BiggerPockets Money Podcast - Reached FI at 60: How to Switch from Accumulation to Drawdown with Bill Yount

Episode Date: January 16, 2026

You've hit financial independence—now what? How do you actually start spending the money you've spent years accumulating? Bill Yount reached FI at 60 after a 10-year journey, and he's figured out the answer. Bill shares his complete decumulation strategy—the detailed plan he built with a flat-fee financial advisor to transition from wealth building to wealth preservation. This isn't just theory; Bill is actively living this plan and stress-testing it in real time. This Episode Covers: Bill achieving financial independence at age 60 The psychological shift from saving to spending after a decade of accumulation How to build a comprehensive drawdown plan (and why Bill hired help) Working with a flat-fee financial advisor vs. AUM advisors Portfolio rebalancing when transitioning to retirement Risk parity strategy and how it fits into retirement portfolios Stress-testing your financial plan: running scenarios to ensure you won't run out Social security timing decisions and optimization Retirement withdrawal strategies: the 4% rule and alternatives How much to actually spend in early retirement Helping your kids build wealth without jeopardizing your own retirement Financial independence for late starters: proof it's not too late after 50 Managing the emotional transition from accumulation to distribution phase Investment strategy changes in decumulation If you're approaching FI, already there and uncertain about spending, or starting your FIRE journey later in life, Bill's practical, well-planned approach shows you exactly how to transition from building wealth to confidently living off it. Subscribe to our Weekly Newsletter: www.biggerpocketsmoney.com Want to be a guest on the show? Apply here: https://biggerpocketsmoney.com/contact/ Get 50% Off Your First Year of Monarch by using code ‘Pockets’: https://www.monarchmoney.com/ Connect with Bill Yount:  Website: https://catchinguptofi.com/ Instagram: https://www.instagram.com/catchinguptofi/ Connect with Scott and Mindy: Scott: https://www.instagram.com/scott_trench/ Mindy: https://www.instagram.com/_mindyatbp/ Follow BiggerPockets Money on Social: Facebook: https://www.facebook.com/groups/BPMoney Instagram: https://www.instagram.com/biggerpocketsmoney/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Bill Yount just did it. After a 10-year journey to catch up to Fy, he ran the numbers and discovered he'd made it. Now he's adjusting his portfolio to preserve wealth instead of building it. So how is Bill going to draw it down? That's what we'll be talking about today. And welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen. And with me as always is my already caught up to FI co-host, Scott Trench. Indy, that intro was fiery. I'm so excited to have Bill on from catching up to FI. Once again, we are going to discuss the moment he found out he achieved financial independence. We're going to discuss his decumulation strategy. We're going to talk about the comprehensive financial plan that he's built and the way he found his planner who manages his assets but does not charge an assets under management fee, which we are big fans of avoiding here at Bigger Pockets Money. So super excited for this discussion. Bill, welcome to Bigger Pockets Money.

Scott, Mindy, as always, it's great to talk to you. Yeah, it's weird being caught up to five. I've been catching up to five for nine years. and I'm not sure what to do with it now. For those who are unfamiliar, Bill's journey is as a doctor catching up to financial independence. And I think you realized, Bill, in your 50s, that you were not on track to have a comfortable retirement the way things were going and made a sharp pivot around those eight or nine years ago. To get to where you're at today, you did have that higher income and also the higher spending

that goes along with being a doctor. And I'm excited now to hear about the transition into financial independence. So can you tell us a little bit about what happened the last maybe year or so when you kind of learn that you were financially independent? Yeah, Scott, you're right. In 2016 or so, when I was around 52, I kind of woke up to, we're not ready. And over the last eight or nine years, my wife and I've been working very hard to get to FI, and I didn't think it was going to come for the next two or three years, but for my 60th birthday, which was just recently, I promised myself for retirement readiness checkup with a financial advisor. Yes, I am a traitor to the DIY movement. I decided to engage with

a fee only, flat fee advice only planner to see, hey, where am I? Because I'm not a spreadsheet guy and I'm not as good at drilling down on the numbers and I wanted a second opinion on, okay, how much longer do I have to go or am I there? Or where do we stand in this fog of Fogify? And lo and behold, after a meeting or two and inputting our data and expenses from Monarch, which we use to track our expenses and I know you support as well, he came back to me with the stress test plan and said, yeah, you have a hundred percent chance of success. you stopped work tomorrow, and I kind of sat there blankly staring at him going, no, that math can't be right. I just don't trust the math. So that's awesome. Walk us through what that math

looked like at the highest level. We don't need to get the specific numbers. We do know that you're kind of in that choppy fire range. I think that's safe to say in here. But tell us about, you know, what that process looked like and what were the factors that led to you having 100% chance of success with this financial plan. Yeah, I mean, we had to drill down our expenses, basically. How much we spending a month and I tracked our data for the last two or three years in Monarch. And then thankfully, my advisor used as Monarch with all of his clients. So it was seamless to just upload the data to him. We went into it and tweaked it, drilled down on average monthly and annual expenses. And, you know, our spend was, you know, roughly around 18,000 to 20,000 a month. And then we just looked at our

nest egg based on the 25 times rule and a portfolio that we're going to talk about to get there with a safe withdrawal rate of 5%. And he said, yeah, you have a huge chance of success in the portfolio that we will construct with you. And I was like, wait a minute, this doesn't make any sense. I'm not ready. I'm going to work tomorrow. I have no plans to stop working. You know, what do we do with this power of FI now? I've been a little confused since then. It's only been a month or two that I found out. And nothing has changed. It was kind of whoop-y, we're there. But then at the same time, it was big whoop because life doesn't change overnight, right? So walk us through.

What was the portfolio that you had going into this conversation with the financial planner? We took back our money from a private bank back in 2015, 16 and put it in Vanguard. And basically, for the most part, we've been in a three fund portfolio, 85% stocks, 15% bonds and cash, split between U.S. and international at about a 70, 30 ratio. And we sort of live there. I'd become victim to a little bit of tracking air following and market timing and made all these mistakes because I was having remorse that we weren't doing as well as maybe some others were. But in spite of all the mistakes, sticking to that kind of portfolio, the market cooperated basically other than 2022. And with a 40% savings rate, and we had gone from a single digit savings rate to 40% within about a year, but it did not change our lifestyle as much as we thought it would.

And so using that really powerful level of a savings rate and decreasing your lifestyle and decreasing your expenses simultaneously, we got there a lot faster than I thought we were. I got to stop you right here and ask about this savings rate change. You were at a single digit savings rate. You went up to a 40% savings rate, but it didn't change your life. So something changed. Did you cut things out that you were not really excited about? Or how did that change from single to 40? A couple things. My wife went back to full-time work. So the income did increase, which enabled a lot of it. We downsized our house, which was the big doctor house. We got into used cars and out of the leases and new cars. We did all the big rock moves that I think people as late starters should make in order to pull both levers, reduce lifestyle deflate and then inflate income and use that extra income to just throw at your savings rate. And it worked great. I mean, at 40 percent, We got there faster than we thought we would. Nice. It's so great about those moves because there's nothing special about them. Yes, you guys earned a higher income in a general sense, but that was your baseline beforehand. The fact that you deflated, you intentionally reduced the cost of your life, and you started

with the big items, housing, transportation, I presume your discretionary expenses also got under more control as part of this process, made it straightforward to go from a single digit savings rate to a very high one, and the money piles up and it works. and all of a sudden you're rich. And it's kind of like, what do I do with these new riches and how do I actually retire and set up my portfolio? So congratulations. And it's awesome just seeing, it takes time, but it's seeing the power of these moves play out to freedom in your life. Well, this is our message to all those late starters out there that feel that, you know, I got started late.

I can never catch up. And it's always a good time to start. It's always a good time to catch up to FI. You'll only sleep better at night and have more financial security. So the journey is for almost anybody, 10 to 15 years, if you can leverage a 30 to 40 to 50% savings rate or live on one income and invest all of that and throw it into predominantly equities for 10 years and then glide down to retirement. Anybody can do this. We've talked about this before when Becky was on with me, when Jackie was on with me. You can go from 50 to 60 and broke to retired in 10 years.

You've just got to be very intentional about it. The formula is tried and true. we followed the formula and we got there. It's not a miracle. It's math. One of the things I think is really interesting about your situation is you're kind of enough to share your numbers with Mindy and I. We're not going to discuss the specifics of your debt worth or anything like that or spending on the show here today. But we can say, I think, safely that your portfolio was not so large relative to your spending that you would be able to survive with a 100% chance with an all-equity portfolio. So walk us through what your portfolio look like before this call with the financial planner and what they're recommending

or what you're going to be switching to as a result of this to achieve this 100% success rate. Yeah, I mean, I'm not saying that people should have a 100% success rate. I mean, I think, honestly, 75% to 80% is what you need to work with. You are at risk of underspending at 100% success rate in these softwares. And we can talk about that too. So, yeah, it may be reassuring, but actually, it's reassuring in a false sense. Because as we know in our community, spending can be a problem. People go to Rameed Sethi to learn how to spend, you know, brand,

And in Gansch and Mindy and Carl, they've all become fine. And it's like, okay, what do I do with this fie? What do I do with this wealth and how do I spend it? So 100% chance of success is not necessarily a success in the truest sense. You know, the guardrails are somewhere else. Okay, if you have an 80% chance and you're monitoring your spending on an annual basis and making adjustments because no plan is perfect and no plan, they're all false as soon as you make them.

But, you know, where is that sweet spot? So, yeah, it was really nice to hear that we, you know, could meet. it based on our current spending. And it also brought up the concept of, okay, how do we give to future generations and our children now that we have FI and we have money more than we need? How do we help our kids grow their wealth? So a lot of questions came up when we found out we were FI. Your question, however, was what kind of portfolio do we move to? And we went from a three fund portfolio to a six to eight fund portfolio known as a risk parity portfolio. I actually specifically sought out an advisor that specializes in using risk parity portfolios with his clients.

And I had to use AI to find one. These are unicorns. These are a rare breed, but they do exist. And, you know, our friend Frank Vasquez has been on your show talking about risk parity. Well, Frank would be so proud, by the way, yes. I know. Well, he is. And I drank the Kool-Aid, not only because we went on vacation to get out of the South Africa,

but, you know, the math works. And once you dive into it and look, get curious. beyond three funds, you're like, I can still DIY it and I only need to diversify at retirement. And I think this is important for people to look at because there's a simple path to wealth. And that is one, two, three funds, all equities and then transition. But when you get to that pivot point of 80 to 100 percent of your fine number, you really got to focus on the simple path to wealth preservation. Can you tolerate the volatility of a stock market crash?

How do you ameliorate or limit that volatility so that you're not seeing deep and long drawdowns that could potentially cause you to have to work longer? So I was turning 60 and I was worried that if we have a 30% correction now in my current portfolio, I'm going to have to work longer. So I need to do something a little different to modulate that. And now a quick word from our show sponsors. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing.

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a few years of life expectancy. Found has over 30,000 five-star reviews from owners who say, Sound makes everything easier, expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's fowundd.com. Found is a financial technology company, not a bank. Bank. Banking services are provided by lead bank member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with FAM. Welcome back to the show. Because you are hatching up to FI instead of having a more steady savings rate over the course of your entire career, did you feel pressure to stay in the higher growth opportunities than to kind of diversify into the safer

funds as you get closer to retirement age? Because I've heard. so many different scenarios recommended, but like, oh, you shouldn't be all in 100% stocks. You should have a bond portfolio too. But 15% as you are getting closer to, you know, traditional retirement age seems a little low based on the 4% rule based on, you know, traditional retirement advice in general. Did you feel like you had to be in these higher risk, higher return investments because you had started later? This mindset thing and mentality of investing is very interesting. And I'm a bit of an emotional investor. I'm not good at the discipline of math, maybe say as Scott is.

And I could never be 100% equities. I just couldn't sleep well at night doing that even as a late starter. And that is the sort of typical formula. But as a late starter at 52, I was like, I can't do 100% equities. I just can't tolerate that kind of roller coaster. So I went 80, 85, 15 for about 8, 9 years. That's what I could tolerate. And bonds may be a bad word in this community.

But we do need to have sort of some ballast to our portfolios where we're able to sleep at night and we're able to tolerate a 20 or 30% drawdown. And for me, that's where we sat. Everybody's different. They have a different set point. But going beyond a stock bond portfolio at the sort of pinnacle of FI, that's what I started looking at, okay, what kinds of bonds, what kind of bond funds, what kind of alternatives do we need to add to a portfolio to have what we call uncorrelated? assets that are diversified across all market seasons or weathers, meaning growth versus recession, meaning inflation versus deflation. We've been living in a low interest rate growth environment or in one of the quadrants of market environments for 15 years. But the weather is going to change

and we need to plan for future storms in the marketplace. And for me, risk parity was the answer to that. Risk parity talks about this theory of having a relatively large number of uncorrelated assets, that we're going to behave differently in different market conditions. And the golden ratio portfolio is a specific allocation using the Fibonacci sequence, the golden ratio, to apply various percentages to these asset classes. But they're all different. You can make a large number, an infinite number of permutations of this risk-security portfolio. What did you end up going with specifically in your situation?

Well, I worked with my advisor because everybody has to add their own spice to these portfolios. The four basic rules of portfolio construction are, one, the Holy Grail principle by Ray Dalio, where it's like you have to have uncorrelated, diversified assets. And number two, you've got to have a macro asset allocation across stocks, bonds, and alternatives. And then number three, it has to be simple enough to manage. And people get stuck on doing simple first. Simple comes in the third position because, yeah, simple path to wealth is one, two, or three funds. Well, risk parity is only five or three.

six funds. And it's imminently manageable by an individual should they choose to. And number four, you add your own flavor, sort of a Bruce Lee principle, like take what is useful, discard what is useless, and add a little something that's your own. And in discussion with our advisor, we came up with what I call my Optimus Prime portfolio, which is a long prime number theory. And we fundamentally have 16% in U.S. large cap growth, 16% in U.S. small cap value, a 50-50 split. And we fundamentally have 16% in U.S. small cap value, a 50-50 split between U.S. growth and value, 6% in international growth and 6% in international value. So that's a total allocation of 22% growth and 22% to value across international and U.S. borders, which is about a 77% split between U.S. international.

And so the equity is total 44% of the portfolio. I do throw in 1% of Bitcoin because you know what, it's down now and I was willing to take a little bit of a market timing flyer on that one. After that, we have 30% long-term treasuries and held in one ETF as far as recessionary insurance or ballast. And then in the alternative classes, I have 11% in a gold ETF. And that's not just market timing because gold is boomed this year and I'm not just chasing returns. And we have an episode we dropped just the other day on our podcast, Catching Upto FI with Frank on the history of gold as an asset class, which I would encourage folks to listen to. And lastly, there's 11% in something called managed futures, a little complicated to talk about maybe in this podcast, but it's an asset class that is trend following related to interest rates, currencies, gold commodities, that is a little bit more actively managed. Oh, and then there's 3% cash. The point here is it's not complex. It is simple. It is across asset classes diversified. And it shouldn't be as intimidating as maybe the name risk parity is the people. We can embrace the simple path to wealth. I think moving forward, now that we have access to financial technologies that are cost effective that hedge fund managers used to use back in the 90s, like Ray Dalio, we maybe need to evolve our thinking that maybe there's a better way to preserve wealth than just derisking a stock bond portfolio by reducing stocks and increasing bonds or cash. What is the historical return profile of this type of portfolio and the historical standard

deviation volatility of this portfolio relative to the S&P 500. When you backtest these portfolios, and I encourage people to do so at sites like portfolio visualizer, portfolio charts, or test folio, three sites that people that create and manage these portfolios often use, you find that the drawdowns for a properly balanced risk parity portfolio are less than 20% in where you'll see 30 to 50% with a typical stock bond portfolio, say a 6040. And then at the same time, time, the drawdowns are shorter. They're more like two years as opposed to three to five years.

So, you know, as a late starter, you can't afford to have a big, big long drawdown or the lost decade of the 20 aughts. Here, you'll have a portfolio that's working in all markets. It's not going to have the big drawdowns. It's not going to have the high highs. You're not going to grow like 100% stocks would grow. But even better, you're going to gain more on the bottom end where you don't have the big losses. So the margin in which your volatility operates is narrower than the volatility of a typical stock bond portfolio. And it provides, I think, security. You won't blow the top off of things as 100% stocks would do in a big bull market. But the losses are where you're in trouble and you're mitigating your losses. If the stock market is going to return 10 to 11%

nominally over a very long period of time, maybe 7% or 8% in real terms, would I expect something closer to like six or seven percent in terms of growth from this portfolio, but with much less volatility? Or how do you think about comparing the growth prospects of the two? Yeah, you'll see them vary between seven and eight percent. You'll take a couple percent off the top. But I think it's a small price to pay once you've reached FI to maintain FI and to not become unfy because you were taking on too much risk. That sounds unfun. Okay, Bill, Scott and I have been very recently talking about the order of operations on the decumulation side.

I'm wondering if your financial planner gave you any guidance as to which accounts you should be pulling from first. Because looking at your account balances, it looks like you have a traditional 401K, you have Roth IRAs, you have HSAs, and you have taxable brokerage accounts to be pulling from. Like, where did they suggest you pull from in what order? It's going to be the taxable brokerage. first using long-term capital gains, and then it'll be your traditional IRAs or 401K

second, and then your Roth accounts. But you're looking at your portfolio in total, in whole, and I don't have the same asset allocation in each account. Actually, we're holding the bonds and the gold and the managed futures in the traditional accounts. So they're going to grow more slowly, and you want to grow your Roth accounts and your taxable brokerages more quickly. That's where your growth assets go and your more stable, secure, insurance-based assets are typically in your pre-tax accounts.

What's in your HSA? And the HSA is all small cap value. Okay. I would imagine that compared to somebody who was not catching up to FI, it wasn't, you know, a late starter as I think you described yourself on the journey to retirement here, you have a much lower relative balance of your wealth in a 401k or tax deferred account than a counterpart. who maybe was contributing and maxing out their 401k for their entire career, working career. Is that true, first of all? Actually, as far as percentages go of our total net worth to about 60% is in pre-tax, actually. Okay, so I'm dead wrong on that front.

The reason that is, actually, is because as we were independent contractors that had 1099 income and were able to use solo 401Ks. And so, for example, this year was super catch-ups in the 60 to 63 range, I can put $81,250 in my solo 401k. And so I've been putting in large amounts of money into our solo 401ks and my wife as well, who's also a high-income professional. So our savings rate has been able to go significantly into the pre-tax arena. There's an endless debate in the retirement community, early retirement and whatever,

around the right order of operations to withdraw. Why are you not thinking about RMD suppression? as a primary goal given what you just said there. Why is that not top of mind? Well, I read Cody and Sean's tax book. I mean, the tax bomb is not as big of a nightmare as we think it is. We actually did tax projections through using right capital, the software that my financial advisor uses.

And my taxes are going to drop dramatically in retirement into the sub-20,000 range from over $100,000 range of taxes. So it's not as big of a deal as you think it is. you've got to model it out and you can do that. And I encouraged all DIYers to actually double-check their plans with the appropriate financial advisor so that they know where their blind spots are, if they're right, if they're wrong, before you pull the plug. It's been a really powerful tool for us to have done this. And then we learned that taxes weren't going to be that big of a deal when we modeled it out, as we thought.

And then when you put your lower growing assets in your pre-retirement, then they won't balloon to those numbers necessarily that where RMDs become more of a problem. And you put your higher growth in your tax-optimized accounts. Love it. I did not realize you were able to use the solo 401K, which is super powerful. And we don't get to talk about it enough here on Bigger Pockets Money. But it is something that actually we started using this year with my wife.

And it's like, whoa, you can put a lot in here and defer taxes in an incredible way. Yeah. I mean, Sean wrote the book on that one, too. I think he has a book on the solo 401K. So I would encourage folks to go read that if they have the ability to use a 401K. Yeah, you have to have some. self-employment income, and you can't put more away than you made in your self-employment income. But if you have the ability to, it is a powerful wealth generator.

If we couldn't have done that, then it would have gone into taxable. I mean, that's just where it would have had to have gone. So, Bill, you have reached financial independence. Are you going to keep working? That's actually the question now. You know, I've been complaining about my job for years and years and years. and my wife says, now that you're five, you cannot complain about going to work anymore. This brings up the whole discussion of identity, meaning, purpose, connection, and then not

over identifying with growing your wealth and your money and a number. And I'm a physician. I provide value in what I do. There are lots of aspects of the job as an emergency physician that I don't like, say nights, weekends, holidays, or long shifts. But to completely go cold turkey on that would be really hard. And the way I'm looking at life now, it's kind of like dials on the thermostat or reestats where I'm going to hopefully over the next two to three years dial down the active income, dial down the time at work. And I'm uniquely able to do that because I work shifts.

And I can negotiate less numbers of shifts, say, per month so that I can dial that down and then turn up the passive income dial slowly. So for me, it's not going to be a cliff. It's a process. it's a glide path of going to work. I may get to the day where I'm just fed up and say, you know what, today is the day. I'm going to give my 90-day notice and I'm not doing anymore. And when it becomes onerous to go to work and spend my time for money as opposed to spending my time for life, then I need to focus on spending the time on life and not on earning any more

money. What does your family makeup look like? Do you have kids at home still or have they flown the coop? Well, that's interesting. We have a boomeranger. Our kids are twins. They're 26. One's at home figuring his life out.

And we're happy to support that within our means to do so. The other one's out in the world and does 95% figured his life out? But now that we're fine, we're also focusing on things like, okay, you know, we can provide a roof and food for a while somebody's in between jobs or whatever is going on there. But now I'm thinking about now that we're fine, how do we help them build wealth in their own constraints. They're in the $50,000 to $60,000 a year entry level salary positions. And with inflation, as we've seen at the cost of living and housing, I am scared to death for how people my kids age are going to build wealth over the next couple of decades without growing their

income aggressively, as we've talked about in prior episodes for Barb, for example. So we're focused now on, okay, what can we do with our wealth to help them build wealth and not let, say, their Roth accounts go unfilled or their HSA accounts, which they have access to, go unfilled because they don't personally have the cash flow to fill up those buckets that don't roll over from year to year. We're going to look at actively, I call it a tax optimized living giving plan for family generational wealth. It's something that I now am very focused on because part of the reason to continue working is to help my kids retire earlier themselves in some ways and not lose out on compounding in their 20s.

So what does that look like in practice, Bill? What are you planning on doing? Well, we look at our kids and if they can save 10% of their income and put it in their raw, that's great. And then we're going to look at, okay, can we fill up the rest of that bucket for them this year? Because they have the active income to do so, but they may not have the cash flow resources to fill up that bucket.

So we'll top it off and match them and they have skin in the game. And then because of a odd quirk of health insurance hack, We were in the Farm Bureau and Plan here in Tennessee, and only about five states have access to this. And we underwrote into this insurance outside of the ACA and the exchange. And it's a very low-closed, high-ded deductible plan. They turned 26 this year, and they migrated or grandfathered into their own version of an individual Farm Bureau underwritten plan with no pre-existing conditions. And so all of a sudden, they have access to an HSA account that they can't fund, but it behooves us to. to help them fund that because they don't have to have earned income to do that.

So you can fill up that retirement bucket for them if you have the resources or at least put something in it to not lose these tax advantages to build wealth early. And then if there's any additional, we can throw it into their taxable brokerage. It would enable them to save primarily into their pre-retirement. You know, they can focus on doing their work plan and we can help them with their other accounts. And then at the same time, why not engage the rest of the family? We're doing it for education. Why not engage grandparents or boomers that, you know, are going to die with more net worth

than they ever had? Why not encourage them to give while living and help their grandkids build their well? These are the kinds of things I'm thinking about. The gift tax exemption for 2026 is $19,000. So doing quick math, $7,500 is your Roth IRA contribution limits for your kids who are 26. and the single contribution HSA, the limit is 4,400. So adding that up, we get to 11,01900. But we still have 7,100 left over in that 19,000 gift tax exemption if you're just going straight

across the board. So being able to give these, this money to your kids is so generous and so beneficial to them. My kids unfortunately don't have jobs right now. I've got an 18-year-old in her first year of college and a 16-year-old in high school, and they don't have any taxable income, so I can't contribute to a Roth for them. And they're underage for their own health insurance plans, so they are under mine. So I'm not giving them that.

But as soon as they have the taxable income, we are planning on helping them contribute to their Roth IRAs, helping them max them out. Because it's no fun to save for retirement when you're 16 years old. You're like, oh, great, look at all this money that I don't get to spend for 40 years. Yeah, I mean, my kids are 26. They're getting a little bit of a late start themselves. I mean, honestly, they, you know, succumb to our mentorship of dysfunction of lifestyle inflation. So recovering your kids from being natural spenders is a challenge.

And they're in, actually, is another advantage of our financial advisor. I've set them up with their wealth building machines in their Roth, HSA, and taxable brokerages and automated into a wealth building all equity portfolio. They're using Monarch, for example, to track all their expenses and to budget. And then one of the requirements is after about, you know, three, four months of doing this, they're going, we're going to pay for them to sit down with our advisor and have him go through it and have in an unemotional disconnected way that isn't the parent lecturing to their kids. They're going to hear, oh, okay, yeah, my dad did set me up.

Okay, but I can do this and this and this. And here I can do this with my spending. Okay, I get it. So the light bulbs will hopefully go off, but in more of a proactive educational way, where you leverage the advisor as your ally and your kids own financial literacy journey. So when you think about your retirement spending, do you plan on annual gifts to your adult children as part of that retirement spending? And do you consider that flexible or fixed spending in the way that you are planning out your retirement? A very good question. And this is something I think everybody should do and should be considering as part of their retirement spending budget plan. For us, the way I've decided to do it is, should monies be available at a financial review at the last part of the year, we will lump sum whatever amount we feel comfortable and appropriate in January of that year for their Roth or HSA. Pre-planning also for what they're contributing that year. And then we can top it off at the end of the year. It won't be dollar cost averaged in. I'm looking at.

at it is a lump sum. Yes, we have it. The market's done well. We're doing well. Our plans on track. This works in stress testing the plan because this is a flexible portion. If we need to protect ourselves, then the giving may go away. That may be a buffer, so to speak, in the spending. You know, we use sort of a 3-1-1 plan for the 5% withdrawal rate. Three percent of it is sort of to keep the lights on expenses. That's your fixed. One percent of it ends up being kind of of your comfort expenses, travel, et cetera, and 1% of your safe withdrawal rate is your luxury expenses. The giving falls into that category, for example,

in addition to sort of over the top first class seats type travel. And for our 3-1-1 rule, we're actually only about 50%, not 60% of our monthly budget is met. So we're well under that 3% needed for keep the lights on. So we have more flexibility there. But when you're building these plans, You have to think about, okay, do I want to help them with a down payment on a house? And when is that going to occur?

Do I want to help them with a wedding as a bolus lumpy expense? When is that going to occur? Do I need a new roof? And will that potentially occur in the future? So there's your monthly expenses, but then there are those variable big expenses that you kind of have to lock into the retirement expense plan so that you know, okay, I can meet that expense or I can pull that away if I can't meet it. It was funny because I had to kind of imagine, all right, so when will my son who's dating this woman for a year now potentially get married? Well, we would need to have this many thousand dollars to contribute to a wedding in four years. I'm going to guess that he's going to get married in four years.

My other son, not in any relationship. Well, maybe he'll get married in 10 years. So we need this sum in 10 years. And then we inflate it in today's dollars to that day. It's kind of fun to imagine, okay, I need a new roof in 10, 15 years. So I need, you know, that kind of bolus in. that time. Future planning for expenses is very different than sort of planning for current monthly annual expenses because there are things that come up that you may not have planned for.

Is your house paid off? It is paid off. Do you consider that in part of your retirement projection planning tapping into the wealth in the home at any point in your retirement journey or is that excluded from this analysis? It's excluded. It's all nest egg based and not net worth based. The way I would look at the equity in the home is catastrophically it could be a reverse mortgage for long-term care for one spouse should one spouse pre-decease. So the house does play into that in a sort of emergency long-term care insurance, but we're self-insuring for long-term care, and that's built into the plan. How are you thinking about when to take Social Security? And is there any kind of dynamism to that decision given how other parts of your portfolio move over the next

couple of years? That's a great question, and that was part of the plan we put together with our advisor. And it's based on a matrix that you get basically from using open social security.com, Mike Piper's website. And it'll take the ages 63 through 70 for your spouse and I'm married. And for me, 62 through 70. And it'll give you sort of optimal times to take social security and what you will get for that. I mean, mathematically optimal is for us to take it both at 70. You get the longevity insurance of a, you know, basically lifetime inflation adjusted annuity of maximum Social Security payments. Only about 10% of the U.S. population actually waits till 70. The majority are taking it much earlier.

Our full retirement age is 67. And so, and it depends on your health. You know, my wife has had significant health concerns. And if you think your longevity is at all affected, then taking it earlier may make complete sense. There's sort of, you know, life experiences of needing and, wanting to take Social Security. And then I think we get too caught up sometimes in optimizing it to the end degree mathematically. I mean, it makes sense for, say, the more, the higher earning spouse like myself to wait till 70s, so you have a great robust spousal benefit. But if you're

financially independent, is that really necessary? Heck, I even know somebody that didn't put Social Security into their plan. And now they're like, okay, it's going to be there. But I'm going to take it at 62 and invest it for a legacy plan for my kids. I'll just take it and then just put it in 100% equities because I'm investing it for the next generation over this time because I don't need it. So there's many ways to look at it. Not that I recommend investing your social security check, but there are some people that are fire that don't need it and can think of creative ways to use it. Can you tell us about how you selected this guy, this financial planner and why you went with, it sounds like a flat fee or advice. In this case, advice only. They're not managed.

your investments, I imagine, in this scenario, rather than some other model. Well, actually, I used AI, believe it or not, because I did a very specific prompt looking for a flat fee, advice only, but a planner that specifically specialized in risk parity portfolio construction and management. And this is a good topic of conversation because I am now pro advisor, but you've got to do a very deep dive for the one that meets your financial, emotional, personal and life planning goal needs. I found one, Brian Minogue of Cardinal Financial, that is a unicorn. There's only a handful that came up on the search for risk parity portfolio based advisors. And we are going to let him manage our investments for several reasons. One, I'm not interested

in managing our investments. I don't have the bandwidth. I want to focus on life rather than the money. Number two, my wife has absolutely no interest in money. She just wants it to show up in the checking account when she wants to spend it. And so she has no real acumen to manage or self-manage our money. So I need somebody to ensure that if I pre-decease her, it's a seamless transition for her. Number three, cognitive decline. You know, I make mistakes. I need somebody looking over my shoulder to make sure that I don't make a mistake with big dollar amounts. It's a sleep factor. I'm offloading this stuff at this point and I welcome it. And the good news here is you don't have to spend as much as you think for the value of an advisor. I found an advisor that is flat fee $8,400 a

year, $700 a month for comprehensive financial planning and investment management. That is cheap. If you go search the flat fee advisor arena, it's going to be between $10,000 and $20,000 depending on complexity fees. And that's in an AUM advisor at a $4 or $5 million portfolio. That's $40,000 or $50,000 a year. So say I have, for example, a five, million dollar portfolio. My cost of an advisor on the typical model would be $50,000 a year. Well, I'm paying $8,000 a year. You can find these things out there and there's huge advantages to doing this. So I don't want people to swear off, oh, the advisor space is horrible. You can find these people. You just really got to search hard. Thank you for sharing that. That's a, it's a really

important issue today. And I think that a lot of people are going to be like, hey, I'm, I'm starting to get, these numbers are pretty big here. And I'm like pretty good at money, but not. so good that I'm feeling like I don't want a real expert to kind of look at this. So thanks for sharing that and how you found this person. I'll give you an example here. As soon as I found out I was five, I canceled our life insurance policies and my disability insurance. Okay. We didn't need them anymore. Okay. I'm self-insured. There are two million dollar life insurance policies and one disability insurance policy and canceling them, that was about eight or nine hundred bucks a month. I'm paying less for a financial advisor. So I'm basically swapping out disability and life

insurance for the insurance of having a financial advisor. There is no, there's actually a net gain in our monthly budget. So if you look at it that way, it might make more sense. I love how you broke down those fees because in our community, we are primarily DIY people when it comes to our financial position. And I personally have missed some fairly big accounts, like specifically the 529 plan for my kids. I've missed out on contributing to those because I didn't know. And you don't know what you don't know. So having somebody be able to look at your entire financial situation, compare that with your goals and say, here's what I think you should do. It can be so beneficial. I mean, that definitely would have covered the 8,400 that I would have paid if I had done it. But as a DIY person,

you come to this page and you're like, $8,400, never mind, I'll just continue to do it myself. I think there's a lot of value in having a professional look at your specific situation and compare it with your specific goals because everybody's different. Yeah, I mean, there are a lot of blind spots out there. And I think navigating your 60s with all the moving parts of Social Security claiming, Irma, Medicare, Roth conversions, there's a lot of moving parts here with how to realize and take income so that you optimize your subsidy for health care as well. And it's hard to keep all this stuff in your head at the same time. My advisor's job is to do this. And yes, and the great part about it is we collaborate. He's not just plugging me into his system. We are

dialoguing. I'm bringing my information to the table, which is not intimidating to him. And he actually enjoys it better because we speak the same language. So I think, you know, DIYers are uniquely poised to find the right advisor to collaborate with. So they're not just feeling that they're being constrained or limited in what they want to do. So, you know, not that I'm rah, rah, rah, all advisors, but it's a tool in the toolbox that people really need to assess to optimize, if you're into optimizing your financial life, well worth the if you do it right. You retire once in your life potentially. When I leave my job, I can't go back. There is no going back for me. So I have to try and get that right. And it's good to have somebody else

looking over your shoulder saying, yeah, you got a 100% chance of a success here. All right. We're going to draw down for a minute here. And we'll be right back after this ad break. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial

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30-day trial at audible.com slash BP money. Let's jump back in. I think that that makes perfect sense with the way I view the journey of personal finance, right? I have just self-education, learning, you know, all of these things. Ideally, getting some of the playbook handed to you via some of the right answers or the versions of right answers around, hey, max out your 401K, take the match. you know, complete a basic order of operations if you're going to be investing passively in particular

here in long-term investments like passive and managed index funds. And then at various points in that journey consider the advice of an advice-only financial planner. Maybe like I'm 35. I'm not going to hand my money over to a financial planner to manage a portfolio passively. There are, you know, there are various things, real estate and other parts of my portfolio that I feel very comfortable with here. But a review from an advice-only financial planner makes a lot of sense for me. And I think that the wisdom that you show here, you know, as you're approaching traditional retirement age to say, hey, you're clearly very capable of managing your portfolio today and all these things, but you're planning for tomorrow. And that's where you're getting the person to, this person you trust

locked in to manage your assets for the long term now. That's super wise. It is not something I've really considered until I started reading the book list that Frank recommended. for me six months ago. I finally got to it this weekend. Started picking them up. But it's just a perspective I didn't have. Well, and the advantages, too, especially if you have a spouse who's not the CFO of the household. You sit down together, you go over this together. It's a platform to unemotionally talk about what are our goals, our dreams, and how are we going to help get our money to do that? And then if you pass away, it's seamless for them. You've got to create the relationship

before you pass. It shouldn't be an emergency. Okay, how do I pay the bills? How do I get money into the account. When do I rebalance and how do I rebalance? It becomes seamless. So to me, it's an insurance policy. It's really no different than insurance. And you just got to pay the right price for that kind of insurance. What else should we ask you about here before we adjourned, Bill? This has been a fascinating conversation. Our journey as late starters is no different than the early starters, other than we have a constrained time frame and can't take advantage of compounding. We can get there in 10 to 15 years. Jackie, my co-host, did it.

Becky Heptec, my co-host did it. Both of them did it in sort of the 10 to 12-year time range. We want to inspire all of your listeners, as we have done with other episodes that, you know, dig in. Dig in now. Listen to bigger pockets of money. Listen to catching up to FI. Find a mentor to help you along the way. Find an advisor if you need that too and pay for it.

It's money well spent. But then do the work. Save the savings. the money, and then when you get to that point of I'm almost there, I got really nervous. I was like, you know, we were in that little AI fear bubble back in November, and I'm watching like a week or two market slide, and I knew it was time to transition when I couldn't watch it. I couldn't take on that. I was not going to do well with another 20, 30 percent correction, and I needed to transition my portfolio to a more conservative one. So I found help doing it.

The two days that it took to do it were very nerve-wracking. I'd never seen money. fly around in different directions like that before. But we got there. The dust settled. And instantly, I felt better. I'm like, okay, I can take whatever the market throws at me now. I can go to work and I can be a better doctor because I'm financially free. I'm not, I don't have to be here. I can be more present. There are a whole host of things that FI does for you that have absolutely nothing to do with the money. The money is the least important thing here once you get there. And then you start to think about, I'm 60. Okay. How many? more. I mean, Brad Barrett talks about I have 18 summers with my kids and you after your kids turn

18, you have spent 90% of your time and your life with them. Well, that comes back again when you turn 60 and you retire. You got to focus on I have 10, 20, 30 more years. I may have 10 more international trips in me. How am I going to maximize for life? And how am I going to focus on that now that the money is taken care of? It's just awesome. Your philosophy and the perspective you bring in here. And of Of course, it's also awesome that the money story turned out the way it did in that you were able to accomplish this goal, get that weight off your shoulders and see, make that shift from accumulation to preparing for traditional retirement. So I'm looking forward to hearing what you do with the next couple of years as you transition

into full retirement and what those trips look like. And I hope that you continue to do catching up to FI for a long time to come to help a lot of other people go through the many stages of this journey and the emotions that. must be attached to each of them that only you can really empathize with fully. Well, I think catching up the five will last because it's a chronicle of the journey, really, and it's going to continue. Jackie and I are committed to, you know, reaching, you know, a million more people, for example, that are outside of the five bubble that need to hear the message you're putting out there

and that we're putting out there that it's possible. It's not only possible. It's a healthier way of living. It's a balanced way of living. And, you know, join us on this great journey, meet these people. We're going to continue doing what we're doing. Hopefully it lasts beyond my quote, end of plan, as we say in the life planning arena. So, yeah, we'll be talking and I'll check in with you on this journey more.

Well, Bill, thank you so much for coming back on the Bigger Pockets Money podcast and Sharon this next phase of your journey. This is really, really fascinating, really helpful. Thank you. Yeah, it's a very exciting time of life. Thanks for having me, Scott and Mindy. Bill, thank you for sharing your caught up to FI journey because I think it's, I think it's really important to check back in with our guests and, you know, see how far they've progressed. And the fact that you did reach FI, I'm really, really curious to see how much longer you're actually going to be working and what that looks like. All right, Bill, thank you again for your time and we will talk to you soon. All right, Scott, that was Bill Yount, host of the Catching Up to FI podcast. And I am so excited about his story. Yay, Bill. You made it to FI. Woo-hoo! Yeah. Congratulations, Bill. Thank you so much for coming on the show. And I just like, I loved everything about this episode. There's the pride, I think, in the hustle that translated

to financial success and enabling him to reach his target. I don't even know what to describe it. The household leadership, he's still, he's, he's growing his wealth, supporting his retirement with a huge success rate, earning a high income, and setting his kids up for financial success going forward and looking at the ways to begin those transfers to the next generation. And I think a really great time in their lives and that will make the biggest difference. I think that he's super wise to be transitioning his portfolio from that accumulation to a decumulation portfolio. This is a drum I keep beating and will not stop here at Bigger Pockets Money. I think that too many people think that they're financially independent, but if the market were to drop, they would be, you know, they're all

in stocks and that that's not what any research around retirement earlier otherwise support. So I'm super excited that he's made that transition. And I love the fact that he was able to find a financial advisor to do that. That doesn't charge one of those AUM fees, which I think is a huge hurdle for me to get over personally. I wouldn't be able to do that. I love so many aspects about his story. Now I want to encourage him to explore what else is out there. Yes, he wants to work longer because he still enjoys some aspects of his job. I just have so many friends who have retired who say, Oh, I wish I would have retired a year ago. I wish I would have retired 10 years ago.

I absolutely love that he is thinking about helping out his kids now that he has reached financial independence. I think that's a great goal. I think that one of the best things you can do for your kids is to help them get started in their life without having a lot of debt if that's available to you. I love that he's thinking ahead. Yeah, absolutely. I have already started thinking ahead with my kids, but that has not really progressed past

529 plan contributions to this point. So I'll have to get more advanced on that over time. And if anybody has any suggestions, let me know. I think there's a philosophical and then a decision to make about how and when to transfer wealth to the next generation. And then the optimization of that philosophy in a practical sense. And I don't think I'm there yet in the philosophy, much less the optimization in a practical sense. I've often thought that maybe I could just put money into an account for them without telling them. The gift taxes $19,000 for 2026.

Your kids are significantly younger, Scott. So you could even tell them then they wouldn't really understand what it meant. But you could just say, hey, Katie, I'm putting $19,000 away for you. And she'll be like, okay, thanks, dad. Or maybe not. Maybe she'll be like, hey, let's play dolls. Then every year you're putting this money away. You're putting it into an after tax brokerage account for them.

Maybe I haven't thought this through clearly, but that's a way to set up your kids. I'm contributed heavily to 529 plans. And we are well on pace to fund college. So that's where I'm at now and otherwise, generally speaking, building wealth that would, you know, at least for now in theory, pass to them. In the meantime, their shoe collection is not going to produce a very good ROI, but produces a very high smile ROI. All right, Scott, should we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench. I am Mindy Jensen saying

farewell. When I evaluate debt funds, I look for things like first position loans, personal guarantees, deep experienced by the fund operator, low fund leverage, fast liquidity, and consistent returns. These are some of the reasons why I'm excited to partner with Pine Financial Group. Their fund six offers investors exposure to real estate credit, largely for construction and rehab, with loans originated by an experienced originator with over $1 billion in origination volume. They offer investors an 8% preferred return paid monthly in a 70-30 LP-SP split of everything over 10% paid annually. The lock-up period is nine months with liquidity available within 90 days after that nine-month

commitment. The fund is open to accredited investors only. The fund's minimum investment is typically $100,000, but Pine Financial is able to reduce that minimum for Bigger Pockets Money listeners to a minimum of $25,000. Full disclosure, I am personally invested in this fund through my self-directed IRA. Pine Financial is sponsoring this message and our podcast. Go to biggerpocketsmoney.com slash pine, P-I-N-E. Please note that returns are not guaranteed and may vary based on fund performance. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun, calculating quarterly estimated taxes. But somehow every small business owner ends up doing it. Your dreams of creating, selling, and growing get replaced by late nights chasing receipts,

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