Podcast: FIRE Reunion — Insights From Year 1 of Early Retirement

Episode 32 of the Boldin podcast is an interview with former guests Karsten Jeske, Chris Mamula, and Fritz Gilbert — F.I.R.E. experts — and discusses insights and epiphanies from the first year after retiring early. This is the first time The Boldin Podcast has had a reunion episode, and as such, listeners are advised to check out the previous podcasts with each of the guests for a more engaging experience.

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Callouts:

• Podcast: PhD on FIRE: Safe Draw Down Rates with Karsten Jeske aka BigERN
• Podcast: Chris Mamula on Retirement Early and the Pitfalls to Avoid
• Podcast: Fritz Gilbert and His Fat FIRE Approach to Retirement
• Early Retirement Now
• Can I Retire Yet?
• The Retirement Manifesto
• Choose FI: Your Blueprint to Financial Independence

Full Transcript of Steve Chen’s Interview with Karsten Jeske, Chris Mamula and Fritz Gilbert

Steve: Welcome to The Boldin Podcast. Today we’re going to be talking with three F.I.R.E. experts: Karsten Jeske, coming to us from Camas Washington State, Chris Mamula from Ogden Utah and Fritz Gilbert from Blue Ridge, Georgia, near the Appalachian Trail. We’re going to be talking about what they’ve learned in their first year of retirement, after F.I.R.E. and any lessons for our audience.
Steve: With that, Fritz, Karsten, and Chris, welcome to our show. I’m really glad that we could pull this together and make it happen. I think it’s going to be super informative for our audience and also for me personally.
Karsten: Should be fun.
Chris: Thanks a lot.
Steve: Yeah. To get started I just want to see if we could go round the room and each of you give … Many of our audience will know you but for folks that don’t if you could give one or two minutes on your background. Well, first just your background and leading up to F.I.R.E.. Fritz, maybe if you can go first.
Fritz: Sure thing. Thanks Steve. Yeah, I write at The Retirement Manifesto, I’ve been writing there for about four years, basically, about my story to transition into and now my life of retirement. I retired in June of 2018, so I’ve been retired about a year and a half now. Spent 33 years in corporate America prior to that, moved around the country, different positions in a company. My last job was running our global commodity trading group in our world headquarters down in Atlanta, which is how we ended up down here. Been a varied career, its been interesting. One company, which is very unusual but it worked out well for me.
Fritz: Been married for 32 years, a wonderful wife and we’ve got a daughter whose up in Seattle so we spent the summer up there with her this summer. One of the benefits of being retired we took a road trip and stayed up there. Really just slow and steady. Been 15% to 25% savers our whole career. Didn’t do the radical F.I.R.E., I got out at aged 55, fat F.I.R.E. approach. We’re traveling in a nice RV and doing things like that. We could’ve got out a little bit earlier, but we decided to go one or two more years and not have to worry about some of the comforts and that’s worked out well for us.
Steve: Awesome. Thanks for that. I appreciate the background. And then Karsten, you want to give us your view?
Karsten: Yeah, sure. I’m Karsten. I blog at earlyretirementnow.com and I retired last year, so both my wife and I retired last year. I was 44 and my wife was 35, and we’ve been traveling since then most of the time, just settled down, bought a house. While we were on the road, we did a house hunting trip to Washington state, bought a house, while we were traveling, we closed the transaction while we were in Australia, so we took possession of the house. Before retirement, I worked for 10 years for a large asset manager in San Francisco, in a middle management role. I was in research department, doing global macro asset allocation. So I actually come from the field of finance, which is somewhat of a rarity in the F.I.R.E. community, intriguingly. And before that I was working at the Federal Reserve Bank of Atlanta as an economist. And before that I was in grad school. You might hear from my accent, I’m from Germany originally, so I came to the US as a grad student, in the mid 90’s and I did my grad studies here. So I worked in two different jobs over 18 years from 2000 to 2008, at the Fed, and then 2008 until 2018 in asset management.
Steve: Awesome. Thanks Karsten. And Chris, can you just give us a quick rundown?
Chris: Yeah. I’m Chris and I write at the blog, Can I Retire Yet?. And I also just finished the book, Choose FI: Your Blueprint to Financial Independence. My story is, I was a physical therapist and I worked for about 16 years in that field, from 2001 to 2017 when I retired, when I was 41 years old. And my background, my wife and I were just natural savers and honestly, I’m not quite sure where we got this from, but we saved about 50% of our income from day one of starting our careers, but really had no idea that normal people could actually retire in their 30’s or 40’s or even early 50’s. And we were just saving because it was a security blanket for us. And we found the F.I.R.E. community after my daughter was born in 2012, and I went all in on that path to early retirement. And after I left my job in 2017, about six months later we moved across the country, so now we live in Utah. I write a little bit and spend a lot of time in the mountains skiing and hiking and on my bike, and that’s what my life looks like now.
Steve: Sounds good. Sounds like a great life. Yeah. You guys are definitely taking full advantage of your new status as retirees. So before we get into the big lessons in your first year, I’d love to hear how you dealt with the time leading right up to saying, “Hey, I’m out of my main career. I’m going to stop needing to make money from work and transition to using my assets.” Because for a lot of our audience, there’s this huge amount of angst around the lead up period and like, am I ready? Can I do this? Is this the right time? It feels like there’s no going back. So, I’d love to get your perspective since you’ve been through this, and at a young age. Right? So you have a lot more risk because you have a lot more time to fund. I’d love to start with Karsten, I know that you probably have a lot to say because you think about it from a financial perspective but … We’ll start with you, but then we’ll go around again.
Karsten: Yeah. Obviously you start planning for your exit maybe five years, probably more likely 10 or more than 10 years before your eventual retirement, and so you start raising your savings rates. And then in my personal case, at around 2016 or so, I was financially independent or I had a big enough chunk of money that I had the feeling that I could make that last forever. And of course, I pushed the eventual retirement date forward one more year and then another year until 2018. And it’s obvious of why, right? It’s a very stressful time because there’s a certain, as you said, it’s an irreversibility. There’s maybe a way back, but for all practical purposes, this may be a one way street, so you retire and it will not be so easy to come back, especially after you’re a few years out. So this is a very profound decision.
Karsten: Think about it, in terms of the other big financial decisions you make in your life, like buying a house or buying a car. If I buy a car, it’s a fraction of an annual salary, for me at least usually. If you buy a house, I’ve never bought a house more than three times my annual salary, even in San Francisco by the way. Then when I left the workforce, you are basically leaving 20 or more annual salaries on the table, that is a very big financial decision. And yeah, obviously that makes you nervous a little bit, and you want to be 100% sure that this is not going to go wrong.
Karsten: So, in my personal view, obviously there are two dials that you can play with. One is, what is your retirement budget and what is your withdrawal rate? Say you have a $50,000 budget and you have a 4% withdrawal rate, then you multiply your $50,000 budget by 25, and that’s your budget. So at some point I looked at the numbers and the numbers became so ridiculous where I said, “Well, even with a 3% withdrawal rate and $100,000 budget, I can retire, what exactly am I waiting for?” And in most places in this country, you can retire extremely comfortably with that. Basically in 2018, so finally as it became really, really certain that I will hopefully not run out of money, then I finally pulled the plug. I could have done it much earlier, but you’re definitely touching on something there is a lot of angst in there because it is such a profound and such a risky decision potentially to retire early.
Steve: Yeah. I like the way you frame it up and I think it would be … We’ll have to look at building some tools where it’s like you have this confidence meter and like you said, it became like an obvious choice. We had Doug Nordman on recently and he said, “Well, when I first retired, 17 years ago, I was at a four or 5% draw down rate, and it’s like now my assets have grown, and I’m at a 2.5% rate. So I just feel like the risk is just going to the floor.” And so he’s just a lot more confident about his decision, but in the beginning he was a lot more nervous about it.
Steve: And for Chris and Fritz, do you guys feel like you could go back like that’s an option or would you seriously consider that?
Chris: Going back to my old job?
Steve: Yeah. To work, as a fall back.
Chris: For me, honestly, that was originally my plan. Like I said, I originally thought normal people can’t retire early. And then I found this F.I.R.E. community and it just sounds so easy, you just built up 25 times your assets and you can draw down 4% and it sounds so simple. And then when you dive into the math, like Karsten has done an amazing job with his series, and you realize there’s all these variables and there’s so much unpredictability. So yeah, I definitely experienced that angst. And so what my wife and I settled on is, how can we get everything we wanted out of early retirement without actually retiring in the traditional sense where you’re drawing down your assets.
Chris: And the way I would frame it is, it’s almost like you’re playing a game of chicken. Are you going to run out of money or are you going to run out of life first? So you’re trading in this lifestyle that we didn’t like working all the time, for a different undesirable lifestyle where you’re constantly worried about money. And so we just focused more on lifestyle design and how can we get everything we want without actually having all the stress that comes with a traditional retirement. And that’s been our approach.
Chris: So my original plan was to just work, as a physical therapist, it’s pretty easy to get part-time work or to do a travel assignment. So that was my original approach, is I was going to maybe work five, 10 hours a week just to keep my toes in it and have some income or work like one rotation a year. And then these opportunities to write came up. And I have to say now that I’ve had the freedom and I’ve left my career completely, it would be extremely hard to go back. I equate it to lifestyle inflation, it’s the ultimate lifestyle inflation once you experience this freedom. And yeah, I’m allergic to anything that’s a commitment to my time now. And I’ve always considered myself a hard worker, but it’d be really hard to go back to a regular job in a regular office.
Steve: Got it. Yeah. Fritz, what do you think? What’s your perspective?
Fritz: Yeah. It’s interesting you mentioned Nord’s interview. I listened to that show that you had with him and he talked about, they were 4% and they thought they could make it, now he’s down at 2.5%. I think the interesting thing is, you think about this, we all talk about, and Big ERN did that great study on the safe withdrawal rates in 3.2%, I think is his recommended number. Whatever the number is, let’s say three, 3.5%. You start with that, the reality of it is if everything is horrible, you’ll make it. Well, more often than not, things aren’t always going to be horrible, right? The averages are going to be, you’re going to do much better than that. And as time goes by, your withdrawal rate should go down as Nord’s talked about on your show. So I think that’s important to keep in mind.
Fritz: I think, Chris, you might have touched on this, it’s either way you’ve got a risk. If you stay working, you’re risking giving up one more year of healthy life when you could be out living life instead of stuck in the cubicle or whatever. So just because you decided to work isn’t risk-free. So I think it’s a balancing of risks. And I was like, I think ERN, I did the extra year. I talked to my uncle, he retired early and he said, let me just give you one piece of advice. He said, “If you’re not quite sure on the numbers, put in one more year.” He said, “Don’t put in one more year, and then one more year and then one more year. Right? Just put in one more year, pad the numbers because you’ll never make the kind of money you’re making now, right in the peak year career.”
Fritz: So I took that advice. I worked one more year and when I left, I said, “This is it. I’m not going to work.” And everybody’s like, “Oh yeah, you’ll be working. You’ll be making money.” I said, “No. If I was going to stay working, I’d stay working.” Right? I had a pension that was accruing. I had a lot of very good benefits. And I said, “No. If I retire, I’m done.” Well, sure enough, and now I’m a year and a half later and I’ve accepted a position on a board of directors, which is, there’s compensation with that. I’m writing the book, we’ll talk about that a little bit probably, there’s some compensation with that.
Fritz: It’s interesting that even if you didn’t plan on earning any money, let’s face it, a lot of us that are in this F.I.R.E. community are pretty driven people who’re pretty successful. And there’s going to be opportunities, the difference is, the opportunities are doing something that you love. So, I think you’ll find that there is income even if you’re not planning for it. So don’t sacrifice all your life to continue working to get that withdrawal rate down to 3%, 2.5%. At some point, you just got to say, “I’ve gotten enough, I’ve run all the different retirement calculators, including that awesome one over at Boldin. I know I can make it,” and pull the plug and go. And life is going to work out okay.
Steve: Nice. Yeah. Now I think it’s like opening yourself up to those additional opportunities that you’ve been closed down to when you’re working a traditional career and on that track. So, before I move on, Chris and Fritz, as you guys led into your retirement date, Fritz, you mentioned your work one more year, and Chris, you’re trying to get at this lifestyle design done, did you have any kind of angst as you prepared to make this jump or anything that jumped out or things that surprised you?
Chris: I could say for me, definitely we had some angst and especially, so I just touched on that, my wife and I, we always saved about 50% of our income. But that really came from a different place for each of us. For me, my family was just always very anti debt, and so it started like, I suggested that we use my income to get her out of debt. She had a little bit of debt from college. And for her though, her family, they weren’t able to help her with school, they filed bankruptcy when she was in high school and it really scarred her. And so for her, it was a scarcity mentality and she really found a lot of comfort in our saving. And so as we got to this point where it was getting close to pulling the trigger, for me, I was ready to go on to this next thing, but for her it was taking away that security blanket. And so it caused some angst and it also just caused some tension between us and some tension in our marriage. So yeah, it was a big deal for us and it was a challenge we had to work through, to get where we are now.
Steve: Nice. That’s great to hear that perspective.
Fritz: That’s interesting because mine was so different and I think it’s a unique path for everybody, this is for us obviously. When we made the decision to do the one more year, we knew pretty much, okay, numbers are going to be fine at that point. I could have retired one year earlier, then probably slightly under a 4% withdrawal rate. So doing the extra year, we got it down to 3.5 or less. And it was interesting, and you’ll see it in my writing. If you go through the timing on my blog, the initial stuff was all about the numbers, all about the math, all about the safe withdrawal rates, it was all financial.
Fritz: And in that last year that I was working, I was like, okay, the math is fine, the numbers are great. I quit worrying about money. I didn’t have the angst about the financial side, it was more like almost an obsessive curiosity about what is this life going to be like in retirement? And what am I going to do with myself? What’s my purpose going to be? An excitement and a curiosity more so than any kind of angst. And I think it’s really important for people as they’re getting close to what I call the starting line, that they do really spend some introspective time talking about that or thinking about it, talking with their spouse. Because the research says, it’s the people that do the most amount of time planning for the soft side that have the best transitions into retirement. It’s been proven and the risk of depression goes up 40% in retirement, big numbers. But the way you avoid that is by increasing the amount of time that you prepare for it before retirement. And that’s really all the soft stuff. So that’s where our focus was and it worked out well for us.
Fritz: So I think everybody goes through it a different way. And our way wasn’t financial angst at all, it was more just a curiosity about what it’s going to be like and then excitement about it.
Steve: Yeah. Fritz, it’s great to get your perspective on that. I feel like you reflect what I see and hear from our audience. That first it is the financial side, that’s why everyone comes and talks to us, I’m worried about money. How am I going to go organize? Where do I stand? How much do I need? Do I have enough? When can I actually retire? And then if they sort through that and they get confident and that’s like, okay, I can do this and now what’s next? How am I gonna spend my time? And there’s so much less out there about that, including from us, but I just think across the board. Have you guys found any great resources for getting organized for that next phase?
Steve: I know Fritz, by the way, I know on your blog you write about the book, how one year healthier, healthier next year, I think. But I would love to hear from you guys, maybe Karsten from you first, like resources you’ve seen for the softer side or the time side of it.
Karsten: The funny thing is, I don’t think I really ever worried about the softer stuff, the softer side. And I have to admit, I’m totally winging that. And my view is that, even if I’m unhappy in retirement and I get bored or depressed, it’s something that you can fix and you can fix it relatively easily. Take on some new hobbies, things like that. Take on a job, do more blogging. So, I don’t think I’m really worried too much about the boredom side, or the depression side. I was, yeah, seriously, for me, the angst was about some of the financial parameters. And again, it’s not so much necessarily about the withdrawal rates, there were also some other financial issues. For example, we moved. Right? So we put our stuff in storage and we traveled a lot. Well, all the travel, will that go smoothly? Is somebody going to break into our storage locker in Hayward, California? We have to move our stuff with the U-Haul all the way up to Washington. While we are traveling, we went on a house hunting trip in Washington state, are we going to find an affordable house there? So some of the worries came again back to some financial stuff.
Karsten: I’m probably not the best person to talk about this, because both on my blog and here at home, we don’t really talk too much about the emotional stuff. We’re just totally winging that, I’m sorry to say that.
Steve: Whatever it is, as long as it is working for you. Chris, any things that you’ve ran into as you made this transition?
Chris: Yeah. So my home on the internet now is Can I Retire Yet? but that blog was started by Darrow Kirkpatrick five years before I started writing there. And he didn’t start writing until after retirement, and so I found his insights really valuable. Another person I knew was a guest on the podcast is Todd Tresidder, and he’s written a lot about, he called it, what he thought it’d be like, what he now calls it the Pro-Leisure Circuit, where he just thought he was going to live this life where he was going to be traveling and hiking and playing volleyball. And after about six months, he found that, that’s really not fulfilling.
Chris: And so I did consider that stuff, and I have to say, I put in a lot of thought on the softer side. But what I’ve found is, I don’t think I’m very good at predicting what I’m going to want and what’s going to make me happy. And I think like research shows that’s a pretty common thing actually, that the things that we think are going to make us happy once you achieve them, oftentimes they don’t. And so I think that’s just something to be aware of and to think about. And I think there’s a lot of value in planning and thinking about these things. But also you have to understand that, as things change, your perspectives change and you might be surprised by what you find on the other side.
Steve: Awesome.
Fritz: I think the one thing I’d add to that is I think it’s really important to focus on your attitude. If you hear what both of you guys said were really attitude related. ERN’s like, “Hey, I’m fine winging it. I’m good with that.” He has an attitude of positivity. Hey, I’ll figure it out. Right? So it’s a positive attitude. I’ll get into it, we’ll make it work. That’s great. And Chris, I think you’ve got the attitude, where you’re receptive to try new things, “Hey, let’s move to Utah and climb mountains.” I think having a positive attitude and having a curious mindset is really the key. And interestingly Steve, you asked about resources. I think this is a side of retirement that is R.E if you talk about the F.I.R.E. side of things. The R.E piece of it, life after R.E is not an area that a lot of people write about and talk about. A much more of it is about getting here.
Fritz: And I think it’s great you’re doing this podcast around the post R.E life. And I think as you see more and more people getting across the starting line, you’ll see this side of it growing. But up until now it’s a fairly limited area that gets covered. The same as I would argue, most of the arguments around the financials are around accumulation and there’s a lot less around how do you position your portfolio for withdrawals. So, it’s interesting that most of the focus’s on getting here, not living in the life after it.
Steve: Yeah. Well, there’s so few people that have done this. Historically, people have this traditional retirement and that typically tend to be a lot older. Now with F.I.R.E. and more resources and more efficiency, you’re starting to see, you guys are on the Vanguard of it, but more people reaching this point. We have two people on this podcast that are in their 40’s, right? And two that are in there, I’m not officially a F.I.R.E. person, so I guess one is in their 50’s. But you still have this really long time horizon in front of you and that’s highly unusual. And you could easily have 30, with the way healthcare is going, 40 years of pretty good health and that’s a huge amount of time to do lots of different things. Right? You could be looking back a decade from now and say, “Oh, wow. I did that blog back then and now I’m doing this or that, or whatever it is, and that’ll be interesting to see how this unfolds.”
Steve: So, well, let’s shift to, what you’re learning in the first year, which is the focus of this podcast. So first, I would love to hear what is the best thing or the couple best things that have happened in your year since you retired? Chris, you want to go first?
Chris: Yeah. I think two things. Just having freedom with my time, I don’t think I’ve had freedom with my time since I was probably in the 11th grade. I don’t think I’ve ever had more than two weeks in a row where I didn’t either have school or work or most of the time for me it was both. And so just having that freedom, it’s unbelievable. And then just being able to open myself up to opportunities, like Fritz alluded to, it’s just amazing. I think we focus so much on the financial part and getting to financial independence, but the person that you become on the way you develop these skills and interests. And these opportunities, there are so many things that have presented themselves to me. And it’s almost the challenge is more so, what don’t I want to do? And learning how to say no to things and focusing on the best opportunities because there’s so many things that have arisen, it’s been incredible. So those are the two biggest positives for me.
Steve: Nice. And Fritz, how about you?
Fritz: Yeah. I think you instinctively go to travel, I don’t know why. But I think when most people think, “Oh, what are you doing in retirement?” Your initial thoughts are travel. And I would say a year and a couple months in now, probably one of our biggest enjoyments was, we did what I called the great American road trip, we did 10,000 miles with our RV, and took our time going cross country, spent the summer with our daughter and her daughter, our granddaughter, and her husband, well, I’d thought about our daughter other than our granddaughter, in the Seattle area for a month. And then took our time coming back across the Northern route, Yellowstone, the Tetons, and whatnot. And to have for the first time in our lives, the freedom to take months to drive cross country in style, we have four dogs with us. So we were like, okay, nothing more than 300 miles a day. If we have a 300 mile day, we’re going to stop for a couple nights. Right? We’re going to take our time, we’ll get out and walk the dogs every morning, every night. So we’re hiking every day, we’re just seeing stuff, no rush whatsoever. And to have, I think it goes to Chris’s point, the freedom to be able to do that is amazing. So that’s number one.
Fritz: Number two, I would say, I’ve always been focused on fitness, but I’ve always had to do runs at lunchtime for 25 years and now that I’m retired, I’m just exploring the fitness side of things. There’s classes that are gyms, I’m taking CrossFit classes, I’m taking spin classes, I swim in the lake. To have the freedom to do a lot of different fitness type of activities and take classes that I’ve never had time to take in the past and feeling the benefit of that physically and knowing the importance of that. The book that you were mentioning was Younger Next Year, by the way, and it talks about the importance of regular physical activity and how if you really want to focus on longevity and living a long healthy life, man, the fitness stuff is really important and it’s something that’s within our control. So making that a priority and enjoying the time to have to do it, it’s probably been the second big thing that we’ve enjoyed.
Steve: That’s awesome to hear. You’re making me feel guilty. I’ve been getting busier and busier and now falling off the mountain biking bandwagon a little bit. Karsten, any big highlights for you?
Karsten: Yeah. So it’s a similar to Fritz, travel. So, when I was working in a corporate job, I actually had a lot of vacation days back then, I had 23 annual vacation days, which for American standards, that’s pretty decent. That’s not for German standards, but for American standards. So you take off some of the vacation days that you quote unquote waste for, is not really travel, it’s not really vacation travel. So you might get maybe three weeks of vacation out of that, that you do on a real vacation. Right?
Karsten: And so in the first year of retirement, we traveled for seven months, and then did a three month stint here in Washington to take over the house and then set that up. And then we did another trip for four months. So just the slow travel, what you can do if you don’t have any time constraint. Right? So you can visit all the relatives along the way you want. Right? So, for example, I have relatives all over Germany, but normally when we visited Germany for one week, we would only travel, visit one place. I’m not going to get in the train, and go on a train for another six hours just to visit my cousins in Northern Germany. Whereas, now we had all of this flexibility. We spent one week or one and a half weeks in Southern Germany, another week in Northern Germany, and then do day trips to visit other relatives and friends along the way. So just the slow travel, the low …
Karsten: And then the other thing is if you do travel, and you have only your 15 vacation days that you budget for your two trips every year, it almost becomes as stressful as work too. You worry about delays at the airport. You’re on the ski slopes, and you get annoyed about lines at the ski lifts because, hey, you’re taking away from my precious vacation days, now I couldn’t care less. If it’s a full day, I wouldn’t even go skiing anywhere, I would only go skiing on weekdays, on Wednesdays is the best. So slow travel. We did two trans-Atlantic crossings on a cruise ship. So we traveled from Amsterdam to Tampa, Florida last year in September. And then this year we traveled from Tampa to Barcelona on a cruise ship. So 16 days and 14 days on the cruise ship, and it’s nice, it’s slow, it’s relaxing. You have no jet lag.
Karsten: Yeah, so slow travel, a lot of travel. And we got probably 15 years worth of travel in our first year of retirement. That 15 years worth of-
Steve: Vacation travel.
Karsten: Travel that you would have gotten in a corporate career. So it’s basically, you take the stress out of travel too, and you get to meet friends and cousins that you haven’t met for a lot of years. So we really, really enjoyed that.
Steve: Yeah. It’s a little bit like changing the scarcity mindset with your time. I noticed this with, we started getting passes for skiing last couple of years and more landlords bought these daily passes, which are getting by the way, insanely expensive in Tahoe.
Karsten: Insane. Yeah.
Steve: It can be like 130 bucks a day and then you’re like, “I got to ski all the time.” Then you can buy a pass for, if you buy at the right time for 600 bucks. And then it’s like, “Hey, we might go skiing for two or three hours and then we’re done. And if we’re late to the mountain, no big deal. It completely, it’s …” Anyway, that’s a microcosm of what you’re experiencing. But I hear you. So it sounds like time, schedule control, flexibility, travel, fitness, those are the big benefits that you’re seeing, and some of the big highlights that you’ve gotten in your life, and it sounds like a lot less stress.
Steve: Any huge surprising downsides that you’ve run into? Fritz, do you want to go first? It doesn’t sound like it, but maybe there’s something that you ran into.
Fritz: Sure. No. It’s interesting because I had really high expectations for retirement. And I’ve got to say, it’s shocking for me to be able to say this 14 months in, there has not been one single negative surprise. It is probably exceeded my expectations, and I had pretty high expectations. You have to be flexible. It’s an interesting evolution, I guess, would be the way I’d phrase it. The first month, two months, it’s absolute euphoria. You can’t believe you don’t have to go to work. You wake up in the morning, you have a smile on your face, just constant euphoria. Obviously that passes and then you get into a period where …
Fritz: I guess I reached a point where I started feeling like I wanted to start accomplishing some things. So I did a big landscaping project, I think you mentioned it on Facebook, you put some comments on there. It was a huge thing. And I think now looking back at it, that was me starting to recognize that, okay, my vacation’s over, I’ve enjoyed this, but I’ve got to start contributing, doing things that give me value. And I think being adaptable and being introspective and going with the flow. And it’s all good, but it’s really hard to explain to somebody that hasn’t gone through it. But I haven’t had a negative surprise. I’ve just learned that you have to be flexible and listen to your gut. And be willing to try different things and just experiment, see what works for you. And it’s been great. I don’t know how the other two guys have been, but we really have not had a single negative surprise.
Steve: Wow. That’s a high bar. That’s good. Yeah. Chris, any thoughts?
Chris: Yeah. I don’t know if it’s necessarily a negative, but one thing that really surprised me is, I just pictured. So I worked a pretty standard 40 hour week. I had like an hour round trip commute. We had to take an hour lunch, so that’s like 50 hours a week. And I was just like, I don’t even know how I’m going to fill all this time, I’m going to have so much time to do everything. And I feel busier than ever, I don’t know where the time goes. There’s so much stuff I want to do that I still feel like I don’t have time to do. And maybe I’m just not good at saying no, and I need to get better with that. But it’s been really a surprise just how busy I still feel. And I think people worry about being bored and I can tell you, at least from my perspective, that is not a valid concern. I don’t think I’ll ever get bored.
Chris: And then the other thing I think was just a surprise, even though I wanted to leave my career, and I was so excited to do it, especially the last day of work, just that change, leaving. I worked for the same company for about 16 years, and we had really little turnover, I was the second newest employee at my company after that much time, that’s how little. So it was really like a second family. And even though sometimes they drive you nuts like your family does, just walking out that door, and you can always call or text or whatever, but it’s just not the same and it’s going to be a change. And I was surprised, like the emotions involved with that last day in particular, even at that last week leading up to it, just knowing that, yeah, I’ve made this decision, and I wanted this change, but it’s still, it was harder than I anticipated.
Steve: Right. By the way, I feel you, I have a kid heading off to college this week and I’m like, okay, he’s going, even though it’s like he’s not going to be that far away, he’s in the same state and everything else, you’re like, well, life is going to be different. Our life, our family’s going to be different, it’s a different phase. It’s not going to be the same as it was before, even though you might like to think, Oh, things aren’t changing that much.
Steve: Karsten, any surprises for you?
Karsten: Yeah. It wasn’t really a surprise, I kind of expected that, but in some way it was a surprise. Obviously, it’s not like the day you retire, you have this sudden bliss of happiness and your happiness level jumps through the stratosphere. And I knew that because look, in 2017 I knew I’m going to retire around early 2018. And if happiness increased, I’m pretty sure it did increase, but it increased more or less linearly between 2017 and 2018, right? Just walk around more confidently at the office and that was phased in linearly. It’s almost like efficient markets in the stock market. Right? Some good news is coming up for a stock, and as the probability rises and you get to that event, the stock price already increases. And then once the news is confirmed, there is not much of a move in the price anymore. And that was basically, if you replace the price of the stock with my happiness, that’s what happened. It’s not like there was some sudden increase in happiness. I was already pretty generally happy person around that time. So I expected that.
Karsten: The other thing that I didn’t expect was exactly the same experience as Chris had. You don’t really get these 50 extra hours. It’s the same thing, where do the hours go. I thought, Hey, in retirement, I’m going to publish blog posts three times a week, and I actually publish less now than when I was working. And it’s quite surprising that you get to fill your day. And the funny thing is procrastination might get worse in early retirement. Right? So I wrote that in a recent blog post, it’s easier to procrastinate because if you still have a job and a career, you’re almost forced to have some way of dealing with procrastination. You say, “Well, I got time to do something on Tuesday night, I better do it on Tuesday night because I don’t know when else I can finish this.” And now I’m retired, I say, “Hey, why should I do it in Tuesday night? I can do it on Wednesday morning or Wednesday midday or Wednesday evening.” It’s much easier to push stuff off.
Steve: That’s right. The average person actually retires between 55 and 60. Even if they’re thinking I’m going to work until 65 or 70, something happens and their traditional thing ends. And I know Fritz you’ve written about this, but you then have to bridge between that time and Medicare and if you’re looking at 18 to $30,000 a year in cost for household, that’s just a huge number. How does that get paid for? So, it’s a whole other topic and it’s growing. Right? It’s going faster than inflation. So-
Chris: That’s going faster than inflation and it goes up as you age because that’s like the one factors into your … It’s just that one factor, let alone all the other aspects of life that can change.
Steve: Yeah. I think staying healthy too is another big factor, and trying not to blow yourself up. Although I will say one thing that that happens is, people do get sick and then if you have a major medical event, even if you’ve got tons of money and great insurance, it can still blow you up, unfortunately in this country. I have friends that have great insurance and if something really serious happens, you start dealing with cancer, it’s like you’re churning through money at an incredible clip. So-
Chris: Yeah. My mom had breast cancer in her mid 40’s, and so she’s still has complications with dealing with that. And so just seeing pre-Obamacare what her premiums were and then even now, what’s her out-of-pocket every year, you can do what you can do to control things, but there’s just certain stuff that’s out of your control. And I think we need to be cognizant of that and respect that.
Steve: Yeah. You can’t hedge everything. All right. Well, I would love to get, before I wrap this up, any big tips for our audience. And also we’d love to get your perspective on, if people are thinking about retirement but holding off, should they just go for it or how should they think about it?
Fritz: Okay. I’ll jump in first, I guess. Big question. Right? Huge question. I think the way that I would recommend it, and I’ll be interested and see what these other two guys say, but I think the initial focus is on your numbers. Right? Focus on your numbers, be conservative in your estimates. I decided the 2,500 I’m using for healthcare, Karsten is at 2000. So I tended to sandbag a lot of my numbers to the high side just to be safe. So I would just encourage people, focus on the numbers and really take some time to look at your spending. I’m like, Chris, we’ve never really been big budgeters. For a year, we tracked every single penny we spent because we wanted to know as realistically as we could, what our spending was. And then we adjusted it for how we thought things would change in retirement, et cetera.
Fritz: So, focus on the numbers. Once you know the numbers are good, don’t waste your life working. Get the courage to make the jump because it really is a numbers game. And once the numbers say that it’s okay to go, it becomes a mental game, not a numbers game. And there’s no reason to let the mental side of it block you from experiencing life post F.I, because it’s really an enjoyable life. And I would encourage people to spend as much of their life in that environment as they possibly can. So that’s my recommendation.
Steve: Yeah. Thanks for it. Chris.
Chris: Yeah. I think something that I write about all the time on the blog, and it was also a big emphasis in the book is, I think typically we think of your financial independent or you’re not, you’re working or you’re retired and it doesn’t have to be that way. It’s like this false construct that we start with, because that’s what people do. And I think if you start with the end in mind and think, what do I want my lifestyle to look like and how can I get there quicker? And as you start to build degrees of financial independence, you can start to take a little bit more risk in your life and you can start to do things that you may otherwise be afraid to do. And so that’s the model I think that we’re following now. But it took us a long time of banging our head against the wall to get to that point and to realize that it doesn’t have to be all or none.
Chris: So, I think build the lifestyle you want as quickly as you can. But then, consider if you can continue to make some money, it really de-risks a lot of things. So if you can build that into your plan, there’s certainly no rule that you can’t continue to earn some income after retirement. And as Fritz alluded to, sometimes that may actually be hard not to because so many opportunities tend to present themselves.
Steve: Yeah. And Karsten before you go here, I just want to jump in. I told my 18 year old, I’m like, “So a big concept you want to understand is FU money.” That was a big thing for me when I first heard the term I was like, build up some pile of money in the beginning, as early as you can, where it’s like, no one can really tell you what to do. If someone’s jamming you up and you just want to be done with something, you can have the time and agency to make other moves. And a quick shout out to him, he’s spent the summer working, a couple jobs. He’s saved up 5,000 bucks, and so he has some initial money, so he’s going to start investing it and he’s starting to see how the system works a little bit.
Steve: Anyway, I just wanted to throw that in there before I go back to Karsten.
Karsten: Yeah. Funny thing is some people, they call me the Grinch of the F.I.R.E. community or they say, “Oh, you try to talk people out of retiring early.” And I actually, I want to say, and now that I have everybody’s attention, it’s actually the other way around. Right? I think that by looking at the numbers more carefully, you gain some confidence. Right? And I’ve seen tons of people, and they were in similar situations to say what Doug Nordman, is right. They’re expecting, say, a pension, after only 10 or 15 years in early retirement, and that would reduce their withdrawals. I’ve seen a ton of people where it’s actually the 4% rule would be crazy conservative. And I gave recommendations, yeah, you should retire and you should withdraw initially 4.5% if you’re certain enough that your future withdrawals will be lower because there’ll be reduced one for one by your government pension or even your corporate pension and then social security, if you were two earners.
Karsten: So depending on your age when you retire, say if you are a 30 year old, you don’t have any corporate pension, you’re expecting social security 40 years down the road. Yeah. Probably you should be a little bit more worried about retiring early and using a 4% rule. Then there are other people who retire in their mid 40’s or early 50’s or mid 50’s, and they’re expecting corporate pensions and social security is around the corner. They should definitely not stress about the 4% rule. They should maybe generally do their homework. As I said, retiring early is your most significant financial decision. It’s not buying a house three times your annual salary, leaving 10 times or 20 times or 30 times annual salaries on the table.
Karsten: So you definitely don’t wing it. But most people don’t even have to worry that much and if they do the numbers right and if they spend a little bit more time than what they do. A lot of people, they have a spreadsheet where before they buy a car or a refrigerator or a dishwasher, probably you want to spend a little bit of time or more time than that before you retire early. But don’t stress out for too long. Don’t do the one more year syndrome, and one more year syndrome, one more year. So retire confidently and doing your homework makes you retire confidently.
Steve: Nice. Yeah. Great to hear that perspective. With that, I’ll wrap it up here. So, thanks Chris, Fritz, and Karsten for being on our show. Thanks Davorin Robison for being our sound engineer. Anyone listening, thanks for listening. Hopefully you found this useful. Our goal at Boldin is to help anyone plan and manage their retirement, so they can make the most of their money and time. And if you’ve made it this far, I definitely encourage you to check out the blogs that these guys write at: Early Retirement Now, Can I Retire Yet?, and The Retirement Manifesto, and their books. So, the Choose FI: Your Blueprint to Financial Independence. And I’m sure you’ll see a lot of announcements about Fritz’s book when it comes out next April.
Steve: So that’s it. And also, obviously check out our website, and we did just do a new release of our software, which is in its soft launch right now, but we’re getting some positive signals there. And finally, if you can leave any reviews are welcome. We read all the comments, and it helps us spread the word about this podcast.
Steve: Okay. So that’s it. Thanks again and have a great day.