I'm now 82, and have tripled my savings too. I've traveled as much as I wanted too. I'm currently in the same boat, finding it hard to spend. So lately I've been taking my less fortunate friends out to lunch as a treat, and it's been a wonderful way to share wonderful life experiences during a leisurely outing. I have been sharing my computer teaching skills with my much older friends. It's amazing how my friend who is 100 years old, wanted to learn how to use her iPad.
Oh wow - the parallels between Ben’s path and my own are uncanny. I emigrated to the US in ‘02 and 5 years later found myself divorced. A 40yo stay-at-home mom having to open my first checking account, apply for a mortgage, find a job and raise two children alone. I took a job to pay the bills that I struggled every morning to wake up for and so immediately set a goal to retire at 55. It felt highly unachievable but I never wavered in my resolve so even I was surprised when I handed back my access badge one week after my 55th birthday. This was the best example of the power of believing in myself and my dreams. Everyone can do this!!
I am really enjoying these interviews with real life solicitations and hearing directly from your clients about what they’ve learned about themselves and the whole retirement & tax planning process
This was really helpful for me. I'm in the same boat Ben was in - I retired at 59 (this past January ) and have a very nice retirement nest egg and I can't seem to let myself enjoy it. This helped me change my thinking a bit - still a work in progress.
Thank you Ben. As a 53 y/o with a healthy portfolio, I too struggle to spend. For me it started with my upbringing. We didn’t have much and now that I do I find it challenging to spend. I find it easier to spend on experiences rather than material items. Wish me luck.
This is so timely! Watching James and Ari's content I've become more aware that I am not alone with difficulty spending now that I've retired so am glad you focused on this issue with Ben. Making the shift from watching savings grow to starting the negative cash flow is emotionally difficult. Even with the hard facts that there are sufficient balances that will grow even with a push to spend, it is challenging--a good problem to have, but it is an issue. I think what I need is a budget--a budget for what I need to spend MINIMALLY each month rather than what a typical budget does which is to set an upper limit. That is sort of what Ben has done by creating a pool of funds he has set aside to spend. And perhaps the fact that it cost him money (fewer ACA subsidy dollars) is some motivation to spend it.
James, I've greatly enjoyed and valued your pod casts and this was another great topic to discuss. I retired 3 years ago at 57 and have learned so much from you and can't thank you enough! This past year... after I watched one of your podcasts that discussed a client not wanting to eat the $5 M&M's in his hotel room's mini bar, but instead walked in the heat to a store down the street to save $3 when he was worth millions was an aaa hah moment. This topic doesn't get discussed enough. Thanks for sharing it.
Great video...a clear case of the portfolio tale wagging the retirement dog. I'm concerned that this will be me when I retire because I am laser focused on accumulation, to the point where it's almost like a game or competition. I live a very frugal lifestyle, but I want my retirement to be richer in experiences.
Helpful topic. For my own application it would have been more beneficial to hear Ben’s actual “magic number” and monthly budget if he was comfortable sharing that info.
James, When you and Ari post nuts and bolts videos, it’s great. However these interviews that you both have done add a different dimension to things. Thanks .
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
I can strongly relate to just about everything he said, especially pre-retirement, other than perhaps the unwillingness to spend now that I'm retired. Tried to retire at 57, got a great offer to remain part-time, then fully retired at 59.
This was a good interview. I wish that the "magic number" was divulged. It sounds like a few commenters are in similar situations, and going from saving to spending is a hard transition, especially if you've saved enough to be free at 53. Are we talking about a "it'll be ok $1M" or a "now you're just being silly $100M?" The sound quality wasn't great though. If it helps, there are apps that the remote person can install on their PC or phone (where the mic tends to always work) that lets them record locally and then send you the raw audio. Don't know how much production work that is, but it's clear.
Thanks Ben for sharing your story. I can easily imagine how, after a lifetime of saving, it could be psychologically daunting to flip the switch and start drawing down. Glad to hear that you figured out a plan before too many years have gone by! Enjoy your travels.
So grateful for this interview. Retired June of 2020 so the travel, activities, and experiences I had planned for were rearranged but not discarded. Plan B was implemented and currently enjoying the fruit of my labor.
I plan having a chart and growing my starting balance by 3% a year and will reference the chart every January and take out all $money above the amount and put into a slush bucket fund for spending.Will start with 3-5 years sending cash on hand too
Excellent topic. Thanks for the great interview and sharing Ben's insights. I'm not fully retired yet, but I'm in the last stages of moving towards accessing the portfolio. During this transition, I've begun telling myself that since I'm no longer paid by others, I am now paying myself.
Interesting how we can get focused on one aspect of retirement (even best intentions) while missing out on big picture opportunities - thanks for sharing your story!
Thank you both for sharing, this has been very helpful. I'm in a similar situation to John. Retired mid-fifties, chasing the ACA subsidies and probably putting too much emphasis on them. One difference, though, is that I have not had as much difficulty spending money on travel. I have a travel-specific budget and adhere to it, spending about 50% of my time on the road. It's the primary reason I retired early. I still don't feel good staying in a premium hotel, or paying for a premium seat on a flight, but do so from time to time whenever the budget allows and I feel there is some value in doing so.
I really enjoyed this conversation with Ben. Chasing ACA subsidies makes it so hard to pull money out of traditional retirement accounts (or really anything that increases income). I'm looking to retire in 2.5 years (@55) and am going to try and save cash between now and then. Maybe even take COBRA for 18 months and pull from my 401k before going on ACA. I just don't want to feel trapped like Ben did by the lure of massive subsidies.
I am curious if he is concerned about RMDs. I am reviewing my concerns about being in a higher tax bracket at age 75, and the larger percentage of tax that will be taken. In his case, wouldn't that alone motivate spending a bit more now to save later.
One thing that has helped me is to divide my income (pension, portfolio) into two. One funds my essential spending and goes directly into my chequing account. The other goes into a high interest savings account to fund discretionary spending. Mentally I know all my bills will get paid which then gives me permission to spend whatever is in the discretionary account without worry.
Taking the ACA subsidies can have opportunity costs: 1. higher tax bracket in the future, due to growing savings balance; 2. missed spending opportunities, due to forced lower income, 3. limits Roth conversions. Ben is probably going to be back in the same predicament once he starts Roth conversions. To maximize conversions, it is helpful to limit spending. I can say this from personal experience. I'm in year 10 of 13 of Roth conversions. Ben and I are in the same boat. The lure of ACA subsidies and Roth conversions are lucrative and difficult to pass up. But, there's no free lunch, as they come with opportunity costs. My final year of Roth conversions will be in 2027. In 2028 when I'm 67, I can finally increase my spending (a LOT). Tip: combining a cash out refinanced mortgage with Roth conversions can be effective: use the cash to pay taxes on conversions along with having extra cash to SPEND.
My fear is a repeat of the 1970s. The two-plus decade real return ending in the summer of 1982 was just 1.4% per year. That time frame featured an annual inflation rate of nearly 6%. My approach is to accumulate massive wealth, so I need only take about 2%. Leaving a legacy is the goal
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
James, thank you for doing this video. I am in a similar situation, retired at 56 in 2021. I am trying to balance my natural instinct to not want to spend money. Thankfully I am learning to spend without guilt, allowing myself to have the house painted and do some remodeling of the house, and also do some trips.
Very informative video you have, I have been able to understand the messages you pass but there are some other challenges that may come about when taking some other risks
It sounds like he should have a higher cash balance before retirement. Cas gives you options for Obama care and withdrawal amounts from your investments
James, as always, I appreciate the rational, even, informative, and levelheaded way you deliver investment and retirement related information and guidance. This conversation was extremely valuable and pertinent to me, as I am looking to retire within the next several months. Fears about transitioning into a spending from savings mindset is something I have been thinking about a lot. Hearing this firsthand account is both reassuring, but also helpful in knowing what factors to weave into my planning that I had not previously considered. Thanks again!
Yes, if you have the travel bug, plan to feed it and feed it well. We set our travel spending in a separate fund at the beginning of the year and are spending it quite well. Ben, thanks for sharing. James, an excellent interview as usual.
Aren’t ACA Health care subsidies funded by tax payer dollars? So he retired early and elected to allow taxpayers to subsidize his retirement by keeping his income low while his portfolio grew? Meanwhile, after 50 years of paying Medicare taxes, my parents are forced to pay a Medicare premium that is MORE that what they payed as corporate employees and it is terrible health care coverage. They have to buy a supplemental plan AND a drug plan as well. Their total Medicare premiums are about 3 times what they payed as corporate employees
Thank the clowns in congress and the senate who passed that monstrosity and the prez who signed it into law. It was heralded as “solving the healthcare affordability crisis” by the media. It did the opposite.
