By Paula Pant
Jillian Johnsrud was falling apart. After suffering a miscarriage, she couldn’t pull herself together to return to her job as a youth pastor in DC. She decided to take a month off.
That unexpected break became Jillian’s first “mini-retirement” — a deliberate step away from work for at least 30 days to focus on something […]
By Paula Pant
Becky and her husband are about to semi-retire. But the four percent retirement withdrawal rule doesn’t make sense for them. Are there other financial frameworks they should explore?
Kris is excited about a potential boost in local real estate values when the World Cup comes to town. Will this have any significant impacts on his property?
Peyton’s parents are pressuring her to buy a house, but she’s worried this will cripple her early retirement goals. Is she right to be concerned?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
By Paula Pant
Kimmy is worried that her mom’s retirement portfolio is invested too conservatively. Is she right to advise her to take on more risk?
Peyton has heard the financial advice about staying away from Whole Life Insurance as an investment, but what about as a savings account for children? Is there good a use case for this?
Jeff and his wife are in a great financial position, but they fear that their retirement savings are too heavily apportioned in traditional IRAs. Will they run into tax problems in the future?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
By Paula Pant
Debi is stressed about saving a down payment to buy a house in her high-cost-of-living area. Should she cash out her brokerage account to speed up the process?
Lucas and his wife are high earners, but they’re tired and ready for a change. What strategies can they use to maximize their investments and confidently step away from their jobs?
Grant is thrown off by recent discussions about the efficient frontier. It sounds a lot like market timing to base an investment strategy on an arbitrary set of historical dates. What’s he missing?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
By Paula Pant
Contrary to recent discussions, Jesse has concluded that a traditional IRA is the smarter way to go for most people once marginal tax rates are factored in. Is he missing something?
An anonymous caller is four years away from early retirement but she’s unsure if her portfolio allocations are in the right place. How and when should she start converting equities to cash?
Luz is confused about how to handle company stock options. Is there an ideal spread between the exercise price and the stock price? And, what should she do once the stocks are exercised?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
Enjoy!
By Paula Pant
Bill Bengen, the former rocket scientist who discovered the “4 percent rule” of retirement planning, joins us at the Bogleheads conference in Minnesota.
Bengen clarifies that calling it a “rule” is misleading since it doesn’t fit everyone’s situation. The 4 percent figure came from studying the worst-case scenario since 1926, when someone who retired in 1968 could only safely withdraw 4.2 percent annually. Out of 400+ retirees in his database, that was the only one who had such a low safe withdrawal rate — most could take out much more.
Recent research has pushed the “safe” withdrawal rate closer to 5 percent. But Bengen identifies eight key factors that affect how much you can withdraw, including how long you’ll be retired and whether you’re drawing from taxable or tax-deferred accounts.
For early retirees planning for 50-60 years, Bengen says the safe withdrawal rate asymptotically approaches 4.2 percent — meaning even with an infinite time horizon, it won’t drop below that. He thinks the common advice to use 3 percent for early retirement is unnecessarily conservative.
Bengen shares what he calls the “four free lunches” in retirement planning:
1. Using an equity glide path (reducing stocks at retirement, then increasing later)
2. Diversification across asset classes
3. Regular portfolio rebalancing
4. Slightly overweighting higher-returning assets like small-cap stocks
When it comes to market drops versus inflation, Bengen has clear advice: Don’t panic during bear markets — they typically recover. But if you hit extended high inflation early in retirement, it’s time to “head for the bunkers” and cut expenses drastically.
Beyond finance, Bengen shares his excitement about space exploration as a former rocket scientist who graduated from MIT just months before the moon landing. He hopes to live long enough to see humans reach Mars and believes space tourism helps people appreciate Earth’s beauty and fragility.
The interview ends with a light-hearted discussion about whether Pluto should still be considered a planet (Bengen still calls it one, out of habit) and speculation about future tourism to Saturn’s moon Titan once the sun’s expansion makes it warmer in a few hundred million years.
By Paula Pant
An anonymous caller, whom we name “Samantha,” and her husband are financially strained and feeling torn. Shortly after purchasing two rental properties, their income dropped dramatically. Should they sell?
Tina is a full-time environmentalist. She’s worried that her index funds don’t align with her values on sustainability. Is there a world where she can be a savvy investor and fight climate change?
Another anonymous caller, whom we name “Sarah,” is excited and uncertain about her growing business. Should she hold steady or invest more resources into it? And how does she know if she’s making the right call?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
Enjoy!
By Paula Pant
What happens when you spend three decades talking to retirement experts? You learn that most of what people think they know about retirement planning is oversimplified or wrong.
Christine Benz, director of personal finance and retirement planning at Morningstar, joins us on the Afford Anything podcast to share what she’s discovered after 31 years of […]
By Paula Pant
Steven is stuck on the question of financial stability. How do you know if you have it? Is there an objective answer based on net worth? Or is it a calculation relative to your income and age?
Jack isn’t sure how to factor his house into his net worth. It’s an asset, but he has a mortgage against it, and there are transaction costs associated with selling it. How should he frame it?
Patricia and her husband are debt-free with a $2.2 million net worth, but she’s constantly stressed about their finances. Are her concerns valid? Or is she a financial hypochondriac?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
Enjoy!
By Paula Pant
Economist Dr. Karsten Jeske talks with us about the current economic landscape. Karsten, who retired at 44, breaks down the Fed’s recent decisions and how they might affect our finances.
He explains how markets often anticipate interest rate changes before they happen. Karsten challenges traditional views on inflation and unemployment, telling us that textbook models don’t always match reality.
Karsten shares his personal investing experiences, covering both market highs and lows. He emphasizes the value of consistent investing regardless of market conditions.
For those eyeing retirement, Karsten dives into safe withdrawal rates. He advises paying close attention to current market valuations when planning. On the topic of mortgages, he offers clear guidance on when refinancing makes sense.
We also touch on economic history, discussing the Weimar Republic’s hyperinflation. Karsten uses this to critique modern monetary theory, expressing skepticism about unrestricted money printing.
Throughout our conversation, Karsten explains complex economic concepts in accessible terms. He draws on his background as both an academic and a Wall Street professional to provide well-rounded insights.
Karsten, also known as Big ERN, is the author of EarlyRetirementNow.com, where he writes about safe withdrawal rates and personal finance while enjoying his retirement.
