The Retirement Wall of Shame: Mistakes That Wreck Retirement Plans (SB1863)

Most retirement content talks about what to do. This episode talks about what actually goes wrong -- and how often it happens to people who thought they had it figured out. Joel Larsgaard of How to Money, Paula Pant of Afford Anything, and Jesse Cramer of Personal Finance for Long-Term Investors each nominate their worst retirement mistake for the wall of shame. Some make it. Some get argued off. All of them are more common than you'd think. What You'll Walk Away With Why "everything's going to go according to plan" is the most dangerous assumption in retirement -- and the gray swan events nobody sees coming that quietly derail otherwise solid plansThe difference between a black swan and a gray swan: why divorce, health changes, and job loss in your early 60s aren't surprises exactly, and yet almost nobody plans for themWhy most people retire two to three years earlier than they expected -- and why those lost years tend to be peak earning yearsThe pre-tax wealth trap: why the number in your 401(k) isn't the number you actually get to spend -- and the planning that closes the gapJoel's RV warning: why the most regretted retirement purchase is almost always the one that seemed most exciting at the moment of retirementThe copy-paste retirement: why doing what other retirees do -- epic trips, vacation homes, the shiny version of leisure -- often produces a quietly miserable resultWhy the 4% rule is a starting point, not a sentence: how lumpy real-world expenses, medical costs, and changing needs make a fixed withdrawal rate more aspiration than realityThe lifestyle design question underneath all of it: why Fritz Gilbert's polling of actual retirees found that finances barely make the top concerns list once you're actually retiredPaula's fix for the go-go years: how a dedicated travel bucket with a deliberate spend-down timeline lets you enjoy early retirement without quietly mortgaging the rest of itWhy the 18-month retirement honeymoon often ends in the biggest depression of someone's life -- and what to do before you retire to prevent it Why This Matters Now Every mistake on this wall is more common than it should be -- and most of them are fixable with a little planning before the moment arrives. This episode is the conversation to have while you still have time to change something. From the Basement Joel Larsgaard, Paula Pant, and Jesse Cramer build the retirement wall of shame live, with Joe trying and failing to get anyone to argue anyone else off the board. Paula tries to win the trivia competition for the second week in a row with a guess of $500 on George Washington's Continental Army salary -- was she right???? Happy Fourth of July from mom's basement, and Stephen Merchant has some thoughts about the holiday. Resources Mentioned How to Money podcast https://howtomoney.com -- Joel Larsgaard; greatest hits in July; available wherever you listen to podcastsAfford Anything podcast https://affordanything.com -- Paula Pant; July 1st episode on the New York City rent freeze and its downstream consequencesPersonal Finance for Long-Term Investors https://bestinterest.blog (FILTI) -- Jesse Cramer; recent episode with Frank Vasquez on risk parity; upcoming AMOT on Roth conversionsThe Retirement Manifesto https://retirementmanifesto.com -- Fritz Gilbert; retirement research and polling referenced in the episode; theretirementmanifesto.comLiving Off Your Acorns by Dana Anspach -- referenced for the go-go, slow-go, no-go framework; available wherever books are soldStacking Benjamins Newsletter (The 201) -- stackingbenjamins.com/201 https://stackingbenjamins.com/201Stacking Benjamins Community -- stackingbenjamins.com/basement https://stackingbenjamins.com/basementOG financial planning calendar -- stackingbenjamins.com/og https://stackingbenjamins.com/ogSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

• 0:00Speaker 00

  Maybe it's time we talked. Kiplinger calls it the trillion dollar talk, a conversation about inheritance, estate planning, wills, and the questions families should be asking before those decisions become urgent. Because knowing what your family wants and having a plan for it can be one of the most important financial conversations you will ever have. Ready to start yours? Visit kiplinger.com to learn more about the trillion dollar talk and what this historic wealth transfer could mean for your family.

• 0:33Speaker 01

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  This is Stephen Dean, our host of the Unidentified Alien Podcast. And that clip you just heard of Congressman Eric Burleson is one example of the work being done on this show. It's not too late to join in on the conversation. Dig into the investigation as we continue to unravel the biggest secret of our time, the alien secret. Download and subscribe to the Unidentified Alien Podcast. Just search UAP on your favorite podcasting platform.

• 1:02Speaker 03

  How can I mess this up? We got a warehouse full of cash back here. We're just stacking Benjamins.

• 1:11Speaker 04

  Live from the basement of the YouTube headquarters, it's the Stacking Benjamin Show.

• 1:26Speaker 04

  I'm Joe's mom's neighbor Doug, and retirement, it can be a time of unicorns and rainbows, or dark days and stormy nights, which will yours be? Like the top meteorologists at your favorite TV station, we'll swoop in today and help you avoid retirement disasters. What are they? How should you prepare? We'll be your guides. But that's not all, because halfway through this discussion, I'm going to guide you all toward our year-long trivia competition. Can Paula Pant win two in a row?

• 2:01Speaker 04

  Two in a row? I mean, it could happen, I suppose. We'll find out. And now, a guy who just found out he's saving a lot of money on his car insurance, it's Joe. So, see you.

• 2:17Speaker 00

  Thanks Doug. Hey, happy, happy Friday, everybody. Welcome to the first episode in July. I am Joe Solci. Hi. And man, the controls elude us today here in headquarters. If you're hanging out with us live on YouTube, we're just having some fun. But we're gonna have some fun today because this episode is an emergency broadcast in the Department of Bad Retirement Decisions. If you claim social security because your brother-in-law said, "Hey, you gotta grab it before the government runs out," please remain calm. If your retirement plan is, "I'm gonna work till I die," well, stop operating heavy machinery. And if your entire portfolio is in your old employer's stock because, quote, "It's been good to

• 2:59Speaker 00

  us," congratulations. You might be nominated into the wall of shame, which is what we're gonna do today. We're gonna create the retirement wall of shame. Of course, the guy who helped me kick off this show is a guy who's not ashamed of anything that happens at his house. Mr. Neighbor Doug is here.

• 3:17Speaker 04

  Are you kidding me?

• 3:20Speaker 00

  No shame, ever. How are you, man?

• 3:23Speaker 04

  Proud of our debauchery here in this house. I'm great, Joseph. How are you?

• 3:28Speaker 00

  You ready to meet the team, Doug?

• 3:30Speaker 04

  I'm ready to meet the team. We have a new team member today that I am irrationally excited about having here. We need to spice things up a little bit in the basement, and this new roundtable member is gonna do it.

• 3:42Speaker 00

  I'm super excited that they are with us today. But first up is the host of the show that reminds us that we could afford anything, but not everything, which is also what mom says when I try to order both mozzarella sticks and refinance my mortgage. Paula Pant is here. Inflation's hitting, Paula. And you're on mute.

• 4:04Speaker 05

  Helps to turn the microphone on.

• 4:07Speaker 00

  We're having a great day. If you didn't think today was live, when our special guest showed up right after the intro for all the YouTube people, and then I came on later. Paula, how are you?

• 4:20Speaker 05

  I am great. I bet you could refi your mortgage and order mozzarella sticks with the money that you save by virtue of doing that refi, right?

• 4:29Speaker 00

  The order matters. The order matters. It's like sequence of returns, sequence of expenses.

• 4:34Speaker 05

  Sequence of mozzarella sticks?

• 4:36Speaker 00

  Sequence of mozzarella sticks, right. Paula, you want to find out who's on the panel with you today?

• 4:41Speaker 05

  Yeah, I'd love to know.

• 4:43Speaker 00

  Next up, he's the host of Personal Finance for Long-Term Investors, which means he's the person at the table who will say, actually, let's model that. And somehow, he makes it fun. Mr. Jesse Cramer's here.

• 4:56Speaker 06

  What's not fun about a spreadsheet, Joe? Spreadsheets are, if you don't find a spreadsheet fun, I mean, it says a lot about you.

• 5:03Speaker 00

  We could have just said Jesse Cramer, freak in the sheets, the spreadsheets.

• 5:08Speaker 06

  That's correct. I V looked up from my microphone and I don't know how to finish that joke because I don't have a sense of humor. I'm a spreadsheet guy.

• 5:18Speaker 00

  Well, I don't know, man. I would say that you're one of those freaks of nature that can do both. I don't know. Don't know how you do it, man, but you find a way.

• 5:26Speaker 06

  Speaking of freaks, though.

• 5:27Speaker 00

  Speaking of freaks, would you like to meet our special guest, Jesse?

• 5:31Speaker 06

  I would love to.

• 5:32Speaker 00

  Our special guest is the co-host of the How To Money Podcast, a show about practical money, regular people, and occasionally, Jesse, beer. How about that? Which means this man's uniquely qualified to answer the question, is this retirement plan frugal or are we just eating cat food with confidence? That's right. He's back. Mr. Joel Larsgaard joins us. How are you, man?

• 5:56Speaker 06

  Good, man. If there's not enough money for craft beer, you're doing retirement wrong. That's for sure.

• 6:00Speaker 00

  That's right. I thought you were going to say the deluxe cat food. Then you're doing retirement.

• 6:04Speaker 06

  I mean, if you have to resort to cat food, but it allows you to drink the best beer on earth, that's fine. Like, that's a worthy trade-off.

• 6:10Speaker 00

  I'm super happy you're back with us on a Friday. What's been going on at How To Money, man?

• 6:15Speaker 06

  The norms? There's nothing to talk about in terms of money, right? Like, everything is staying stagnant. Like, just really nothing interesting to discuss. So, we're pretty bored over there. I'll tell you that.

• 6:24Speaker 00

  Well, we've got a super fun show today and I'm super glad that you could join us because today we are going to be chatting about retirement and so many people make retirement mistakes and the ones that we're not going to talk about today are the cute ones like forgetting your 401k password, right? That's a neat one, but the monster ones, the ones where you find people Googling, "How do I do a reverse mortgage at like 3 a.m.?" Which is by the way, something you usually don't want to do. We, uh, we're going to address mistakes like that. So we've got Joel here, we got Jesse here, we got Paula here, Doug's here. We are going to take one quick break. We only have two advertiser spots during the show.

• 7:05Speaker 00

  We're going to have one now and we're going to have one in the middle of our trivia competition. Can Paula Pant win two weeks in a row? We're going to find out, but first we're going to hear from our sponsors and then Joel, Jesse, Paula, Doug and I, we're going to build this retirement wall of shame.

• 7:23Speaker 00

  Well, you may know the chaos is the name of the game here in mom's basement, what with guests coming in and out, Cooper the cat getting in the way, Doug being, well, being Doug. The holidays make it even worse because it's all about food and big meals and the problem is prepping for those takes forever, but what about those between meals, right? The meals between those huge, huge, huge bookends. Well, that's where Factor comes in. Factor is made with high quality ingredients that you recognize and trust with over 175 banned ingredients. You always know you're eating something that's good for you, even when you don't have time. It's ready in two minutes, whether it's lunch between meetings or dinner after holiday shopping.

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• 9:24Speaker 00

  Okay, team, here's how this works. We have a board full of retirement disasters, right? Imagine you've got this huge board of retirement disasters. What's going to happen is each member of our panel is going to nominate the mistake they think deserves a spot on the retirement disaster hall of shame. You're going to have to defend your nomination and everybody can agree, they can object, you can heckle politely, or you can ask, is that really worse than buying a timeshare? Like, which one is it going to be? So for every disaster, we're going to give you an emergency kit, what to do next, and what to check next, when to call professionals. So the first thing we're going to do, we're going to start with pre-retirement mistakes. Then after the break, after the trivia contest, we're going to do

• 10:06Speaker 00

  post-retirement. So let's lay out the scenario. This is the biggest, biggest problem for people in pre-retirement widely, retiring without a spending plan. We have no spending plan at all. And I think all of these things go to that point of not having a spending plan. We don't have plans in all these different places. So Paula Pant, we'll start with you. What are you going to nominate for the pre-retirement wall of shame?

• 10:34Speaker 05

  With regard to not having a spending plan? I don't think I understand the, the rules of this game. So like, wall of shame about not having a pre-retirement spending plan? Margin call.

• 10:47Speaker 00

  I think everything, I guess the reason I brought up the spending plan is just because I feel like all these are going to wind up with being a part of, I don't know what retirement looks like. I don't have any idea what retirement's going to be like. So. I have this mistake.

• 11:02Speaker 05

  Okay. All right. So mistakes that people make because they don't know how to plan for retirement.

• 11:08Speaker 00

  Exactly. Thank you. Paula Pant, new co-host of this show.

• 11:13Speaker 05

  Inadequately guarding against like gray swan or black swan events. Because they, again, don't know how to adequately plan for it. And because there are so many variables and so much that's unknown with regard to your health, with regard to your family's health, et cetera.

• 11:30Speaker 00

  So not guarding against black swan events. So, wait a minute. So you're talking about, are you talking about both in the economy and the world like 2008?

• 11:41Speaker 05

  I was thinking more in terms of personal life, right?

• 11:44Speaker 00

  Yeah, like all of a sudden disaster hits.

• 11:46Speaker 05

  Yeah, yeah, exactly. You know, and you don't have adequate levels of protection for any kind of personal disasters.

• 11:52Speaker 00

  Oh, gotcha. So everything's gonna go perfect syndrome.

• 11:55Speaker 05

  Exactly.

• 11:56Speaker 00

  Yes. Joel, you like that one for the wall of shame or not?

• 12:00Speaker 06

  I do. Can I piggyback on that just a touch? I just want to say like, that was my first thing I was gonna go to was just assuming that you're gonna be employed where you're working until you want to retire, right? And that's the kind of like black swan event maybe you're referring to Paula is just, yeah, I'm gonna work until I'm 70 and then I'll ride off into the sunset. But if for some reason your health fails you or your employer says, actually not so fast, we're gonna, you know, cut bait at 64, then you've got a lot to figure out. And so just assuming that you're gonna work as long as you want to is kind of one of those potential black swan events that could befall. So I'm gonna say, yeah, that goes on the board.

• 12:35Speaker 00

  I'm glad you brought that up, Joel, because there was a study that we covered recently on the show. And you guys, I'm sure you saw this come across your desk as well, which is I think the average person retires about two, two and a half years before they expected for one reason or another. Either something in their life or the boss decides to let them go, age discrimination, you know, all the above. Pick a thing. People don't go when they think they're gonna go.

• 12:56Speaker 06

  It's not usually because they won the lottery and they're like, oh, I guess I'm getting out early. It's usually because they're out for some other reason, unexpected reason. And those extra couple of years, right? That means potential lost investment returns. If you have start tapping things early, it means lost income that could have gone towards padding your investments or just a whole bunch to figure out. And oftentimes for a lot of those people, those are peak earning years, right? It's not, it's not some of those like early twenties earning years that are a little bit lower. So that can really complicate things for a lot of people.

• 13:24Speaker 00

  Well, and in the early twenties when it's easier to change jobs, frankly.

• 13:27Speaker 06

  Right. Yeah, you can pivot a lot, a lot more easily.

• 13:29Speaker 00

  And Doug, thinking about this, I think, because this was on a Monday show, I believe, the average person said they want to retire at 65 and they retired at 62 and some change.

• 13:39Speaker 06

  Right.

• 13:40Speaker 00

  Yeah, I think that was the number. Jesse, you think this goes on the wall?

• 13:43Speaker 05

  I do. And I do. And I had a question for Paula. I don't know the answer to this one. Did you say gray swan? Gray swan, yeah. So what is a gray swan? Okay, so a gray swan would be something like a divorce, which is statistically probable. You can't really call it a black swan because it's common enough that you could reasonably expect it. And yet, no one expects that it will actually happen to them. So if it does happen to you, you're shocked.

• 14:14Speaker 00

  I bet it gets more statistically probable, the closer it gets.

• 14:17Speaker 05

  I mean, it depends on the relationship. Some people are really caught off guard.

• 14:21Speaker 00

  Sure.

• 14:21Speaker 05

  You know, if there's a cheating spouse, like they discover an affair.

• 14:24Speaker 06

  Yeah, or like, hey, we've been together 30 years.

• 14:27Speaker 05

  Yeah.

• 14:27Speaker 06

  And I didn't expect that this was going to unravel. But the kids move out of the house and it's like, what do we talk to each other about? Because we haven't been, been working on a relationship for the last couple of decades.

• 14:36Speaker 00

  Have you seen Joel's, just speaking of statistics, every time Joel says something, I go, have you seen the statistics on that? But seriously, kids move out of the house, Joel, that's a work on my marriage time, because this is when divorce hits for a lot of people with kids.

• 14:47Speaker 06

  Yeah, yeah. And I mean, it goes to the point that like for a lot of people, we're so focused on building, you know, money to be able to retire. We're so focused on a lot of that involves work and trading off time for money in order to get there. And we're less focused, especially for those decades in your 40s and 50s so often, on building the relationships that matter that are going to ultimately be where you find a lot of joy and meaning in retirement. And so if you like, let those fall by the wayside, your retirement could be like, far less enjoyable than you assumed it was gonna be.

• 15:20Speaker 00

  Yeah, it was definitely the hardest time in Cheryl and my relationship because you go from spending a lot of your time parenting to just be in the two of you. And ended up, you know, more solid than ever before. But man, we had to, we had to really get through a lot of stuff when it was, when it was then just the two of us. So Jesse, you were saying it goes on the wall of shame. Even with the gray swans and the blue ones and the yellow swans and the...

• 15:45Speaker 07

  I'm even more convinced by the gray swans, I think, than the black ones, only because, you know, part of the whole black swan definition is that it's, it's risks that are so out there that maybe you couldn't even be expected to think of them or prepare for them in the first place. Whereas the gray swan events, especially now that I understand them better what they are. Yeah, I mean, some of those are the events. I think another one could be just like health concerns. Like, when you're healthy, all you ever really think about is like, man, I'm so healthy. And then I could see when you're approaching retirement and at those ages, there are a lot of sneaky health concerns that can come up and really derail your retirement plan in some way. So not considering those gray swans, I think, could definitely be a reason to be up on the wall of shame. So I like it.

• 16:25Speaker 00

  All right, Paula. So now it's time for our fix. It's up on the wall of shame. Congratulations. You made it through the nomination process. What's our first step to fix this?

• 16:35Speaker 05

  I would sit down, and if you have a partner, maybe this is like a couples exercise, or if you're single, do it by yourself, or do it with a financial advisor. But like, sit down and brainstorm a list, or I guess you could do this with AI too. Brainstorm a list of like, what the gray swans are and what the black swans are. Once you've brainstormed that list, then kind of write out, or like, if this, then that. Like, if this were to happen, what would I do next? Actually write it out, because that'll give you an idea of how prepared you are.

• 17:04Speaker 00

  Paul has got it, I think, on a strategic level, Joel, but let's do some tactical things like the moves I can make that will reduce my chances of having a problem. What's one move I maybe can make that can help me get through black swan and gray swan events?

• 17:19Speaker 06

  Yeah, I mean, I think one is like flexibility, right? And for a lot of people, they're like moving in a certain direction and the idea of pivoting, the older we get, the harder that becomes, like to kind of shake things up or make a change. And if you're only focused on like this one way of moving forward and you don't have enough flexibility to your financial plan and to your life plans, the ability to talk with your spouse, if you have one, or just say, hey, listen, I'm going back to the drawing board on what I actually want out of life or what retirement, a great retirement actually looks like for me. You have to be willing, I think, to, to make a shift, to make a change if things don't go according to plan, because things, I mean, there's always going to be a wrench in your plan, right? It's that Mike Tyson phrase about everyone's got to play until they get punched in the face.

• 18:02Speaker 00

  Punched in the face, right.

• 18:03Speaker 06

  Yeah, and I think the like the gray swan is like a punch in the face and you can just like sit there and take more punches, or you can like reassess your game plan. And that's going to be part, I think, of what it looks like to move forward and make changes and still be able to retire well.

• 18:15Speaker 00

  It sounds like though, if you're talking about that, like I'm, like I'm thinking really tactically, you're saying emergency fund, I mean, interpreting what you're saying, you're saying emergency fund, because that gives you the ability to pivot. You're saying stop over optimizing money into retirement accounts, maybe keep some money in a flexible place?

• 18:31Speaker 06

  Yeah, I think some of that, but then I think it's also just truly like, well, I mean, do I really feel like I have to retire at 66? Or do we both need to retire at the same time? Do our travel plans for those first couple of years have to look as ostentatious as maybe we were planning or hoping? Or like, can we pivot and do something? Can we take the truck around the country like and hit some campsites? Like, can you make other changes, I guess, if something happens? That doesn't mean, yeah, an emergency, having a beefed up emergency fund is great and just having more financial flexibility. But then I think also having more flexibility when it comes to your plans and what will make you happy, what you're going to be okay with in terms of lifestyle.

• 19:11Speaker 00

  Gotcha. It reminds me of, I heard a comedian talking recently about his structure and he's got like a series of jokes, but he also has an off-ramp if that series isn't going well. Like having your own, if things aren't going well toward retirement, knowing what your off-ramps are. Same, similar thing, I think.

• 19:27Speaker 06

  Yeah, exactly. And that's as a comedian, like you have to have that on stage, right? Cause if you're bombing, you gotta make a pivot and you gotta like please the audience in another way. And I think you've got to figure out the same thing. Like life lets us down all the time. Like I love being a dad. Like we just, you know, Father's Day was just a minute ago, but like, man, being a dad has its like share of aches and pains at the same time. And it's, it's not always the way I envisioned it. It's not always like a Hallmark greeting card. So what does it look like to engage with my kids and to have a lovely time, even if it's like different than how I envisioned.

• 19:56Speaker 00

  It's not a unicorn rainbow to be Joel Larsgaard every day.

• 19:58Speaker 06

  That's right. It's harder than you think, guys.

• 20:02Speaker 00

  Jesse Cramer, your time to nominate somebody for the wall of shame or something for the wall of shame. Pre-retirement, what are you thinking?

• 20:11Speaker 07

  Yeah. So for pre-retirement, I think that the assumption that your pre-tax wealth will resemble or even be identical to your post-tax wealth is a very common mistake that pre-retirees make. Especially because a lot of people, their easiest avenue to saving for retirement is through a pre-tax account. There's probably an employer match there. People often end up with a majority of their assets in a pre-tax account. And they never actually think to themselves, wait a second, I'm going to have to pay some taxes on a lot of this money. And so they do all their retirement calculations, just looking at the pre-tax number. They don't actually take taxes into account and they end up making a pretty big retirement mistake.

• 20:53Speaker 00

  It's like our friend Ed Slot says, you're still sharing it with the government, Jesse.

• 20:57Speaker 07

  That's correct. That's correct. And Ed is right. And of course there are things you can do to try to minimize that impact and plan around it. That's what good planning does, but it's very hard to avoid altogether.

• 21:08Speaker 00

  Actually, now that I think about it, Ed doesn't even say with 4th of July coming up. This is an apropos quote. He doesn't say the government. He says, you gotta share it with Uncle Sam. And you know what, Joel? He's not even your real uncle. Not even your real uncle.

• 21:20Speaker 06

  We're not even related, man. That makes it even harder to stomach.

• 21:23Speaker 00

  Sharing your 401k with that guy?

• 21:24Speaker 06

  That's right.

• 21:25Speaker 00

  Do you think this belongs on the wall of shame?

• 21:27Speaker 06

  For sure, for sure. I mean, I think when you're looking at, there's a huge difference between having a million dollars in a traditional IRA versus a Roth IRA. And there are understandable reasons why people would make different choices, I think, on the contribution side of things. But then when it comes to planning how you're going to be able to spend that money, you got to factor in, well, what is my tax burden going to look like in retirement? And so if you are maybe thinking more along the lines of, well, yeah, I got all this money and I'm just start planning out my spending. And you're not thinking about where the tax man's going to come in and enter the situation, then it's just poor planning on your part. And yeah, that'd be a big time retirement fail.

• 22:04Speaker 00

  Paula, we need a dissenting opinion here. Come on, tell me Jesse's isn't going right up on the wall.

• 22:11Speaker 05

  No, no, I'd place it on the wall. Yeah.

• 22:15Speaker 00

  How do we fix it, Jesse Cramer?

• 22:16Speaker 07

  Yeah, there's no substitute for good planning. And it just starts with maybe some education of just, you know, we'd want to make sure that the average pre-retiree investor, stacker, anyone listening right now is simply aware of how their various accounts could get taxed, kind of how those accounts and withdrawals from those accounts could kind of play in concert with one another. And simply, you know, you can even go online and use some free tools that are fairly rudimentary, some paid tools, which are much more intricate. You can work with a planner, which is obviously something you would pay for. But there are a lot of avenues that you can use to try to figure out, okay, how much in tax would you owe on average in any given year during your retirement?

• 22:58Speaker 07

  How it changes throughout retirement, you know, before you claim social security and after, maybe before the first spouse retires or after both spouses retire, before and after RMD start, all those kinds of things. The goal being, of course, to, you know, minimize your lifetime tax bill in a way, or maybe the other way to think about it is maximizing your lifetime after tax wealth. There are a lot of avenues that you can use to figure that out. It starts with education and then probably the next step is a good calculator or person to help you do the calculations.

• 23:27Speaker 00

  Joel, do you have a calculator that you prefer for this kind of thing?

• 23:30Speaker 06

  Hmm, uh, no, I like to use my brain, uh, Joe. I just like to go solo on this one, you know?

• 23:36Speaker 00

  I'm a ninja.

• 23:37Speaker 06

  Yeah, exactly. Uh, when I'm talking about Roth IRAs in particular, this is something that we're like young people, people in their twenties and thirties, like, let's say, maybe they're, they've got a lot of room left to run when it comes to earnings. And when you have the availability of a Roth IRA before, let's say, maybe you make too much money and you can't put money in a Roth IRA. It's a great problem to have, but it's still a sort of problem. I'm so glad when I was in those young years and I couldn't even max it out, but I was sticking money in the Roth IRA and I was just like trusting that it was going to save me money on future taxes. And then to see that thing grow and then to be like, that's tax-free money at some point. And then having that balance as well, like some people like maybe, like they, they just talk smack about the traditional and they're like, you should put everything in Roth. But really, I think what Jesse's alluding to here is that it's, it's a

• 24:22Speaker 06

  difficult conundrum because you're talking about trying to save as much taxes you can over across the whole span of your life. And it's really hard to predict all that stuff out. So you're doing your best. But I think one of the best things you can do, especially for younger stackers, is to prioritize the Roth IRA in those early years. And then you can make changes as you move on. But the goal ultimately is hopefully to have like a balance where you can kind of draw from both traditional and Roth accounts later on down the road to try to hit that sweet spot and throw the needle.

• 24:49Speaker 00

  That's it. When somebody gets all adamant about one, I'm like, you can predict the future? That's amazing. It's so, so, so difficult to do. Joel, you have the last, the last one. There's still a ton. There's a ton of stuff out there that people mess up pre-retirement. What, what do you think is a big one that goes on the wall?

• 25:08Speaker 06

  I'm ready for this one to get smacked down, but uh, I see the, the stink eye coming from Jesse over there. Uh, I'm, I was gonna say, like, putting all your eggs in the retirement basket. I think especially people who listen to shows like this, shows like How to Money, like, shows like Afford Anything, you're trying to be so thoughtful about your financial future. And it's really easy to be like, oh yeah, I'm, I'm reading like about the massive impact that compounding returns can have. And then we're nose to the grindstone so hard for so long. That we're missing out, kind of like what Wes Moss would call corporate suits. We're not pursuing those hobbies on steroids. In the meantime, we get to retirement and we're like crickets. Like, what do I do with my life now? Because I've been spending it working and I've done all the things that everyone told me to do.

• 25:52Speaker 06

  But my goodness, I think I missed out on the payoff that retirement can have. Because I wasn't practicing it along the way, whether that's like many retirements, or whether that's just being overly focused and not having enough flex, financial flex, to be able to enjoy some of the here and now. So that's maybe long winded, but I'm gonna nominate that.

• 26:09Speaker 00

  Now Benjamin Brant talks about retirement begins now, about experimenting, living your life, like if you go on a vacation, if you think you want to live in Florida, go on a vacation or two in Florida and see if you'd actually, actually like it there. Oh, my God, it's the surface of the sun in July. Who knew?

• 26:27Speaker 00

  All right, Paula, does this one go up on the, up on the wall?

• 26:30Speaker 05

  It does. And, and the way that I would summarize it is I would say that it's the mistake of living in the future, rather than simply planning for it.

• 26:40Speaker 00

  Oh, what do you mean by that?

• 26:42Speaker 06

  That's a good way to say it.

• 26:43Speaker 05

  There's a distinction between delayed gratification versus deferred life. And delayed gratification in the conventional sense of that phrase, I actually kind of don't like that phrase either, because I think that saving and investing is inherently gratifying. But the phrase delayed gratification is meant to indicate that saving is simply delaying spending a pile of money until a future date, right?

• 27:10Speaker 00

  I see what you're, yeah. So you find spending to be fun, but if you're cranking away at something that you absolutely detest doing, just to build a tomorrow that's better, that's not assured while you're wasting today, that's not good.

• 27:23Speaker 05

  Right, yeah, exactly. So the distinction is deferred life is like you're deferring your entire life. You're not enjoying the life that you have today, because you're building towards what you hope will be a better life tomorrow. But like at the expense of having a sucky life today.

• 27:40Speaker 00

  All right. You can't let Joel get away with this one, Jesse. You gonna smack this down?

• 27:44Speaker 07

  Um, I find it very hard to smack it down. I was thinking about, you know, a lot of times when people write a manifesto, it's kind of, there's kind of a negative connotation there. But our friend, if it's a retirement manifesto, you think of Fritz Gilbert, who lives just north of Joel, I think, down there in the great Peach State. Cause Fritz had some really good data points that he put together a few years ago about this very subject. And like, that's, that's one of those things that I always come back to. And, and it's about that subject of, the one that I really love is Fritz and another colleague of his ran a big poll of Fritz's audience. And I think there was like hundreds, if not over a thousand different retirees participated in it. And the number one concern for all the pre-retirees was financial. It was just making

• 28:27Speaker 07

  sure they had their finances in line for retirement. But then when they polled all the post-retirees, people who had already been retired for a number of years, like finances was like number six on their list. And all of the top concerns on their list all had to do with lifestyle and, and making the most out of retirement. And like, it had to do with kind of the, the soft side, right? The soft side of retirement. So the idea that Joel is pointing out, I think, is that a lot of pre-retirees really index for the future. They really index for their finances. They, they think about all the numbers and all that stuff. And most of the time, what Fritz's data points out is that most of the time, that concern is kind of misplaced. Like, once your numbers are good enough, you really have to start thinking

• 29:09Speaker 07

  about the soft stuff. There's a great stat. It's like 28% of all retirees at some point feel depressed, or I'm probably butchering it. But one of the data points is that retirees actually get depressed pretty often. And, and part of it might have to do with, well, did they prepare for all the soft side of retirement?

• 29:24Speaker 00

  Yeah, I haven't seen Fritz's numbers, but I have seen retirement expert Ken Dykwalde's numbers. And Ken says that the average retiree will have 18 months of pure bliss when they first get into retirement. And then the biggest depression of their life, especially Jesse, to your point, if they haven't thought about this enough, if they haven't made that transition. So Joel, it's time to apply the fix then. How do we stay off the wall of shame?

• 29:46Speaker 06

  I was gonna say, follow up to your question after that honeymoon appeared, a lot of people go back to work, not because they need the money, but because they need the connection and they haven't built those connections, right?

• 29:54Speaker 00

  Finding the purpose, yeah.

• 29:55Speaker 06

  Yeah, yeah. And so I think it's really important in your 30s, 40s and 50s to yeah, take those, take those mini retirements, maybe like longer vacations, like what is it gonna look like? What do I want my days to look like? Who do I want in my life? And how do I build those relationships now? Whether that's like a running buddy or somebody you do woodworking with, or whatever your hobby is, have a couple of those hobbies too, that you're not just like, yeah, I'll get to that when I'm 65, but you do along the way so that you have connections, right? In, with other people who are interested in the same stuff you are. But I think so often, like, there's just, especially, I'm thinking about like my dad's generation, right? He was working so hard for this far off future. He's often

• 30:39Speaker 06

  missing some of those connection points along the way. And he's done a great job of building that up in retirement.

• 30:44Speaker 00

  Oh, that's good.

• 30:44Speaker 06

  It can be. Yeah. It can be for a lot of people. A really, like, it can take a long time. It can be really hard to actually get there if you're not kind of conscientious and being thoughtful about that along the way in those decades leading up to retirement.

• 30:55Speaker 00

  Yeah, there's this fork in the road at retirement, really between people that have spent a lot of time thinking about what they're gonna do and people who haven't. And it can be, there be the best or the worst. And by the worst, it's men over age 70 that have the highest rate of suicide of all age groups. So it can be a really, really tough time. All right. In the second half, we're gonna talk about traps during retirement. What do you guys see then? But at the halfway point of every Friday show, we have this year-long competition between our three frequent contributors, OG, who's not here today. So Joel, your team OG, and of course Jesse and Paula. And Joel, we've got good news and bad news then when you play for OG. You want the good news or the bad news?

• 31:37Speaker 06

  Go bad news first.

• 31:38Speaker 00

  Well, the bad news is you're gonna have to guess first, which I never like the guest to have to do. But the good news is it's because you guys are on a record pace. The record is 18 wins during a year. And Doug, how many does OG have?

• 31:52Speaker 04

  OG has nine points as of today. I will say that he has been stagnant of late. Joel, maybe you can break him out of that. He hasn't gained a point in a few weeks because Jesse and Paula screaming up in his rearview mirror. Jesse has seven points and Paula has now four points, at least one of which she earned by herself.

• 32:14Speaker 00

  Herself.

• 32:18Speaker 00

  She owes Sarah Catherine Gutierrez two of those points. Yeah. So, all right. Now you know the stakes, Joel. Big, big stakes to try to stay in the lead as Jesse and Paula are coming for you. Doug, you've got today's pre 4th of July trivia question. What are we talking about?

• 32:38Speaker 04

  Well, hey there, stackers. I'm Joe's mom's neighbor Doug. And just like I've come halfway through this episode to take command of the podcast, today I'm shining a light on a man who took command of the Continental Army way back in 1775. Yes, nearly one year before the US officially declared for free agency, George Washington was put in charge of the whole shebang. Of course, you know, it wasn't like a shebang so much as it was like clunk, clunk, clunk, clunk. I mean, the troops were pretty poorly equipped. Their supplies were running out all the time and the British looked more unbeatable than Joe's mom at a poker table. Here is today's question. How many Benjamins did Congress approve to

• 33:23Speaker 04

  pay George Washington in $1775 as an annual salary to lead this mess of an army? I'll be back right after I go help Joe's mom get ready for our 4th of July celebration. She's ready and a bunch of fireworks for the neighborhood kids as we speak. Not sure that's a great idea, ma.

• 33:43Speaker 00

  You always gotta remind mom that somebody's gonna lose a finger doing that, Doug. Like, settle, settle down.

• 33:48Speaker 04

  Remember Stevie?

• 33:49Speaker 00

  It is horrible. Joel, how many Benjamins? That's the key. We're talking numbers of Benjamins. In 1775 money, did Congress approve to pay George for leading the Continental Army?

• 34:07Speaker 06

  I'm gonna say eight Benjamins.

• 34:08Speaker 00

  Eight Benjamins?

• 34:10Speaker 06

  Mm-hmm.

• 34:10Speaker 00

  All right, Jesse. Joel throws down the big eight. What are you thinking about that?

• 34:16Speaker 07

  Yeah, I'm trying to do some mental math here.

• 34:20Speaker 07

  Yeah, it's a pretty good guess is my, is my, I'm gonna go higher though. I'm gonna go, um,

• 34:28Speaker 07

  11 Benjamins.

• 34:29Speaker 00

  11 Benjamins. This army goes all the way to 11.

• 34:36Speaker 00

  Paula?

• 34:37Speaker 05

  First of all, do you remember the episode where OG recommended reading the book 1776?

• 34:43Speaker 00

  Yes.

• 34:43Speaker 05

  So I actually bought the audible version, the audiobook version of that upon OG's recommendation.

• 34:50Speaker 00

  I know where this is going.

• 34:51Speaker 05

  And I've listened to it and I have zero recollection of any numbers.

• 34:56Speaker 00

  Well, that's because this happened in 1775, Paula, so it didn't make, you need the prequel.

• 35:04Speaker 05

  Um,

• 35:07Speaker 05

  part of me wonders if this is a trick question because Benjamins technically did not exist at the time for a number of obvious reasons.

• 35:16Speaker 00

  Yeah, look, I'm a jerk. I'm not that much of a jerk.

• 35:21Speaker 05

  I will take the under. I will go seven.

• 35:23Speaker 00

  Take seven. So we have Paula at seven, Joel, nice and cozy there at eight, and Jesse with 11. Who's got it? We're gonna find out in just a minute. We will be right back. Well, you may know the chaos is the name of the game here in mom's basement, what with guests coming in and out, Cooper the cat getting in the way, Doug being, well, being Doug. The holidays make it even worse because it's all about food and big meals. And the problem is prepping for those takes forever. But what about those between meals, right? The meals between those huge, huge, huge bookends. Well, that's where Factor comes in. Factor is made with high quality ingredients that you

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• 37:14Speaker 00

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• 37:55Speaker 00

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• 40:49Speaker 00

  All right, Joel, how you feeling about that guess now?

• 40:51Speaker 06

  So confident. I'm gonna crush these people. Oh gee, I gotcha.

• 40:56Speaker 00

  Eight Benjamins gonna nail it. Actually, wait a minute. Yeah, Jesse, you said 11.

• 41:02Speaker 07

  I think I said 11 Benjamins.

• 41:03Speaker 00

  11 Benjamins. How you feeling? Everybody came in last. Paula came in down at the bottom.

• 41:07Speaker 07

  I'm feeling good. I was doing some inflation math in my head.

• 41:10Speaker 00

  Well, generally, Paula trusted her gut. You know, she probably should have taken the over and didn't. So you gotta feel good about that.

• 41:17Speaker 07

  Feel great. I don't know.

• 41:18Speaker 00

  Feel great about that. But Paula, last week, your gut was right.

• 41:23Speaker 05

  I know. I mean, it's, sometimes it comes around. If only I could remember what the book said. Because I, I listened to the book. I just don't remember any of it.

• 41:32Speaker 07

  I did the homework.

• 41:33Speaker 05

  I did the homework. Totally did the homework. Oh gee, gave me the assignment.

• 41:38Speaker 00

  Well, we're gonna find out. Is it a 4th of July miracle, Doug? Is Paula gonna win two in a row?

• 41:47Speaker 04

  Hey there, stackers. I'm George Washington fan and guy who's all about independence. In fact, I'm so independent, Joe told me I'd really thrive in an independent living facility.

• 42:01Speaker 04

  That means Joe's mom's neighbor Doug. George Washington, father of our country, hero of the revolution, underpaid guy in charge of the Continental Army. Well, was he underpaid? Let's find out. My question was this, how many Benjamins made up Washington's annual salary when he signed on to head the new Continental Army? Well, I'll say this, these are three of the worst answers I've ever heard on this show.

• 42:29Speaker 00

  Wow.

• 42:30Speaker 04

  Guys, it was 493 more Benjamins than what Paula guessed.

• 42:36Speaker 00

  Wait a minute, what?

• 42:36Speaker 04

  492 more than what Joel guessed.

• 42:39Speaker 00

  Doug, Doug, it's Benjamins. $100 bills, dude.

• 42:43Speaker 04

  480.

• 42:44Speaker 00

  No.

• 42:48Speaker 00

  It is, uh, who guessed 11? Jesse?

• 42:54Speaker 07

  It's six less than Jesse and three less than Joel and two less than Paula. Is the answer five Benjamins, I assume?

• 43:00Speaker 00

  Yeah, six Benjamins less than Jesse.

• 43:03Speaker 04

  Well, we'll have to get back to having a pre-show meeting about this show, so I'm clued into that. The correct answer is five, making Jesse our winner.

• 43:13Speaker 00

  No, making Paula our winner.

• 43:16Speaker 07

  Paula?

• 43:16Speaker 00

  That makes Paula our winner, Doug.

• 43:19Speaker 04

  All right, take over to you, Joe.

• 43:24Speaker 07

  Sorry, Doug. Sorry. Well, can I ask a question of clarification? Could you tell us the answer in dollars, just so we're sure?

• 43:32Speaker 00

  500 bucks.

• 43:33Speaker 07

  500 bucks, okay. I would assume that means Paula wins.

• 43:38Speaker 05

  Right.

• 43:39Speaker 07

  Actually, Don, Paula.

• 43:40Speaker 05

  Thank you, thank you.

• 43:42Speaker 00

  How did that happen, Paula?

• 43:44Speaker 05

  I mean, sometimes there is a turnaround. Isn't that like the plot line of every, um, you know, Goliath comes up upon David? No, David comes up upon Goliath, kind of a plot line movie thing? I'm asking you because I think you've seen movies. I have not, but I have been informed that in movies, ultimately, ultimately, the underdog prevails.

• 44:11Speaker 00

  Is this gonna be a Christmas miracle, like at the end of the year?

• 44:13Speaker 05

  I think it's a 4th of July miracle.

• 44:15Speaker 00

  It is a 4th of July miracle, but I'm saying, is this like the beginning of like the big second half run? It's gonna be super.

• 44:22Speaker 05

  Maybe. I don't want to make any predictions.

• 44:24Speaker 00

  All right, speaking of super, we're in the middle of a super discussion about, see what I did there? We're in the middle of a super discussion about retirement, and we got this wall of shame, Joel. So now we're into retirement and, uh, well, what's, uh, I'm gonna call these largely, like, I thought most of what you were gonna tell me was about not having a spending plan. And in some ways it did, because Joel, you said that was the fact that we would have no clue what we were gonna do. So we don't know what we're gonna spend, right, in retirement? Don't think about what we're gonna spend, because we don't know what we're gonna do. Paula, you talk- About black swans, which is we have no idea if we're going to have to retire early, if we can retire now, which is also has a lot to do with spending and Jesse,

• 45:07Speaker 00

  the fact that money isn't all yours. Also, we think we get to spend X and instead we're spending Y. So I'm going to call these, I'm going to predict ahead of time that yours are going to be timing traps, that these are going to be, we do, we're not sure about the timing of these different things. But Joel, let's try to put one on the board. What are you going to nominate?

• 45:26Speaker 06

  All right, I'm going to say, and only because I've known people who have done this, is thinking that the retirement nest egg you built up, it's ready to be spent. Once you reach retirement, you're like, well, it's retirement's in the name of the funds that I'm like investing and saving up. And I've reached retirement. So boom, it's go time. So I've just seen people make big mistakes, accessing way too much of their money, way too quickly in retirement, and then being like deer in the headlights afterwards.

• 45:52Speaker 00

  Go and wait a minute. And then when you try to pump the brakes, it's too late.

• 45:56Speaker 06

  Right. Yeah. And like, but they said it was for retirement. I'm retired. I started using it. And it's like, yeah, but it's so, so poorly, like with zero methodology behind it. And I just blowing vast sums of money really quickly, right after you reach that point of not working.

• 46:10Speaker 00

  Jesse, does this go on the wall?

• 46:14Speaker 07

  It does. It goes on the wall, I think, for a couple of reasons. There's a, there's a location reason, and then there's an allocation reason that I think of as Joel was describing this. And the location mistake is there are some people out there who are like, yep, I'm 12 months away from retirement. So when that day comes, I'm going to move all that money from my 401k into my bank account. Cause that's what you do, right? I've reached retirement. Now it's time just to, to put the money somewhere safe. It's, I no longer will invest it. I'm going to put it in the bank account. And that should make us then think of the allocation reason, which there are some people who say, yeah, well, retirement is one year away. And I've listened to podcasts like stacking Benjamins or how to money. And they say that one year isn't enough time to really be

• 46:56Speaker 07

  invested in stocks. So I'm just going to move all of my retirement monies into bonds and cash. And they don't realize that retirement is going to be a 30 year long process. And some of that 30 years is pretty much, that's, that's long-term and you can stay invested in the stock market if you want to, for, for at least a good amount of your money. So anyway, I, I hear what Joel is saying and it belongs on the wall because I think those are two, the first one might, might not, might not be that common, but the second mistake, the allocation mistake, I think is very common.

• 47:23Speaker 00

  All right, Paula, I'm going to throw some dirt on this one and you tell me what you think, which is that we had Dana Onspah on recently talking about how, you know, you've got your go-go years, your slow-go years, then your no-go years. Why wouldn't you go ahead and spend more money during those go-go years? Joel, be damned.

• 47:42Speaker 07

  You're not the only one who said that.

• 47:45Speaker 05

  The best solution that I heard for this is to take a separate bucket of money. Let's say it's maybe your travel fund, right? And in this very specific separate bucket of money, you say, this is the bucket that is allocated specifically for traveling during the first 10 years of retirement. And so then you allocate exactly what that budget is, and you have a bucket that is just that. And cool, now you can manage that bucket for the express purpose of traveling during that first decade. That's a way that you can manage the go-go years. And the goal is to spend down that bucket within the first 10 years of retirement. You want that bucket to be zero at the end of year 10, right?

• 48:28Speaker 05

  So that's a way of managing a specific bucket for the go-go years so that you can like, enjoy, you know, there are things that you can do, that many people can do in their 60s that they can't do in their 80s. You know, you can enjoy your 60s, but you're not misallocating your 80s and 90s.

• 48:45Speaker 00

  So are you saying then that there actually still is some planning for the amount that goes in here? So you're saying it is going on the wall?

• 48:53Speaker 05

  Goes on the wall.

• 48:54Speaker 00

  Oh, damn it. Joel, what's going on there?

• 48:59Speaker 07

  That's hard.

• 49:00Speaker 00

  Paula had a fix. Do you like Paula's fix or do you have another one?

• 49:04Speaker 07

  Well, I want you to know I paid Jesse and Paula ahead of time to agree with me. Just to mess you up.

• 49:09Speaker 00

  You gave him five Benjamins?

• 49:11Speaker 07

  Right.

• 49:14Speaker 06

  So yeah, I mean, this is one of those things where you just have to realize like Jesse was alluding to that there's many decades of retirement. And so just like when pulling like buying an RV, right? That's like a massive expense. And that's the kind of thing that maybe a new retiree would pull the trigger on, even if it absorbs like far too much of their retirement funds. They haven't planned well for that purchase. And they're just saying, well, hey, listen, YOLO, these are the years where I'm like young and reasonably fit and I can get out there and do this. And then they realize pretty quickly, wait a second, I don't like RVs and driving across the country is actually not my jam. And I dropped 250 grand on the super fancy RV.

• 49:54Speaker 06

  And now because of the way depreciation works on it, it's worth 150 when I try to resell it. And so there's this kind of belief too, where like, hey, I got social security coming down the pike. My home is getting close to paid off. Why don't I just use a big chunk of this money now? And I'm with Paula, like it's a great idea. If that's something you've tested and tried already, and you know, hey, RV, that RV lifestyle really is my jam. It's going to light me up and make me happy. And we're going to be doing that for, you know, a bunch of many years. That's great. It's worth spending the money on. Just make sure you've planned ahead for it and you're not like dipping into a huge chunk of the investment nest egg that you built up because you need that money to keep working for you for decades. And you need to be able to use it to live life, you know, for many, many years.

• 50:39Speaker 00

  I had clients when I was a financial planner, Joel, I swear you must know them because it was George and Gail, world's nicest people. When they retired, they bought an RV that at that time cost about a hundred thousand dollars. And this was maybe 1998. So think about that in today's dollars, right? Just a beautiful RV. They lasted two and a half years before they were in my office going, it was too small. I love my spouse.

• 51:04Speaker 00

  But this is not enough room and we don't like traveling as much as we thought we did. So it goes back to the same thing that you talked about earlier. The way that Dana, by the way, solves this is just replanning every couple of years. How much can I spend? How much can I spend and roll it out there? You were going to say something else though, Joel.

• 51:19Speaker 06

  Well, just the last thing too, is to know whether, how do you know whether or not that that purchase is going to make you happy? You have to like test drive it in smaller ways. There are a lot of people who will make, I think the RV has to be one of the most regretted purchase decisions that anyone makes after like a timeshare, right? Like it's just, there, there are way too many, it sounds great. And like traveling the country and parking at these campsites and it just sounds awesome. I mean, it sounds awesome to me, but then I've experienced so many people who have done the thing and they didn't really like it very much. I'm like, what am I missing? So what I've got to do then, if I'm, if I'm thinking it might work out for me is to rent one for a while, borrow one from a friend for a couple of weeks, test out the lifestyle. My wife and I were, we were just on vacation. We're like, every time we go somewhere, we're like, I could totally move here.

• 52:03Speaker 06

  And we start thinking through what it would look like for us to move to that place. And then the more I think about it, we're like, but if we bought a place here, every time we come, we're going to have to think about like all the fixes we have to make. And yeah, well, how often are we going to actually be here? And what if we want to take a trip somewhere else? We're going to feel obligated to going to the house that we bought.

• 52:18Speaker 00

  It's a whole different experience.

• 52:19Speaker 06

  It's a whole different experience and it's actually, when you run the numbers, much cheaper to book the hotel room or the Airbnb in the place where we want to travel and have the freedom to go wherever we want. RV locks you down, owning the vacation property locks you down. And I just think for a lot of people, they haven't really thought through it well enough. And so they make sadly a mistake with a lot of their money that doesn't pay off the way they thought it was going to.

• 52:41Speaker 00

  Paula, what's next to go on the wall?

• 52:43Speaker 05

  Kind of piggybacking off of what we were just talking about with the RV and the travel, like the underlying assumption under all of this is that when people retire, they want to travel or when people retire, they want to engage in hobbies. And I think that like having a copy paste retirement. Yeah, I would say having a copy paste retirement.

• 53:05Speaker 00

  Having a copy paste retirement. Jesse.

• 53:09Speaker 07

  Joe, I could tell by that little that you had a little hint in your voice right now that you really don't want me to put this up on the wall. I could hear it in you. I could hear it in your voice.

• 53:18Speaker 06

  Joe just wants a cage match here, you know?

• 53:20Speaker 07

  Jesse, this is the one, Jesse, this.

• 53:23Speaker 00

  This is it, Jesse.

• 53:24Speaker 06

  Take out the folding chair, Jesse.

• 53:26Speaker 07

  Let me, I'm climbing up on the ropes. Let me ask you, Paula, so you just mean that retirees are looking to the way that other retirees live their life? And they're like, well, I want to do the thing that all those other retirees did. Is that what you're saying?

• 53:43Speaker 05

  Yeah, exactly. And I think that oftentimes, and you know, social mimicry is natural. There's this guy, Luke Burgess, and he writes this book all about like what's called memetic desire. And that is like a very innate human. You see it even in young children, like we learn what to want by observing others.

• 54:03Speaker 07

  Fidget spinners.

• 54:05Speaker 05

  Yeah, exactly.

• 54:06Speaker 06

  Frozen yogurt.

• 54:07Speaker 05

  Yeah, exactly. And so it is a like very intrinsically human trait, like memetic desire. But the issue in retirement is that oftentimes that can come at the expense of, of purpose, of community, of these things that are well documented to actually correlate to longer lifespans and greater self-reported life satisfaction. So if you're going to Tahiti, but your grandkids aren't there or your friends aren't there, sure, it looks great on Instagram or whatever it is that you're using when you're 70, but it's a goal that came about from copy paste, not that came about from like a deeper place.

• 54:48Speaker 07

  Put it up on the wall.

• 54:50Speaker 00

  Oh, come on.

• 54:52Speaker 07

  She's totally right, Joe. I don't know what you want me to do. Paula's right.

• 54:55Speaker 00

  She is right, but the problem, Jesse, you're done.

• 54:59Speaker 07

  Cut me off.

• 55:00Speaker 00

  But the reason Joel, it shouldn't go on the wall, I think, is because it's the same thing you said about pre-retirement. Like you didn't do enough of this planning and living ahead of time, which creates what Paula said later on.

• 55:12Speaker 06

  You're stepping on my toes here, Paula.

• 55:14Speaker 00

  That's right. That's right.

• 55:16Speaker 06

  But I mean, we know this is true, like talking about fro yo, whatever it is that's like the popular fad of the moment, Stanley cups a few years ago, right? Oh, my gosh. Those things are the biggest pain in the ass. Ever of all time. And by biggest, you mean? Cause they're so damn big. And they're huge, right? But like, everybody was like, oh, I gotta get six shades of it. And they take up so much space in your cupboards. And they're like, they're the worst. And yet, everybody bought into it. And this is like, we're humans. Like, this is human nature, right? Which is what Paul is alluding to. It's, I think it comes from a lack of self-knowledge oftentimes about what actually makes us tick, what we actually like, because we're constantly looking toward the world around us to tell us what we should be liking. And it's harder than ever to kind of get off of that sort of,

• 56:00Speaker 06

  out of that way of thinking, out of that mindset. But I agree that for like, if you want an unsuccessful retirement, try to do what every, what it looks like is making everyone else happy. Cause I think so often, behind the scenes, what looks like it's making everyone else happy is putting people into lots of debt, is making them pretty miserable, maybe behind the scenes. And those epic trips, like, sometimes are great. Like, I'm not even, you know, I think travel for a lot of people really does, like, light them up. And it's worth the effort, it's worth the expense. But then for a lot of other people, they're doing it in an attempt to mimic what the successful retirement should look like, instead of deciding, what is it that a successful retirement, for me, looks like?

• 56:41Speaker 00

  All right, Doug, you've got the deciding vote. Cause I don't think it goes on the wall. But it sounds like, Joel, you're saying it does go on the wall.

• 56:49Speaker 06

  This is, don't make me do this, Joe.

• 56:56Speaker 00

  Doug, you don't care? Does this go on the wall or not? I think it does. I think it does. Oh, man.

• 57:03Speaker 06

  You're the odd man out here, Joe.

• 57:05Speaker 00

  Oh, man. Sorry, Paula. It goes on the wall. Well, we'll go ahead and put on, it isn't that I disagree, because I definitely agree. We don't spend enough time thinking at a time about what we want to do. And we look at all the pretty stuff, like you said so eloquently. It, it is definitely a big problem. And it's funny, the longer that all of us do this, we talk about money less and we talk about lifestyle design more. Listening to all of your shows. We're always tying it more and more to lifestyle design. As we get more research, we find out just how absolutely important this is. Whether you have a Roth IRA or not, pretty important. But what do you think about retirement? Far, far, far more important. So, we've got Paula's. We've got, who else went? Who did I lead off with, Joel?

• 57:46Speaker 06

  I went.

• 57:47Speaker 00

  Yes. All right. Here he is, the man, the myth, the legend. Jesse, you're bringing us home.

• 57:54Speaker 07

  My thought is that I'm looking over at my notepad. It's when people assume a constant withdrawal rate, like a lot of, you know, your pre-retirement, you're going into retirement, you've run your retirement math, you read a book by, you know, Bill Bengen or something like that, and you're like, cool, I've got 2 million bucks. Bill Bengen says I can withdraw 4.7% per year, 94 grand a year, inflation adjusted every year, I'm golden. The fact of the matter is though, like, that withdrawal rate is not going to remain constant for the 20 or 25 or 30 plus years of your retirement. There's going to be this one year where you need to sink some money into your house to replace some stuff, and you actually need to buy a new car. And on top of that, you need to withdraw all your normal lifestyle costs.

• 58:38Speaker 07

  And that's totally okay, and that's totally normal. But if you've convinced yourself that you're locked in to this, you know, prescribed

• 58:47Speaker 07

  number, right, withdrawal rate, then you are going to throttle down your own lifestyle, you're going to self-limit how you can live. And it's all because you entered retirement and you've been living your retirement with this false understanding of how safe withdrawal rates work in retirement. It's never going to be a constant number, and you can still analyze your way to a really happy place, accounting for the fact that your withdrawal rate will change over time. That's totally okay. That's my nominee for the wall.

• 59:15Speaker 04

  Okay, so Paula, I saw head nods from you, which means you want this not on the wall. That's what you're trying to say.

• 59:22Speaker 05

  It is on the wall. It is so on the wall. Because it's true. The whole premise of the 4% withdrawal rule is steady drawdowns, 4% adjusted for inflation every subsequent year. That is not, it's just not how humans live, you know? And so you go into retirement modeling this thing that sounds great on paper, but that just has absolutely no basis in the real world.

• 59:46Speaker 04

  Isn't that like saying that a budget isn't real world? Because if you, if you set a 4% of your funds for that's your income for the year, that's your budget, but that's not how people live? I guess I'm not understanding.

• 1:00:00Speaker 05

  Um, if you, when you're planning for retirement.

• 1:00:06Speaker 05

  If you're in a position where you are unprepared for retirement, you wake up one morning and you're like, you've just turned 50 and you have zero saved and you're like, oh no, this is an emergency. I need to start doing something. And you have to figure out what is going to be like the bare bones, like here's the budget that I'm going to live on. And this is going to be really hand to mouth. Okay, cool. Like I, I get the, this is your quote unquote salary, and you live on it in the same way that you would live on a salary. That's something that you might have to do out of necessity. But if you are in a forward looking way, planning

• 1:00:48Speaker 05

  for the retirement that you want, which might include replacing your car, it might include upgrading your kitchen, it might include taking a trip to Alaska or Hawaii, like it might include all of these discretionary expenses, those are going to come at like, they're gonna

• 1:01:04Speaker 04

  Lumpy. It's gonna be lumpy.

• 1:01:06Speaker 05

  Yeah, it's gonna be lumpy. And the part that we're not talking about, um, medical spending, and that medical spending is also going to be really lumpy.

• 1:01:13Speaker 04

  Oh, yeah.

• 1:01:14Speaker 05

  You know, and that's something that for the 50 year old who has zero saved, they don't really have a way of dealing with that medical spending. Like if their budget is the 90,000 a year that they can live on, that better include a huge amount for medical spending. Cause if it doesn't, like

• 1:01:33Speaker 04

  Heart transplant.

• 1:01:34Speaker 05

  Yeah, like they have no bandwidth to deal with those lumpy expenses when they come up.

• 1:01:38Speaker 00

  All right, Joel, you already said not thinking through your expenses. I mean, Jesse's is really just a modification of yours. So clearly it doesn't go on the wall.

• 1:01:47Speaker 07

  Yeah, you're, you're the kind of guy though, Joel, who isn't easily manipulated. You know, you're too bright to be manipulated. So just keep that in mind, too.

• 1:01:56Speaker 00

  Who would manipulate him? I'm just pointing out a truth.

• 1:01:58Speaker 06

  Yeah, you should have seen me in the Stanford prison experiment, man. Like it was not good.

• 1:02:04Speaker 06

  This totally goes on the wall and this is making me think about even just my parents situation when they, when they first retired, we kind of had a plan thought out and then we get a medical diagnosis for my mom that's not great and you have to make a pivot like when it comes to even, hey, when are we, when are we taking social security? Part of our thought process early on was like, well, we can take more than 4% a year, maybe even take seven or eight percent out of your portfolio in an effort to hold off on taking social security. And then guess what? At this point in time, when you start taking social security and you also have a paid off mortgage then, then you can take less. Like, it's okay to expend more of your portfolio a little earlier on in order to achieve these other goals. And then when a diagnosis comes down the pike, you maybe make a bit of a different

• 1:02:47Speaker 06

  decision and you say, well, actually it makes more sense to claim social security now and to withdraw less of my retirement fund. So there's always, I think there's different things at play, right? And there, there are all of, there's a million different things that can change and tweak your plan. You're probably not most of the time making dramatic overhauls, although sometimes I think that's necessary. But that idea that like 4%, just like set it and forget it, kind of like those old school rotisserie, rotisserie cookers on the infomercials, like that's not how it's, that's not the right approach. I mean, I think it's, it's good to have that rule of thumb in the back of your mind, but then you have to be willing to make changes along the way, too.

• 1:03:25Speaker 00

  I love doing these live on YouTube and Jay Edwards Dev hanging out with us says, "Bill banging in the Stanford prisoner experiment? Y'all are nerds. I feel so seen." You finally found your people. I remember first time I went to FinCon and I'm having a discussion with Steve Stewart and another guy about term insurance versus permanent. And I'm like, these are my people. This is amazing. Yeah, so welcome. If you want to hang out and be a part of this nerdery, just join us on Monday afternoons, which is super, super, super fun. Speaking of fun, this was a great discussion, although I am a little annoyed that they all went on the wall, but actually in truth, they were all really good. So thank you for that. I think we need a second one though, because I actually have a list of like eight more

• 1:04:09Speaker 00

  that I was thinking you might say, and I didn't hear any of those. So the list is long, a mistake. So maybe we can help people in a future Stack Your Benjamins episode with more of these. But let's find out what's going on where you all are working. And Jesse, you got something?

• 1:04:25Speaker 07

  Just a question, Joe. Can you run polls in the YouTube chat?

• 1:04:31Speaker 00

  I don't know. Doug, can we run polls? Do you know?

• 1:04:34Speaker 04

  I don't know how to do that. I haven't ever seen it before. Doesn't mean it can't be done, but I don't know.

• 1:04:39Speaker 07

  Because it's hard for us, when we all know each other and we're facing each other live, to vote each other to not go on the wall. But for the audience to anonymously decide, you know, it's kind of like, you know, it's a little more Roman Colosseum thumbs up, thumb down. I mean, that could be interesting.

• 1:04:54Speaker 00

  Oh, that could be interesting. If we get the ability for that, that would be fantastic. Yes.

• 1:05:00Speaker 06

  Joe, you were really trying to breed some enmity here today.

• 1:05:03Speaker 00

  I was.

• 1:05:04Speaker 06

  I don't know what that's about.

• 1:05:05Speaker 00

  It's so annoying. We get to the end of the episode, you guys all still like each other. Like, what's up?

• 1:05:09Speaker 06

  Go to therapy, Joe, okay?

• 1:05:11Speaker 00

  What's up with that? Joel Larsgaard, thank you so much for joining us today.

• 1:05:14Speaker 06

  Thanks for having me. Always a joy.

• 1:05:16Speaker 00

  What is going on? What's coming up? Give us a scoop, man. What's coming up at How to Money?

• 1:05:20Speaker 06

  Oh dude, so I'm trying to take my own medicine and the month of July, I'm out of town, baby. Like, no, no, no work. So you might, if you're coming over to hear How to Money, it's a lot of replays in July. But I hope if you haven't listened before, it'll be new to you. So enjoy.

• 1:05:36Speaker 00

  It's greatest hits.

• 1:05:37Speaker 06

  That's right.

• 1:05:38Speaker 00

  We actually know what's funny is we have greatest hits coming up on Stucky Benjamin's next week as well. People are going to hear Scott Galloway next week. We're going to hear a great roundtable discussion. So some stuff that maybe you haven't heard before. But you guys, what you talk about very seriously though, what you talk about is so evergreen. Like these tips, they're not things that go away tomorrow, Joel. You don't talk about like the fads.

• 1:05:58Speaker 06

  No, I mean, I will say on our Friday episodes, we call them the Friday flight. Those are where we try to tackle the timely news stories of the week and how they pertain to your personal finances.

• 1:06:06Speaker 00

  But you're not going to replay any of those.

• 1:06:08Speaker 06

  No, no, we won't. We won't. But like, yeah, so most of the stuff you're going to hear, if you haven't heard it before, is going to feel still fresh and new. We try to pick the ones that, that make the most sense or some of our favorite episodes.

• 1:06:18Speaker 00

  Awesome. And that is it. How to Money, where finer podcasts are found. Paula Pant, what's coming up at the amazing Afford Anything show?

• 1:06:27Speaker 05

  So on the first Friday of every month, we host an episode in which we take a look at the economic landscape. And so for our July 1 Friday episode, we go deep into the New York City rent freeze and unpack what's happening there, what the consequences are. We kind of lay it out, you know, explain first for people who might not be acquainted with how rent works in New York City, because New York is kind of a different beast. We first lay out, here's how the rental system in New York works. Here is the new freeze, and here are all of the downstream implications.

• 1:07:06Speaker 00

  The quote of the day, "New York is a different beast." We had no idea.

• 1:07:09Speaker 05

  Yes.

• 1:07:12Speaker 00

  It is fascinating to watch it work, not work, in between. Always, always fun. And that's at Afford Anything, where the finest podcasts are found.

• 1:07:21Speaker 05

  Absolutely.

• 1:07:22Speaker 00

  What's going on, Mr. Kramer at Personal Finance for Long-Term Investors?

• 1:07:27Speaker 07

  Wrapping up June, another good month. A couple of days ago, Frank Vasquez stopped by and I peppered him with some risk parity questions, including, you know, managed futures and gold. Like, how do we incorporate these assets that other people might see as suboptimal into a portfolio that ends up being, you know, quote unquote, "better than a traditional retirement portfolio"? So it was, it was a good conversation. Frank's got really good answers to any question you could possibly lob his way. So I tried to lob some good questions his way, and he had some good answers. And then next week, we're doing an Ask Me Anything episode exclusively about Roth conversions, a very popular topic that I get questions about. And so I just compiled a bunch of questions into one, one episode.

• 1:08:06Speaker 00

  Wait a minute, you said, "Ask me anything," but about exclusively one topic?

• 1:08:09Speaker 07

  Ask me only one thing.

• 1:08:13Speaker 00

  Would that be a-

• 1:08:14Speaker 07

  Good point, Joe.

• 1:08:15Speaker 00

  A-M-O-T?

• 1:08:17Speaker 07

  It's an A-M-O-T.

• 1:08:18Speaker 00

  It's an A, man. And that's it. The Personal Finance for Long Term Investors Podcast. Well, guys, thanks a ton. And by the way, hang out after, after the credits because our last show before Independence Weekend, we always like to end our show with one of my favorite pieces from one of my favorite comedians, Stephen Marchant. So we're going to say goodbye and then you're going to hear a little clip from Mr. Marchant talking about, he's, by the way, a British comedian, which will give you an idea of kind of where we're headed. But Doug, what should we have learned on today's show, man?

• 1:08:52Speaker 04

  Well, Joe, first, take some advice from Joel Larsgaard. Maybe test out your retirement plans before you devote a giant pile of money into, say, an RV that'll get real small, real quick. Second, heed Jesse Cramer's warning, your pre-tax wealth will not be reflective of your retirement wealth. Don't forget, the taxman cometh. But the big lesson, if you just bought a shopping cart full of fireworks, remember that no matter how much they beg, none of those belong in your neighbor's pants, especially the sparklers. Those things are hotter than the stereo in my El Camino.

• 1:09:30Speaker 04

  Thanks to Joel Larsgaard for joining us today. Get to know Joel a little better by checking out his podcast, How to Money. We'll also include links in our show notes at stackingbenjamins.com. Thanks to Paula Pant for hanging out with us today. You'll find her fabulous podcast, Afford Anything, wherever you listen to the finest podcasts. And finally, thanks to Jesse Kramer for joining us. Jesse is the host of the Personal Finance for Long Term Investors Podcast. Check it out. It's filthy.

• 1:09:56Speaker 00

  And also, big Ask him anything. Big, ask him one thing. Yeah. A big thanks to neighbor Doug who wrote the credits today because our writer forgot. So big thanks to Doug for filling in some potholes. Happy 4th of July, everyone in the US, and happy weekend for everybody else.

• 1:10:17Speaker 04

  Oh, happy 4th of July, America. Ready to fire up the grill and celebrate our victory over the Brits?

• 1:10:23Speaker 02

  Well, I'm not, because despite that incredibly convincing American accent, I'm one of those Brits. Now, I've acted in film and TV for years, but my greatest performance is acting like I don't care that every summer you gobble down tube sausages and celebrate kicking our arses, or butts, as you say, incorrectly. Do you really still have to celebrate your emancipation from us? I mean, that's like your girlfriend breaking up with you and then celebrating with fireworks. Every year, for 300 years. It gets my goat. But what really gets my goat is imagining how great America would be if we were still in charge. "Oh, America, if we'd won the war, you'd have better comedy, news, TV programs, and way better rude words."

• 1:11:06Speaker 02

  "Oh, I'm talking fanny, trollop, minger, tar, minjbag, bleeding, sodding, blooming, cocked up, get stuffed." And of course, wanker. Imagine how sophisticated you'd sound when you're insulting someone. "Oi, Brad, your wife's a slag! Now piss off, you wanker!" See how classy that sounded? With our accents and your American self-confidence, you'd be unstoppable. Yeah, you'd have to pay a few more taxes, but you can't put a price on that. Great Britain 2 would be the greatest country on Earth. Your lawyers would all wear powdered wigs, so criminals really respect them, and you'd have all the mushy peas you can stuff down your bloody great gobes. Oh, and if you get sick, you don't need to worry about medical insurance, because with the National Health Service,

• 1:11:50Speaker 02

  a doctor will see you for free in about two years. Plus, your taxes would be spent on things you really need, like a royal family, who do the tough jobs no one else wants to do, like being driven around in a really nice car while waving.

• 1:12:07Speaker 02

  "Y'all wanna eat some apple pie? Then shoot some hoops and have a hoedown, [bleep] bollocks."

• 1:12:13Speaker 00

  Maybe it's time we talked. Kiplinger calls it the trillion-dollar talk, a conversation about inheritance, estate planning, wills, and the questions families should be asking before those decisions become urgent. Because knowing what your family wants and having a plan for it can be one of the most important financial conversations you will ever have. Ready to start yours? Visit kiplinger.com to learn more about the trillion-dollar talk and what this historic wealth transfer could mean for your family.