Episode Overview

Title: Q&A: I Want to Retire Early Without Selling My Stocks in a Crash
Date: January 13, 2026
Podcast: Afford Anything
Host: Paula Pant (with recurring guest Joe Saul-Sehy)

This episode features a triad of listener Q&As focused on:

• Saving and investing strategies for a mini-retirement/sabbatical
• The philosophy and practicality of pensions vs. 401(k)s
• Sophisticated early retirement tax and liquidity strategies
  Throughout, Paula and Joe offer practical frameworks, behavioral insights, and risk management mental models while maintaining their approachable, humorous style.

Key Discussion Points & Insights

1. Saving & Investing for a Mini-Retirement/Sabbatical (00:52–24:46)

Listener: Jean
Scenario: Planning a year-long sabbatical in 3 years; wants to save $30–36k, unsure whether to split funds between a 4.5% high-yield savings account and stock ETF brokerage.

Key Insights:

• Medium-Term Investment Dilemma: For 10+ years, equities are appropriate; for <1 year, pure savings. Three years is a gray area.

  • “Most people know that if you've got a 10 year goal then you can invest that money… If you've got a one year goal, you keep it all in savings. But that three to five year, that middle term, that's the big head scratcher.” (Paula, 03:18)

• Risk Aversion for Fixed Timelines:

  • Joe: Emphasized greater risk aversion due to importance and fixedness of the goal. “I'm not doing anything besides a high yield savings account. The money's completely safe. I don't ever have to watch the news, think about what's going on…” (05:07)

• Would Bonds Help?

  • Paula: Suggested some allocation to bonds or Ginnie Mae, but acknowledged risk even in these.
  • Joe: Pointed to historical losses—even “safe” choices like Ginnie Maes saw 10.8% loss in 2022 (07:13), emphasizing risk even in low-volatility instruments.

• Dollar Cost Averaging & Knowing Volatility: Dollar cost averaging into a bond fund can help, but “knowing what you're getting into and knowing what the bounce around is going to be in that exchange traded fund is a big part of winning because you won't jump out at the wrong time.” (Joe, 09:00)

• Flexibility Increases Risk Tolerance:

  • “The more flexibility you have around the date, the more risk you can take.” (Paula, 15:18)

• Behavioral Factors & Mental Models:

  • Counterbalance risk in one area of life (e.g., income interruption) by reducing risk elsewhere (e.g., investments).
  • Paula shared her risk-balancing model from rental property investing: “If you are going to have risk concentrated in one dimension, then you counterbalance that by reducing risk in other dimensions.” (17:02)

• Emotional Risk and Execution Risk:

  • “The chance of you making a mistake in your financial plan goes up the closer you get to needing the money.” (Joe, 20:50)
  • Mental health can change your ability to manage risk. “If you know yourself well enough to be able to anticipate that you might be going into a state in which you are going to have to be focusing on your inner life…there's a strong case for de-risking.” (Paula, 23:13)

Summary Recommendation:

• Majority (or all) in High-Yield Savings: Prioritize safety, given timeline and essentiality of the funds.
• Tiny Percentage in Low-Risk Bonds (optional): Only if you are comfortable with a potential short delay—know the small gain isn’t likely worth the extra risk.
• Always err on the side of caution when a fixed, near-term goal is involved.

2. Pensions vs. 401(k)s: The Behavioral and Structural Debate (28:25–43:41)

Listener: Jared
Scenario: Philosophical question considering recent nostalgia for pensions vs. 401(k)s as retirement vehicles.

Key Insights:

• Pension Positives (as seen by Jared):

  1. Removes behavioral errors—“You can't under save, you can't overspend.”
  2. Predictability and immunity from sequence risk.
  3. Collective risk management = more efficient.

• Pension Negatives:

  1. If 401(k)s “under-save” due to low wage, why assume a pension would be better-funded?
  2. Vesting periods decrease job mobility (“I left before 5 years and I’ll never see that money again.”)
  3. Linear, not exponential, accrual if you leave a pension job.

• Panel’s Take:

  • Job/Career Inflexibility: “Pension makes you feel locked into a particular job, that might not be your calling.” (Paula, 34:00)
  • Small Business/Entrepreneur Penalty: Pensions make self-employment or job-switching less attractive—dampening societal dynamism.
  • Workforce Reality: Joe explains pensions were viable in the era of single-career jobs, but “the average person will have 4.2 different jobs...So they’re not going to stick around long enough for a pension to make sense.” (36:11)

Memorable Quotes:

• “You overspend at your own risk because you know how much you're getting next month.” (Joe, 32:24)
• “I believe everybody has a calling...if we can solve [financial constraints], that gives people the ability to pursue their calling.” (Paula, 34:00)

Additional Workplace Benefit Musings:

• “If you’re truly looking for benefits to wax poetic about, it’s a monster freaking match on your 401k...Shorter vesting schedules. Signing bonuses...Student loan payoff.” (Joe, 38:05)
• Unlimited Time Off: Sounds great but rarely works culturally unless leadership models it; otherwise, employees take less time off (40:24).

3. Early Retirement: Using a Securities-Backed Line of Credit (SBLOC) Instead of Selling in Downturns (44:15–52:56)

Listener: Mia
Scenario: Planning to retire early, use taxable accounts for liquidity until retirement funds become accessible. Are SBLOCs a smart buffer, especially to avoid selling at a loss during downturns or going up a tax bracket?

Key Insights:

• Borrowing Against Securities = Wealthy People’s Tax Minimization:

  • “You have tapped into how wealthy people avoid paying taxes, borrowing against securities...when the interest that you’re going to pay on the loan is lower than your capital gains tax, you come out ahead.” (Paula, 45:52)

• DIY Risks & Emotional Costs:

  • “Most of the wealthy people I know though who use a strategy like this, they're not doing it themselves...DIYing this strategy also gives you...the hives.” (Joe, 46:50)
  • Margin call risk, mental load, and the fact that market recoveries may take years (e.g., ten years after 2000 crash) were all highlighted.

• Should You Do It?

  • Small, incremental use may make sense for “tax bracket smoothing” if supervised by a professional.
  • Paula: “Tiny amount of money, under the supervision of a financial professional, and it falls under the umbrella of sophisticated tax planning strategy, not baseline way to live.” (51:57)

Memorable Moments:

• “Freedom from worry rules the day...I don't want any mind share toward it.” (Joe, 47:59)
• Sherlock Holmes parable: “He doesn’t know the solar system exists.” (Paula, 48:51)

Notable Quotes & Moments with Timestamps

• Early Philosophical Framing:
  “You can afford anything, not everything...This is a show about how to think critically, recognize our behavioral blind spots, and make smarter choices.” (Paula, 01:06)

• On Emotional Risk Near a Goal:
  “The chance that you’re going to make a mistake in your financial plan goes up the closer you get to needing the money.” (Joe, 20:50)

• Mental Health as Risk Factor:
  “If you know yourself well enough...there’s a strong case for de-risking so that you can focus on your inner life.” (Paula, 23:13)

• On Pensions & Calling:
  “...if a pension makes you feel locked into a particular job that might not be your calling…I recognize the reality that many people feel that they can't pursue their calling because of financial constraints. And so if we can solve those financial constraints, then that gives people the ability the freedom to be able to pursue their calling.” (Paula, 34:00)

• On Modern Worker Reality:
  “A pension was an artifact from the days of you working for the same employer for a long period of time.” (Joe, 36:11)

• On Borrowing Against Securities:
  “You have tapped into how wealthy people avoid paying taxes, borrowing against securities.” (Paula, 45:52)

• On Freeing Up Headspace:
  “Wealthy people have enough money that freedom from worry rules the day…Sherlock Holmes is a fairly extreme example of being judicious with what you know.” (Joe & Paula, 47:59–48:51)

Timestamps for Important Segments

• Sabbatical Savings & Risk (03:18–24:46)
• Pension vs. 401k Philosophy (28:25–43:41)
• Securities-Backed LOC for Early Retirees (44:15–52:56)
• (Skip ads at 24:47–28:17; 42:30–43:41)

Takeaways

• For medium-term goals, safety and liquidity trump chasing higher returns; high-yield savings (and maybe a sliver of bonds) is best for a fixed timeline like a sabbatical.
• Pensions offer simplicity and certainty, but the modern workforce's fluidity, entrepreneurship, and personal calling needs are ill-suited for them.
• Tax-optimization techniques like borrowing against securities should be used sparingly and with professional guidance; risk tolerance and mental load matter as much as the math.
• The true risk in finances often lies in human behavior, timing, and life's uncontrollable variables—so decision frameworks should account for flexibility, emotional state, and self-knowledge.

For Listeners

This episode is highly recommended if you’re:

• Facing a medium-term savings/investing decision
• Curious about the true trade-offs between pensions and self-directed retirement
• Considering advanced withdrawal techniques for early retirement
  Paula and Joe combine depth and practicality with their trademark candor and humor, offering both frameworks and actionable pointers for real-life financial crossroads.