Afford Anything - Q&A: The Unintended Consequences of Early Retirement

Episode Date: August 6, 2024

#529: Anonymous, 60, recently lost her job and is worried about retirement. She owns a paid-off triplex, living in one unit and renting the others for $30,000 a year. She used her 401(k) funds to buy the triplex and now has $50,000 in retirement savings and $150,000 in cash. She expects only $2,400 a month from Social Security at age 67. After losing her son two years ago, she's seeking advice on managing her underfunded retirement. Noelle, 40, and her husband, 49, want to cancel his whole life insurance policy. They are debt-free, own their home, and plan to retire soon, relying on Noelle's $80,000 income. They have $504,000 in retirement savings. Should Noelle keep her $100,000 term life policy until she retires? Sleepless in San Antonio, age 35, plans to retire at 45 but is concerned about how this will affect Social Security benefits, which is calculated based on the top 35 earning years. Should they work longer in order to boost their Social Security benefits? Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode. Enjoy! P.S. Got a question? Leave it at https://affordanything.com/voicemail For more information, visit the show notes at https://affordanything.com/episode529 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Joe, when you were a financial advisor, did you ever have to talk to people about the unintended consequences of early retirement? One of my favorite books, as you know, Paula, is Stephen Covey's Seven Habits of Highly Successful People. Highly Effective. And successful. I'm going to rename that book to be whatever I wanted to be, Paula. That's the very effective thing to do. When you pick up one end of the stick, there's an unintended end. So to figure out all the other consequences when you're building.

is an important part of the plan. Absolutely. And we're going to talk about that today. We're also going to talk to a woman who was unfortunately laid off at the age of 60 and is trying to decipher what retirement is going to look like with that set of circumstances. And we're going to talk to a couple that thinks that they can shave $600 a year off of their budget because they're paying for a benefit that they may not need. Welcome to the Afford Anything podcast. The show that understands you can afford anything, but not everything. Every choice carries a trade-off.

And that applies not just to your money, but to your time, your focus, your energy, your attention to any limited resource you need to manage. So what matters most and how do you make choices accordingly? Those are the two questions this podcast is here to answer. My name is Paula Pant. I trained in economic reporting at Columbia and I help you do what matters most. every other episode I answer questions that come from you alongside my buddy, the former financial advisor. Joe Sal C-See-high.

What's up, Joe? What's happening, Paula? I am having a great time. How about you? People don't know that we were going to start recording about 45 minutes ago, but we were too busy laughing. Yeah, we've been having a great pre-show meeting. It's been a barrel of laughs, a bucket of monkeys, whatever the expression is.

But also coming up with some great ideas that are going to help the conversation. community in the future. Absolutely. We're going to kick off with this question from a woman who is 60, and I'll let her explain her current situation. I am 60 years old and recently laid off from a job that I held for about three and a half years. I'm not really feeling super confident about my ability to become re-employed at this time. I own outrun. a triplex. I live in the smallest unit and I rent out the other two units as vacation rental properties. I generate from that about $30,000 per year net. I only have about $50,000 in 401k retirement funds. In addition to that, I have about $150,000 in cash. Long story,

but I used my 401K funds as a down payment when I purchased my Triplex. It was a really great opportunity for me as a single mom really struggling to support kids during a really bad economy where we lived in particular. And it enabled access to generating income from a 401K that I otherwise couldn't really touch and benefit from. it was really vital to my survival at the time and has proved to be a positive move. On the other hand, now I'm 60 and I don't really have a lot of retirement. I use the rollover for business startups, Rob's account, to do that.

And I know there's some exit strategy that I'll have to figure out when it comes time to sell. I feel like I can almost live on the 30,000 net and maybe pick up some small job here and there. But I'm just wondering if you have any thoughts on Rob's, on how poorly my retirement account is now funded. I lost my 24-year-old son to cancer about nearly two years ago. And everything has changed. So just wondering if you had any suggestions for someone who won't be getting a whole lot of Social Security, maybe $2,400 a month when I turned 67. And no real pile of money, but I have a house that makes a decent amount and I live here happily. So thanks for your help.

Wow, I'm so sorry to hear that. It's a tough, tough situation. Joe and I talked about this quite a bit. We have some ideas, but before we get into those ideas, we have to give her a name because she's an anonymous caller, and we give every anonymous caller a nickname. So what do you think, Paula? Normally it's Joe who gives the nicknames, but all right. My turn, I see. Okay.

My first thought was Betty, in honor of Betty White. because Betty White, who recently passed at the age of 99, had what appears, as far as I as a layperson who's never met her can understand, Betty White appears to have had a wonderful, wonderful time in her 60s, her 70s, her 80s, and her 90s. She was working throughout those years, but she was clearly having an amazing time doing it. She was in great health. She was having fun. She was laughing. She was doing creative, fulfilling work. She worked until the age of 99, but she so clearly loved every second of it.

She had more fun at 99 than most of us have at 30. So in honor of the example that Betty White set for how to have a great time in your 90s. Let's help her create that future. Yeah, exactly. So this caller is going to be named Betty. Awesome. So I think for everyone, we should explain what Betty's talking about when she says a Rob's account. Because I think a lot of people, Paula, haven't heard about this.

It isn't actually an account. It is a rule. It's kind of a loophole that allows you to take money tax free out of your 401K. And I know what a lot of people are saying. What? I can do that. That's awesome. Maybe not so much.

Because the way a Rob's account works and what Rob's means or the Rob's Lukehole works. It's a rollover as business startups. So Rob's, rollovers as business startups. And you're rolling money over from your 401k or your retirement fund and you're putting it toward starting your new business. And the cool thing about that is if you have a new business, then you don't have to find outside financing or if you're struggling to find outside financing, like Betty with this triplex she wanted to buy. She maybe wasn't able to get outside financing, did want to look at outside financing. She was able to create this business, which is the triplex, and then roll money over tax-free

to fund that business in the case to pay for the triplex. Legal, yes, absolutely. Significant downsides are exactly what Betty was talking about. Number one is she talks about how she might have to unwind some things later. Well, to do a Rob's account, you have to have a C corporation. A lot of people operate as an S corporation. A C corporation is a whole other level of tax filing. It's going to jack up the rate that your accountant charges. You're going to have more administration fees. When you look at a C corporation, these are major companies usually in the United States that operate as a C. There's also double taxation on a C corporation because you're paying corporate tax and then you're also paying individual tax. Yeah. So there's some downsides there. Second piece and the piece that most experts weren't about is exactly what Betty is, you know, a big source of her frustration is, yes, it helped me get through this time when I absolutely needed the money, but I took that money away from my retirement. And now I'm looking at the other side of that and I don't have any significant assets in place for retirement. So we often look at the present, which means mortgaging our future. And a Rob's account makes it really easy to do that. So in terms of unwinding, it's actually not that hard.

You just have to shut down the C corporation. Your accountant will know how to do that. And you'll be fine there. The bigger question is creating an income stream in the future. Because Paula, my first question was when she said she has net $30,000 coming in from this triplex, we have the stacking deeds podcast. And one thing, all of our guests, you included, always asks is, does that include money that should be set aside for upkeep in the future? And the answer, sadly, especially when somebody is trying to extract as much water from that sponge as they can possibly get, she might also be robbing that account.

Might be going, you know what, I'll deal with upkeep later. Right now. I've got to keep a lights on. So I'm taking every dime that I can get, which is a mistake. Right. So that 30,000, Paula, might not even be 30,000. Right. Well, I'll take the optimistic side of this, which is, number one, we have no idea how she's calculated that 30,000 net.

So it's entirely possible, and I don't want to make any assumptions, it is entirely possible that when she says 30,000 net, what she means is that after setting aside money for major capital expenditures and normal repairs and maintenance, after all of those set asides, she's netting 30,000. I hope that that's the case. I hope so too. Yeah. And if it is, and that was really less caution for Betty than for anybody else. Anybody listening to this? That is the thing I think new real estate investors get wrong is their first time.

They're like, oh, look, this net's out this much. Yeah, no, it doesn't. If you want this house to still be pretty 10 years from now and attractive to future tenants. Right. It's not as rosies you think it is. Right, right. The other optimistic piece that I will take on this, the other optimistic angle is She has an incredible asset, which is a fully paid off triplex.

And so, Betty, I want to congratulate you for having a fully paid off triplex. That is the equivalent of having an annuity or having a retirement account with a huge balance in it. It's the equivalent of having a portfolio that is large enough that it would generate a $30,000 a year. annual withdrawal. So if you use the 4% rule of thumb, then that is the equivalent of having a retirement portfolio valued at $750,000, which is absolutely incredible. I have to applaud you for that. That is a huge asset that you have. So props, congrats. Absolutely. The other good news there, Paula, that property, just over the normal course of time, what does real estate do? It keeps up with inflation. Yes. So that will do it. And if Betty is vigilant about her rents, and sometimes people

aren't, we get lulled into, well, I really want to keep this tenant. And so I'm not going to raise the rent this year. But if you're vigilant about your rents and you make sure those should also go up with inflation. So that 30,000 today, I really, if I'm vigilant, I don't have to worry a lot about whether I'm going to keep pace with the price of bread going up. Right. Which when talking about protecting a 30-year retirement or a 40-year retirement. I mean, you're 60. If you like Betty White, expect that you will live to 100. You've got 40 years ahead of you. And to have an asset that is inflation protected is enormous. So. Well, Paula, then that leads to, I think, the big win that Betty could have here that I saw. Because I don't think it's about being a genius,

and getting, you know, phenomenally complicated with your investing strategy. It's just making sure that everything is working toward the end goal. And if the end goal is to make your money continue to produce a paycheck, the triplex, it sounds like is doing that. It has helped her in the past. It can continue to help her in the future. $150,000 sitting in cash is not, is not. And at the very least, we need to make sure that's keeping up with inflation,

but when she says that she thinks she can live on 30,000 a year and maybe a little more than that, then we know that if your emergency fund is three to six months, maybe even a year if she's going to be really conservative sitting in cash, I think that there is some room there to make sure that that money keeps up with inflation. Right. At the very least, it should be in a high-yield savings account, but I think that at least half of that money, should be in a spot where it protects five years out, ten years out from now. That money really, really could be moving better. Right.

Yeah, that struck me as well. I don't quite understand the logic in having $150,000 in cash. Absolutely, I agree. An emergency fund that represents between six to 12 months of ordinary living expenses and an emergency fund that represents six months of gross rent on the triplex. So, Betty, whatever monthly rental amount you collect on that triplex, that monthly rent, time six, put that aside. That's your cash reserve for the triplex. And that is separate from your own personal emergency fund. So that is the amount of money that you should be

keeping in cash. Everything else should go into investments because in cash it's losing value to inflation. I would do then the same. She didn't mention what her retirement funds are invested in. And it's funny because, you know, when people's account isn't as large as they'd like it to be, they go, well, I don't need to worry about asset allocation that much because it's not that much money. You need to worry about even more because it's not that much money. Like, we need to be careful with that money that's sitting in the retirement account. So she didn't tell us what that's invested in. But here is the way that I would look at this, Betty. I would start projecting out when you think you're going to need that money.

And then if that money is money that you want to have propel you for after age 70, then I think going into something like the Vanguard Total Stock Market Index is a great place for it. If you think you're going to need it five years from now or a piece of it five years from now, I would not put that money in the total stock market index. But I might have it in a good, solid bond fund. fun. But that's if it's five years or longer. We've seen the bond fund do bad, bad, bad things over short periods of time. So we want to... Bad, bad things. Wow. That sounds serious, Joe. I can't believe CBC's missing out on this. There should be a show. There should be... The bond market's

been naughty. Go on, go on. The bond market is scary in a less than five-year time frame. Yes. Over 10 years. Actually, over seven or eight. years, the bond market is scary because it's just going to not give you the oomph that you need. Once you get to 10 years, I think, having money in things like a diversified stock market position, like the Vanguard Total Stock Market Index is a great place to be. And if you don't think that's safe, if you're like, I don't know about this stock market thing, I would read Jail Collins book, the simple path to wealth. The other recommendation that I would make, and I say this for the sake of reducing friction and keeping it simple, the Vanguard Target Date Fund.

I'm a huge fan of that. Now, I want to put an asterisk here. Target Date funds at other brokerages often have high fees, so I don't recommend a Target Date Fund from just any old brokerage. But the Vanguard Target Date Fund specifically has incredibly low fees. In fact, if you were to try to piece together the constituent elements of that target date fund, you'd be paying the same thing. They don't put an upcharge on it, which a lot of other brokerages do. And you can, if you want to get a little bit fancy about it, you can buy a couple of different target date funds for different years. So you can buy target date 2030, 2035, 2040. I mean, if you wanted to, you could split your money that way or Joe's making faces,

for those of you not watching on YouTube. Or for those of you listening in audio and you can't see the YouTube. Joe's literally just stuck his tongue out. I still maintain. If you want to do it that way, you can just so you can have a little dose of choosing a different risk profile than the one that's assigned to you. Because the premise behind a target date fund is that everybody in the same timeline cohort has the same risk tolerance, whereas your mileage may vary. So if you want a little bit of personalization, sure, go five years above, go five years behind. Fine. Cool.

If you don't want to bother with that, that's fine too. just stick with a target date 2025 or a target date 2030 and put everything there and call it a day. I think that'll work fine. I think that is, I just think we don't need target date funds. We disagree again. Well, I think it's meant to reduce complexity and make it easier. And you know what? I think it's not nearly as difficult as people make it.

I think people make investing seem between our ears. and I think the concept that there has to be a target date fund because I'm too dumb to do this without a target date fund just drives me crazy. And it creates two layers of friction. Layer number one of friction is, is the target date fund actually moving at the time that I needed to and not just a class of people are needed to move? And then second, who is the person administering the target date fund really protecting? They protecting me? They're protecting themselves. And there's a lot of research that's come out recently that has shown that the target date fund family, Emily is really being more conservative than they need to be to avoid lawsuits. Yep, exactly.

Which is the reason why I think there is an argument for using target date funds, but going 10 years out beyond your actual date. Why would you just stick with the Vanguard Total Stock Market Index then? The J.L. Collins strategy, two funds. You're completely diversified. You don't have to worry about it. Plus, you have a little bit of understanding of your strategy then, which I think if you understand a little bit of your strategy, I feel like I press the target date button.

then I go to sleep and I don't understand anything that I have. If I use the J.L. Collins strategy, well, then I understand what I'm doing, which makes it stickier. And I like that better. And I think you're smart enough to do it too. I got a lot of pushback on this when I did my book tour, Paula, people going really, because, you know, I go hard against Target Day funds in my book. And I don't think anybody, I just don't hear that very often. I hear so many responsible people like you recommending Target Date funds. Yeah. And I just, I think. think, we just don't need it. We just, we don't need it. My stance is if it reduces friction and it gets you in the market, it's a simple way to get people invested in a manner that is congruent with

their timeline. You know, and you can argue maybe it's a bit too conservative, but it's at least directionally congruent with that timeline. I don't disagree with any of that. I just think going to the next step is a lot less work than people think that it is. We see it as this big thing. It's a lot less work than you think it is. It's maybe one-tenth more work, maybe even less than that. And you have an asset allocation that is yours specifically and not for a group of people, which behaviorally always makes it stickier. If I get what I'm doing, I know how I'm going to mess it up and I'm not going to mess it up because I get why I have the money there. I want to do that. So I think there's short-term win by the Target Day fund, long-term win, do an easy bit.

more work, and I think it'll last you a lifetime. Yeah. Well, I mean, Betty, whichever one of those you want to do, I have no objection. I totally agree, Paul. In the big scheme of things, that last 10 minutes that we just did, don't get caught up on that. Right. Don't. Because the important thing is that you invest to the $150,000 that's currently sitting in cash.

Yeah. Yeah. Part of it, make sure you're in a high-yield savings account with the piece that is sitting there. The emergency fund's got to be in a high-yield savings account. Yeah. Got to be. Yeah, exactly. And then beyond that, everything else should be invested.

Again, you want a personal emergency fund and then separate and distinct from that. You want cash reserves for the Triplex. Yeah, those shouldn't touch each other. Right. Exactly. Those should be two separate accounts. So they're mentally bucketed in separate accounts and they are physically held in separate accounts. Well, and also, Paula, for her specifically, because she used the Rob's loophole,

she has to have the C Corporation, really in that C corporation, you got to make sure that that money is in a C corporation's separate account that's inside the company. Otherwise, you're going to get some IRS attention that you truly don't want. It's going to be difficult to defend. How am I mixing my corporate money with my personal cash? Right, right. So with an LLC or with an S corporation, those are pass-through entities. You still want to maintain a separation between business and personal accounts. But, But with a C corporation, it's not passed through on your taxes. And so maintaining a strong corporate veil, which basically means a barrier, a brick wall between what's corporate and what's personal is more important. I mean, it's important for all of the above. It's important for LLCs, important for S-Corps, important for C-Corps. But at least LLCs and S-Corps are passed through to your personal taxes, C-Corps are not. So I want to address the. occupational portion of Betty's question because she was laid off at the age of 60. I'm so sorry to hear that, Betty, because that is a tough, tough situation to be in. We live in a society that has enormous age discrimination, and it is, as you know, incredibly difficult to get a job when you are in your 60s. But I love your spirit and your attitude when you talk about the idea that you can still find work. You can still do some work, maybe full time, maybe not, that carries you through the next couple of years.

And I want to encourage you, Betty, to dream big because you have not indicated that you have any type of health-related restriction. Let's look at the golden lining here. I'm not even going to say silver lining. This is golden lining. What's better than gold? This is platinum lining. Right? Let's look at the platinum lining here.

As far as I'm aware, you don't have any significant health restrictions that would limit your ability to work, particularly if it comes to computer-based knowledge work, which you could do remotely. And that means you have, through the Internet, the world at your world at your, fingertips. I realize I sound like I'm a 1999 ad for the information super highway, but truly, you could do anything. And what's beautiful about remote online-based opportunities is that no one has to know your age. Right now, I'm in the process of hiring thumbnail designers for our YouTube channel. I have no freaking clue how old any of them are. They could be 20. They could be 80. I have no idea because all of our communication has been through messaging. It's been through Twitter. It's been through email. All right. It's all been entirely remote communication.

And I have been assessing these candidates purely based on the quality of their thumbnail design. I've no idea how old they are. And it's not relevant. I mean, I genuinely. I genuinely. don't know, nor do I care. I think a lot of the time, Paula, especially when someone is age 60, they start to feel maybe some ageism, right, that people are going to discriminate against them because they're not sure how long the arc of their work is going to be. So I think that there's a confidence, a lack of confidence a lot of the time, right? That even before I go, well, heck, I think we could hear it in Betty's voice, the lack of confidence. I'm not sure that I'll be able to do it a great place I think to gain confidence here is Arthur C. Brooks' work, which he's got a great

book called From Strength to Strength, which talks about our decline as we get older in some areas of our life, but then reattaching in the second half of our life to areas where older people truly have strength. Older people learn faster than younger people do. Older people are better at assimilating knowledge that other people have already made and figuring out where to put it. So they're better teachers. They're better mentors. So anything that really flexes the strength that people over 60 have, it's funny. As I listened to his book because I listened to the audio book, I was just struck by the fact that the world kind of knows this. I had never heard Brooks work before. But then as he's making his case, I'm like, you know what, I usually do see older

people succeeding there. And I see the universe kind of going, I'm going to somebody who's older for this particular role. So I also wouldn't fight gravity. I wouldn't fight to be something that you're not. I would look at where is the confluence of what I like to do and what are people hiring for? And as I continue to get older, where am I going to have strengths where younger people don't have this strength? Going back to Arthur Brooks, he's a Harvard professor. He has been on this podcast twice. We will drop links in the show notes to both of those episodes. But right now, I'm actually going to play a clip, something that he said that relates to what we're talking about right now.

Early in your career, what makes you good is fluid intelligence. Fluid intelligence is the ability to solve problems, answer other people's questions, get to the heart of the matter to innovate really, really fast. You can be a cowboy, a sole proprietor. You can do things better than anybody else. So hot shot, strivers, they have tons of fluid intelligence, but it declines. So what Ramigatel showed is that because of the structure of the brain and the way it works, that between 35 and 50, just like I saw in my data, that your fluid intelligence is declining. It gets harder and harder and harder for you to do those things.

And it's normal and it's natural. But here's the good news. There's another intelligence curve lurking behind it that's even better called crystallized intelligence. Now, that's an intelligence that doesn't require or doesn't rely on speed of analytic capacity where you can solve problems quickly. It requires that you know a lot of stuff and know how to use it. So you go from being able to answer anybody's question to knowing what the right question is and who to ask. Now, think about it. Now, which one you want?

You want the one where it's like, yeah, I can answer any stupid question, but I would prefer to come up with the right question and know where to get the answer. And that's what crystallized intelligence is all about. And that if you develop it, if you pay attention to it, you know, struggle to stay on your first curve, then happiness is in store for you. But you have to know how to develop it. You have to know how to cultivate it and you have to know how to use it. So would it be accurate to describe crystallized intelligence as the synthesis of many ideas across multiple disciplines that emerges over time? Yeah, it's also known as wisdom. So one of the things that you notice when you talk to somebody who's wise, they tend to be older. I mean,

there are some very young wise people, but you notice that the people who are the wise people you've ever met. It's like your grandma, why? Because your grandma's been around the block a thousand times. She's seen everything. She's had every experience and she can use all the information that she's got. She can't come up with a recall of somebody's name in 74 milliseconds, but she knows a whole lot of people and knows a whole lot of things. And then she can put them together into a coherent storyline and give you unbelievably good advice. That's what it means to have crystallized intelligence. Now, you can synthesize knowledge across many fields. You can tell stories based on other people's work. Here's the weird thing, Paul. When I first got my PhD, I'm an economist. I was writing this mathematical theory that today I don't even understand. It's like it was a different person

writing these papers. But now I write for the Atlantic and I'm looking at everybody's research. I'm reading 15 academic journal articles in week written by these hot shot brilliant young scholars. And they don't really know the significance of their work. They don't really know how you could apply it to your life. Now, when my fluid intelligence was really high, I was writing papers like that. Now when my crystallized intelligence is a lot higher because I'm 57 years old, I can take other people's big ideas and put them together into a storyline and tell you how to use it. And I'll take this eight days a week because I actually can give people ideas on how they can live happier, better lives based on the best science. And I couldn't do that when I

was creating the best science. That was me inadvertently plugging your show, Paula. Well, thank you. Go back and listen to that whole interview. I want to hear more of that. The biggest takeaway that I got from him, and I think he's brilliant, is he talks about the distinction between fluid intelligence and crystallized intelligence. And when you are young, you have this fluid intelligence that allows you to pick up deep skills quickly. So when Arthur Brooks was in his 20s, he was a renowned musician. He played at Carnegie Hall. In fact, he famously fell off the stage at Carnegie Hall and damaged his instrument. As he got older, he realized that he was not able to do the deep hours and hours of deep study on a musical instrument that he could when he was 19, but he could synthesize between

disciplines in ways that he couldn't when he was younger. In fact, he says that for many professions that require synthesis across multiple disciplines, so interdisciplinary or multidisciplinary disciplines, people in those disciplines tend to thrive at later ages. And if you think about running a business, running a business is the ultimate multidisciplinary discipline. So it's no surprise that some of the best business leaders are older. The CEO of Nvidia is in his late 50s, early 60s, and he's considered young by the standards of a Fortune 500 CEO. Warren, Warren, Buffett is in his early 90s, and he is the active CEO of Berkshire Hathaway. And for anyone who doubts that a person in the early 90s could operate a business that is

as robust and as profitable as Berkshire Hathaway, just go to the Berkshire Hathaway annual shareholders meeting in Omaha every year or watch a taping of it if you don't want to go there personally, every single year, Warren Buffett gets up on stage in Omaha with Coca-Cola and peanut brittle, and he sits there for six to eight hours, totally unscripted, and answers questions. This is a point, by the way, that Chamoth Polyhapatia made on the All In podcast. This observation is coming from him. He sits there for six to eight hours, unscripted, and on stage in front of all of his shareholders in Omaha. answers questions about Berkshire Hathaway.

And if you have any doubts that a person in his early 90s is capable of running Berkshire Hathaway, just watch that shareholder meeting, watch him talk eight hours unscripted about his company. And if you as a shareholder doubt his capacity, then you're free to sell your shares afterwards. But nobody does because there's enormous confidence in him, even in his early 90s. In fact, it's funny, there's a lot of trepidation about what happens. happens when he's gone.

Exactly. Are we going to hand it over to the kids? We don't want to hand it over to the kids. Right. And by kids, we mean anyone. Oh, he is 93 years old. And by kids, we mean anybody in their 70s. We don't want to hand it to those whippersnappers.

They don't know what they're doing. So, again, I want to give proper attribution to that observation. That attribution comes from Chamoth. But it's a brilliant observation because it highlights that if you have the right attitude if you have good health, both physical and mental, and if you are in the proper field, if you are in a field like running a business, which is by its inherent nature, interdisciplinary, multidisciplinary, and requires synthesis across a broad range of ideas, you thrive at that in your 60s, 70s, 80s, 90s.

Yeah, for Betty, if running a business freaks her out, I mean, he talks about just the concept that older people are generally better storytellers. Older people are able to be better coaches, taking the things that they learn and coaching other people. Sometimes there are people that are you're talking about entrepreneurs. There are people in every business that are entrepreneurs. And in fact, businesses rely on entrepreneurs, people inside the business who kind of act entrepreneurial because they're really helping everybody be better at their jobs to get where they're going.

I mean, I would think then older people would usually be then better in the human resource function, right? Because they're taking all this stuff that other people already created. They don't have to create something new. They're teaching people how to more effectively use the things that are out there. And that type of crystallized knowledge is something that the world, I think, largely, there's always going to be people that don't, but largely understands are going to be great and maybe better than younger people in that role. The big thing here, though, I want to go back to, Paula, is this is all about confidence. Because I heard it maybe this is misplaced, but Betty didn't sound confident. Yeah.

And I think that that starts with learning where your strengths are and really then being able to go into an interview situation or a strategic job search where you have confidence. I think competence builds confidence. And so getting competent about where your strengths are is going to give her the confidence she needs then to find that work that she'll find both rewarding and profitable. Yeah. Betty, I don't know what you did for work prior to this. But I wonder if the first step is figuring out what service you want to offer from this point forward.

Where is that intersection of what you're interested in, what you're interested in, what you want to be good at, whether or not you have a skill in a particular domain yet, what is it that you're interested in? What is it that you want to learn and you want to become good at? And how does that intersect with what the world needs? You find that Venn diagram intersection, what interest, skill, and what the world needs, what the world needs and what the world is willing to pay for. Find that Venn diagram intersection. That is the service that you offer. And the beauty of running a service based one-person business, the beauty of being a remote contractor who offers a service, is that there is no startup capital that you need, literally none.

The thumbnail designer, the leading one that I'm most likely to hire, I found him on Twitter. I found him on Twitter because he was building these mock thumbnails and he was tweeting them and he would tweet them. He was following all of these other Twitter accounts that tweet about, YouTube thumbnail design. There was one particular account that said, hey, unofficial design contest, drop your design in the thread below. And so I just looked through that thread below and I found his and I was like, wow, the people who are dropping thumbnails in this thread self-select as the type of people who are following a thumbnail design account. Right. So these are already

people who are into thumbnail design. And among the people who have self-selected, here. I'm looking through this thread of a bunch of thumbnails. And my personal taste is I think that this guys is the best. So I looked at his account and his account had a line in it that said, I'm open for work. I'm open for contracting. DM me. And I'm like, done. So I DM'd him and said, hey, I love your design. Here's my YouTube channel. I'd like to talk to you about potentially working together. What would it take? As of the time of this recording, we have not struck a deal yet. But I'm certainly interested in hiring him. And you think about, I don't know how old he is. I don't know what country he lives in. I don't know anything about him other than I like his thumbnails. I don't know where he went to school. I don't know what education he has. If he has any, I don't know. I don't care. Doesn't matter. Can he make good thumbnails? Yes or no. That's all that I'm hiring him to do. So, Betty, what is the skill that you either have or want to develop a very specific tailored skill that you can offer?

online with no startup costs, right? No initial capital. It'll cost your time, but it won't cost you any money. What is it that you want to throw yourself into? And this can be the beginning of a multi-decade new passion, a service-based business that costs nothing to create other than your time that you absolutely love because you have autonomy. You have mastery and you have purpose, right? Those are the three attributes that make people love their work, autonomy, mastery, purpose. And mastery, if you're learning a new skill, you are developing mastery in that skill every day. That is inherently gratifying.

Autonomy? Great, you're working for yourself. There's the autonomy. And then purpose? If the service that you're offering is serving great clients who are working towards a mission that you believe in, there's your purpose. But I agree with Joe. It's rooted in confidence, and confidence comes from competence, and competence comes from putting in your reps. Thank you, Betty, for the question.

Next, we're going to answer a question from a listener who thinks that she might be able to save $600 a year on a benefit that she's paying for that she might not need. Is she right? And after that, we are going to discuss a question that comes from someone who is grappling with the unintentional. consequences of early retirement. All of that is up ahead, but first. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient. They're also powered by the latest in payments technology, built to evolve with your business.

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You can get up to 70% off during Wayfair's Black Friday sale. Wayfair has Can't Miss Black Friday deals all month long. I use Wayfair to get lots of storage type of items for my home, so I got tons of shelving that's in the entryway, in the bathroom, very space saving. I have a daybed from them that's multi-purpose. You can use it as a couch, but you can sleep on it as a bed. It's got shelving. It's got drawers underneath for storage.

But you can get whatever it is you want, no matter your style, no matter your budget. budget, Wayfair has something for everyone, plus they have a loyalty program, 5% back on every item across Wayfair's family of brands, free shipping, members-only sales, and more, terms apply. Don't miss out on early Black Friday deals. Head to Wayfair.com now to shop Wayfair's Black Friday deals for up to 70% off. That's W-A-Y-F-A-I-R.com. Sale ends December 7th. Welcome back. Our next question comes from Noelle. Hi, Paul and Joe. This is Noelle in Tennessee. Thank you for taking my question. Really big fan of the show. My question is about how to know when you don't need life insurance anymore. I am 40 and my husband is 49. We do not have any children. We own our home and we don't have any debt. We plan to retire at 50, which is next year for him and in 10 years for me. And the plan is to live off of my income until I retire, which is $80,000 a year.

And then when I retire at 50, he will be 59 and a half, and we can start taking minimum distributions from his retirement accounts. We were recently discussing his whole life insurance policy because I'm not a fan of whole life, and it's pretty expensive. We pay $52 a month for $100,000 whole life policy for him. And I would like to cancel that policy so that we could invest that money instead and make more off of it. But then we're not sure if we should cancel my life insurance. insurance policy. I have a term life insurance policy for myself of $100,000. We pay $16 a month

for it. I believe that that should stay at least until I retire, because in the next 10 years, if something happens to me, he might need that income so that he doesn't have to return to work after retiring early. We have 33,000 in cash savings and $504,000 in investments. between our 401k, Ross, brokerage, and HSA. I hope that was enough details. I'd love to hear your answer. Thank you. Noelle, first of all, congratulations on being so close to an early retirement.

One year away for him, 10 years away for you. That is absolutely incredible. Steve, can we get a round of applause? Noel, Joe and I actually have not discussed our answer to this beforehand, so I'm going to state what I think, and I'm curious to know. Will Joe and I agree or is this going to be like ding, ding, ding, ding, fighting match? But my take is, Noel, I think that you are spot on. I think cancel his whole life insurance policy.

Maybe keep it until he retires, which is coming up in a year. But I would cancel it when he retires. But keep yours because term life insurance $16 a month. It's great coverage for the next 10 years. If something were to happen to you, if the worst were to have to have. happen, he might still need to find work again, but he would at least have a runway of more than a year before that happens. So if something were to happen to you in the next 10 years, your income is $80,000. That's the income that he would need to replace. So even after funeral costs,

even after all of those other expenses, he would still have a runway of a year, really over a year, more than a year, to look for another job. So I think that keeping term life insurance on you for the next 10 years is a great idea. I don't see any reason to have it on him. My answer is actually, Paula, very close to yours. And just to cut to the final answer, the answer is I don't know. Ooh. But let me tell you how you think about this. Because much like I don't like target day funds because it takes away from us knowing about how our money works, which makes it less, our plan less sticky. Also, I don't like life insurance rules of thumb

because of the fact that it's not that hard to know how life insurance works and really how to make a good life insurance decision. And once we know kind of the methodology of how to think about life insurance, we will make a good life insurance decision. Here's how we do that. And We start off with kind of Noel what you were talking about. I want to keep mine because if I pass away and I'm the one that's going to keep working, he may need that money. The A number one question is how much money will the other person need or the family need or your community need, whatever your goals are when you pass away, how much will they need to make it through

to be financially independent? So as an example, when we look at his life insurance, we know that you have enough with you working for financial independence to still be viable without his work. And I'm assuming that, Paula, I'm assuming that their plan lands them 10 years from now based on the lifestyle that they want to get financial independence. If it's not, and it turns out they're actually going to be behind and they don't have enough, Well, number one, they need to change the saving strategy then. But then number two, you might need to keep the life insurance in place.

I do firmly agree, Paula, with what you said, though, about whole life insurance. The chance that they're going to need this insurance for their entire life is probably zero. Yeah. So while I can make a case for whole life insurance in some scenarios, and I think you can too, those are very few scenarios. What I would do is this. If it turns out that you do still need life insurance on him, either way, I would cancel it now. But I wouldn't do that first because often what I've found is that people have, sadly, medical

diagnoses that they don't know. They have things going inside their body. They have no idea about. Now, I've seen people cancel life insurance first. And then they go, Paula, and they go to grab the new term life insurance policy that they could have that'll save them, not the $52 a month, but maybe a huge percentage of that. Because you could still get term life insurance for a much cheaper cost than $52 insurance. $2 a month. But they cancel the first one. They go to get the term life insurance and they get

denied or they get rated, which means it's going to be super expensive. And you ask why. And they're like, well, you know, the medical test that you took showed that you have these problems that you didn't know about. You don't want that shock. So what I would do first, and this is the appropriate order of operations, apply for the new life insurance if you need it. Step one for him. Apply for term life insurance. Make sure that you have it. The second that you have it, then cancel the whole life insurance policy. And you'll get two cool things that happen. Number one is you'll recoup that $52 a month that you can apply toward the term life policy or to your life. But then you also get all that cash back from the inside of the policy

because a whole life policy is fueled by cash value. There is money that's being saved inside of this policy that is meant to propel it after you stop paying for it. So people often will hear this term for life insurance. It's paid up whole life. Paid up really should be prepaid. I just prepaid for my later years of life early on when the cost of insurance internally was much less to make sure that I have coverage for the rest of my life. And the insurance company can afford to pay me when I pass away or pay my family when I pass away. So I think the first thing is this very simple analysis of, is there enough money for financial independence?

If there is. And Paula, I kind of agree with your gut. probably is because I feel like Noel's done this work. If they have done it, they're sure that they don't need that. Kill the policy. You're good. On hers, same thing. She is term life insurance, which is probably the right type of insurance. But do they have the right amount? That right amount is going to be based on what's the amount that he would need if she passes away. Now, the bad news is that's going to be a diminishing number over time. So there will come a time when you're paying for life insurance that you don't need the whole thing. You might have half a million dollars of life

insurance and you only need $100,000 at that time. It isn't worth usually going and get another policy because as your age goes up, the cost per thousand of term life insurance goes up. It's still wasteful, but not nearly as wasteful as that whole life policy is. I don't know if I would bother switching from hold a term because he's about to retire. If he's a year away from retirement, may as well hold on to it for another year or another six months. I don't know why you would do that. If you don't need it, you don't need it. Yeah, just the effort.

But what I'm saying, Paula, is not, I'm not saying have term life insurance for a year. I'm saying if they haven't truly run the numbers on financial independence and they go, hey, he's retiring next year. But Noel working 10 years does not get us where we need to be. Well, then there still is a life insurance need. Based on Noel's question, I'm assuming they've run. the numbers on financial independence, they know that he can retire in one year and she can retire in 10 years and the numbers work out.

Yes. Assuming that they remain healthy and happy, the numbers work out. Then I would assume that your assumption about the assumptions would be then correct. And we would not need to go to term life insurance at that point. In fact, I would cancel the policy today. His policy. Yeah, his policy. Yeah.

So basically, Joe, you're agreeing with me. Cancel his policy, but she should get term life insurance for the next 10 years. You're agreeing with me and I'm agreeing with Noel. I'm agreeing with what Noel suggested. Yes, we're all agreeing with you, Noel. Yeah, exactly. Because Noel's smart and she's doing the right thing. Yeah.

So that's the second question, Noel, is, is that policy you have now sufficient to make sure that he still gets financial independence? Because a lot of the time, people base their, because they're using rules of thumb and their life insurance, and I'm not talking to Noel, I'm talking to the community. here. We base it on, do I have enough money to get through the next 10 years? Well, we don't just need that. We also need that savings that Noelle was going to probably continue to do to make sure the two of them together had enough money for financial independence 10 years from now. And I think you need an additional buffer. I mean, when it comes to life insurance,

the precipitating event, meaning the passing of someone, often incurs costs. I mean, there are often big medical bills that happen at the end of life that have co-pays and deductibles associated with them. And then there are funeral expenses. Death is not cheap. And so in addition to your normal day-to-day budget, there's some extra cost buffer that you need to cover the cost of death. I hate to say it that way, but that's what it is. Yeah, the good news is when it comes to term life insurance, that additional cost. I like a little slop on the upside, meaning give the person a little more while people are grieving,

you're not going to want to think about your asset allocation and making sure your money's in a high-yield savings account. You don't have to think about anything. So I will slop for bad diversification and underperforming assets. I would also slop for we don't know what is going to happen. When people are grieving, that's when your path becomes more uncertain. Like the one time when I was a planner that I had a really hard time helping people manage their affairs was when they were grieving was because of the fact that I didn't know which way they were going to go. Some people bury themselves in their work and they go 24-7 get tons of overtime and the side hustle's rocking because they just don't want to think. They just want to do. Other people just want to go away and be alone and not be with work.

And everybody's different. And so I like slop on the top end over and above what you quote need, what we call the capital needs analysis and financial planning above that to also mitigate the risk that you decide that you want to do nothing for a little longer. Yeah, we talked about that in a previous episode when we talked about how to handle an inheritance that if a person is grieving, assume that for at least one year that person is not going to. do anything significant monetarily. And in fact, that person often shouldn't do anything significant monetarily. You know, don't make any big investments. Don't make any, don't make any big moves when you're in grief. And the good news here is if you're in decent health, the cost of ensuring that is the additional amount, assuming you get the base amount that you need, the capital need analysis approach, ensuring a little bit more is not a big deal. Yeah. And the difference, just to tell people,

why Whole Life Insurance is so much more expensive, the term life insurance. Paula, we're saying to cancel this whole life policy, just categorically cancel it. And yet, out of the other side of our mouth, we're saying, you can be sloppy with terms, buy more, buy more. People are wondering, how can we do this? Why could we make that recommendation? Well, here's the thing. People will say, Whole Life Insurance is a rip-off.

It's not a rip-off. It's doing exactly what it says it's going to do. it is going to insure you for your whole life. So if the insurance company has an expectation that they're going to have to pay a death benefit to somebody, well, they need to recoup that money to stay in business. Right. So if there is a one-to-one ratio between the number of policies I have and the number of death benefits are they're going to pay out.

Right. I have to have a much higher cost of insurance than a term policy. These are old numbers. So the numbers may have drifted. But I believe the number is between. three and four percent of all term policies actually pay out the death benefit. And the reason is, when the average person passes away, the term life insurance has expired. It's gone. Right. The term has ended and you don't replace it because like in Noel's case with her husband,

they finally reach the point that they don't need it. So it's great duct tape at a low cost for you and it's cheap for the life insurance company to do. So it's very easy for me to say you can be sloppy with term life insurance, where I wouldn't do that in a million years with whole life insurance. You want to be very careful every dollar you buy. Because Noel is essentially making, hedging the risk that she will pass away between the ages of 40 and 50. By virtue of buying a term life policy, the risk is she might pass away between the ages of 40 and 50.

The insurance policy covers that risk. If she passes away after the age of 50, she and her spouse already have a plan financially. of how he will handle that. And so that risk no longer needs to be hedged by an outside third party. Whereas with whole life, it's guaranteed you're going to die sometime. So, Noel, we have good news, which is that was the world's longest way of saying yes. Yeah, yeah. I think Noel's instincts, Noel's analysis is spot on.

I agree with everything she suggested. And, Noel, congratulations on being so close to retirement. That's incredible. Huge, huge props to you and to your husband. Big step. So thank you, Noel, for the question. And then coming up, Joe, we are going to answer a question, tackle a question also about early retirement. And this is about some unexpected consequences of early retirement, specifically as it relates to the money that you can take out from social security, your social security benefit. it. How does that get wonky when early retirement enters the picture? So we're going to talk about that up next. Our final question today comes from an anonymous caller who goes by the moniker, Sleepless in San Antonio. Hi, Paula. I wanted to call to ask about how to think about the impact of fire on social security benefits.

So I looked up my Social Security benefit recently, and it looks like currently the government estimates that I would receive just over $3,800 a month in Social Security if I retired at full retirement age. It looks like the way they calculate this, though, would be the average of the top earning 35 years of my working years. So let's assume that I'm 35 and I plan to fire at 45. In that case, I would have less than 35 years of working years. And so would the estimated benefit from the Social Security currently, should I lower that amount in my calculations of what I could expect for

fire. I wanted to check in with you on this and also whether it would ever make sense for someone to delay their fire plans in order to achieve more in social security earnings in their later working years. Thanks, Paula, for everything you do. Sleepless in San Antonio, thank you for the question. And before we get to the answer, we've got to give you a nickname. Joe, I'm I named... We can't just call her sleepless? Sleepless. Insomniac.

Joe, I named Betty. So it's your turn to name Sleepless in San Antonio. Well, the classic movie Sleepless in Seattle starts Meg Ryan, the Meg Ryan. And how can you go with any name other than Meg then? It's got to be Meg. Meg, all right. Well, Meg, to the latter part of your question, should you delay early retirement for the sake of getting a higher social security benefit? My question back to you is, why do you need it?

Retirement, voluntary retirement, is the conscious decision to earn less than you otherwise could and build a lower net worth than you otherwise could because you have made the conscious choice that other things in your life are more important, whether that's family, friends, hobbies, health, whatever it is, you've made the conscious choice. choice that time and freedom are more important than earning more and building your net worth, and you have enough assets that you can make that choice. Whether it's framed as, should I work longer to get a higher social security benefit, or whether it's framed as, should I work longer to make more money, which I can then invest to have a bigger portfolio,

I mean, six of one, half a dozen or the other, and frankly, between the two, investing your own money in order to grow your portfolio is actually more efficient and will give you a bigger payout at the end than just trying to beef up your social security account, assuming that you adequately save a substantial enough portion of each paycheck, which if you're talking about early retirement, you do. So why, in the context of making this conscious choice that you're going to trade your money for time, would you reverse that unless you need to? Right? It doesn't sound to me based on your question that there's a need there. Well, I don't like chasing additional benefits just for the accomplishment of more. To your point, Paula, I think if we start with the intention, what do I try? truly want my life and then see if that works out. If it works out without it, why then do I add

strain and complications and friction to this wonderful life that I'm designing so I can get an additional benefit which is not additive to that life I'm trying to create? Which I guess brings up the question, when do we chase benefits and when do we not chase benefits? I think What you and I just talked about is when you don't chase benefits. I do think sometimes, you know, if you're retiring early and you go, wow, this health care thing is just kicking my butt, is there a way for me to still get health care benefits and have largely an early retirement? Is there a middle ground? I can stop doing the thing I don't like doing. Get the life that I want and maybe have a little bit of a quote, mortgage on it, right, where I have to take on a job or roll or something.

that supplements it. I'm thinking specifically about my father-in-law retired before he was eligible for Medicare and he didn't have insurance from his company. And he thought long and hard about still working another five years to bridge that gap. But he didn't like the work anymore. He was done with that work. What he liked was kids. And he thought that being around youth was really fun. He was a gregarious guy. My kids, by the way, when he was alive, didn't even call grandpa. They called him Papa Dave, like he was a mafia figure because he was so funny. And he was a larger in life person. And kids loved him. And he got energy from being around kids. He became a bus driver, Paula, because every day he would get just a couple hours of kids and kids loved him.

Like, I know there's a lot of people listening going, I wouldn't be a bus driver. Like, no, thank you. But you know what's cool? He got to work part time. He got to be around kids. and he got to do the rest of the day doing what he wanted to do, and the school system paid for his health insurance. So he was able to bridge the gap by finding something that was additive to the design he was creating for his life. So I think in that case, if it's additive, then chasing benefits is perfectly fine. How do I find a way to make this dream of not working here anymore work? well, I can maybe piece it together that way. I like that. But if I'm just in search of more, I had a client, and I will just call him Mike, he came to me, he and his spouse, because they knew

that he could retire. They weren't certain, but they thought he could retire. I ran the numbers with them, made sure there was no mistaking the math, and he could retire. He would not retire, Paula, because he was getting excellent overtime. And he goes, you know what? They keep saying the overtime's going to go away. So when the overtime goes, goes away, that's when I will retire. Well, the overtime just stayed and stayed and stayed. And then all of a sudden, I get a call out of the blues that they need to meet with me right now. They find out that Mike has gotten this diagnosis that he's going to die in a year. But good news, the next six months, he's going to feel pretty healthy. So all of a sudden, this trip to Alaska, they've been putting

off because Mike couldn't put off the overtime. They decide that they're going to do it now. And I see Mike change and all the sudden he is happy. He's sick, but he's happy. His spouse is so freaking happy because she never liked him doing the overtime thing anyway, right? She's like, you got to retire, Mike. Well, he's finally going to retire and they're going to do all this great stuff in the next six months. They're going to pack as much life in as they can. But then Mike goes for a second opinion and he finds out that he has an even rare condition than he thought. And Mike is not going to die. Mike, if he takes this treatment, can live for a long, long, long, long, long time. And he's got this rare thing that is going to be kind of painful, but Mike is going to live.

And guess what Mike effing did? Oh, did he stay in his job or return to his job? That overtime. Oh. Got that overtime. There's not more hours. His spouse and I, Paula, beat the hell out of him. We were so angry.

His spouse especially was, as you can imagine, was just. angry. But watching Mike waste his life just in pursuit of more. And he had enough. And he had this dream and he was so happy. It was very frustrating. I think we sometimes overestimate the money and how, especially in our community, you know, because we're mostly money geeks, right? We overestimate the power of what the money is and I need more money. I need more money. But that other resource of time, we just don't get it back. Right. So pursuing more so I can get more social security, I would build the plan around less social security. And if you can do it, screw social security. Who cares? Let it go. Yeah. Yeah. What do you need it? What's it for?

But yes, if you're in the fire movement, you will have less social security is the direct answer. Exactly. If you're in the fire movement with the definition of early retirement as the cessation or reduction of income, then you will not only have less social security, you will also have a smaller portfolio than you otherwise could have. You will also have a smaller net worth than you otherwise could have. Your balance sheet at the end of your life will be smaller than it otherwise could be. That is the trade-off for... All these positives. Yeah, exactly. Yeah, for the trip to Alaska. That life might be longer because you get to spend more time at the gym. That life might be happier because you get to spend more time traveling or with your family.

But I can't even promise that. I mean, heck, it might be happier. It might be more miserable because you've just got time on your hands to endlessly ruminate, right? It could go in either direction. It could. Simply not working does not ensure happiness. If you decide to spend the time playing video games and scrolling social media and fixating on all of the wrongs that have been inflicted upon you,

then, yeah, you might not be working anymore, but you'll still be unhappy. So it isn't that early retirement brings happiness, but it does bring flexibility, it brings freedom, it brings time, and what you do with that is up to you. What if your goal is to play video games, Paula? Oh, well, you know, if you are genuinely

passionate about it, right? If you are a video game enthusiast and you start a YouTube channel about video games, that's different. That's a completely different thing. You're talking about just wasting time. I'm talking about unconscious habits, the stuff that you pick up mindlessly. Yeah. Yeah, the distinction is not the... It's the same as just watching Netflix because you got nothing to do. Yeah, it's the distinction between the person who mindlessly watches Netflix versus is Roger Ebert, somebody who's passionate about cinema. Those are two very different categories. It's funny. I'm reading a great book right now by Twyla Tharp. The Creative Habit is the name of the book. Highly recommend the book. It was a bestseller. So I'm not the only one that says this is a great book.

But I finally, I'm reading it a little bit like. We'll put it in the show notes. But Twyla talks about how she loves cinema. And she, Paula, conscientiously, does not watch movies because she knows that if she did, she would do nothing else. And she is so creative in so many other areas. And she found that her love of cinema is actually a barrier. So just us bringing up Netflix and talking about movies and your love of cinema, she loves cinema, but she clearly loves being a choreographer and ballet way more. Right. She's so good at it. She's like, I would create nothing if I watch movies because I love movies so much. It's all I would do. Wow. And there are some of those things, I think in all of our life where we're like, you know what, if I actually cut out this thing,

even though I quote, love it, how many things I love more would blossom? Cut the good to make space for the great. Isn't that wild? Right. Yeah. I hadn't really thought about that until I read Twyla. I was like, why would you do that? I read it.

I'm like, wow, that's a pretty powerful statement to yourself going, you know what? I think I can play for more. Right. Cut the good to make space for the great. So much of regret comes from settlement. for good enough, not taking enough risks, not striving for bigger. And I don't mean bigger in terms of income or net worth. I mean bigger in terms of the vision, the imagination of what could be. And that is so much bigger and more compelling than some boost to Social Security. So,

sleepless in San Antonio, Meg, if you're going to early retire, do it with gusto. do it full on. Embrace the lower benefit. That's the point. That's exactly the tradeoff that you're consciously choosing. What I love here, Paula, knowing what you're trading and willfully trading it away is a pretty powerful, cool thing. Yeah. Saying, you know what? Less Social Security. I'll take it. Exactly. Worth it. 100% worth it. Yeah. Yeah. Well, Joe, we have done it again. unbelievable. Absolutely. Where can people find you if they have not heard enough and they want to hear more of your ideas?

Mark Cuban did an interview recently where he talked about how when the market collapsed between 2000 and 2002, he avoided that and he used a strategy using options. So we talk about how Mark Cuban did it and we help you answer the question, should I do that too? Because I feel like whenever somebody sees these strategies, they're like, oh, maybe that's something I should be doing. So we walk to talk about unintended consequences. We'll walk through that too. Perfect. So that is all on the Stacking Benjamin's podcast. Available anywhere that the finest podcasts are found. Only the finest. Absolutely the finest. Well, thank you so much for tuning in. If you enjoyed today's episode, please, number one, share it with a friend, a family member, a neighbor, a colleague,

your dog walker, your babysitter, your mom's, grandma's, second cousin's third grade teacher. share it with everybody that you know. It is the single most important way that you can spread the message of strong financial health. Number two, please make sure you're following us in Apple Podcasts and Spotify. And number three, please subscribe to our newsletter at afford anything.com slash newsletter. You can also chat with members of the community by going to affordanithing.com slash community. Thank you so much for. for being part of this community.

I'm Paula Pant. I'm Joe Sol-Sehigh. And I'll meet you in the next episode.