1. Maslow revised his hierarchy of needs to include self-transcendence at the top: https://images.app.goo.gl/wMdsQwdZ3LXv92Tr5

   1. Who knew? Thanks for sharing.

2. This is a great set of steps. I for one, will not be paying off my house, I just believe that at 3.25% mortgage is something I’m willing to carry because my invested money will always outearn it. Maybe not every year, maybe not even every 5 years, but over time it will for sure.

   And awesome sketches!

   1. Dave, I can totally relate. If you were reading my blog when I went through the preparation for retirement, you’ll see I went back and forth on the “pay off the house” topic. I ended up paying it off in spite of a 3.5% mortgage, just wanted the peace of mind of entering retirement debt free. I agree, purely on financial logic, that the arbitrage can easily justify carrying a mortgage. It was the “softer” stuff that tilted my decision.

      And yeah, those sketches are pretty cool, right?

3. I’m in that 0 to 1% SWR zone too, but don’t have pensions, just have a lot in our portfolio. We pretty well did those five steps although the idea that retirement means moving somewhere else strikes me as a little odd. Why would anyone want to leave all their friends behind just when they have more time to spend with them? Why would you not have already been living where you wanted to during your work years? But I know some people do relocate. Also I’d suggest a side hustle in retirement. After a long career you may not like the feeling that no longer earning brings. I volunteer a lot, chairing a college and a large charity board as well as helping at the university I attended and several church roles. None of them fill the same needs that my consulting does. Some, maybe most of us need to be doing some productive work that’s pays, even if you don’t need the money. Congrats, you’ve done a superlative job getting ready!

   1. Steve, great comment. Moving is a personal decision, with a lot of factors. As you likely know, we chose to relocate from Atlanta to the Appalachian Mountains. We had a cabin here for 7 years prior to retirement, so we had a bit of a community pre-established. Ultimately, the mountains were a much better fit for our desired retirement lifestyle.

      And I agree with the recommendation to pursue a side hustle (or two, or three). I’ve found they add a lot of value in the retirement years, as well.

   2. Thanks Steveark, I’m the guest blogger from this post. Yeah, I do think about the loss of community that some may have with a move. But right now the pull to explore and find new and different communities is stronger for both my wife and I. Maybe it’s a mistake, but that’s part of the thrill with a new start. My career is very specialized and is in a sector that doesn’t offer many choices to live elsewhere; thus it’s been my/our choice to stay where the job is. And I certainly worry about being productive in retirement, and maybe that means a part time paying job. Cheers!

4. Love the case study Fritz – please do more when you can – very valuable because everyone has a few different variables in their life. I am a big believer of a paid -for house in retirement for risk reasons among others. The more I understand about retirement the more I realize it’s a financial number and not an age! I love your content Fritz and I consume a lot of personal finance content!

   1. Dusty, glad to hear you like the case studies. I like to weave them in from time to time, folks get tired about hearing my story. Wink. Thanks for the kind words about my blog, much appreciated.

5. Sounds like you have the money sorted, – well done on that!
   However l think you still have a bit to go on ‘what will we do?’, ‘where will we live?’ questions.
   I had a similar conversation with someone in their late twenties today. He and his partner were from NZ, lived for a while in Australia, then came across to Scotland. They were only going to stay 2 years. The 2 years became 5, and now they are going back to NZ. His comment was along the lines, if you only plan to stay somewhere for a short time, you don’t put down roots in the same way. So I am interested that your current plans suggest moving somewhere different each year. The drawback might be that you don’t build a support network, and 10 or 15 years in, when you slow down, you might miss that.
   As to what to do – lots of options. It would be worth experiencing a few different things in the next few years.
   Have fun

   1. Erith, I always value your comments, so insightful and genuine. I encourage the guest author to “listen closely” to what you have to say. I also like how you take extended vacations each year to a different country, what a great way to experience the world in retirement, while maintaining your home base in Scotland.

   2. Thanks Erith. Totally agree that we’ve still got more exploring and thinking on what to do and where to live. Gives us something to do for the next 3+ years! Certainly that nomadic life may not turn out right for us. We may find the right place and community very early on and set roots there, or get tired of that and move back. We still want to downsize from our current place, so nothing really is lost if we go this route and we’ll have some good stories. But right now my feeling is that we’ll regret a lot more never trying this out.

6. I’ve been seriously pondering retiring for the past 4 years but finally put numbers to paper and then spreadsheet only within the last year. I heard at age 55, federal govt allows you to withdraw from your employer 401k without penalty. Unfortunately, my firm’s Plan did not allow for that.

   I’ve been listening to FI podcasts and had a general idea of our financial picture. But it was when I drilled down on our expenses and found Fritz’s spreadsheet projection to age 96 and a couple case studies that it clicked. With online banking and credit card statements, I was readily able to see the discretionary spending we could cut without too much pain.

   We have funds in taxable accounts for 3 years of living expenses, until our second kid goes to college. We saved enough for our 2 kids’ college. We’re able to get reasonable health insurance through Covered CA. We’ll rent out our house, which would net enough to fund our slow travel throughout US and beyond (we live in a high-demand resort area). I can draw on retirement savings by then as I will be 59 1/2, if needed. That will tide us over until SS kicks in. We’ll do Roth conversions before SS.

   So not only could I retire next year but my husband could too!

   1. “But it was when I drilled down on our expenses and found Fritz’s spreadsheet projection to age 96 and a couple case studies that it clicked.”

      Music to my ears, and a perfect example of why I do what I do. Congratulations on your looming retirement. One word of advice, don’t wait another 4 years! Life is really, really good on this side of The Starting Line. Wink.

   2. Thanks Tess. I’ve looked quite a bit into our government retirement system. As I understand, I am able to take our 401k withdrawal without penalty before 59 and a half only if I take an immediate retirement (which I am not eligible for until 56 years and 4 months). Some government employees are eligible earlier, depends on birth year and number of years with the government; so maybe that’s where the 55 came from. I’ve thought about renting out our house also, but after so many years of home ownership there’s just something appealing of not having that worry (at least for a while). Good luck to you!

7. Excellent post, fully of great information that is highly relevant to me as my wife and I near retirement.

   Any chance your correspondent could share his spreadsheet? That would be a huge service to the many of us who are working hard to map this journey! I have tried many different spreadsheets but in general they are either too complicated or too simplistic for me—his looks like it threads that needle very nicely.

   1. Steve, glad you found the article relevant. We’ll see how he responds to your request, but in the meantime here are a few of the spreadsheets I have available which may be of help (to save a copy for your personal use, simply click “File, then “Make A Copy”:

      1) Retirement Cash Flow Model: our projected spending and income through age 95.

      2) Spending Tracker: the sheet I used to track our actual baseline spending.

      I hope they help!

   2. Thanks for the comment Steve. I’ll need to think about your request. I have 2 concerns; one is it’s going to be very difficult for someone else to understand how it works, the right cells to fill in, the relationships with other spreadsheets that it pulls data from, etc. I can manage it fine, but it’s probably too chaotic for anyone else. The second is my concern of anyone else using it to base their situation on….. It’s one thing to just have me and my wife’s future at risk and quite another to know I may have messed up someone else! But let me think harder on it and see if there’s a way to clean it up and make it understandable.

      1. Jeff P–

         Thanks for considering sharing your spreadsheet! I sure hope you end up with a a version to share—I think your approach could help a lot of us. (And no worries about messing us up—-that’s entirely on us, not you!)

         1. Steve, I’ve been rolling around the idea and occasionally looking at my excel model to understand how I would make it user friendly, strip out all our personal data and allow someone else to understand how they would alter it for their own use (and still be valuable and confident that it is valid). There are just too many buried formulas, conditional statements, and equations for me to go through…. I guess that’s an issue with gradually building something like this over many years with only my specific situation in mind. It would be a full time job for me for at least 2 weeks or more. It may be something I would tackle as a post retirement hobby, but not now. Sorry about that.

            1. No worries, Jeff–thanks for considering this.

8. Great write up, do you have the spreadsheet to share for calculating the sources of income Chart shown in Step #1?

   1. EW, see my response to Steve immediately above.

9. I don’t agree with the catch-up section. The couple has too many assets already and would not be able to spend. It’s better to live a little instead of being the richest person in the grave. As someone who achieved Financial Freedom before 40 I already believe they waited too long to retire.

   1. I think you’re right…… We probably don’t need to save any more and will do just fine. As you eluded I’m at FI now; but it’s hard not to hang on for just a few more years and get the added security of pension and medical plan available to me then. Like Fritz commented, it’s an option to stop these catch up funds and instead finish up my daughter’s college costs when her 529 runs out and let her start her post college life debt free. Congrats on reaching FI at 40. I wish there was better education when I started working about that mindset!

10. Loved this case study, as I am 1-3 years away from retirement. But this article did something else for my thought process. Instead of obsessing about when and looking for guarantees that there is “enough $$”, I need to refocus on how I see my “third life”. I understand there are no guarantees, life is short etc. and you can’t take it with you, but maybe the reason I need to stick with this career is to spend more time developing my own idea of what I truly want with that new and very different time in my life.

    1. Thanks Karen, I agree. That’s almost more concerning to me now than the finances. One problem I seem to have in developing the next life is just having the energy and time to do this while working full time. I do manage a 3 hour volunteer gig every weekend, but much beyond that, along with daily exercising and taking care of daily life, doesn’t leave much room.

    2. “But this article did something else for my thought process.”

       Music to my ears, and exactly the reason I dedicate so much time to this blog. Glad to know the things that are shared here are causing people to think about what really matters in life. Best of luck as you work to figure it all out. Great comment.

11. I want to leave money (in very strict trusts) for my kids. I also want to draw a combo of social security and state retirement pension (I can draw both, we pay into social security in my state) that equals my current salary. I don’t want to have to draw from assets unless a dire emergency. In other words, I want to pretend for the rest of my life, I am living on my current salary, and that is all I have. I also want to work until Medicare eligible because I have excellent cheap health insurance currently, and just don’t want to have to pay with the ACA or COBRA. Given these boundaries (I am almost 60), I should work until I am 67, which would be full retirement social security age for me, and I would actually draw a little bit more than what my salary is now with both retirement pension and social security, which would hopefully protect me from some increased cost of living issues. Obviously if my health takes a downturn, I will probably retire earlier, but I don’t want to. I also don’t know exactly where I want to live when I retire. I have three different locations, based on the locations of my kids. Where I live now is convenient for work, so I would have to move. I am kind of ambivalent about moving as long as I can drive. I like to visit my kids but they work, and it will be short visits. I don’t like to interfere with their already busy lives. I am kind of ambivalent about travel, except to see my kids. I do have to fly 2000 miles to see one of my kids. I like to fly about three/four times a year for a weekend visit. I live close enough to the beach that I can drive there spend all day there and drive back home at night if I want to, so other than visiting my faraway kid, I am not into traveling. Really, I am kind of ambivalent about retiring, although I would like more time to exercise and less work stress and more time off.

    1. Cindy, good to know that you enjoy your work and are willing to work until age 67, but will be in a position to retire earlier “if my health takes a downturn”. Always good to have options. When we retire, and what we do in retirement, is a very personal decision that each of us must make. Glad to hear you’re thinking about it, and doing what makes the most sense for you!

       1. I may also buy a small condo near my daughter. I just don’t want to retire there because it is not a tax friendly state at all. It would be fine to visit during the summer. I have thought about buying the condo and renting it out until I am ready to retire. I went to college in the state where she lives and I love it there. Really, I want to be in two places, near my sons, and near my daughter. I don’t think any of them are leaving where they currently live.

12. Hi Fritz,
    I really enjoyed reading this case study. Of course, everyone’s path is different and his looks nothing like ours! Our decision was to drastically reduce our expenses by living small and simply so we could retire in our 50s on a reduced pension. To us, the time was more valuable than the money.
    What I especially liked was the concept of retiring “to” something rather than “from” something. Finding your Ikigai – your purpose or reason for getting up each morning – post career is important to your longterm well being and happiness.
    Cool post.

    1. Nancy, glad to hear the case study was of interest, seems a lot of folks enjoy them. It is amazing how our journeys are all different, and yet the core principle of time value and finding a purpose apply to all of us (and why those concepts are the focus on my pending book). Cool comment. Wink.

13. Excellent case study Fritz and Jeff! Five years prior to retiring we were set on buying a place in the Southwest to spend half the year and downsizing here in the Northeast. We’re very happy with our friends, family, and community and want to maintain that going forward. We’ll most likely downsize within a few years as the upkeep and multi-story layout will not be welcome as we age. As for buying in the Southwest? We now want to rent and explore in lots of locations, similar to your nomad thoughts for awhile before we settle on a final location. We’re happy to explore new places each year rather than have the need to return to the same location.
    Thanks for sharing your plans!

    1. Mr. P2F, sounds like a solid plan! Downsizing while you’re still able to manage the significant effort involved is a sound strategy, and something we did when we downsized to our mountain cabin. We love it, and have had absolutely no regrets with the decision. I also like your idea of renting in various locations before deciding on “buying in the Southwest”. You never really know what an area is like until you’re able to spend extended time in an area. Good luck on your journey, and thanks for stopping by!

    2. Thanks for the reply P2F! I’m happy to hear someone else with similar plans. Your idea of downsizing and having a smaller home base near your current community is another very appealing option for us that we’ve knocked around. As we get closer, it’s possible we go more in that direction rather than the total nomad option I described above. That would help a lot with not having to get rid everything, keep roots locally and in our comfort zone, and knock down some of the expenses and home maintenance with our current home. We,ve clearly still got things to think about, but I don’t feel it’s necessary to have this nailed flat by the time I retire (i.e. Have this be one of those challenges to look forward to in my retirement and when I have more time).

14. Great job, Jeff. There’s no downside to following Fritz’s 5 critical steps. Mrs Groovy and I did and things worked out amazingly well. For us the key was nailing down our expenses prior to retirement. We began tracking our expenses three years before we retired. We’re now in our fourth year of retirement and there’s been no surprises on the expense front. We were also incredibly lucky when it came to accessing our portfolio. When we began saving for retirement back in 2006 we were putting $3,000 a month in a brokerage account. As time marched on we gradually shifted and put most of our retirement savings 401(k)s and Roths. The result is that we entered retirement with ready access to 50 percent of our portfolio. Not bad for a couple of ham-and-eggers. Best of luck, Jeff. You have three years to figure out what you’re retiring to and I have a strong suspicion you’ll succeed. Cheers.

    1. Right on daddio! 😉

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