5 Critical Steps To Take Within 5 Years of Retirement: A Case Study

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If you’re within 5 years of retirement, welcome to The Red Zone.  It’s a time where retirement planning gets serious, and today’s post examines the critical steps to take within 5 years of retirement.  Even better, we’re going to review the steps using a real-life situation from a reader who’s currently taking the steps in his journey toward retirement.  We’ll review his situation as a Case Study for how to handle your journey through The Red Zone.   
The reader approached me after reading my original article on these critical steps to take within 5 years of retirement.  We traded some emails and agreed to use his situation as a case study for others who are nearing retirement.  He’s even added a bit of personal artwork to highlight each of the steps, and I’ve offered my thoughts on his approach to each of the steps. I trust you’ll find value in the approach.

5 Critical Steps To Take Within 5 Years Of Retirement

I contacted Fritz in response to his “5 Reasons Why Retirement is Hard” post.  In that post, Fritz spoke of this self-directed “Ph.D.” related to his manifesto of “Helping Others Achieve A Great Retirement”. I decided to reach out to Fritz and submit myself as a case study for his Ph.D. research.  Fortunately, he accepted, though he also assigned the writing of this post as a homework assignment.  Tough teacher!

I’m In The Red Zone of Retirement

I’m currently 53 and my wife is 58.  We’ve been married for 26 great years and have one daughter, a junior in college. My wife left federal employment in 2010 to spend quality time with our daughter (age 11 at the time) and she is eligible for the federal deferred retirement pension plan. I am also in federal employment, with a Minimum Retirement Age (MRA) of 56 1/2 and will be eligible for a reduced pension at that time.

Being in the Red Zone, I’ve compared my existing plans against Fritz’s “5 Steps to Take Within 5 Years of Retirement”post and am providing that assessment in this blog. This will be in a similar format to a previous guest post titled “My Journey Through The Red Zone”. I may introduce additional concerns, challenges, or things to be considered as well. With that, here’s how we’re managing the 5 Critical Steps to Take Within 5 Years of Retirement…

How We’re Managing The 5 Critical Steps

1. Make The Numbers Real

Make the numbers real as a critical step to retirement

What It Means:  Making the numbers real means moving beyond rules of thumb and doing a deep dive on your personal financial situation to determine when you can retire.

What I’m Doing:  I’m a nerd, so developing my own Excel spreadsheet to track and predict our finances was enjoyable and natural for me.  I began my retirement projections several years ago with fairly simple income needs and comparing that to estimated pensions and savings withdrawals.  Things just gradually developed from there over the years.  I’ve learned a ton on different considerations to use with my financial modeling, and now have a robust model on which I can run a variety of different simulations.  I’ve even modeled the impact on an early death for either one of us, and how the finances would fare for the survivor.
All of that effort not only provided a better model for my own use but gave me an understanding of the commercially available models. After I began writing this post, I realized that I really needed to validate my model. I was worried about missing some key factors that could distort my results.  After looking through several of the best retirement calculators, I settled on the firecalc tool for my validation, running both that tool and my spreadsheet with the same inputs.

After a few tweaks with the inputs on both models, I was able to correlate the results well enough to confirm that my spreadsheet model was accurate under several different scenarios.  Whew, that was a big relief. 

To determine our income needs for retirement, I’ve monitored my take-home pay for the last 6 years, and then:

  1. Added expenses which are currently taken out pre-tax from my paycheck (e.g., health insurance).
  2. Subtracted expenses that we’ll no longer have in retirement (e.g., college expenses, IRA contributions)
  3. Subtracted income we won’t need (money left over at the end of the month which we currently save to our taxable accounts).
  4. Added some “wish list” spending every year to cover wants (vacations, cars, etc).  This will also be the portion of our spending which we know we can omit if things get tight in retirement.
  5. Estimated our tax spending obligations in retirement to include in our spending requirements. 

We’ve been diligent savers our entire careers and have substantial investments to draw from in our retirement to supplement our income needs beyond our modest government pensions and social security. We certainly don’t live large, avoiding expensive cars, lavish vacations, and that hedonic consumer treadmill.   

Generally, it appears we’ll have a few years in which we’ll need to draw about 3.5% from our investments until we’re eligible for social security.  At that point, our withdrawal rate will drop near or below 1%. Based on this assessment, our savings at Age 100 look very healthy. 

Fritz’s Comments:  You’re in great shape!  Too bad you have to wait around until Age 56 1/2 to be eligible for that federal pension.  I think you’re wise to wait, that pension is too valuable to walk away from, even if the numbers say you may be able to do so (1% SWR seems too conservative).  I also had to “wait” for my pension and elected to work One More Year beyond when “the numbers” said I could have retired, and I am happy I took that approach.  

2. Get Your Portfolio Ready For Withdrawals

setting up your investments for retirement withdrawals

What It Means:  Moving from accumulation to withdrawal is a major step in your retirement planning and should be planned well in advance of your retirement date. 
What I’m Doing:  Given that we have a lot of our savings in tax-deferred accounts, we’re building up our taxable account in our final years of work.  We’re currently at ~2 years of spending and working to get it up to 3 years before I retire.  We’ve also got some spending obligations that will draw from these funds over the next few years, including possibly helping to fund our daughter’s postgraduate work so she can begin her adult life debt-free.  
We are very conservative with our qualified savings accounts, with roughly 50% in bonds/cash and 50% in equities.  Therefore, I’m not too worried about needing to build up a large cash reserve in our taxable account to handle large market swings.  We’ve considered adjusting our asset allocation for retirement, but given that our withdrawal need is low we really don’t want to be overly aggressive.
To Do’s:  I still need to re-write the “Love Letter” to my wife to ensure that everything is up to date.  We do have a financial advisor who should be able to take care of things should the need arise, although the Vanguard advisory service is also an interesting option.  We’ll need to file for our pensions, of course, as well as determine our optimal age for claiming social security when that time comes.  I’ll also be putting together a withdrawal plan from our qualified accounts, including a strategy to minimize our risk of RMD’s when my wife reaches age 70 1/2.  We’re considering doing some Roth IRA Conversions during our first few years of retirement before our social security payments increase our income. 
Fritz’s Comments:  It’s admirable that you’re considering supporting your daughter’s education expenses.  Given that your projections from Step #1 look very comfortable, you could potentially consider your Roth contributions as a source of short term liquidity if you find yourself a bit short of after-tax funds in the first few years of retirement.  Also, I’d encourage you to shift your cash position to your after-tax savings if possible, and keep a higher % of your qualified investments in longer-term investments.  You could maintain your same asset allocation, but ensure the cash is available should you need it in a market downturn in the years before you can access your qualified investments.

3. Deciding Where You’ll Live, and Pay Off The House (?)

deciding where to live in retirement
What It Means:  Now is the time to decide where you want to live in retirement and put your plans in place to migrate to your new retirement lifestyle.  You should also decide whether to pay off your home prior to retirement.
What I’m Doing:  On the good side, we decided to pay off our house before my wife left employment and we should have decent equity in it when we decide to sell.  I haven’t factored that equity into any of our calculations as I expect this equity will be used to purchase a new home or help us offset the costs of rental if we decide to go that way. 
To Do’s:  We have talked many times about where and how we’d like to live in retirement.  We have lived in the same city and house for 25 years, and I have lived in the same area all my life.  I’m ready to experiment and move somewhere else within the USA and have even considered moving abroad.  My wife is generally on-board with moving somewhere else in the USA, but we’re unsure where this may be.  At this point, we’re looking forward to this being one of those activities we’ll be doing in retirement, and I look forward to doing the research, travel, and number crunching to solve this puzzle.  Our approach right now would be to sell our house and be nomads, renting a place for a year at a time in different parts of the country.  It’s possible that we’ll quickly tire of that lifestyle, but we’re looking forward to the uncertainty.  
I don’t look forward to ridding ourselves of all the stuff we’ve accumulated over 25+ years of being in the same house.  I often wonder if anyone “knows a guy” that can just take care of this for us.  Or maybe those ads I’ve been getting lately about “I’ll buy your house as-is now”…  I certainly need to revisit the advice and experience Fritz and others have on this, but we’ll defer until we have more time in retirement.
Fritz’s Comments:  Congrats on having the house paid off, that’ll free up some options in retirement. The life of a nomad sounds romantic, but just realize that you’ll be losing your network of friends both from work and your community at the same time.  Also, I’d encourage you to start experimenting with Facebook yard sale sites to start unloading a few of the items you know you won’t need now.  We were happy we’d tested out some sites before we unloaded all of our belongings in 24 hours.

4. Catch Up

keys to a great retirement transition
What It Means:  In your final years of work, you should attempt to live on your retirement budget and aggressively save the difference. 
What I’m Doing:  We’ve been maxing out my TSP contributions for a very long time now, had maxed out my wife’s TSP while she was working, and increased our contributions to the catch-up levels when I turned 50.  We’ve also been buying Vanguard Roth IRA’s when possible, and have nicely built up our HSA accounts.  We’ve also been shoveling the “leftovers” every month into Vanguard taxable accounts to help build up the first few years of living expenses.
To Do’s:  We’ve been doing as much as we can in the catch-up category and I feel very good about this .  We plan on continuing to save aggressively until retirement.
Fritz’s Comments: It sounds like your financials are in solid shape.  It’s time to start turning your attention to the “softer” side of retirement planning.  Spending as much time focusing on what you want your life to be in retirement is really the key to a great transition and retirement.

5. Find Something To Run “To”

What It Means:  Spending time in your final year of work focusing on what you want your life to be in retirement has been shown to be the most important factor in having a great transition to, and life in, retirement.
What We’re Doing: This is really what it’s all about.   While I’m grateful to have the job I do, it gets to be a bit monotonous after 30 years of being in the same industry.  I’m really trying to stay positive as Fritz advises, especially given my sense of obligation to the taxpayer given my role as a government employee.  I have to remember that it’s a better plan to find something to run to, rather than thinking of retirement as running “from” something.
Over the last 5 years, I’ve been dabbling in a number of things in my spare time.  I’m engaged in a number of volunteer activities but I’ve struggled to find organizations that give meaningful work.  This is no fault of the volunteer organizations, but more because I haven’t had the time to invest and grow within those organizations.  This will be easily solved in retirement and I look forward to finding the right organization, then building my resume and skills with them.
I’m also dying to have more outdoor activities and look forward to hiking some great trails, diving some great reefs, surfing some tasty waves, and pursuing other things of interest.  I’ve been lucky to remain physically active all my life, working out several times a week and walking a couple of miles every morning with my wife.  I won’t be competing for Mr. Universe, but I think that I’m in pretty good shape and ready for some exciting adventures without having to get in shape first.  But…no cold water swimming for me (how does Fritz swim in 48F water?).
Last, but not least, is leisure learning.  I take pleasure diving into random subjects and pulling those threads through research, books, music lessons, blogs, podcasts, etc.  Some of my favorites podcasts are (also see Fritz’s post “I Almost Enjoy My 2-Hour Commute):
To Do’s:  When I started reading about running to something, I was mildly worried that I may fall into a trap during retirement, bored without having 8-10 hours a day consumed by work.  But after thinking through this (thanks to Fritz for this forced introspection homework), I’ve found there are a lot of opportunities that I already enjoy.  I just need to say “yes” to the opportunities I decide to pursue in retirement.  I really don’t like the idea of a bucket list because, well, what happens if you get it done?
Fritz’s Comments:  I’m pleased to see this homework has made you think about some things, though I’m shocked (bad pun) that you haven’t attempted cold water swimming!  Sorry to hear the volunteering hasn’t been as fulfilling as you’d hoped, I encourage you to be quick to drop your activities if you’re not “clicking” with a particular organization, and try out several before you decide to commit your time.  As for that bucket list, I don’t know anyone who has “gotten it done”, and it seems we’re adding more to our bucket than we’re able to complete.  You may want to think about the Activity Jar concept my wife and I did, it was a good exercise and gave equal voice to a list of potential retirement activities.


So there you have it, my Red Zone Journey assessment.  The five critical steps to take within 5 years of retirement:
1. Make The Numbers Real.
2. Get Your Portfolio Ready For Withdrawals.
3. Decide Where You’ll Live, and Pay Off The House.
4. Catch Up
5. Find Something To Run “To”.
I certainly don’t have all the steps wrapped up, but I feel good about my progress.  Being caught in this sandwich generation, we have some variables which may disrupt our plans (a wonderful daughter on the cusp of conquering the world and aging parents), a dilemma many folks struggle with as they finalize their retirement plans.
Thank you, Fritz, for introducing these 5 critical steps to take within 5 years of retirement.  It certainly has been an interesting reflection completing this homework assignment for you!
Your Turn:   Have you taken the time to work through these 5 critical steps?  Are there other steps that folks should consider?  Do you have any questions/comments about this reader’s plan?  Let’s chat in the comments?


  1. 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?

  2. 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!

  3. 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!

  4. 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.

  5. 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!

  6. 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.

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

  8. 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!

  9. 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.

  10. 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.

  11. 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.

  12. 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).

  13. 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.

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