Why Does No One Talk About 'Rich Guy' Early Retirement?

[@joethecomputerguy1]

Downsize downsize downsize. Retire today and live comfortably but smaller. Tomorrow is NOT guaranteed. This is coming from someone who retired at 52 seven years ago and diagnosed with cancer this year. My prognosis is good but yours may not. I always said this would never happen to me. But it did. No one can take away the 7+ years I have already enjoyed in retirement.

[@GP-fw8hn]

amen brother. Im 57 (just turned) and I am OUT come next March and then off to Spain for a few months to LIVE!!

[@daved2023]

I lost my wife (of 32 years) last year at the age of 50 to breast cancer. I've decided to retire at 55 (5 years earlier than planned) to enjoy my health because like you, we just don't know what can happen. I officially go into retirement at age 55 next March! Best of luck to you in your recovery and thanks for sharing your experience. 🙏

[@JBoy340a]

@@GP-fw8hn enjoy Spain. But if you are from the US don't let them know. There is an anti-American sentiment because of American expat's making it harder for the locals to get affordable rents.

[@michellemilano9067]

​@@daved2023I'm sorry for the loss of your wife.

[@Mary-tj5qx]

Spot on. I’m going to retire next year at 58. Later than i would have liked but not too late, i hope. Healthy right now but have lost enough people young that I know how short life is.

[@twlee1930]

I had read this article a few days ago and thought the Moneyist's response was incredibly self-righteous and unhelpful. I think your analysis is much better and without judgment.

[@damienbates]

My parents managed an early semi retirement because my dad had a construction job that allowed him to work six months of the year and he had nearly unlimited overtime if he wanted. They lived in a huge motor home and were able to travel close to wherever he was working on the highways. They hit the road the rest of the year traveling with a group of friends all over the country. They eventually hit retirement age in their 60’s and settled in a small house in the south west. It was a good thing they retired early because my dad got colon cancer that took him out in his late sixties.

[@elee14]

Totally agree with what you said about peak expense years. They are also in their peak earning years and they would be leaving a lot on the table. Personally, I would work a few more years to cover the mortgage and their children’s educational expense. Kudos to him and his family. First world problems are a great thing to have.

[@putradfr]

Don't simply retire from something; have something to retire to. Start saving, keep saving, and stick to investments

[@tammarasietsema]

It’s really heartbreaking to see how inflation and recession impact low-income families. The cost of living keeps rising, and many struggle just to meet basic needs, let alone save or invest. It’s a reminder of the importance of finding ways to create financial opportunities. You've helped me a lot sir Brian! Imagine i invested $50,000 and received $190,500 after 14 days

[@TraceyAllenbaugh]

Absolutely! Profits are possible, especially now, but complex transactions should be handled by experienced market professionals.

[@DaveMorris894]

Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.

[@ChristineMeier963]

Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things

[@Kimberlybaker331]

Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit

[@CoachKennyG]

Based on experience, here's a few big ticket expenses that may have been overlooked which tip the scale towards more building up of the nestegg: 1. Kids grad school 2. Kids weddings 3. Helping kids buy homes 4. Gifts to grandkids including college plan funding 5. Unexpected healthcare costs including assisted care 6. Home capital improvements 7. Vehicle replacement during retirement It's not easy transitioning from income accumulation to the income preservation phase, especially if you've spent decades living below your means. Since life can throw curveballs, for many, "enough" is never enough.

[@genxretiree]

Wife and I retired late 40s/early 50s with a 9m net worth/5m of that liquid (3m+ brokerage vs 2m in retirement) with no debt of any kind. We actually went debt free 3-4 years before retirement including our personal residence and our commercial property. It's just a lot easier when you eliminate the debt and you can spend more on what you want to vs what you have to. Our kids are done with college as well so that helps.

[@GP-fw8hn]

well done!

[@northtexan95]

If I was him I would feel much more comfortable waiting five years. However, I could do it now if I continued to add income. Perhaps become a financial advisor or consultant where you can choose your work load. I did flinch when it was questioned what would happen if a child choose an out of state school? Who cares what a child chooses. As the parent who would be paying for that school, you can dictate that your children choose in state.

[@kendesmarais9018]

I retired at 65 but continued to work part time in a job that I love. I wanted to cut back not check out. It’s great because I still do very satisfying work but also have the time to spend with my kids and grand kids and get things done around the house. Retirement looks different for everyone. Some people would hate continuing to work but it fits my goals and personal lifestyle very well.

[@edwardstewart9085]

Good stuff...when Erin Talks about retirement...we all should listen.

[@masa1inst]

Another thought: I was in a similar situation although I did not have as much savings. When our children were entering their teenage years they began to build their own lives. They got involved in High school sports, clubs and other activities. In High school they both got part time jobs. If I had retired at that time I would have actually seen less of them. I ended up taking on a hobby to occupy my spare time (ironman triathlons). I also did some volunteer work. Yes it is great spending time with our children but they will begin to build their own lives at an early age. My first suggestion would be that this person look at how he is spending his spare time and look to find a satisfying hobby or activity. Maybe volunteer work that he can share with his family.

[@FIRE_DrNinjaTurtle]

Many of us have to do FIRE on a low income. I am building my parachute on the way down. I make more in retirement than I made when working.

[@kirklandphil]

That can easily happen, I make over 90% of what I made, all the residual income that my partner and I made over the years went back into the business now we get it monthly. The only disadvantage is my wife and I pay a large amount for our Medicare. But well worth it!!

[@JBoy340a]

@@kirklandphil we also pay for medicare, but IMHO that is a better choice than having insufficient income in you late 60s.

[@thomasmoshier3920]

If this guy were to retire at 50. There’s a very real possibility within a short period of time he might have to downsize without the additional income due to his substantial expenses. How would his wife and children feel about that? I’m guessing they enjoy their current lifestyle and wouldn’t want that to change. I’ve never understood why guys are so quick to walk away from their jobs in their peak earning years of 50 to early 60’s. But you’re absolutely right. Retiring early isn’t out of the question. I’d reevaluate in 5 years to see where things stand. Then every couple years thereafter. I know for me personally I could have retired at 60 on paper easily enough. But that would have left me on a strict budget in retirement and at the mercy of the markets. By working just a few extra years I now have complete financial freedom. Which, for me was well worth it.

[@GP-fw8hn]

that house is a huge cost albatross. I would sell it and put the equity to work and consider living in a country he likes. for me something like Spain or Italy; what an adventure for you and the kids!!. if he wants to stay here then re locate to less expensive state/city

[@horanz]

I’d love to retire in my mid to late 50’s to have more time for family and do outdoor activities any day of the week in the middle of the day. If I can do it financially, why trade that time for more money?

[@thomasmoshier3920]

Yeah, retiring to Spain or Italy would have virtually no appeal to my children at that age or my wife.

[@thomasmoshier3920]

We’d all like to retire in our 50’s. However the question becomes do we have enough resources to finance at 35 to 40 year retirement? By working less and living longer, those retirement dollars are going to have to stretch. And the farther out in the future we have to project the less certain we can be.

[@horanz]

@@thomasmoshier3920 But if someone believes they have worked out the numbers to leave the workforce in their 50’s and have other desires to do in retirement, why not? Sure there are higher risks with early retirement, but some of us feel the risk is worth it.

[@erickarnell]

My natural response to deal with a desire to retire early is to adjust living expenses. Everything has tradeoffs.

[@damienbates]

Yeah it has to be a balance because living on the edge financially is stressful and can put a real hurt on when those unexpected expenses come. Imagine being retired and getting your place destroyed or seriously damaged in on of the recent hurricanes and flooding. Your life would be turned upside down without some serious nest egg.

[@josephmaschak8652]

I wouldn't consider retiring until the last one started college. To many variables can creep up to guess what your expenses will be 10 years ahead. You're doing well, why stop now ?

[@GP-fw8hn]

interesting position. they seem to save a lot so 5 more years (if they dont hate their jobs) would possibly set them up for permanent retirement with no worries at all.

[@JBoy340a]

Agree. Until that time they would not accurately know what their college expenses would be since they don't know where the child is going to college, their major, etc. Also, they need to consider the cost of post-Bachelors education, if any, for the student's selected field.

[@bobbert1945]

I love The Moneyist. Very good advice from a very intelligent, kind person. I'm glad you watch him too.

[@BrianW211]

It's possible, maybe even likely, that the man's 401(k) would be accessible without penalty at the age of 55 or up to 1 year before, depending on the exact date he was born, due to the "Rule of 55".

[@steveshow-tos5394]

I agree with downsizing. The only caveat would be if you live in a place like Cali (where I live) and you’re grandfathered into lower property taxes based on the purchase price of your home. I bought my house from a guy for double what he paid for it 5 years before. In the last 7 years since I bought it, the price has doubled again. He paid $2,500/year in property tax, I pay $5k/year. I couldn’t afford to buy this place today with the $10k/year property tax bill it’d have due to the price doubling since I bought it. So this is likely our forever home.

[@kirkl11]

Don’t forget about medical insurance for the entire family…

[@kirklandphil]

So true, 15 and 17 years before Medicare kicks in and the kids!!

[@stickymonkey75]

I am breaking away from the workforce at 49(next year). Going to rent my house out and move to the Philippines to bring my cost of living down and live the island life. Great Content Erin as usual 🐵🏝

[@ariefraiser140]

If you don't mind me asking what monthly expense budget are you considering? I plan on doing something similar around age 50 except I will likely sell my home and decide between Malaysia, Thailand, Philippines, or Vietnam.

[@stickymonkey75]

@@ariefraiser140 No, I don't mind at all. My base budget will start at $1500 a month. My plan is to start in Cebu(we have an office out there I may work a little from there if permitted).

[@Papinka3900]

You are spot on that the kids will be busy a lot of the time. Shoot for more flexibility and make the available time count. Many struggle with the transition to be retired. I assume a high earner who likes what they do (or at least doesn't hate it) will have an even more difficult time. Lay off the gas but don't slam on the brakes. That's what I've already done to maximize my most valuable resource - time.

[@amypruss8391]

This is very solid advice! People who are high-performers and go-getters should probably take their foot off the gas, as opposed to slamming on the brakes. Even just cutting back a bit could really improve quality of life.

[@danh2716]

Hard to do though. Most high paying jobs aren't about to pay you half your salary to work half-time. I doubt I would even be able to get a third of what I make today if I proposed working half-time to my current employer.

[@MrTimbo17]

I fall into this category and decided to retire several years earlier than what is considered normal retirement age of 65. A critical factor is discussed at <a href="#" class="seekto" data-time="530">8:50</a> of this video, he seems to enjoy his job. In my case, and I expect many others, the final decision to retire early is driven by your job satisfaction in addition to your financial situation. Count me as someone who doesn’t love Oprah

[@jglee6721]

Oprah is a race hustler and a con.

[@thomastillman7150]

Great content. Thank you so much.

[@ErinTalksMoney]

Glad you enjoyed it!

[@mymail6601]

I think of a high-income job as a sort of asset. Once you’re on top of your game, it’s easier to keep making a high income (compared to how much hustle it takes to get there). So it’s the culmination of a lifetime’s work. I think it’s psychologically hard to walk away from an “asset” like that early. And to know it will be hard to re-start at the same income level later.

[@ariefraiser140]

It's definitely an asset. The only issue is to retain that asset you have to give up so much of your time and autonomy. Unless a person really really loves their job there will come a time when their freedom is more valuable to them. I've met some who can easily leave their job early, want to retire, but are scared of pulling the trigger because that job asset is their security blanket or worse their identity.

[@hanglu1335]

This is a great way to look at his job. If multiply PE, the value of this "asset" is 27 X 300k = 8.1 million

[@danh2716]

Yes and no. Considering his $300K wages will be taxed heavily, the market really only needs to earn about 5% or less before his inveatment gains replace his earnings. The frequent reality for people who accumulate wealth significantly before retirement is that they really just need income sufficient to pay for their current expenses, such that they don't start draining their savings before they hit their number. Now I'm not saying this guy is ready to retire, per se. But the pay/prestige/stress calculations certainly change in your career when you get to a point of significant net worth. Certainly with respect to continuing to put full effort into the rat-race just to "get ahead."

[@keith7286]

Love your channel! Thank you.

[@benmccarty4598]

I agree with you Erin, since your example family has young children, they should continue the course and save/invest then retire at age 55 and be able to continue their desired lifestyle.

[@ld5714]

Hi Erin. Good discussion today, measured and well balanced IMO. If I were him, I would probably work another 5 years or so to allow the situation to adjust a little better and line up for the future. Medical insurance also needs to be considered and factored into his planning. See you on the next one. Larry, Central Valley, Ca.

[@frankoh3193]

I see that the top 1% income earner with the top 1% net worth comes with the top 1% expenses. Wow!!!! I can't imagine.... Thanks for the clip.

[@Andocus1213]

@Erin, paying off a 3% mortgage when Treasuries are yelding 4% + is a bad financial decision. "Piece of mind" of having paid off home is not just overrated, but completely wrong in this scenario. A much better solution is to create an account and invest it into something very conservative like 20/80 stock/bond. Keep funds there and use it for minimum monthly payments during retirement. Now this becomes piece of mind and income generating asset.

[@JBoy340a]

Maybe. If they can pay off the home, they can invest a big chunk of the former mortgage payment into something than can earn way more than 4% that Treasuries are paying.

[@ericj9011]

Depends on his after-tax return on the treasuries and any tax benefits from the mortgage interest. Could go either way, but yeah, probably it doesn't make sense to pay off a 3.5% mortgage.

[@jabow1878]

To be honest- not having a mortgage became the most significant thing we did for our mental health in retirement. It meant we could easily move around money to do things in our go go years.

[@Andocus1213]

​@@JBoy340a I disagree, rather than investing after the mortgage is paid off, they would be better investing the same funds before the mortgage is paid off. This way they increase "time in the market" (market exposure)

[@Andocus1213]

​​@@jabow1878 Mental health can be influenced by logical arguments. My plan is to retire with 15 years left to pay off my house. I know for sure that I will feel much better having liquid assets in account with conservative expected yield of 5% than in a paid off house( iliquid asset) that would only yield me 3%.

[@EricMoore790]

I throw 200 bucks in the savings account right away and then 20 bucks here and there after bills. That really worked for me to get over the hill.

[@christiansailor2880]

Great video!

[@robertmeyers3640]

My wife and I have a federal, military and social security pensions amounting to over 150k in low cost New Mexico. We didn’t need any saving to retire at 53 but we are now working on our 3rd million 18 years later. Most of that money will go to our 5 kids since we have no need for it.

[@vernshird711]

Typical Marketwatch Ad- I'm 60 years old, debt-free, will get an inflation adjusted pension of about $5,000/month, have $3.5 million dollars in pre-tax accounts, and $750,000 in Roth accounts. Can I retire now? Marketwatch's Answer: It depends. My answer: Are you blind? Of course you can.

[@Dave-sw2dm]

It does depend on what lifestyle you want to live in retirement. What your expenses are going into retirement. The more you have the more you need to maintain.

[@vernshird711]

@@Dave-sw2dm I hear you - my response was in jest. I question whether the Marketwatch scenarios are real or fabricated. If a person was disciplined enough and smart enough to amass such a huge nest egg, then you'd think that they did their homework, ran the numbers, and would know if they could retire.

[@WileeRunner42]

I would do the arrange time off for the holidays, kids events, and a big vacation in the summer. And of course keep healthy lifestyle so that your 80s to 100s can be as good as possible. This would model a good work-life balance, make the memories even more memorable with quality over quantity, and ensure they'll have no worries for their retirement. Something to consider, what is the divorce rate for early retirees?

[@herb7877]

EXCELLENT presentation ! Just as a FYI & real world example ( history) I was in a similar situation / dilemma. The age old question of when is enough, enough and trying to predict the future. Seeing one parent die very young and another at average age as well as being in finance (conservative), didn't help my decision. I elected to keep working but at a much slower pace & make small withdrawals from my brokerage account. Went to all my kids events but missed out on any extended time off. Their college was educations were in UGTMA, so that was covered. I did 100% retire at FRA. The Covid stock market had me concerned but had enough to ride it out. I keep 3 years income in liquidity. Large equity in home as my backup or retirement home. Although who knows what will happen in the next 10-25 years, I now look in the rearview mirror and can say I should have done it sooner. Hindsight is always 20/20. My accounts have risen ~30% higher in that time & now have to look at RMD's. I look at this as a good thing vs being broke though.

[@mavrikmavrik3032]

First, being able to save/invest $3M on that salary with those expenses is incredible. As you indicate he has too many expenses (current and future) and too high a mortgage to retire right now (unless he wants his kids to go into debt for college). I’m locked in for at least three more years until my youngest finishes her JD. Once that’s done the house will be paid off and the expenses should drop considerably.

[@iTzDritte]

Something that never got discussed here is using a SBLOC (securities-based line of credit) loan to fund expenses, rather than actually selling the underlying securities. Buy+borrow+die is not just for billionaires; it’s very accessible these days.

[@Random-ld6wg]

i retired at 55 after 25 yrs in my career but saved/ invested 25-35% for most of those yrs (40 and 45% last 2 yrs but worked less during those years, lay off and shortened work yr when i retired). that retirement year would have been my highest salary ever 300K but i only had 8 months of it before retiring. like your plan i did not consider the 529 and home equity in expense planning. drew 3% per year for the first 2 years due to the early retirement age. this was still more than what we used to live on. also rounded down portfolio to 79K less as my retirement starting assets (just as another safety buffer). i still kept my 2.75% mortgage which had 6 yrs left( now only 3 yrs- hey i get a raise in 3 yrs!). this was only about 16% of my initial monthly draw, now only 11.5% of my adjusted monthly draw. 3rd yr of retirement saw a large jump in expenses(inflation and trips) to 4% of initial retirement assets but would have been 3.7% of assets at onset of 3rd yr retirement due to growth. started 4th yr of retirement a few months ago and increased draw again to 4.4% of intial assets but now only 2.9% of 4th yr starting assets . a large taxable brokerage is what makes this possible. i am living on taxable only. untouched retirement assets have grown by 34.6% from retirement. i do roth conversions and pay taxes on them but i don't count the tax i have to pay towards my monthly/yearly draw. since i started retirement with my son in high school, you couldn't really take long trips except during his breaks. my son's 529 was 406K( i had put in 10k per yr from 0-13 yrs old and stopped- 140K in all) at onset of retirement. he is now in 3rd yr of college in state and with state scholarship, expenses have been low and last week it had grown to 457K. for the first time i am getting his scholarship for 2024 reimbursed from his 529 ( without 10% penalty but with marginal tax owed). i will put it in his utma which he takes over next yr. i could replace my highest ever inflation adjusted salary now with the growth in my assets since retirement if i switch to guyton klinger at a still reasonable higher draw rate. i always planned to go on guyton klinger around 60. the huge difference between me and the guy is his huge remaining mortgage and 3 kids with prep school plans and likely expensive universities. we live in a middle class neighborhood and my mortgage was 275K, less than 1.5 times my salary when i bought the house. my assets did double from 50 to 55 and i suspect he will conservatively have 6.5M excluding the 529 by 55 if he waits.

[@Izzy_Gtz]

Was that the Squidward dance in the bloopers? 🤭

[@drz400sy8]

I agree with your assessment of another 5 years. He is doing well and will need something to do. If he is highly motivated I don’t see him quitting working. It may be small but what about SS? Medical? Costs tend to trickle in with kids.

[@scottthomas1894]

Great video. I think 50 for this gentleman is too early especially in light of his fixed expenses. He needs to get his children through prep school and add more to the 529 before he retires. He also needs to explain now to his children that they must go to an in-state public university. If they want to go to some other private university or out-of-state public university, they will need to fund the difference themselves via loans. I think the earliest he should retire at is 60. This gives him 5 solid years before 65. Also, his children should be pretty much self sufficient by that point giving him more freedom to do things. My wife retired at 58 and I retired at 65.5. Unfortunately, she passed away from pancreatic cancer 4 months before I retired. I now wish I had retired earlier. Life is very fickle and you don’t know what is waiting for you around the corner. You need to enjoy life while you can; but, enjoying it too soon can add a lot of stress. Notwithstanding dealing with my wife’s illness and death, I am very grateful for the life I have lived. I have been extremely fortunate and now use my wealth to assist other people. That gives me much more pleasure than buying things for myself.

[@Bum_Hip]

The top earners probably don’t get as much attention because they likely have money management, and CFP’s already servicing them. Small fries like myself often do not.

[@CB_4216]

The taxable account is also my favorite because of the flexibility. Finance KZbin too often says that you need to invest 40K+ every year in tax advantaged accounts before you even consider a taxable account. That doesn’t make sense for everybody, especially if you want to retire early.

[@BrianW211]

Imagine where this guy would be if he didn't let lifestyle creep (the $3M home, the need to send kids to prep school, and probably A LOT of other things) eat up his income.

[@danh2716]

Agreed. Move to a less expensive area and spend your time homeschooling your kids. One solution to two big costs while also spending more time with your children.

[@brucef1299]

Woo Hoo.....I qualify for rich guy except no debt for the last decade. Now if I turn back the clock to when I was 50, I wasn't even close. I don't disagree with FIRE and freedom of choice to select the retirement date that best fits our needs, wants, and desires. I'm just personally glad we stuck in for the last decade when our earnings potential as a couple was at our peak. It set us up much more favorably for the next 30 to 40 years. For those considering FIRE, don't discount the psychological boost you can get from being able to retire, but choosing not to.

[@HHH-nv9xb]

The truly rich guy never really retires. They probably only work at a leisure pace as desired to maintain and continue to increase their wealth.

[@JBoy340a]

Exactly. You turn from working a job for a paycheck, to working on managing your assets to increase your worth.

[@danielmcwilliams4058]

In the words of Toby Keith “I wanna talk about me” ❤

[@ErinTalksMoney]

😂😂😂 Literally made me laugh out loud!

[@raylukic5716]

Retire overseas, live like a king on fraction of the cost, visit the kids during their school breaks.

[@jglee6721]

I'd say about 50% savings is a good estimate. It won’t be as low as 10% of U.S. costs unless you live like a local-like no AC in the heat, for instance. Energy prices are pretty similar worldwide, unless you're in an oil-rich country in the Middle East.

[@hansschotterradler3772]

Yep; I'm considering going back to Europe. Free health care and rent/groceries cost about half.

[@raylukic5716]

@ that plus food is healthier and property taxes (depending on the country) can be just a few hundred dollars per year.

[@JBoy340a]

"When is enough, enough" is a question that many people ask.

[@markandrewkoval8920]

Meh, I honestly think FIRE is a bit overrated…compromise being simply working less or dropping down to part time. Personally I’d probably die from boredom.

[@ErinTalksMoney]

I 100% agree with that! I enjoy what do and I love keeping busy, so I can't imagine not working.

[@X.MillennialResponder.X]

FI 100% but I look at RE as recreational Employment

[@markandrewkoval8920]

@@X.MillennialResponder.X 🤣

[@Dave_D.]

I can never understand the ppl that would 'die from boredom' if they didn't have a job. Are you telling me that work is all you have in life and that without it, your life would be empty? I have so many things to do, I will never run out, I never get bored....I can't wait. Even harder to understand is the ppl that 'love' their jobs! I think they need a mental evaluation! LOL But, to each their own.

[@Random-ld6wg]

retired at 55 but when i feel bored i still am grateful that i feel that way rather than being stressed at my job. it paid well but was stressful. i do envy people that love their jobs.

[@dacianbonta2840]

@<a href="#" class="seekto" data-time="160">2:40</a> I'ma be sooo even moreso grateful when Ima retire.

[@Cdictator]

If they downsize his house from 3M to 1M, they can easily retire immediately

[@markandrewkoval8920]

Yeah I would not retire if I still had an outstanding mortgage. My parents downsized upon retirement

[@JD-ir2sb]

What a problem to have😂

[@jk_22]

Yes, this is why no one talks about “rich guy” retirement. Cause the solution is ridiculously simple.

[@JBoy340a]

Depends where. I assume they are in an area with nice schools and amenities since they mention private education. And in many major urban areas a 3M house is a 3000 sq foot tract home in a high-end neighborhood.

[@Mazlem]

That question of what you'd actually be doing in retirement is pretty important.

[@caustinolino3687]

Yes, and this is super easy to be unrealistic about. What you'd do if you didn't have work on Monday is a totally different mentality from what you'd do if you never had to work at all. I don't know of a great way to simulate this without actually doing it.

[@Mazlem]

@@caustinolino3687 It wouldn't be perfect but if you could take maybe 3wks off work without having set plans ahead of time, that'd probably give a good idea.

[@miketheyunggod2534]

Retired six years ago at 55. Still have a mortgage, car payment, credit cards, and sending my son to college. No problems. Get a clue lady.

[@steveandrews512]

You go Erin. Let's talk about it 😁

[@logicae4096]

Huh. I am close to the 'rich guy' retirement I guess. Downsized at 48. I have a wife and 2 young kids (10,12). Following assets - $2.4 million in post-tax savings $100k in emergency fund $850k in 401k/IRA $900k home fully paid for We use our post-tax account for current income using a dividend strategy which yields 7%. We use our 401k for long term investments into VOO, QQQ, etc. We live off of $160k per year and expect when we get to 60, the 401k will be worth about $1.2M.

[@derekhudson3462]

It seems like this guy could just split the difference and retire at 55 as opposed to 50. He would likely have a significant amount more saved by that point, as long as he doesn't lifestyle inflate himself. And he would have 5 more years of an increasing high salary, and compounding interest from investments that he wouldn't have touched. Retiring at 55 would still be an awesome accomplishment. I have some family members that retired in their mid 50's. While it was great for them, I think they got a bit bored because their spouses kept working, so they were just sitting at home most of the day.

[@kristheone1]

Could you do a video on pros and cons of having multiple brokerage accounts for different themes - let's say, one for US equities, another for international, a third for "fun" risky bets etc. Thanks for the great content!

[@global2829]

Seems like it'd be simpler to do all of that in the same account.

[@wolfe5047]

There is at least 2 ways to tap his 401K before 59.5 without a penalty that I am 90% sure is possible. 1 He could go the route of substantially equal distributions based on his life expectancy. 2 he could work until 55 and take withdrawals penalty free known as the rule of 55. And a 3rd way which I don't recommend is Total Disability which is how I got my SSDI and penalty free access to my Simple IRA. But I assumed that he is healthy. The rule of 55 means he couldn't quit at 50 but he could at 55 penalty free.

[@ericj9011]

In short, he (and anybody looking to retire) should start with the 4% rule of thumb and then adjust it to maybe 3% based on his younger age. This is what we're lacking - a better rule of thumb that gives a percentage withdrawal rate based on age. No one has really done that analysis, have they?

[@lonnieevans4127]

Come for the commentary, stay for the bloopers! 🙂

[@buyerclub2]

Hi Erin, I agree with your analysis. I also agee with your preliminary statement about being grateful. Now I am no longer able to consider "early retirement", as I post social security age, and and although I have substantially more than this person. I dont understand a few things. First, why do people not consider this question from a "burn rate" perspective first. In other words, the question I would have firto him, is while you know what you are spending now, how much could you reduce that . Also, what is his plan, almost certainley he will do "something" where he can earn money. Once he can determine the "burn rate" and the post "retirement " acttive income, he could a "retirement / montecarlo" analysis and see the probability and at what groth rate his portfolio could handle. THe other question, and I dont quite understand, is why give up on a successful career. I know when I was working, I emjoyed many aspects of the work. I have to beleive with his salary he gets some "perks" that I bet he will miss too.

[@jerrym3261]

I don't love Oprah or pop psychology. I do love Dr Robert Holden and Dr Laurie Santos, happiness based on empirical evidence. I'm no where near the rich guy but, I did quit my factory worker job at 46 years old and moved to the beach. I did it by not spending and saving up to 28% in some years. Life at the beach can be really cheap. I'm 70 now and I have more money than I'll ever spend unless the medical system gets me so, no regrets.

[@wagon9082]

Good Video

[@bradleygraves5915]

If he downsized housing to a mere $1M house, his expenses fall off the cliff and then he could live easily off the interest on $3M dollars.

[@rebeltheharem7028]

Rich guy early retirement, also known as fat FIRE. People talk about this a lot, but since its out of rich for most people, not as much. But if you want to spend upper middle class money, in retirement and you are retiring at 50 or earlier, you would need safer than a 4% withdrawal. A 2% withdrawal should suffice. If you are making over 250K a year, and 25% of gross income goes to savings, then that means you can live on 75% after tax income. So that's realistically around 50% of your gross income or less. That means you need at least 25x your current income in investments. For someone making over 300K a year, that's around 7.5 million (honestly, you can probably just live off dividends alone, and never touch the principal, shifting to a 25% bonds, 25% fixed income, 25% market, and 25% real estate cashflow if you can or another 25% market). Bonds and fixed income, will on average, get you 4% per year from dividends and interest, while 50% of the market (will add another 1.5% on average). That's roughly 2.75% in dividends. And just adjust your withdraw based on market conditions. Take more out during a good year (but keep spending the same to act as a buffer), and spend it into next year, while doing the same, and if you have too much, put it back in the market.

[@Mitzi73]

Rich guys usually have younger kids because they tend to trade wives. He needs more money. Regular people wait until their kids are done with college before they retire.

[@NoahKahan01]

Retirement isn’t an end goal, but a journey best secured by careful and consistent investments.

[@subrec]

I disagree. Retirement is the end goal, otherwise you are working until you die. But you are correct, there is a journey involved to get there.

[@Lion_McLionhead]

No-one can really do it because of inflation. They all have self employed jobs. Property tax on $3 mil is no picnic.

[@williamkhsu4]

Thanks for this video, I retired early at 44 and was always very careful and still always concerned about what I've been doing. Would you be interested in giving me your thoughts about what I've been doing?

[@kirklandphil]

Haha, everyone should love Oprah! I spent 10 years before my company started making big money. At 35, I was rolling, and at 62, I was cooked and knew I had done all I wanted to do in my business life. This gentleman has done very well but needs to ask himself if he's really done or if it's a phase. He certainly can retire. Cutting back and working out what they really need to fund is the first thing. In my mind nobody needs a 3M house, I know I could afford a much nicer house but I don't need it. Giving your kids 100K for their education is great, I had about 60K in each of my kid's education funds and all three made it through without debt, yeah they had to work all three and four years to make it but I saw them all learn how to work and all three have good jobs now. Sorry for the rambling answer but I bet like me this guy had a lot of hard work to get to the level of pay he's at and it's so hard to just walk away from your life's dream.

[@drouu]

fortunately, the investments don't have to last indefinitely -- at 59 1/2, all the 401k money gets rolled in, and it will have had almost a decade of growth.

[@shannonswyatt]

...or it could be that one of the kid joins the military and maybe another gets a scholarship. You can what if on the high side as well as the low side. He could retire, he just wants someone to tell him he can retire.

[@RS-lw9cd]

IMHO, the decision to retire for this person's family is what type of risk tolerance he (they) have, and that comes down to how he invests his funds. Stash a small percentage away in high yield savings accounts (like CDs) for an emergency/low risk assets. The rest should be invested in long term growth or growth and income (stocks, ETFs, mutual funds), since they are still relatively young and since they still need to grow their investments. Their expenses are going to increase especially since they have 3 young children to support. And inflation is going to chip away at their living expenses. Plus, even though they have a good mortgage interest rate, they need to have their investments grow in excess of that 3.5% rate, because they will have to pay taxes on their gains (and then be able to pay the mortgage payment with those gains). Lots of things to think about...plus if he leaves his job, he will have to pay for health insurance, which will be substantial for a family of five. Its not a simple solution...and will they be able to tolerate the risk of investing their assets in the stock market?

[@Larry-yb7zl]

He's not ready financially but could make it happen. Is he ready mentally is a bigger question. Switching from a saver to spender is very hard....... Financially, sell the house. Allocate a minimum of 500k to qualified div payers in a brokerage. Pay cash for a home with the remainder. Make sure current outside-the-401k investments all pay him income that is qualified divs, no spec or growth in this account. Use the div income to live on and he has a 100% federal tax free income stream which is enough to cover his lowered expenses. He has no house note and reduced insurance/taxes on home., and with zero to little income tax should have a notable buffer. The 401k can still be in growth. This makes him financially ready. But not mentally ready, guaranteed.

[@Jim96SC2]

Servicing a $1,200,000 mortgage (plus everything that goes along with that kind of house) on a $300k salary? That's 4x my mortgage, and we are close enough in income levels. I would be hurting and not saving much, and that is with a 2.8% rate.

[@calebdoner]

Sell the house! But a million dollar house out in the country and have an extra ~million in his nest egg

[@XM110]

He could retire at 55 and use the rule of 55 to access his 401K without penalty. I've considered doing that, however, I don't want to spend from my 401K when I take it. I want to convert it to an IRA, and use that to sell covered calls to create income. But I don't believe I would be able to pull funds from the IRA until I'm 59.5, so for now, I'm holding off.

[@redblur389]

Please do a video about the Windfall Elimination Provision and what it means for those of us with a government pension. Thanks!

[@ErinTalksMoney]

it's coming 😊

[@redblur389]

@@ErinTalksMoney Wonderful! Can't wait to watch it.

[@michaelb1369]

I would advise this gentleman to stay in the workforce for 3-5 more years and hang on to the low mortgage rate.

[@TheNotimprezed]

I hate to throw cold water on this, but we made 299,xxx last year, so 300k. Taxes and withholdings knock that to 161k or $13,500/ month. And this guy has a 12k/month mortgage and managed to save $3.75m in brokerage and $700k 401k and $250k 529? Am I missing something here?

[@BrianK-zz4fk]

The 300k could be net but you brought up a good point in factoring in taxes.

[@jabow1878]

In a big city- $ 100 k is not enough for Catholic School. Prep school is more like 200k per child.

[@jabow1878]

Room, board tuition for state college is close to 120k

[@JBoy340a]

Wow!

[@jamesp1544]

You are not taking into account the growth of his investments. 529 if invested will be 50%+ greater by the time he needs to tap it. $3.5m in investments will be worth $7m within 5-10 yrs if untouched and he only taps 401k .

[@buckwildz]

Noone is talking rich guy retirement because there are less rich guys out there that will click on the KZbin video.

[@racerx6]

Pay off that mortgage first.....easy to do with that income

[@rhondavigil795]

Rule of 55 Erin. He could work 5 more years and then use the rule of 55 without penalty on his current employer 401k.

[@Pops2]

I think that 50 year old making 300 k must have an aunt Nancy or not live in Massachusetts. That's middle class in the Commonwealth. Lol😅

[@Chekmate99]

exactly I was also going to comment about this - something is amiss maybe his income is something more like 500k and he’s banking 100k after taxes into investments - also why is his 401k so low and is mortgage/home so high for a 300k salary

[@Pops2]

@@Chekmate99 Inheritance helps and many are born on third and think they hit a triple. My advice to young men ....take a wife with good earning potential. 😂

[@glenn71144]

The "real question". What does his wife think about this?

[@TheNotimprezed]

Her boyfriends are not ok with it 😅

[@BradColemanisHere]

Yep, ages 55-70 are good ones.

[@tcwaz]

I would never retire in this situation. So many expenses in the future with the kids etc and a 1.2m mortgage? That is 1/3 of his savings kinda equal to ----If I had 1 million saved and a 300k mortgage. Downsize and maybe I would consider it.

[@darenmcgovern4285]

It would also be good to know if this 401k includes the clause that he can withdraw funds at the age of 55 with no penalties if he were to separate from service after age 55.

[@j.wilkerson1905]

Can we talk about the "poor man's" retirement 😬

[@ADobbin1]

My question would be is that 3M in investments generating an annual income equal to or greater than his current income or are they willing to make the changes in lifestyle if it doesn't?

[@over07ful]

His expenses are too high to retire early. This is wishful thinking.

[@daviddeavours4909]

Personally? I would wait to 55 and (hopefully) use the rule of 55 to access the 401k in addition to the investment account.

[@Markrtsoon]

Three kids will cost about 1 million if they go to private universities.

[@JBoy340a]

Depends where. For example, Stanford states: "Parents with typical assets and incomes below $125,000 pay no tuition, and those with incomes below $65,000 pay no tuition, room, or board." They have other programs for families making upwards of $250K. Of course, getting into Stanford, Harvard, or other schools that have these massive endowments to cover student expenses, is more than just difficult.

[@scorcher7641]

I hate these stories. Guy has a fortune saved, planned for kids education as well, and may have debt, but plenty of equity. I don't understand the idea that since you're making the most that you continue to. When is enough enough?

[@kliff8586]

Hi Erin. What did you do for work before your KZbin career?

[@ErinTalksMoney]

I still have my day job, I have a small company that handles dental insurance billing and dental claims processing. 😊 KZbin is a side venture for me.

[@kliff8586]

Forgive me Erin I just saw your video from December of 2022 in which you went into great detail. Great transparency. We share a similar health situation. Extremely competitive and value my independence. My family wanted me to go on the "D" word after many ER visits. My situation happened in my late 30s and I will be 62 in a few months. I plan on going early at 62. I would have waited until 70 before my situation. My specialist and other medical professionals are now advising me to go on the "D" word. Being hyper aware of finances I find it difficult knowing that with our 35 trillion dollar deficit we are now spending more to cover the interest on that debt than what we spend on our defense spending budget. We all must do what we can to help. I've gone this long without it. I am self-employed. I'm currently being advised not to let my pride get in the way. I know everyone's situation is different. I came across your video and it kind of blew me away. You may not be the most qualified and/or experienced individual to answer this question but your response is greatly appreciated. Any and all information would be greatly valued. I feel I need to decide within the next few weeks My birthday being in January. It's all about the journey. Thanks in advance. Best of health!

[@kliff8586]

Forgive me Erin I just saw your video from December of 2022 in which you went into great detail. Great transparency. We share a similar health situation. Extremely competitive and value my independence. My family wanted me to go on the "D" word after my situation and many ER visits. My situation happened in my late 30s and I will be 62 in a few months. I plan on going early at 62. I would have waited until 70 before my situation. I'm very grateful for so many things. Very conscious about my diet, no sugar limited carbs. I also consider myself healthy and play ball three times a week. My specialist and other medical professionals are now advising me to go on the "D" word. Being hyper aware of finances I find it difficult knowing that with our 35 trillion dollar deficit we are now spending more to cover the interest on that debt than what we spend on our defense budget. We all must do what we can to help. I've gone this long without it. I am self-employed. I'm currently being advised not to let my pride get in the way. I know everyone's situation is different. I came across your video and it kind of blew me away. Your qualifications and personal experience are highly valued to answer this question and your response is greatly appreciated. Although it's just our opinion any and all information would be greatly valued. I feel I need to decide within the next few weeks. My birthday being in January. It's all about the journey. Thanks in advance. Best of health!

[@leem6011]

Why not discuss the Roth conversion ladder for early retirees to gain access to IRA funds through Roth penalty free???