am too young and nobody else in the room is. How have you handled this? I know… I shouldn’t care …but seems I do.
Soccer Rules / RI 38 & MI 235 says
Hi JTC, my heart goes out to you on your situation. If I hearing you correctly, your company let you go unexpectedly after the company being sold causing you into an early retirement. That is never an easy position to be in when someone else dictates your time frame on retirement. We planned our departure out 4 years in advance so it was under different circumstances than your situation. I suggest you try to take a few months to answer these two questions:
1. What makes you happy?
2. What is your purpose in life?
While these two questions may seem easy to answer or trivial, I would argue that they are pinnacle to our existence. They took me 6 months to answer these questions. I created a two page Life Plan that I update every month to answer these two questions and also plan out how I would live my life. There is nothing wrong with going back to work if it makes your happy and you feel it is your purpose in life. For me, my personal goals were out weighing my professional goals so that is why we decided to start our early retirement.
Like you, my wife and I are the only ones in our pre-retirement circle of friends that took an early retirement almost three years ago. We still spend time with them on weekends and evenings. In addition, we have met others that are available during the mornings or during the day that we have developed friendships, mostly at our health club where we play a lot of tennis, pickleball and workout exercise classes. Do you have access to something like this near you?
In terms of my elevator speech, I am honest and direct by saying, I retired early and living my dreams. It does surprise a lot of people do to my age, but we are proud and blessed to be in this position. I hope this may offer some comfort and help as you consider your next move. Good luck and enjoy your journey in life.