You Need These 5 Things to Retire Early

The worst articles I read on early retirement and the worst comments I get in YouTube videos have something in

common. They all say, "You need $2

common. They all say, "You need $2 million to retire early. You need $1.5 million."

million." Honestly, I love the comments, but I hate that question because it um misses

the point entirely and shows that there's not to offend anybody, but there's a lot more to learn. If you're chasing a specific

learn. If you're chasing a specific number, you're missing five points that are key to retiring early. And I'm going

to cover them today. This is not theory.

This is not textbook advice. This is

real world stuff from my experience.

That's why you come here, right?

Uh let's jump right in. Number one, you need a real plan and a lifestyle that that plan can support.

A lot of people will say, "Hey, I've got a 401k balance of 900,000.

I here's roughly what I'm going to get at social in social security and I'm thinking about taking it 62 because I want to get my money. I'm not sure what my expenses are going to be, but I think

they're going to go down and I hope the market just does well for the first couple years and my retirement date, you know, I'd like to work till I'm 60. I'd

like to work till I'm 55. I want to work till I have 30 years. these nice round emotional emotionally driven numbers. This isn't a

plan. This isn't a plan. Real plans need

plan. This isn't a plan. Real plans need to tackle what are my expenses going to be? What changes when I retire? What

be? What changes when I retire? What

goes up? What goes down? Some some will go up. Like you may want to play golf 5

go up. Like you may want to play golf 5 days a week. Um you know, why should I take social security at 62, 67 or 70?

What are the benefits and drawbacks of each? How am I going to manage taxes?

each? How am I going to manage taxes?

What if we live, my spouse and I live to 95 and what if one dies early? What

happens in those scenarios? Okay, not

guessing, not hoping, but stress testing them in an actual software package or software packages that do that very easily. And also that $2 million, that

easily. And also that $2 million, that $1 million, that $500,000, whatever, needs to support your lifestyle, not

it's not just a number. Needs to support what your expenses are. The best uh plans have very low fixed expenses. This

is something that has to go out every month. You know, food, electricity, you

month. You know, food, electricity, you know, water, things like that. Uh

there's things that are uh variable uh maybe not variable but um you'd like not to have going into retirement like a mortgage, like a car

payment, okay? Um you know, a boat

payment, okay? Um you know, a boat payment or let's say uh a remodel, something like that. Those things are more uh optional, right? And the best

plans have those things as optional. So

when the market goes down by 30 40%, you have these levers to pull. You can dial back your expenses. Not saying it's not impossible, but this is what's

encompassed inside of a plan. These

things are known and you see how the plan can fail. You test how they can fail, not just, hey, this plan works.

Okay? And that ties into number two. You

know what enough means. This is probably the number one reason people keep working. They work one more year. Okay,

working. They work one more year. Okay,

they don't know what enough means. Um

I, you know, uh enough keeps moving is the problem. Okay. Uh I need $750,000

the problem. Okay. Uh I need $750,000 and then it's $850,000 because man, market valuations are kind of high. I'm

worried a little bit about inflation.

It's almost the end of the year and I get a bonus at the end of the year. And

boy, I'd really like one more bull market to just just really, you know, boost my um, you know, go into a retirement with, you know, I know I only

need 750, but boy, 950 would be a little nicer. So, I'm going to wait for that

nicer. So, I'm going to wait for that next bull market.

You know, at some point that that money number becomes, you know, a hiding place. It's something just, you know,

place. It's something just, you know, out of reach all the time.

Uh and you got to realize uh that you're spending time to get enough. And

everybody eventually makes a decision that says my time is more valuable than money. When are you going to do it?

money. When are you going to do it?

Enough is a huge issue you need to solve. And uh to me a good plan ties

solve. And uh to me a good plan ties into that, you know, and I know uh if my plan I stress test it, I get a lot of confidence that hey, I'm probably going

to leave a pretty nice legacy to my heirs. And when I can say that with a

heirs. And when I can say that with a lot of confidence in different market conditions, I know I'm at that enough sp

uh spot. Um you can retire early. You

uh spot. Um you can retire early. You

cannot retire early rather uh if your definition of enough changes. Okay, this

this is what stops most people. Number

three, you need a disciplined review process. Okay, this is where your plan

process. Okay, this is where your plan meets reality. You're reflecting back

meets reality. You're reflecting back on, hey, the market didn't do what I thought it was going to do. I had these unplanned expenses that came up. Uh

inflation was higher than I thought. Um,

so where are you at versus where you planned on being? And does your Monte Carlos still work out? Do you need to adjust anything? You know, do you need

adjust anything? You know, do you need to dial back some spending? Maybe your

go- go spending you were planning on, I'll just make up a number, 20,000 a year. Maybe you really need to dial that

year. Maybe you really need to dial that down to, you know, 14 or something like that for the next couple years because of factors that you didn't plan on. that

you know that your plan can adapt and you know that spending is the major lever. Another major lever is timing of

lever. Another major lever is timing of social security. Take a look at that

social security. Take a look at that when you're doing your plan. Uh if your plan doesn't work at taking it at 62, put in 67, see what happens to your

plan. Uh I've run a lot of uh scenarios

plan. Uh I've run a lot of uh scenarios like that and it almost always improves the plan. So what are those levers? But

the plan. So what are those levers? But

you need this review process. I used to review my expenses and my uh account balances where I was invested once a month. I moved to once a quarter

and now I do it once every six months.

But I've I've been retired seven years now. So I feel really good about my

now. So I feel really good about my process. I really I know what my levers

process. I really I know what my levers are. Just got a lot of confidence. Uh

are. Just got a lot of confidence. Uh

and the market's helped out. I'll be

honest. the market uh you know you know performance of my my long-term buckets been doing outstanding.

So uh you can't say I hope my plan works. You got to say I know what's

works. You got to say I know what's changed in my you know I did my review and I know what's changed and I know what to do next. That's how what a

disciplined review pro process of your plan looks like.

Number let's see I'm on number four I think now. Number four. Yeah. Number

think now. Number four. Yeah. Number

four.

You need confidence to act. Just because

you have a plan and the plan is good uh doesn't mean you have enough confidence to act. I see this so much.

So much. You know there's a big difference between having enough money, believing you have enough money and acting like you have enough money.

Acting is a big difference. Okay. Um

they're they're just not the same thing.

Um you know, advisor cannot tell you, a financial advisor is not going to be able to tell you, hey, you've got a perfect plan.

Nothing bad's going to happen. I know

you're going to be safe. No software can tell you that. Okay? No Monte Carlos simulation is going to tell you that.

What a good plan can say is here's what I expect. Here's what can go wrong.

I expect. Here's what can go wrong.

uh here's the levers I can pull and here's how much flexibility I have in that plan. That's where your confidence

that plan. That's where your confidence comes from is stress test. It's kind of like practice retirement. You know, you go into Bolden software package and you practice retirement. You say inflation's

practice retirement. You say inflation's going to be high, returns are going to be low, expenses a little high. Okay,

this is reality. How what are the levers I get have to make that solve again? To

make that Monte Carlo be above 80 after all those bad things happen. Once you

know all those levers, that's where the confidence come from. Okay. Um it also comes from um having a buffer, you know, having a

buffer in your spending. You know, it's real, you know, I have um you know, I I stress test my plan. I put

in, you know, like $500 a month crazy spending. You know, just I put that in

spending. You know, just I put that in there and just put that line item in there and say, "Hey, uh spending goes up by $500 a month. Does it still solve? A

big one, and you've heard me say this a lot on this channel, is getting a second set of eyes in your plan. Having

somebody else look at your plan and stress test it and look at it and say, "Man, you got it all covered. You look

to be in good shape. You got a you got a stout plan that can take a punch." And

you know, that that's just priceless.

And uh so many people uh follow that uh advice and retire 1 2 3 4 years earlier than they thought was possible just by having somebody else saying what are you

what are you thinking about why are you still working and that's kind of the bucket of cold water over their head saying man I guess I can go now that a week does not go by

that I don't have 10 interactions either comments emails or live conversations that somebody doesn't tell me that They retired earlier because they got a second set of eyes on their plan. A week

doesn't go by without 10 of those. Early

retirement is not just a math problem.

It's a courage and confidence problem.

Okay. Number five, you need something exciting to retire to. Now, a lot of people look at this and say, "This isn't financial. I'm just focused on the

financial. I'm just focused on the financial stuff." I'm telling you, when

financial stuff." I'm telling you, when you're approaching that cliff of making the decision to retire and you're saying bye to your work career, bye to your

work culture and your social network and the steady money coming in, there's going to be a little bit of fear and you yes, you need confidence in your plan,

okay? But you're also going to need

okay? But you're also going to need something that is um emotionally pulling you into retirement. That can be um you

know getting in shape, could be exercise, could be eating right, could be travel, could be I want to buy an RV and travel the country, could be I want to help manage my uh uh raise my

grandkids. Could be I need to take care

grandkids. Could be I need to take care of my elderly parents. Whatever it is, you need something that you say, I need to do this. Otherwise, you're going to get trapped into one more year. I see

this happening all the time. This is

probably number two that keeps people from retiring early. Number one is definition of enough. Number two is, you know, gosh, work isn't that bad. I kind

of like my job. I I it's a kind of a routine. It's a safe, easy I I'll say

routine. It's a safe, easy I I'll say lazy thing to do is to keep on working

because it it's harder to change and decide to retire. So, um, what are you retiring into? What are you retiring

retiring into? What are you retiring into? So, do I have enough money? Hey,

into? So, do I have enough money? Hey,

I've got 1 million. I've got, you know, $750,000. I got $500,000.

$750,000. I got $500,000.

Is that enough to retire Joe? Uh, that's

probably my most popular question that I get. And I'm like, man, they're they're

get. And I'm like, man, they're they're asking the wrong stuff. I need to get them there. And you know, I I make a lot

them there. And you know, I I make a lot of videos and there's some overlap in them because I keep getting that question. Do you have a real plan that

question. Do you have a real plan that your lifestyle can support? Do you know what enough means? What's your

definition of enough? And it's never going to be with 100% confidence. Do you

have a discipline review process? Do you

have enough confidence to act?

Confidence to act. Big deal. think, you

know, I got a couple options down below in the links. If you're looking for, you know, confidence to act and get a second set of eyes on your plan, that's that's nitroglycerin on your retirement plan

and confidence. Okay? It'll it'll jump

and confidence. Okay? It'll it'll jump it up a notch. Two two notches. Do I

have something meaningful to retire to?

There you go. This is Joe out.