Ask Farnoosh: When Can I Retire?

This week on Ask Farnoosh, we're tackling one of the biggest money questions of all: When can I retire? Inspired by a viral Instagram reel https://www.instagram.com/p/DYvEIMCTi0u/about repeatedly refreshing a retirement calculator in hopes of finding financial freedom, Farnoosh breaks down how to determine your retirement readiness—and why retirement may not be the right goal at all. Instead, what if the goal is optionality? In this episode: Why so many Gen Xers are obsessed with retirement calculatorsHow to calculate your "freedom number"The 4% rule explained simplyWhy Social Security may be worth more than you thinkHow home equity changes the retirement equationFour retirement personality typesPractical ways to move your retirement date closerWhy burnout—not retirement—may be the real issue Plus: Farnoosh weighs in on the controversy surrounding Belle Burden's bestselling memoir Strangers following a recent New Yorker investigation. An update on the new Trump Accounts program, including why Farnoosh believes it could become one of the most powerful wealth-building tools for children. Related Listening: Retiring on Social Security Alone https://podcast.farnoosh.tv/episode/anne-tergesen/ How's midlife going? Fill out Farnoosh's survey https://www.jotform.com/build/262556781257063 and help shape the podcast in 2027. Hosted on Acast. See acast.com/privacy https://acast.com/privacy for more information.

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  You're listening to So Money with award-winning money guru Farnoosh Torabi. Each day, get a 30-minute dose of financial inspiration from the world's top business minds, authors, influencers, and from Farnoosh herself. Looking for ways to save on gas or double your double coupons? Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life? Welcome to So Money.

• 1:59Speaker 06

  Welcome to Ask Farnoosh Friday, everybody. We're tackling your big money questions. Well, actually, one big question this Friday, and it is, can I retire? When can I retire? Please give me some good news, Farnoosh. This is a question inspired by a viral reel that I created on Instagram this week. Had no idea it was going to hit such a nerve. The reel was me simply refreshing my retirement calculator with the joke of like, KOV, refreshing your net worth so you can figure out if you can retire tomorrow. And the reel took off, hundreds of thousands of views, thousands of shares, people telling me, this is me, others saying, I checked every week before 6:00 AM. I sent this to my husband. We laughed

• 2:41Speaker 06

  because this is us. And I thought, wow, okay, so I'm not alone with this. And I had a feeling I wasn't, which is why I shared it. I'm not huge on social media, guys, but I'm getting back into it a little bit. I go through droughts and then I come back. And when I do come back, I'm here to tell you, like, people are here for it. So if you need a break from social media, take it. Nothing bad will happen. And come back when you're ready. So I'm ready again. I've been posting more frequently. And today, we're going to dedicate the entire Ask Farnoosh deep dive into one big question, which is, when can I retire? Or maybe the better question, when can work become optional? We're going to get through the math. We'll

• 3:22Speaker 06

  talk about some shortcuts, the mistakes that people make, and I'll give a simple framework that can help you estimate your own retirement timeline. First, though, a couple of stories from the week that caught my attention. Now, you know that I am big on this book called Strangers by Bell Burden, the memoir. We did a whole episode on it. I've talked about it a couple of times on the Friday shows. This week, there was a piece in The New Yorker about the author, Bell Burden, and her book. And so just quickly, if you're not familiar, Bell Burden is the author of Strangers. It's a memoir about her marriage, which fell apart during COVID. TLDR, Bell is an aristocrat. She is a descendant of the Vanderbilts on

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  her father's side and on her mother's side. Her family is a big oil family. And she's married for 20 years. They have three children. She has a home on Martha's Vineyard. She lives in Tribeca. And March 2020, her world falls apart. Her husband tells her he's having an affair. He wants a divorce. And he wants really nothing to do with raising their kids anymore. So the book is about her searching for clues that her husband was not who she always thought he was. He felt like a stranger to her, hence the title. And through that examination, we learn a lot about not just their interpersonal relationship, but also their financial dynamic and the discreet, compliant woman that she once was. She was

• 4:48Speaker 06

  nicknamed Bell the Good. And how her husband, and it's really up for interpretation, I think, but it's pretty loud and clear to me, he was somebody that was playing the long con. Somebody who was all about protecting his wealth, using hers if she wanted to. That's fine. And boy, did she. She emptied out her two trusts to buy two properties, put them in their joint names. But in their prenup, which he edited, demanded that they edit it before they got married, a standard prenup, he wanted it so that if they ever got divorced, any money that was in their individual names and the accounts that bore their individual names would be theirs only in a divorce. So all of their marriage, he was making millions

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  and multi-millions of dollars. And he only had that money in accounts bearing his name. She didn't know, and that's on her. She never asked. She never insisted to know what was going on with his salary and income and investments. And all throughout the book, Bell is very upfront and transparent about her privilege. No one's really worried for her in terms of, oh, this woman's going to become financially destitute. She's a Vanderbilt. But this whole jump scare of your husband after 20 years, seemingly out of nowhere, wants a divorce, and then he comes after her for the properties that are in their joint names, in which their children are still living and she's still living. Can you imagine, like, being bullied

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  out of your home? Although that's what the prenup stipulates. Nevertheless, it's not a good look for this husband. And the book, right now, in its ninth printing, has been on the New York Times Bestseller List for multiple weeks, maybe months at this point. Then this New Yorker article comes out this week claiming that Bell Burden was not truthful about her financial reality. This reporter went through their prenup, their divorce documents, and came to this conclusion that she left out a lot of important financial truths in her book. The New Yorker article says that Davis's financial disclosure during

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  the divorce in the book lists his base salary as just over $200,000, while she was set to inherit something like $63 million that are in trusts. She's not able to access them right now. But here's the thing, everybody, he definitely made millions and millions of dollars because, as we all know, a base salary for someone who works in finance, which he did, is not the totality of what you make every year, right? It's actually the smallest amount compared to the other things that you make, like your stakes in companies and your bonuses and your return on investments. And so he had hoarded, essentially, millions

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  and millions of dollars throughout the marriage, never told her about it. And as you read the book, you learn about the differences in their financial personalities. So, for example, he's the one who had the watch collection, the Rolex watch collection. And he essentially kept their household on an allowance, which is fine. That's called budgeting. But she was never led to believe that they had more, that he had more. In fact, there's this one scene in the book where she would talk about, like, they'd go on vacations, and he would be so stingy. He wouldn't have the buffet breakfast in the hotel. He would send down his wife and kids, but he would ask Bell to bring back, basically smuggle food from the breakfast buffet back up to the hotel for him to save money from their family. But

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  from his personal accounts, he had no problem splurging and buying himself all of these things. So I found that unsettling. I found that weird. And look, there are a lot of more red flags about this guy in the book. And PS, he read the book before it came out, and he didn't have any problems with it. So I have to assume that all of this is true, right? Anyway, I'm not into this New Yorker article because for me, and apparently for a lot of the readers, because if you look this up, people are like, come on, New Yorker, slow news week. The fact remains, and the lesson remains, that when you are in a marriage where there is no financial transparency, no financial communication, frankly, you

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  don't even know what your partner is earning, you don't know how much he's saving or she's saving or investing, that's a problem. And it became a problem for her at the moment when the marriage is dissolving. Because amidst all of the emotional betrayal, she's also having to now deal with all this financial news. I can't speak for Belle Burden, but assuming again, because she is a rich woman, it was less about the money and more about the betrayal, right? And we have to remember that money is just a tool. It's how we act with it. It's how we share it. It's how we don't share it. It's how we use it. That is a reflection, at the end of the day, of who we are as individuals and in our partnerships.

• 9:44Speaker 06

  And I love the fact that this book has inspired so many people to talk about money in their relationships, to not bury their heads in the sand. So, look, had this New Yorker article come out with some bold revelation, like she lied about the prenup, she lied about the terms of their divorce and what led up to it, that's different. But this, look, at the end of the day, did anyone think that a Vanderbilt was going to be financial destitute in a divorce? Absolutely not. The whole time I'm reading it, I'm like, she could always go live with her mom. She's got plenty of rich friends and plenty of rich relatives who'll take her in at minimum. Not that I see her couch surfing at any point. She'll be fine. But if financial betrayal can happen to her, it can happen to anyone.

• 10:29Speaker 06

  So that's my piece on that. The book is called Strangers. I highly recommend it. Now, as a complete departure from that topic, I have an update on Trump accounts. So about a month ago, I talked to you all about Trump accounts and why I'm actually a fan. There is an app now for this, but the accounts have not yet launched. According to USA Today, there is now a mobile app for Trump accounts. It launched yesterday. Trump accounts function as IRA accounts for kids, essentially, and the government is ceding $1,000 to the accounts for kids born between 2025 and 2028. This is according to the Treasury Department. Now, what is a Trump account?

• 11:09Speaker 06

  So these are tax-deferred investment accounts for children under the age of 18. They are issued through the federal government. Individuals, companies, state and local governments, and qualified charities can contribute annually up to a combined, yours and theirs, $5,000 to a Trump account. And once again, the Treasury is ceding $1,000 for those kids born between 2025 and 2028. And about 1.4 million children registered were eligible to receive the $1,000, according to a Treasury spokesperson. The accounts will invest in low-cost index funds, and you cannot withdraw the money until the child turns 18, at which point the account becomes theirs.

• 11:52Speaker 06

  And it will be treated like a traditional IRA at that point with basically the same rules. And you know, the hack that I talked about last time, which is that once your kid turns 18, let's say you've been investing in this Trump account since they were born. By the time they turn 18, $5,000 a year compounded in the market over, let's say, let's make it even, let's say 20 years, okay? You're going to have over $200,000 in this Trump account, right? Theoretically. So you know you can convert a traditional IRA into a Roth IRA, right? The Roth conversion. The catch is, of course, that you have to pay the taxes on that money the year you make the conversion. But if you're 18 and you don't have a job and you don't have income, again, theoretically, what is even the tax implication? Zero?

• 12:37Speaker 06

  So then you convert it into a Roth IRA, and now you have a Roth IRA that you're contributing to, starting at 18, already funded with six figures. Okay, that's incredible. Now, I feel like I got to keep this under wraps because I'm not sure the Treasury Department thought this one through, because this is a really great deal for the American saver. And everyone's trying to hack how to get their kids a Roth IRA, right? I'm going to add them to my business and have them do some social media, and then I'll pay them, and we'll take that money and put it into Roth IRA. Okay, sure, that's fine. But this now is more accessible to so many more Americans, right? You don't need to have a business to hack your way to this. You just have to open up a Trump account and then convert it when they're 18 to a Roth IRA.

• 13:22Speaker 06

  Now, again, could the rules change? Maybe. But I'm going to open up a Trump account. And we're not fans of the current administration here in my house, but we, so far as we can tell, we think these Trump accounts might be their best move ever. And the bar is very low. But the Trump account, you know what? If it works, like it says it's going to work, we're fans. Some episodes you might have missed this week, I just want to shout out. Memorial Day, we revisited my interview with Mr. Money Mustache. So if you didn't catch that and you want to, or you want to listen to it again, because it was so darn good. Mr. Money Mustache, of course, the OG of the FIRE movement, retired early, talks about how he did it, how he's doing now, post, quote unquote, "retirement," which is pretty

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  aligned with what we're about to talk about. And then Wednesday, oh my gosh, Eric Becker came on the show. What a gem. Eric is the founder and co-chairman of Crescent Family Office and Private Wealth Management. So he's helped a lot of families oversee their wealth, and he has advised hundreds of companies, big and small. And so our conversation ranged from talking about what helps companies endure, fodder for any entrepreneurs in the audience as well. We talked about estate planning and legacy building and this concept of an ethical will, which I have been talking all about since the interview. This idea of, in addition to an estate plan where you have a will and maybe some trusts,

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  that you write down your family values and your family heritage and all the stories that you want to protect and pass on to the next generation. All right, now to the big question of the show. When can I retire, Farnoosh? Actually, can I do it? Am I ready? How many more times do I have to hit refresh on my net worth calculator? All right, so let's go through this, okay? Step by step. We'll talk about technically how much people may need, but also realize that retirement, while it is a math problem, there are some underlying issues, right? There's burnout, we're feeling that, uncertainty, and we have a craving for optionality, ultimately.

• 15:32Speaker 06

  I think that's really the new definition of retirement. It's arriving at a phase in your life where work becomes optional. It's not that you necessarily want to, for some of you, maybe. But I think, generally speaking, we don't want to just abandon work, considering that we are living longer, we are much healthier than a generation ago in our 60s and 70s, and we want to stay connected. I recommend continuing to work in retirement, quote unquote, "retirement," not just because, for some people, it would be a financial safety net to have that income coming in, but the emotional, mental, social benefits of applying yourself.

• 16:13Speaker 06

  My father is in his mid-70s, and he was working full-time until about 70, then he went part-time. And while I don't think he's working for anyone right now, he is busy. He keeps himself busy. He's like, I wrote a book, I created some apps, I got a certificate in this thing and the other thing. And look, my dad's exceptional. And if you think I'm hardworking, like you have not met my father. So I'm not saying that's the norm, but I do think his insistence on staying busy with his mind has allowed him to live a much longer life than his siblings. Okay, so when can I retire?

• 16:55Speaker 06

  Now, again, the better question may be, when does work become optional? This is the first thing. I want us to stop thinking about, when can I retire? That question, and transition to this concept of, when does working and making money in the way that I'm making it now and the amount that I'm making now, optional? And I know this is ultimately what people are seeking, because in the comments on that reel, which I think at this point has been viewed about 200,000 times, shared about 4,000 times, lot, a lot of comments. And I'll tell you just again, the reel is me. It's very simple. It's just refreshing my dashboard, my net worth calculator to see, can I retire yet?

• 17:39Speaker 06

  And people are like, this is me. I'm doing this every week. I'm exhausted. Someone said, I don't even want retirement, I just want a break. Someone else was like, I don't even know if I'm on track. And I realize that people are not necessarily dreaming about retirement. They're dreaming about relief, optionality, less stress. A lot of us are feeling financially anxious about the future right now. There are many surveys that show retirement confidence has dropped, fallen. Why? Inflation, healthcare costs, caregiving responsibilities. And then, of course, the prevailing concerns about social security, this is always a constant, continues to weigh on a lot of Americans.

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  And especially for, and I want to give a big hug right now to all my Gen Xers in the audience, those of you who were born between 1965 and 1980. I'm right on the cusp. Gen X, my gosh, this is really it, right? We are the ones who are refreshing the net worth dashboard. If you're 25 and doing this, God love you. Maybe you're in the wrong career. Maybe you got to find something that you actually enjoy doing and you won't want to get out and go cold turkey. But for Gen Xers, we are in this perfect storm because we are at this phase of life where we're supporting our kids, possibly our parents. We're trying to save, we're paying down the mortgage and we've been at this job potentially,

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  or this career of ours for decades at this point. And we're wondering, is this it? What's next? Will this stop? And then when will I start something else later? When will something else come into my life? And so I want to give all of us, but particularly those who are, I would say 10 to 15 years out from retiring, a simple framework. It's not going to be an exhaustive retirement plan. This is your audio roadmap, okay? Firstly, I'm going to repeat, let's stop asking the wrong question. The traditional question is, when can I retire? But I do think that a more meaningful question and helpful question is, when can work become optional for me?

• 19:49Speaker 06

  Many people don't want to stop working entirely. They want flexibility, freedom, maybe some part-time work, consulting, passion projects. Definitely don't want any more Zoom meetings. Definitely don't want anyone putting anything on my calendar. Gosh, and I definitely don't want someone over me telling me what to do, telling me when I can take a vacation. A growing number of workers are even taking these mini retirements. We did a whole episode about this throughout their life, rather than waiting until age 65 to breathe. And so that could be one sidebar piece of advice is if you're younger or in your 30s, 40s,

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  and you are burned out and you have some savings, consider using that to give yourself a sabbatical or even a three-week vacation. Forget the one or two week, go full blast, go three weeks, four weeks if you can, to really unplug and see how that maybe shifts your mindset or gives you a new perspective. The goal in retirement, though, is not zero work, right? The goal is to have more control, more optionality. I have been wanting to refresh my bedroom for years. You know those home projects that just keep getting pushed to the bottom of the list? This was mine. And honestly, I think part of the reason I kept putting it off was the cost, especially the window treatments. Have you seen the prices?

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  But a really rich life isn't just about the accumulation in your bank account. It's also about how you use your money to drive real change in the world. And if you've ever tried to figure out how to donate effectively, you know it can be daunting and it can feel like a black box. Where's your money actually going? How do you know if an organization is making a real impact? That's why I want to share a podcast I've been using for guidance. It's called Giving Done Right, hosted by Phil Buchanan from the Center for Effective Philanthropy. What I like about the show is that it cuts the noise with candid conversations on how to make a real impact, whether you're donating $20 or $20,000. Phil's interviews are very insightful.

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• 24:48Speaker 06

  Next step, figure out what your life in retirement will cost. This is the part, I think, where a lot of us, it gets fuzzy and so we skip ahead, but we can't. The calculator that we're using, because you're calculating a retirement number, this essentially means you need a lifestyle number, a lifestyle number. What is their lifestyle going to be in retirement? So who knows, right? But here's a way to figure it out. Figure out right now, what does your life actually cost? Not your salary, not what you're earning, but what is going out every single month, every single year? It's going to be an average, obviously, because for most of us, 99% of us, this is not flat.

• 25:32Speaker 06

  So the list includes housing, food, healthcare, travel, maybe helping adult kids, because we know that more kids are returning home post-college. The job market's difficult. I don't know what it's going to be in 10, 15 years, but let's just put in a little bit of money for that. Grandkids, maybe you'll have grandkids by then. Will you have pets? This number is very critical. It could be lower than you expect, it could be more than you expect. But I'd be guess if I had to ask anybody right now, how much do you spend every month? They would not know. They would know how much they earn. And hopefully there is a margin, you're making more than you spend. Next, retirement planners love to call this next step, your freedom number.

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  Calculating your freedom number. And the famous shortcut is the 4% rule. This idea of the 4% rule is that if you withdraw roughly 4% of an investment portfolio or savings portfolio annually, your money will have a reasonable chance historically of lasting you about 30 years. Because remember, you're withdrawing 4%, but the rest of the money is continuing to be invested. So it's going to grow. And chances are, it will grow more than 4% average every single year. You're not fully invested in the stock market in retirement. You shouldn't be. You should have some bonds, some stocks, some cash.

• 27:00Speaker 06

  But even that mix should get you, on average, over the next 25, 30 years, more than 4%. So withdrawing 4%, you're giving yourself that margin and your portfolio continues to either stay stable or even grow. So let's say you tell me, Farnoosh, I need $100,000 every year in retirement. Okay, so let's use that 4% rule, which another way to think about it is multiply your annual spending by 25. That means you need $2.5 million shored up before you can comfortably retire. This is according to this 4% freedom number calculator,

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  which takes your annual expected spending in retirement and multiplies that by 25, assuming you're withdrawing roughly 4% of that portfolio every single year. Now, there are caveats, including taxes, market returns, your longevity, inflation. But this is a podcast, it's not a CFP exam. We're trying to just get to a ballpark right now, okay? But that is, in many cases, a conservative way to think about what you will quote unquote, "need" in retirement to have options. Now, next step. I want you to stop assuming that your portfolio,

• 28:25Speaker 06

  your investments, need to do all of the work for you. This is where people often get really happy when they hear this. Your investments are only one piece of the puzzle. So when you look at my net worth, and I use a dashboard called Empower, it's free, E-M-P-O-W-E-R. A lot of people ask me this. They don't pay me. I like it because it's one free and it sorts all of our financial life on one dashboard. It doesn't allow my husband anymore to be in this. Unfortunately, they stopped allowing couples, which annoys me. But we just are working now with a financial planner who has her own dashboard. So there we can combine our assets.

• 29:05Speaker 06

  And so at least on my dashboard with Empower, I get to see my savings, my liquid savings, whatever's in my checking accounts and savings accounts and money market accounts and liquid brokerage accounts, as well as my retirement investment accounts, SEP IRA, IRAs, Roth IRA from when I was younger and I could still invest in a Roth IRA, my debts, which includes my mortgage. I don't carry any other kind of debt month to month. And then other assets like our home property value, our car values, any artwork that I might have that one day, gosh, who knows? Which I'm learning is probably worth nothing. But in my mind, I like to think that it has some value to someone out there.

• 29:50Speaker 06

  And then at the top, it's got this grand number that updates hour by hour at this point. But as I mentioned, that dashboard includes more than just investments, right? It's also savings. It's my home property value. It's other assets. And what I should really add to it is my social security estimated payouts. So everyone should go do this. You've heard me probably say this on the podcast more than once, but it begs repeating. Go to ssa.gov, log in and go through the prompts and you will be led to your estimated social security monthly payout, depending on when you want to withdraw. And for many people, that is a delightful surprise.

• 30:35Speaker 06

  Because raise your hand if you're in the camp of, I don't think I'm going to get social security. It's not going to be much. For those of us who are consistently earning the maximum taxable income over, say, a work span of 35 years and your 35 highest earning years is what social security calculates, the maximum monthly benefit will vary by age. But at age 62, when you can start collecting, almost $3,000 a month. At full retirement age, 67, over $4,000. And at age 70, over $5,000 a month. That's the maximum possible benefit. Social Security can contribute quite nicely to your annual spending needs. If it gives you $35,000, $40,000 a year, what a load off your plate, right?

• 31:20Speaker 06

  So now your portfolio only needs to cover that difference. And then you're thinking, also, I might sell my home and downsize. So let's do the math on that, right? And so you have a couple hundred grand in your home equity. You sell the house minus your selling fees, all the things. Let's say you shore up there. And again, conservative, $50,000. You've had this house for many years. I'm sure it's going to be more than that. That adds to the pile. So that changes the math quite dramatically. And I have to say, it's a pretty fun exercise. I like going on, I don't know, I just like going on the social security website. So anecdotally, my husband and I, we went on to the ssa.gov site. He and I are going to be making, each of us, over $5,000 a month from social security.

• 32:05Speaker 06

  He's actually making more than me and I'm not sure why. I'm the breadwinner, like, how is that possible? But in any case, a lot, right? $10,000 a month, that's my $100,000 a year, right there. Now, our expenses are more than that every year. So I'm not throwing in the towel. And also, I can't collect social security until age 62. And we know that the longer we wait to collect, the higher our monthly payouts will be. They estimate that every year that we delay social security, receiving social security, your payout goes up by 8%. Not bad. Okay, next step. This is not math. This is a little bit of a mental gymnastics exercise.

• 32:48Speaker 06

  But I want you to ask yourself, why do I feel behind, if at all? Many Americans feel deeply worried about retirement. Six in 10 workers say they're not confident they're going to have enough to quit their jobs and call it retirement. Confidence is on the decline. And then we also know that 58% of Americans are afraid of outliving their savings. Nearly half of Americans don't feel financially prepared for retirement. And inflation, it's one of the biggest concerns and it's lingering. So if you feel anxious, that's normal, healthy state of panic, right? The problem is a lot of us are comparing ourselves to the boomers or even the generation above them that had a pension, for example. They had more of a security blanket.

• 33:33Speaker 06

  They were able to retire quote unquote, "on time." But what does that even mean anymore? What is "on time"? They bought their homes in the 1960s or the 1970s. And yeah, of course, by the time they sold it, 50 years later, they had a nice cushion. They were able to really live off of that. We're in a different world now, obviously. Few people in the private sector have access to a pension. And the average cost of buying a home, when I first started reporting on personal finance in 2003, the average cost was roughly $200,000. Now it's $400,000. It has doubled in a span of 20 years. And we're not talking about a small thing. This is a house.

• 34:15Speaker 06

  On top of that, interest rates, on top of that, the cost of maintaining your home has also gone up, right? Insurance, taxes. So even if we are building equity in our homes, it's being chipped away and chipped away by all of this input, all these input costs into the home. So if you're feeling behind, make sure you're not feeling behind because of comparison culture and comparison culture to a culture that doesn't even exist anymore. Next step, I think we're on step six. I want you to know your retirement personality. And this may go back to the earlier question of what you think your living expenses are going to be. But knowing your retirement personality could inform

• 34:58Speaker 06

  what your living expenses may or may not be in retirement. And there are, I would say, four types of retirement personalities. The traditional retiree, I want to stop working completely. I want to volunteer my time. I want to travel. I want to go on a cruise every year. Fine, you probably need the biggest nest egg. Then there is someone who is like the consultant. You leave full time work, but you still earn some income. And this is becoming more and more common, again, because people realize, I do need to keep working for the income, but also I want that sense of connection to making an impact, working with the team. Maybe you are then this third personality, the passion worker,

• 35:41Speaker 06

  where you don't work for anybody else, but you freelance. You teach, you write, you coach, you create, you volunteer. The income here may be smaller, but it will help to offset necessities, expenses that are fixed. And then there's a fourth category. And now I'm talking again to the younger generation where you're like, I'm not ready to retire fully yet, but I do need a break. And I want to have what's called a so-called mini-retirement. You're someone who is working intensely. So you take a break, you re-enter, and then maybe in a few years, you do the same thing again. And for you, retirement becomes a series of chapters instead of one ending. And for that person, I would say, if the only place you're investing for retirement

• 36:26Speaker 06

  is something like a 401K or an IRA, where you cannot take the money out without being penalized before age 59 and a half, if you are someone who wants these mini-retirements, you should probably start investing in a liquid brokerage account, mirroring how you're investing within these 401Ks, but in a portfolio that is liquid, that is accessible, and you can take money in and out at your whim. So that, my friends, is how we get to the number and the when of the question. And if you're like, okay, I got work to do. Here are some ways to move that date closer. And it's not about trying to game your investments and trying to figure out,

• 37:10Speaker 06

  should I move my money into this stock or that stock? No, let your investments, we always say, ride the market. Make sure you're diversified. Make sure that you have an appropriate mix of stocks and bonds for your age. A good rule of thumb is you take, these days, 110 minus your age, whatever number you get, that output, put a percentage symbol next to that. That is the percentage that you may want to consider putting your money in stocks, equities, the rest in more conservative investments like bonds, even maybe a little bit in cash as well, within that portfolio. And then click on the button that says auto rebalance.

• 37:52Speaker 06

  If you're investing on a robo-platform or if you're working with a financial advisor, they should be doing it for you. You can do this yourself as well. But worry less about your investments and focus more on what you can control. You can't control the markets, but you can control your spending. So I know it's boring, but every dollar you don't need in retirement lowers your target. If you reduce your annual spending, even just by like 5%, 10%, your freedom number drops by tens of thousands of dollars, maybe more, depending, of course, on how much you dial back in your annual spending. And then, of course, you do this and then you get accustomed to that lifestyle. And then you're training yourself for retirement.

• 38:36Speaker 06

  You're easing into it now as opposed to you get to retirement, like, I really need to adjust my spending dramatically. And that's a really hard transition. Another way to move that date up for retirement is right now, and I'm talking to everybody here, including my 55-year-old audience, 55-plus audience members. See if you can earn more. And this, you know, is my love language, earning more, more jobs. This is my favorite lever because people underestimate how powerful additional income can be, whether that's asking for a raise, starting a side business, doing a little consulting for my experts out there, maybe create some kind of course, maybe get us

• 39:19Speaker 06

  a couple of speaking gigs under your belt. But can you bring in an extra $1,000 to $1,500 a month? Work towards that. Maybe the first year, it's just a few hundred extra dollars a month. But I have found personally and in my research that when we start to focus on this potential of making more, how can I make more? The opportunities become more apparent. One gig turns into three gigs, but you've got to start somewhere. And this last tip is not necessarily going to make retirement sooner, but it may make retirement more comfortable when you do retire.

• 39:59Speaker 06

  And that is working a little bit longer and saving all the while, investing all the while. I have many people who write in and they're like, I'm 58, I'm 60, I'm late to this investing game. Is it just not even worth it for me? And my answer is absolutely not. People who are 50-plus have perks, actually, for investing, right? In your 401K and in your IRA, you get to make catch-up contributions. You can actually invest more than anybody else. If you're 55 and you haven't saved anything for retirement, then I might say you have to keep working. You're not retiring in five years or 10 years. Unless you're okay with living entirely on social security, which we know some people do, and I've done that episode, I'll link to that in the show notes.

• 40:43Speaker 06

  How are they doing it? Pretty creatively is the short answer. But it's going to have to be a combination of continuing to work and investing, even at that stage. All right. So those are the nuts and bolts. But let's talk about something else, which I felt was the underpinning feeling as people were chiming in on social media and leaving comments is we're burnt out. That's it, right? That is a lot of this, right? We're tired. We're not staring at our retirement calculators because we love to see the power of compound interest. We are staring because we're wondering, how much longer do I have to do this? And the operative word is have to.

• 41:27Speaker 06

  And so what I want us to ask ourselves over the weekend is what do I want to do? And I will say for me, this feels like such a privileged question, but we've earned the privilege, y'all. If you've been working really hard, you have amassed a lot of knowledge, a lot of work experience, your network is awesome, if you've earned any sort of trust in your industry, people look to you as an expert, those are the things, those are the tools, those are the assets that we often forget and we often underestimate. We don't think that's leverage. It is. So I went to my husband the other day and I'm like, I just don't know what I'm going to do for the next 10 years.

• 42:12Speaker 06

  Is this it? Just keep on keeping on? Which would be fine, but you know me, I like shifting. I like new things. And I have other things going on, but with regards to so money, what is the next leg of this? That would be exciting to me and continually meaningful to my audience. And he said, you know what? Good news, you can do anything you want. And I think that for a lot of us, when we've been doing something for so long, it's, we haven't really taken a step away from it to look back in and say, my gosh, what a body of work. And you have been thinking on your feet and pivoting and taking risks more often than you've realized.

• 42:56Speaker 06

  So I'm now speaking to the person who is burnt out or maybe feeling like they want a shift, they don't know what it is. So the fear in them is saying, I guess I should just stop and I guess I should just retire? No, maybe the solution is you want to find that passion project, you want to experiment with something new, you want to find a thought partner and start to hash out what the next 10 years might be. Map it out or even just the next year, right? We don't have to go that far out into the future. But I find that even just that exercise of reflection and thinking about what we want to do, where we really can show up in our next chapter for ourselves and also for our community and our audience.

• 43:41Speaker 06

  And if you work in an industry for your customers, for your teammates, make a wish list. There is no harm in doing this and I do think it will re-energize us, give us a new sense of purpose. And then this stress of retiring tomorrow, yesterday, the next day, it will dissipate. I think that's so much of it. I think, I don't think, I know, I know that so much of it. We're human beings. We thrive on experiences and connection. And when we've been doing an experience and connecting with the same people for a long time, naturally, we want a restart or a refresh or a pivot, or whatever you want to call it.

• 44:26Speaker 06

  And in midlife, this is everybody. It's everybody, let me tell you. So close the laptop, stop hitting refresh. This is my own, this is my own inner talk right now. And don't think about when can I retire, but think about how can I work towards a life where I have more options? And from now until that point, how can I really reinvigorate my career, my sense of purpose? And that's our show. Thanks for tuning in, everybody, and I hope your weekend is so money.

• 45:12Speaker 00

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  Hey, we're Nick and Jack, hosts of The Best One Yet. Behind every episode, there's research, emails, spreadsheets, and our shared Google Doc, the headline hammer.

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