Why the Last 3 Years Before Early Retirement Matter Most

Summary

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BiggerPockets Money Podcast

Episode: “Why the Last 3 Years Before Early Retirement Matter Most”

Date: March 20, 2026
Guests: Hosts Mindy Jensen & Scott Trench with Fritz Gilbert (The Retirement Manifesto)

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Overview

This episode dives deeply into the essential, often-overlooked “final three years” before early retirement (FIRE), offering both advanced financial and—crucially—non-financial strategies for serious early retirees. Guest Fritz Gilbert, drawing from his prolific writing (400+ articles and The Retirement Manifesto blog), presents a framework for ensuring a smooth, fulfilling transition into financial independence—not just “getting to the number,” but actually thriving afterward. The hosts and Fritz explore the “phases of retirement,” the perils of neglecting personal fulfillment, and tactical steps to avoid common pitfalls post-FIRE, blending practical steps with philosophical insight.

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Key Discussion Points & Insights

The Real Challenges in the Final 3 Years Before FIRE

• Non-Financial Preparation Trumps All:
  Most FIRE seekers focus obsessively on numbers—savings rates, 4% rules, etc.—but neglect the psychological, social, and structure elements lost with work. This dramatically heightens the risk of post-FIRE dissatisfaction and disorientation.

  • “The numbers in and of themselves are not sufficient... it’s focusing on the non-financial stuff that really leads to a smoother transition.” — Fritz ([04:54])

• Phases of Retirement Experience (Drawing on Dr. Riley Moynes’ research):

  1. Honeymoon Period (12-18 months)
  2. Loss and Lost: Disorientation hits 85% of retirees—loss of identity, structure, relationships.
  3. Trial and Error (Experimentation): Testing what brings fulfillment.
  4. Reinvent and Rewire: Finding new passion and purpose. Only 65% reach this.
  • “Most people, after six to twelve months of the honeymoon, start just feeling a little bit off and they’re not sure why.” — Fritz ([05:38])
  • “Getting to the number is not what’s important. This isn’t a finish line. This is a starting line.” ([09:44])

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The FIRE Community Has It Harder, Not Easier

• Obsession with “The Number” Leaves Gaps:
  Early retirees, being hyper-focused on spreadsheets, risk worse phase-two blues due to the abrupt loss of structure and meaning.

  • “I would argue it’s almost a bigger risk in the FIRE community ... because their whole goal is driven around the number and they don’t take the time to think as much about what happens after.” — Fritz ([09:44])

• Community is Crucial:
  Both Mindy (Longmont, CO) and Fritz (Blue Ridge, GA) describe the insulation and support a strong community provides post-retirement.

  • “Relationships are huge and Longmont’s got it in spades. That’s a great example.” — Fritz ([11:25])

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Fritz Gilbert’s Framework: Five Key Non-Financial Steps

1. Take a Hike (Introspective Visioning)

• Not literally hiking (unless that’s your thing):
  • Find routine, intentional time/space for dreaming, planning, and envisioning your future lifestyle.
  • Could be hiking, pottery, blog writing, or anything that fosters regular reflection.
  • “Take a hike is symbolic: Be intentional to carve out a regular place … to get a little bit philosophical about what you want your retirement to be.” — Fritz ([12:30])

2. Experiment (Try New Things Before You Retire)

• Start “testing” different routes to fulfillment NOW (new hobbies, volunteering, travel, side businesses).
• “Curiosity,” and building that muscle, is vital. The sooner you iterate, the less likely you are to flounder after retirement.
  • “If you can find a way to do some of that phase three type of work and incorporate it into your retirement planning, you exponentially increase your odds of skipping phase two.” — Fritz ([06:48])
• The “Activity Jar” anecdote—design ways (with your spouse/partner) to surface and share future interests, and time-sequence them for your healthiest years.

3. Pursue the Four Cs (Dan Hallett’s Framework)

• Contribution: Find ways to give back and feel needed.
• Creation: Don’t just consume—create (art, writing, building…).
• Curiosity: Keep growing, learning, exploring.
• Connection: Pursue and maintain meaningful relationships.
  • “The quality of your relationships is the number one factor [in retirement happiness].” — Fritz ([34:48])

4. Write Your Ten Commandments (Set Your North Star)

• Create your own “guiding principles” for life after retirement—mental attitude, values, mindset.
• Print them and review regularly—use them as a touchstone and self-correcting mechanism.
  • “Are you going to be a glass half full or glass half empty type person? Having the right mindset is tremendously important.” — Fritz ([37:32])
• Don’t neglect “spirituality” or awe, regardless of your beliefs—find what sustains your sense of wonder.

5. Prepare for the Shift from Accumulation to Spending

• Practice living on your anticipated retirement budget before you actually retire.
• Psychological adjustment required: it’s unsettling to transition from saver to spender.
  • “The skill sets you need to develop to manage your financials post-FIRE are different ... the risks post-FIRE are different than the risks pre-FIRE.” — Fritz ([44:04])
• Be conservative but not paralyzed: pad your assumptions, but don’t let perfect be the enemy of done.
• Flexible/dynamic spending and regular review are critical, especially for Lean FIRE.

[Bonus] Develop a Healthspan Plan

• The FIRE community’s post-retirement “obsession” often shifts from spreadsheets to health.
• Critical insight: The gap between lifespan and “healthspan” in the US is now around 12 years.
  • “People are living longer, but they haven’t pushed forward that healthy year, the healthspan year.” — Fritz ([24:34])
• Use your new time to prioritize fitness, be creative about staying active, and plan for a longer, healthier life.

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Notable Quotes & Memorable Moments

• “Getting to the number is not a finish line. This is a starting line.” — Fritz ([09:44])
• “Your goal is to always get the best cards in your hand.” — Fritz ([16:09])
• “90% of your effort before retirement is about the numbers; after a couple years, it’s 10% the numbers, 90% the non-financial areas.” — Fritz ([18:33])
• “Develop a healthspan plan. Now that you’ve got time, how will you use it to increase your quality years?” — Fritz ([27:41])
• “Live on your retirement income [before you retire]. It’s a great way to test it, because things pop up and it’s a real eye-opening experience.” — Fritz ([57:13])
• “The takeaway: if you’re focused on the financials, great. But recognize they’re necessary—but not sufficient.” — Fritz ([58:54])

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Timestamps for Key Segments

| Timestamp | Topic | |------------|--------------------------------------------------------------------| | 03:07 | Episode Theme—The Final 3 Years Before FIRE | | 06:48 | Four Phases of Retirement (TEDx framework) | | 09:44 | FIRE Community Unique Risks & The Numbers Obsession | | 12:30 | “Take a Hike”—Visioning and Reflection | | 17:43 | Transition from Numbers Obsession to Non-Financial Focus | | 24:34 | The Healthspan Gap—Fitness After FIRE | | 27:41 | Experimentation—Try New Hobbies/Passions Pre-FIRE | | 34:48 | Four Cs: Contribution, Creation, Curiosity, Connection | | 37:32 | “Ten Commandments”—Guiding Principles | | 44:04 | The Accumulation-to-Decumulation Shift | | 53:06 | Dynamic Spending & Risks Unique to Lean FIRE | | 57:13 | “Live on your retirement income” pre-retirement (test-run) | | 58:54 | Parting Wisdom: Financials are necessary, not sufficient |

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Actionable Takeaways

• Start experimenting with new activities, communities, and passions before you retire.
• Build relationships and community outside of work—don’t underestimate their power.
• Create your “Ten Commandments” as a guiding star for your new life; revisit and iterate regularly.
• Practice living on your anticipated retirement budget a year early to flush out errors.
• Pad your financial assumptions, especially for health care and big-ticket items, but avoid perfection paralysis.
• Embrace curiosity and creation; strive for contribution and connection every year, not just the first.

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Additional Resources Mentioned

• Retirement Manifesto (Fritz’s Blog)
• Economy Conference
• BiggerPockets Money Goal-Setting Worksheet – Free, no-email-required tool for structuring your visioning exercise

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Concluding Thoughts

This episode stands out for its practical, deeply human—and sometimes sobering—approach to preparing for early retirement. The focus isn’t just on amassing wealth, but on designing and living a rich, meaningful life after financial independence. Fritz’s frameworks, lessons, and tactical steps offer invaluable direction to anyone on the FIRE path, especially as they approach the most critical final years before their “starting line.”

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Transcript

[Scott Trench]

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[Mindy Jensen]

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[Mindy Jensen]

If you are three years away from retiring early, this might be the most important episode you ever hear because the final three years before financial independence aren't about earning more, but making sure you have a strong foundation and the finances are just one piece. Hello, hello, hello and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen and with me as always, is my Loves A Framework co host Scott Trench.

[Scott Trench]

Thanks Mindy, Great to be here. I do love a good framework and today I get to just withdraw and let Fritz talk about his framework for early retirement and the wind up the approach the three years preceding it. We are super excited to be joined again by Fritz Gilbert on the podcast. You might know Fritz from his blog the Retirement Manifesto and today he's going to talk through the five, maybe a couple extra bonus one. Most important things you need to do before you retire early. This is a excerpt from his presentation at Economy which happened last weekend. That's a fantastic event. Very integrated in the financial independence community. We highly recommend it. We are not associated with or sponsored by Economoo. We just love those guys and we're grateful that they allowed us to use

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some of the work from Fritz's presentation

[Scott Trench]

and for Fritz to come on the

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show and present that today.

[Scott Trench]

So thank you very much the Economy folks and go check that out. Welcome to the Biggerpockets Money podcast.

[Fritz Gilbert]

Fritz hey, thank you Scott and Mindy. Great to be back with you guys and looking forward to talking about the things that matter as you're getting ready for retirement.

[Mindy Jensen]

Yeah, I am super excited to discuss this because so many people talk about the journey too, but they don't talk about what happens afterwards or even like right before you retire. Fritz, what is one of the most important Things that you think people are missing in these immediate years leading up to early retirement.

[Fritz Gilbert]

You know, Mindy, I've written over 400 articles about this. I started my blog 3 years before I retired so like 10 years ago. And then I wrote all through the transition and now I'm having a great retirement. I've written about life now and through that whole journey, what I've really come to appreciate is the importance of the planning on the front end. And when people hear that, they think the numbers and the numbers are critical, but the numbers in and of themselves are not sufficient. And if you look through, there's actually 20 things in my presentation at Economy, we'll talk in depth about five of them. But as you look through those 20 things, only five of them are financially related. And to me that's symbolic of what I've realized through all my research and my own personal journey. It's focusing on the non financial stuff that really leads to a smoother transition. Most folks after the honeymoon period, they go through a little bit of a disorientation period. And what that's driven by is the fact that you think about replacing your paycheck, but you don't think about replacing those relationships you had at work. You don't think about replacing that sense of identity. You don't think about replacing that sense of accomplishment. When you do a good job and you get the little pat on the head, you know, there's a lot of intangibles that you get from work, the structure to your day. And most people, after six to 12 months of the honeymoon, they start just feeling a little bit off and they're not sure why. And typically it's because they haven't found a way to replace these other non financial elements. So that's really what I focus on in my writing now. And that's really what the core of this presentation was about.

[Scott Trench]

You have a great framework for this. Would you mind pulling that up? Because I think you have a wonderful visual for those. We'll explain this of course for those listening on audio, but this is also be a great one to watch on YouTube. One of the things that I learned a ton from skimming through your presentation is this stage, these stages of post retirement, lived experiences that have been observed that you've summarized really powerfully. Can you tell us about that journey for the typical retiree?

[Fritz Gilbert]

Yeah, you're hitting right on the core of the issue, Scott. My title is why the Mind Matters and I'm getting into why mental preparation is so important for retirement. This is Work that was done by Dr. Riley Moynes. It was a TEDx talk that he did that went viral, over 2 million views. And he basically walks through these four phases of retirement. Let me just explain what the four of them are. The first one is the honeymoon period, lasts about 12 to 18 months. Everybody goes through that. The second one, phase two is the one you got to be careful about. It's called loss and lost. 85% of retirees go through it. Only 15% skip it. I was one of the lucky 15%. And we'll talk about how you do that. Phase three is trial and error. And then phase four, only 65% of retirees get to. Phase four, by the way, is kind of reinvent and rewire. This is where you find a purposeful retirement. Your life is great, you're loving, you're loving what you're doing. So this is a really good framework to think through. And all of these 20 steps that I presented are really based on what do you need to do to minimize your chances of falling into phase two. So that's a really important thing. And most people as they're planning for retirement, they're so focused on the financials, they don't even recognize this is out there. None of this is driven by the financials. This is all driven by the non financial reality that you're losing a lot of those aspects from work that you didn't even realize you were getting. The relationships, the sense of identity, all those things that we talk about. When people start feeling those being gone in their lifestyle, that's really what phase two is about. You're just disoriented and you're not sure why. So that's really important. One of the items we're going to get into is experimentation, one of the five that we'll talk about in detail today. The reason experimentation matters is if you get yourself stuck in phase two, the way to get out of it is as phase three suggests, trial and error, which is experimentation. So if you think about what I did, I started my blog three years before I retired. What was that? That was experimentation. And in hindsight, what I've realized is I was actually experimenting while I was still working, right. My last couple years of work. So in your last two or three years of work, what's important? Well, experimentation is one of them. If you can find a way to do some of that phase three type of work and incorporate it into your retirement planning, you exponentially increase your odds of skipping phase two. So this is a really good framework to think about it first, how do

[Scott Trench]

I think about this in the context of early retirement? A lot of work, you know, that that studies traditional retirement is very helpful for an early retirement or the fire community, but some of it also does not apply. For example, the spending smile would be something I would argue likely does not apply to many early retiree households where their spending is unlikely to decline as they approach 65. In the same way that someone who's going from 65 to 80 is likely to see their spending decline in a lot of areas. Do you believe that this framework broadly can be transplanted onto the fire community or they're likely to be some, you know, notable deviations?

[Fritz Gilbert]

This will surprise you. I would argue it's almost a bigger risk in the fire community. And the reason why is folks in the fire community typically are so focused on the number, right? When can I get to fire? When can I get to 5? What's my savings rate? Oh, 25x, you know, 4% safe withdrawal rate. When can I get there? Their whole goal is driven around the number and they don't take the time to think as much about what a lot of traditional retirees. Oh, great. I can have more time with my grandkids. Some do. I did. I was an early retiree and I blew through this, you know, no problem. But I think the red light flashing warning is getting to the number is not what's important. Right. This isn't a finish line. This is a starting line. So what's going to happen after you get to the number and how are you going to plan for those years post fi to make them the best that you possibly can? It's not about getting to phi. It's about setting yourself up for the best possible life post phi. And you look at a lot of the phi folks that, you know, they kind of go through phase two. You hear it, right? I've talked to some of them. I'm sure you guys have too. They're kind of a year into a post fi and they're like, you know, I worked my butt off to get here and I'm not. This isn't really what I thought it was going to be. That's symbolic. Or that those are symptoms of phase two. Thinking.

[Mindy Jensen]

I live in Longmont, Colorado, which I think has an outsized FI community, which is great. I have said multiple times I live in this little FI bubble where I'm not really touched by some of the issues that other early retirees have because we have such a big community here. How important is having a community in Avoiding step number two or phase number two, tremendously important.

[Fritz Gilbert]

Mindy, I've got the same thing here. We live in Blue Ridge, Georgia. My wife runs a charity. We've got, you know, 40 great friends that are all early retirees that help us build fences for dogs. Right, and what is that? That's one of those non financial elements you used to get from work relationships. What are you talking about? You're talking about relationships. You've replaced those work relationships because you live in an area where there's a lot of people that you just connect with and you've got a natural set of relationships that are fostered by where you live. And I encourage people when they're thinking about relocating in retirement, don't just think about, oh, I want to go to Texas because it's low taxes. Right. Think about, where do you want to go, that the activities are the type of activities you want to do in retirement and where you're surrounded by the type of people that you want to spend your time with in retirement. Relationships are huge and Longmont's got it in spades. That's a great example.

[Scott Trench]

What I think is really powerful about your work here is obviously you diagnosed this issue, but you also provide a prescription for addressing it that's pretty tactical. Can you give us the most important steps to take to avoid this loss and loss?

[Fritz Gilbert]

Let's step back and there's 20 things in here. We can't obviously get through all 20 by any chance. What I will do is I will pull out the ones that I think are probably the most, maybe not the most important, but they're important ones that people might not intuitively think about. Okay, we'll start with number one, take a hike. The point of take a hike is. And that's me in Greenland, by the way. For those that are on YouTube, that's. That's the biggest ice field in Greenland. And the iceberg that sunk the Titanic was supposed to come from that ice field. How they know that, I have no idea. But anyway, the point of the slide is, is for me, it's a metaphor. Take a hike is a metaphor. This is three years out, by the way. This is early in the process. Find a way to be intentional about taking time to find a place where you can contemplate what you want your life to be. It's almost a spiritual journey, I guess you could say. But if you, if you use the Japanese word shinren yoku is take a forest bath. And the concept of that is get out in the woods, take a breath, you Know, look around and just contemplate life. Right. Kind of philosophical. For my wife, it was pottery. She was taking care of her mom. Her mom had Alzheimer's, and she went to pottery once a week. And that was her take a hike. For me, it was kind of writing my blog. Right? It gave me an opportunity every week to think through what was happening, what I wanted my retirement to be. A lot of the things we'll talk about later. Writing your ten commandments, right? Getting your mindset, right. I was doing that through writing my blog. That was my take a hike. So take a hike is symbolic of be intentional, to carve out a regular place that works for you for now. In retirement, I love taking hikes with my dog. And to me, that's kind of like my wife's pottery class was. Now my wife volunteers at a farm, and she goes there once a week, and she takes care of these animals. And to her, that's her take a hike now. You know, this doesn't stop when you retire. It's just finding a place to disconnect from your normal routine and get a little bit philosophical about what you want your retirement to be. That's important, you know, to dream about, be introspective about. You're building your life, and you don't have a boss that's going to do it for you. It's your responsibility. But it takes some intentionality to think through what we talked about with Mindy a minute ago. Where do you want to live? What do you want to do is the place that you're living? If you live in the city, but you want to spend your time hiking in the mountains, maybe the city isn't the best place for you. If you want to go to the theater every week and go to really nice restaurants, maybe living in rural Tennessee is the place for you. Right? Those are all these types of things that you should be thinking about while you take your hike.

[Scott Trench]

Love it. You know, I think a lot of people spend a lot of time on early retirement now, you know, learning from big earn. But really, you and your wife have figured out that you should be making a big earn in your early retirement. Sorry, I couldn't resist.

[Fritz Gilbert]

I had to put that in. It was terrible. I know, I know. Okay, but.

[Scott Trench]

But on this point, I'll actually try to add something to this conversation now. Now, I think that one of the challenges people have with this exercise is that the concept of visioning and putting this together has been guru ties to no end, and there's kind of cheeseball fluff out there all over the place with it and it's off putting. To some people, it's as simple as putting down on a piece of paper in some kind of structure for a free template while you're feeling good. You're saying do it at a hike. I do this exercise after a cup of coffee or a workout with some beautiful backdrop like when you're feeling good, don't do it when you're feeling bad. The other piece, I think that's important to this exercise is I think that it's built up too much in people's minds, this exercise. It should be a hypothesis. It's your first draft and you have all the rest of your life to iterate on it and move on it and put it down in pencil or put it down in a word doc that you're going to go and you're intentionally going to modify next quarter, next six months or next year. Do you agree with those two builds to this process?

[Fritz Gilbert]

Yes, I do. And I would also make the point that this isn't something that ends when you post FI even now. Yeah. I wrote an article a couple maybe a year ago where I was stepping back from my blogging and I'm now partnered with Dana Anspock. She and I write together on the blog and it's given me I don't have to write as often. I don't like to be in front of a computer. I want to be outside. So even now I'm still iterating. Right. And she has this term where you should chase the shiniest object. I love that term. What's shiny in your life. Right. Think about it that way. What gets you excited? And as the shine starts wearing off of things, whether you're post fire or pre fi, it doesn't matter. As the shine starts wearing off, what's shinier? And I use the metaphor of a hand of cards. And the beautiful thing about life post FI is you can hold as many cards as you want and you can pick up new cards whenever you want. You can put cards down. Your goal is to always get the best cards in your hand. So that's exactly what you're talking about. It's thinking about, you know, what excites you. And I agree with you. It's been especially for the people in the FI community that are really numbers driven and they're kind of an engineer, engineering type mind. This is kind of fluffy stuff and it's hard to get your head around it, which is why I think some people struggle with it because it is Kind of the artistic side of the brain. And what I found is this transition to retirement. You have to exercise that creative side of your brain more than you did when you're working. That's one of those things that's going to help you skip phase two. It's not that you can just lay out a spreadsheet and lay out the tasks. It's a more iterative introspective process. So it's hard to explain, but that's what I'm attempting to do with these 20 steps.

[Scott Trench]

I have so much fun with this concept because I think in general in personal finance there's this like all the advice is here's how to amass the largest possible long term net worth tax advantaged. It's all, it all presumes that goal. And then when you start breaking that apart and you say no, the goal is optionality at age 35 or fire at 45 or whatever. Now all of a sudden the engineering brain can turn on and begin thinking about all the bridge to these paths. But that it all is dependent on this exercise and it's so missed. Now you can really conflict with mainstream advice. You can really make people mad about things. And it's right because it's coherent in the pursuit of whatever this is, whatever the output of this, this exercise is. And that is a really fun challenge that gets me going. As you can tell from this. I love challenging conventional advice. Once a clear goal is defined and it obviously is incompatible with the conventional

[Fritz Gilbert]

advice, let me throw another one out there at you, which I think is interesting. I call this the 9010 rule of retirement. And I wrote this and I never dreamed this would happen to me because I was a numbers guy. I had all the spreadsheets, I was absolutely up to my eyebrows on the financial stuff stuff. Now I look at a spreadsheet a couple times a year literally. So the 9010 rule of retirement is as you're preparing for retirement or FI, you're focused on the numbers. 90% of your efforts going to the numbers after your post fi a couple years and you've kind of set up your paycheck system and you've lived with it and you know, you're in your safe withdrawal rate and everything's kind of working and you've been through maybe a downturn in the market and everything was fine. Over time you spend like 10% of your mental capacity on the numbers and all of that energy gets focused into these non financial areas. The shiny stuff, chasing the shiny stuff. That's like I never dreamed. And I'm sure there are people that listen to this say, no way. That's not going to me. I'm a numbers nerd to the nose. I almost guarantee it's going to happen because everybody I've talked to and I've got, you know, 18,000 readers, whatever it is, I hear it over and over and over again. They thought the money stuff was so important as they were planning for it. And now it's like I don't even think about the money. It's just kind of it is what it is and it works. And you know, it's. It's a weird realization that's it's probably going to blow those engineering minds because it doesn't seem possible. But it happens.

[Scott Trench]

I often think there's an obsession to financial independence that is inherent across almost everyone who's pursuing it. Almost everyone who pursues a version of very early retirement will have had that obsessive period in accumulating wealth. Then it translates over time to what you just described there. And I would argue it's worth it. Do it, go with that obsession is worth it. For that end result, I would agree. And it needs to be unwound.

[Fritz Gilbert]

One thing I found and Mindy, you'll relate to this because I know we've had this discussion. What's interesting is a lot of the really aggressive fi mentality post fi, a lot of that tends to translate into an obsession. Not obsession, but a really healthy focus on Health span and getting yourself healthy. Because guess what, that's numbers based, right? You can track your metrics, you can do your wearable, you can look at all your data and you can get yourself healthier. So it's interesting to me how many post 5 people people turn that obsession into fitness and longevity and Health span, which is to me a really good thing. They've unwound to your point, they've unwound that focus on the financials and they've redirected that energy to the next best thing, which is going to help them live longer years of healthy living. So that tendency is still there, but it does tend to get redirected into other things.

[Mindy Jensen]

When you want more, start your business with Northwest Registered Agent and get access to thousands of free guides, tools and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the US with over 1500 corporate guides who are real people who know your local laws and can help

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you and your business every step of the way.

[Mindy Jensen]

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[Mindy Jensen]

I think we're an obsessive bunch just to begin with, and then once we have reached the pinnacle of this obsession, it just transfers to something else. I do find a lot of people focusing on their health in a way that is definitely obsessive. But also it's difficult to make time to go to the gym when you're also going to work and you've got to get the kids to school and they've got after school activities and all of a sudden it's time for bed and you're like, oh, I didn't get it to the gym today. And then now it's been only the last 10 years that I've missed.

[Fritz Gilbert]

That's right, yeah. And the beautiful thing about post fi life, Mindy, is your life now opens up, right? You've got all that time. And one of the things I've enjoyed the most is being creative and finding ways to stay fit. You know, I go swimming in the lake now. I mountain bike, I hike with my dog, as I mentioned. I used to just run at lunch because it's all I had time for, you know, now I'm lifting. I invested in a home gym, I'm lifting weights, you know, three, four times a week. Because muscular degeneration is the stuff that leads to mobility issues, right? So it's a healthy obsession and it's a good place to put it. And it's just interesting to me, the reality of a lot of people post fi, they do redirect it there, which is a good thing. Thing. Let me give you this one last fact. This was Dan Hallett, a good friend of mine over in the uk. He wrote this. It's a longevity gap that people are living longer, right, by, I don't know, a couple years. You know, every. Every couple decades, people live longer, but their health years aren't increasing. So the gap, let's say you start getting unhealthy, typically in your mid-70s. So now instead of living at 85, you're living to 90. So instead of 10 unhealthy years, you've got 15 unhealthy years. So people are Living longer, but they haven't pushed forward that healthy year, the health span year. You got health span and lifespan. And the gap between health span and lifespan right now in the US is about 12 years. That's a big gap. So anything you can do to reduce that gap, hopefully by increasing health span and not reducing lifespan. But if you can push that health span horizon out, you're going to have that many more years of enjoyable life. Post five. Why? It's just, it's math.

[Scott Trench]

It's so funny because as soon as I stepped out as CEO, I started obsessing over fitness. And I just published this to the BiggerPocketsBuddy blog right around the time we're recording this. Scott's age 35 health and fitness protocol with my six part philosophy around weightlifting, VO2 max recovery diet, skin and hair care to prevent my hair from receding, which is, you know, a losing battle. And then you know, the prevention and screening component, it's in there all listed out in a protocol format. So and of course that's accompanied with a home gym around there with barbell because that's critical. It's just like so funny watching going through your, your deck and saying, oh yeah, yeah, that's, that's, that's correct. That's correct. That's correct. That's how I did it. Yep. I wish I had done that. Oops. And it's not even retirement, right? We're doing this right now.

[Mindy Jensen]

When you were CEO Scott, you had no time to work out. You got up, you had five minutes with your family, you had 500 hours

[Sponsor Voice - Found and Indeed]

at work and then it was time

[Mindy Jensen]

to go to bed head. It's so easy. I can't tell you how much weight I gained while working at Bigger Pockets because I am butt in chair 40 hours a week and then I've got kids on top of it and taking care of the household and, and, and, and all of a sudden you're like, I mean getting to the gym was never my priority because I don't like working out. So that's super easy to say no to. And now it is a priority because I see how my parents are aging, I see how my in laws are aging and, and I want to have a better lifespan that where I am more active. And I, you know, I want to go on hikes, I want to go on bike rides and I can't do that if I am, you know, couchbound.

[Fritz Gilbert]

So we just added a bonus because that wasn't going to be one of the five we talked about. But it is on my list of 20 is develop a health span plan. And that's what we're talking about. Right? How are you going to keep yourself healthy longer now that you've got time to do it? So that's a good one. Let me. Let me jump to the second one that I suggest we talk about. I got some financial stuff in here. I'm not, you know, you guys are all financial. We got the financial stuff down. So let me. Let me talk about the stuff that may not be as intuitive. The second one I think is worth talking about is step number three, which is experiment in experimenting. Basically, this is the concept that I talked about with my blog. You can start experimenting in your last couple years of work looking for shiny things that interest you, that will survive post fi. And the more that you can do this pre fi, the greater your odds of skipping phase two, which is our goal. So I put this one in here to just encourage people to start exercising that curiosity muscle. Curiosity, to me is probably the most important word in post fi life. So you really need to foster that curiosity. It's not intuitive. It's kind of the artistic side, but it's. Think back to when you were a kid. I use the story. When I was a kid, I grew up in Michigan. Small town, bunch of woods around. I used to go riding my bike through the woods with all my buddies. We'd be build forts in the woods, right. I spent all my time outside. Well, now I'm 62, and what do I do? I spend my time riding my bike through the woods because I like mountain biking in the mountains. It's like, wow, that's pretty weird, right? So looking back at some of those things you enjoyed as a kid is a good place to look. Thinking about ways that you can just experiment with something that interests you a little bit. For my wife, it was starting the charity. You don't have to wait until you're post five to do that. And I encourage you not to take your weekends and go volunteer at a dog shelter. Right. Find ways to get engaged that are outside of your workplace that may provide means for fulfillment post fi. That's what experiment's all about.

[Mindy Jensen]

Fritz, do you have a bucket list?

[Fritz Gilbert]

You know, it's funny. One of the things on here is fill your activity jar. That's number 17. What my wife and I did. This was kind of neat. It's not really a bucket list, but I think it's worth talking about. The last year of my working career, my wife and I, we had a bucket, literal bucket in our house. And each week, each of us would write a note of something we wanted to do in retirement and we didn't tell the other person what it was. So there were 50 weeks, two of us doing it, 100 things that we put into this bucket. Only half of them I knew what they were and only half of my wife knew what they were, but we didn't know what the whole thing was. And our plan was always, let's, when we get into retirement, every week we're going to pull something out of the bucket. I'm eight years into retirement. We've pulled like two things out of that bucket because we've gotten busy and we're doing stuff we love. So that's something you can think about doing that it's a way to get your spouse engaged on and dreaming about what you want to do post retirement. The funny thing is it didn't work out the way I thought it would. We still got the bucket. Like, we got to start pulling some stuff out of this bucket. So that's not necessarily a bucket list. Now, I do have some things. This is kind of the Daiwa0 approach, right? I've thought about Daiwa0, for those that don't know is do things you can do while you can still do them. If you want to hike, you know, the Himalayas, you better do it before you're 80, because you're not going to be able to do it. Right. So we've thought about sequentially, what are the things that matter the most for us to get done. And an example I'll give you was last summer we took a cruise up to the Arctic and we. I showed you the picture. From Greenland, we went up to, I don't know, 75 degrees north. We were 600 miles north of the Arctic Circle. And that was one of those things that came from that exercise is, you know. Yes. We kind of have a bucket list of places we'd like to go, things we'd like to do, impacts we'd like to make. But we've also kind of of time sequenced it to say, let's make sure that the things that we really want to do, we do while we still know we have the health and the, you know, the fitness to be able to do them.

[Mindy Jensen]

I love that answer. Carl and I recently sat down and we were on a drive. We dropped our oldest daughter off at college and we were driving home, California to Colorado. So we had a lot of time to talk about it, but we started talking about our bucket list. We have a daughter who's a sophomore. So we still have two and a half years at home before we can really go off and travel. And we're not like counting the days until we can do it. But we also, like, we are very entrenched in this community and we have seen the stories of the people who are like, okay, I'm retired. Why isn't my life better? So we're trying to plan so that we don't like, we're skipping phase two. We are 100 skipping phase two. So we're starting to plan and talk about this. And I, I mean, I've got decades worth of stuff that I'm going to do starting in two and a half years. I don't know if I've announced it on this show or not, but is it 2028, October of 2028, I'm going to hike the Camino with Darren and Jolene and Carl and anybody who wants to come with us, email me mindy biggerpocketsmoney.com because we're going to be gone for about a month and Darren and Jolene have done many of them. This is like the first thing I'm going to do once my youngest daughter is, is in college and you know, we've given her a little bit of time to get settled.

[Fritz Gilbert]

Mindy, good for you because what that to me is talking about is you're thinking about what do you want your life to be post five. Right. Basically empty nest. But you're already thinking and, and I would encourage people, the first thing you almost always think about is travel. And, and that's good. You should, you should travel and see the world while you can. That's absolutely important. And Camino is going to be a great hike. I, I, I've always kind of thought about the, that one too. I had a buddy that did the Appalachian Trail, then he did the Continental Divide and then he did the Pacific Crest. So he's done the triple crown. Only 500 people have done that. But anyway, what I would say is the other thing you find we started with a lot of travel. We have an RV and we spent, you know, months going across the country, spent the summer up in the Pacific Northwest. We did a lot of traveling. I've got a lot of friends that were full time, you know, RVers, but what they tend to find over time, travel is fun, but it doesn't necessarily bring you that purpose because you don't have the relationships like you have in Longmont. Right, right. You have a sense of community and there's something about being engaged in a local community and making a difference that is rewarding in a way that travel isn't. Think about blending both of them together. And what we do now is we take off for a month with the RV every year. We. Okay, what are we going to do for a month? Last year, we went to the Arctic on a cruise. We do something big every year, but we complement that with things like the charity work, things like my blog, Other ways. These. These are cards in the hand. Right. Travel is one card in the hand. But think about all the cards in the hand and. And you're thinking exactly the right way. You're thinking about it now while you still have a couple years to go. Perfect.

[Mindy Jensen]

Yep. And we've already made the decision based on our conversations with Darren and Jolene, who have a house that they love, but they also love to travel. So they're gone and then they come back because they love where they're at. I love where I'm at. I told Carl. I did. I didn't want to just fly away and travel for, you know, six months at a time. I want to go experience something in a slow travel way and then come back and experience my neck of the woods. Carl doesn't like it when it's really hot, so we'll probably be out of town in August, but we'll be back for Christmas and, you know, the holiday season and birthdays with our kids and things like that. We've been thinking about it because we don't want to get caught up in phase two.

[Fritz Gilbert]

All right, you want to move on to the next one?

[Mindy Jensen]

Yeah. Let's talk about the four Cs.

[Fritz Gilbert]

Okay, the four Cs. And again, I give this credit to Dan Halett. So, Dan Hallett, as I mentioned earlier, I was writing a post I'd still in my drafts. I'm going to get it done. But it was basically the six things that have led to a great retirement or something along those lines. And as I was writing this article, you know, I've got it kind of scoped out. I get this weekly email from Dan Halett, and he said, pursue your four Cs. And I'm like, oh, my gosh, these four Cs were exactly part of my six. So I've got two other ones, but I don't have it done yet. So I went ahead with this four Cs. And this, to me, is really good. This gets to what we were just talking about. Mindy, where do you find real fulfillment in retirement? This is Dan's Work. So I'll give him credit, but he came down to these four Cs and I'll just read them. Contribution, creation, curiosity, ironically. Right. I mentioned curiosity earlier and connection. And his point is pursuing these things are the areas where you'll get real fulfillment. Post fi and contribution. Basically, if you think about it, all through your working career you've been making a contribution. You've been getting recognized for it. I mentioned earlier, you get the little pat on the head for doing a good job, finding a way to contribute. I think it's a basic human need, right? We want to feel needed. We want to know that we're making a difference in the world. However small it may be, it doesn't have to be big. So finding a way to contribute to society is an area that you should focus on. That's typically, for me, kind of charity work that we're doing now. But I would argue it's what you're doing on your podcast. It's what I'm doing, my writing. We're contributing to society. The second one is creation. And this is the point of don't get focused on personal consumption type stuff. Life is not about just consuming. And me, me, me, find a way to make something that, you know, makes a difference in the world. So for us, we build fences. That's creation, right? I write my blog. That's creating content. It's not just create, it's just focus. Instead of just consuming stuff, redirect that focus to what can I create that can make an impact? I think that that's a really good thing to think about. The third is curiosity. We've talked about that. Pursuing your curiosity. Of all the things, I really believe that is the key to a successful postfi life. And then the last one connection, we talked about this in Longmont. You've got those relationships, and everybody underestimates how important those relationships are until suddenly they're gone. And if you look at the Harvard study that made the rounds a couple years ago, right? They tracked all these people, people for 80 years. You know, it's one of the longest ongoing studies of retirement happiness ever. I think it is the longest study. And the number one factor they found that matters is the quality of your relationships and those connections. Those are the four Cs, and I think it's a great concept. So it's step number 12. And I recommend you can do this, you know, two years out, three years out, but make sure you make time

[Mindy Jensen]

to do it after the four Cs. Fritz, what do you think is Next.

[Fritz Gilbert]

This is really, I call it write your ten Commandments. And I did this about, about three months before I retired. And what it is, is it the chance to kind of define your North Star. And it's really focused on your mental attitude. For example, my number one is have an attitude of gratitude. Number two, give with a generous heart, pursue passions, keep the balance, etc. So these are primarily focused around are you going to be a glass half full or glass half empty type person? Because having the right mindset is tremendously important as you're going to face trials, you're going to face things you don't expect. But going about it or going through it with the right mindset is really helpful. So I wrote these ten Commandments. I actually printed it out. I've got it on my wall on the other side of that bookcase behind me. And I look at them from time to time and it's amazing, eight years into retirement, how these principles have really applied. But the way that they've actually demonstrated themselves in terms of things that we're actually doing in life was totally unexpected. I'll give you an example. Try new things. That was commandment number five. So try new things. I was pushing myself to never get stuck in the rut. Always try new things. Look for the shiny object. And it has led me to. I now have a woodworking shop on the other side of that wall. I was never into woodworking, but my wife started this charity. We needed some dog houses. We had one of our volunteers that had a really nice woodworking shop. So I went up with him. We built some dog houses. I'm like, you know, dang it, that was fun. And I was like, you know, that might be something that's worth investing in, right? You've got to learn to spend your money. We've been by definition, because we're fi. We've all been miserly. We've been, you know, careful to spend our money. But there are things that you need to spend your money on once you're within your safe withdrawal rate and all the disclaimers that bring dividends beyond financial considerations. We've made investments all our life that have gotten us defy. What are you going to invest in post fi that brings you non financial benefits? To me, it was a woodworking shop. I love being out there in a woodworking shop, building doghouses, doing stuff like that that came from these Ten Commandments. Try new things. I never expected it would lead there. So I really encourage everybody. And this kind of goes back to the take A hike mentality as you're working through, you know, what do I want my life to be? Take a afternoon and go with your spouse and sit down somewhere quiet and just, just think about what are your 10 commandments and refine them, go back to them a month later, look at them, print them out and hang them on a wall and look back, you know, five, ten years post fi and say, okay, if I kind of stay aligned with what I thought was going to be important to me, I think it can be a very nice, like I said, North Star to what are your priorities and how do you want to live your life?

[Scott Trench]

You know, one of the things I think is really important here is, you know, I'm not, I'm not a very religious guy in all of these contexts, but that last one, keep eternity in mind, mind in terms of your ten Commandments. There's a real power in this concept of awe. Like what brings awe to you, right, Is that, that, that can be God, that can be religion, it can be majestic mountains, it can be, you know, the exploration of the universe or whatever. But that's, that's actually like a quite. There's like a real science behind many of these and that kind of concept of eternity or zooming out or whatever it is that brings you awe into your life.

[Sponsor Voice - Found and Indeed]

Life.

[Scott Trench]

I just wanted to hit on that. That's something I've been learning about recently that I hadn't really approached from that. Oh, what is, what does this actually mean in a more deep way?

[Fritz Gilbert]

And I would argue I would expand it out to maybe spirituality. You know, I am a Christian, but one of the other ones on here I've got is measure your spokes. It's number 11. So look at this. Your listeners are going to get through all 20 of them by the time we're done here. But measure your spokes is the concept of there are many, many different areas of your life, right? You got your financials, you've got your family, you've got that, you know, your spiritual is one of them. And if you're spiritual, I had a friend of mine, not a friend, but I was in a Dale Carnegie course when I was like in my 20s. This really resonated or stuck with me, you know, I was in a work environment and now you should take this Dale Carnegie course. Fine. So I went to Dale Carnegie. It was a good course. But halfway through, a guy didn't show up in class and the professor said, yeah, you know, Bob, Bob killed himself last night. We're all like, what? And he Said, yeah. He said, I can't get into a lot of it, but let me just say Bob didn't have very even spokes and a wheel with uneven spokes doesn't roll very well. And man, that hit home with me. And ever since, it's all about balance, right? But the, the point of the eternity and the spirituality side of it is that's a spoke. And don't sacrifice it. Spend some time thinking about it. Whatever you believe is fine. You know, it's. It's your life. But make sure you're thinking about it. You know, what brings you awe to your point, Scott? What do you think about what happens to you after you die? And you know, that's something you need to factor into your thinking as you live life. It's part of having a whole life.

[Scott Trench]

I just bring it up because we've talked a lot about happiness in the recent past. And if you do any of these workshops for goals or whatever, you're going to find a Wheel of Life concept. Here's your relationships, here's your business, here's whatever. And almost all of them include this concept of spirituality, which is very weak in my world. I'm not even sure it's a factor that I'm very concerned about in a person who sense. But I think it's. I'm curious, why do so many people talk about this? And for someone who is not a Christian, how does that begin to apply? And it's this. I think that the concept of awe is the starting point I bring with that hypothesis. So something interesting there. Without getting into the world of religion too, too deeply, it's this concept of spirituality that you're trying to bring up here that I think is, is the question, how do I explore that in, in what way? Some people will have a very obvious answer to that and other people have to. Other people have to work hard, harder.

[Fritz Gilbert]

Kind of a tangent, but it's somewhat related. You know, think about what's really important from a long term perspective. At the same time, think about what really isn't very important. Right? And if you look at, you know, our Facebook feeds and the stuff that people get all irate about and, you know, losing friendships and everything else, a lot of that stuff's not really important. So I would almost say you could couch this in a bigger question of determine what's really important for you and focus your energies there. At the same time, think about the stuff that you're spending a lot of time on that really isn't that important and reduce your focus There, that's all about rebalancing your spokes.

[Mindy Jensen]

And that's good advice even before you get to retirement. That's good advice for right now. Stop fighting with people on the Internet.

[Fritz Gilbert]

Yeah, exactly. You're never gonna win.

[Scott Trench]

Oh, Mindy's just taking a dig at me right there. It's one of my favorite kind of things.

[Mindy Jensen]

I didn't say stop fighting with people on the Internet, Scott. That was for everybody listening. If you take it personally. Good.

[Scott Trench]

Let's talk about one, one or two more core concepts here before we adjourn. What, what is maybe the next biggest thing people miss?

[Fritz Gilbert]

Let me touch on a financial one because none of these have been financial. And I would say it's probably number five. You know, we, I'm sure you guys have talked about this a lot. It's, it's a well known concept, but I think it's important to touch on it. Prepare for the move from accumulation to decumulation or withdrawals. Right. And the point of this one is we have spent our lives perfecting our skills at accumulation. Right. We've all done a good job with it. We wouldn't be where we are if we hadn't. And the point is the skill sets that you need to develop to manage your financials post fi are different skills than the skills you've had pre fi. I wrote a personal drawdown strategy. I encourage everybody to do that. I actually went back and revisited like three years later and said, okay, here's what we were thinking that was going to play out. How did it actually play out? So, you know, you can revisit these things, but there's a real psychological impact to moving from always having your PayCheck, saving your 20, 25, 50%, you know, to pick your number to suddenly not saving anything. And you've got your safe withdrawal rate calculated and you're spending. That's a totally different mindset. And the anxiety over down markets, legitimate with sequence of return risk. Right. All of those types of things. When you're working, the best thing that can happen is a rip roaring bear market because you're buying on the cheap and you know, you know it's going to rebound and you'll be fine. Man, that's terrifying. When you're in retirement, you're living off your assets, preparing for that and designing a scheme to, you know, build a systematic paycheck that you're comfortable with the system. That's, I think, something most people do think about because it's one of the financial things that escalates but it's really important, having been through it now myself, you know, the risks post FI are different than the risks pre fi. And I've actually got a slide on that. There's four basic risks that I outlined in the presentation for decumulation sequence of return risk we mentioned on that. You're spending without any income, so your, your investments have to cover your spending. You've got long term risks of inflation and longevity. The biggest concern people have is that they're going to, you know, run out of money before they die. Those risks are materially different than the risks you had while you were accumulating. So it's really important to take some time. And this is an area where, even if you're diy, I think this is an area where it justifies, you know, paying for a retirement readiness review with, with an expert to make sure you don't have any blind spots. Even DIY people should do that because it's money well spent because you just have never been through it. But there are experts that have led thousands of people through this and they, they know things that you don't. So it's an important element on the financial side.

[Scott Trench]

I've been obsessing with this area recently and the more I dive in, the more I model things out, the more I find offsetting comforting findings that are typical to many people's situations and I find very unsettling. Failure states that are very concerning have very aggressive assumptions in other hands. The way I'll articulate This is the 4% rules. Risk with respect to sequence of return risk is very well known and quantified or it should be by anyone is considering early retirement. You should have come across that topic. If that's new to you. You're very early in the journey of being ready to understand what the financial risks of early retirement are. Really that's a first order kind of understanding of the 4% rule. The real risk is spending volatility. It's inflation in specifically healthcare or certain other known areas that is structurally going to increase faster than inflation, not CPI or your average spending, assuming higher inflation. It's those pieces that can really derail your plan. And in many cases there are offsets to those risks. Like if you have a home that has a mortgage on it and you're 10 years into the mortgage, you have 20 years left, that's almost exactly going to offset, for example, the health care premium cost risk in many scenarios. And the problem that I'm coming to is these rules of thumb are fine for guiding you towards the beginning of the end at the 4% rule. But they can be accidentally right in many cases. They can be too conservative in some cases and they can be way off in other cases. And in particular the 4% rule I think is doing a disservice to the lean fire community who are most at risk of falling into challenges with it, not just because they're the lower dollar amount, but because of the risks of any one of these things moving outside of their ban that they can't control. Like healthcare, for example, far outweigh are such a bigger percentage of spending that they can't absorb in the rest of the pile. How close am I in terms of what you've observed in the community across your work?

[Fritz Gilbert]

I agree. Spot on, Scott. I think the tactical way that I would recommend people think about this, when we were in that stage where we were really fine tuning our numbers, we really got serious about tracking our spending something we always saved first and spent the rest. We didn't live on a budget because we knew we were saving aggressive, aggressively. So whatever was left we could spend. But we knew that wouldn't work for retirement. So we went through every line item for a year. We tracked it, we adjusted it for, you know, what would it be post fi. Private insurance. I'm only 62 now. Right. I've been paying for private insurance for seven years, still have three to go. So we've seen those inflation type things. So what. What we did is we were conservative on all of our assumptions. But it's a delicate balance because if you're too conservative, you're never going to retire. We. One more year. One more year, One more year. One more year. Because you just, you know, you talk yourself out of it. So build in some discretionary spending. Travel. Mindy just talked about this, right? Yeah. We're going to go to Europe every year, somewhere international every year. So we're going to throw $10,000 in for that, you know, whatever build in some of these things that you know are discretionary. Now that affects the lean fire, because if you're lean fire, you're not planning on going to Europe every year. I would encourage people that are too aggressive maybe work another year and maybe add a little bit of padding and you know, assume a little bit higher inflation. Because once you do that, that year seems like a long time when you're in the middle of it. But once you get. I did one more year. Once you get out and your actuals come in lower than your projections that you used, that's a lot Better situation to be in than the reverse. Because then you're like, crap, I didn't, you know, this is getting out of control. What do I do now? And then you're really at risk. So it's a delicate balance though, because if you're too conservative, you never retire. So it's one of those, those subjective pieces. But my, my encouragement would be pad your numbers a little bit, but don't go crazy with it. That's about the only thing you can do.

[Scott Trench]

Yeah, I think the community overwhelmingly does that and their instincts are right. And I think that there's a pushback among that, you know, in a big portion of the community that I think, I think is a little too sunshine and roses in some cases for it. Because this is a serious risk that you take when you fire. Right. You're not going to many cases be able to return to that same level of pay. Your career trajectory will be permanently altered in there. And it's a worthwhile pursuit and it's realistic here. But I think there's a careful this that is missing in some assumptions about there that we've talked about in the past too. Like this is, this is an evolution of my thinking over the last year in particular as well on this. But I think that's. It's a little too hand wavy to say the 4% rule solves the problem. It's more serious than that at the

[Sponsor Voice - Pine Financial Group]

end of the journey.

[Mindy Jensen]

Journey.

[Fritz Gilbert]

And really what building some discretionary spending in allows you to do is it allows you to set up guardrails instead of a straight 4%. What I do every year, we take our net worth, we strip out the house, you know, the stuff you can't spend your cars. So we end up with this retirement reserve. And I multiply the retirement reserve by three, three and a half, four, four and a half percent. And, and, and every year I redefine kind of what could we pull for the next year. So it's dynamic, right? As the market's doing well, hey, we can spend a little bit more knowing that if the market tanks, we've got some of that discretionary stuff built into our budget. We went to the Arctic last year. We could have not done that. So having the ability. Because what has been proven to significantly improve the odds of something like the 4% rule is the dynamic spending. Right where you are able to flex your spending. The only way you can flex your spending is if you built some stuff into your spending forecast that you can strip out if the, the market tanks. That's where this Discretionary buffer comes in. That's the way you, you build your insurance. And the other thing I would say, Scott, is a lot of these risks don't necessarily materialize over a year inflation, that can be a multi year problem that you may not realize until you're three or four years in. And by then, you know what, your ability to go back and work, you're kind of out of date, you know, and maybe you say, okay, I got this side hustle, I got two years to go. I'm going to start this YouTube channel. I'm going to pull in 20 grand a year from the YouTube channel. Fine. But what happens if you get into retirement? You don't really want to spend your time on your computer doing your YouTube channel. But now you have to because you need that income to live. That's the other risk. Right? So, so minimize how much money you think you're going to make from your side hustle and overestimate your cost a little bit. But don't do it to excess because then you'll never, never get out. So it's tough.

[Scott Trench]

I just kind of harp on these problems. Like that flexible spending component. It is clearly fine for somebody who is in that chubby or fat fire range, right. To spending maybe 150, $200,000 a year. Okay, you don't go on vacation this week.

[Fritz Gilbert]

Right.

[Scott Trench]

Like, great. But it's so different if you're spending $40,000 a year in lean fire. And that's your plan. Like, that's not like, it's just not realistic to bake in those flexible spending components in there. And that's where, that's where again, I'm challenging this stuff is I don't want to be a party pooper for the fire stuff. I believe in this, of course, but I also, I think that more important than, than cheerleading these components is being real about the assumptions you're making from a financial perspective. And of course, doing the prep work that we just covered for the most of this episode to be prepared for what that's actually going to look like

[Sponsor Voice - Pine Financial Group]

and how you're going to enjoy yourself.

[Scott Trench]

I think that those risks have been understated in some categories in some, in some components. And the 4% rule is too sweeping for this. The risk is not really sequence of return risk, which is a known variable for most people people. It's the more subtle cues, especially at lower fire numbers.

[Fritz Gilbert]

It reminds me of a personal story that I think is worth sharing. We've got a friend here who's in his late 60s. And they basically, I wouldn't say they lean fired, but they, they didn't have a lot of fluff in their budget and they kind of missed. And so now this guy's like 68 years old and he's working at the supermarket 20 hours a week in the meat department. You know, nice guy, had a business, sold the business, you know, very successful guy, but didn't get his forecast right. And they're short and he's got to go back to work in his late 60s in a, in a scrub, minimum wage type of job. How terrible is that? So it's a real risk to your point. And it, it's scary, but you've got to recognize and this gets into all, you know, this is the accumulation risk that we're talking about, right? That's my point on this element of these 20 steps is you've got to make that mental adjustment to recognize what your risks are going to be in the next phase because they're different than risks while you're working. That's the point.

[Scott Trench]

Becoming wealthy is not really an intellectual challenge, right? It's, it's, you spend less than you earn, you try to increase your income and you invest in the total market stock index fund, right? The rules are so simple for the base case, for, for that staying wealthy and managing this portfolio across 40 to 60 year retirement is a real intellectual challenge and discipline that requires, you know, you know, reasonable controls if you're close, if you're, if you're around this 4% rule for, you know, three and a half to 5%, depending on which school of thought you want to ascribe to. So I think that's a piece there spot on.

[Mindy Jensen]

I want to bring up one more slide of yours. Number seven, live on your retirement income. I think this is so important to test out your numbers before you actually get there. Test run your spending assumptions and not just loosely keep track of where your money's going. I would encourage you to tightly keep track of where your money's going. In the beginning of 2022, I publicly tracked my spending just so people could see that, you know, people like me who are supposed to know all about money, get it wrong. Like my budget was, I blew out of my budget every single month for some random thing or another. Like I broke the ball joint on a, one of my cars and I don't have a traditional emergency fund because I have different buckets that I can pull from. It's a conscious choice. But I noticed that like I kept track of different spending. I host a Lot of parties at my house. So I kept track of what I'm spending money on for the parties because that's really easy to cut out while still living my life. Or you know, I go to, I live in Longmont, we've got like, like 13 microbreweries in town. It's a big thing to go and meet people at the microbrewery. But beer's really expensive at a microbrewery, so that's something that I can cut out going out to restaurants. Not just a food budget, but I separated out into groceries and restaurants because I can cut the restaurants if I need to. And I encourage people to not only live on their retirement account and test run their spending assumptions, but tightly, really keep track of where that money is going. So you can see, oh, I really am spending a hundred thousand dollars or hey, I thought I was spending 100, but I'm actually spending 125. Maybe that one more year actually does make more sense.

[Fritz Gilbert]

Yeah. And a really good hack that I used, this comes after the make your numbers real, which is one of the earlier things. That's where you're putting your retirement spending forecast together, et cetera. So now you've got your assumed spending. So what we did, we said, okay, we think we're going to spend X. So what we did is we said, okay, let's just adjust our savings rate so that my take home is roughly X now. Okay, I still got to commute to work, so I've, okay, that's a little bit extra for gas. Okay, I've got, you know, you can adjust it because you're still working and you, we still had a mortgage. We paid off our mortgage when we retired, we downsized and sold the house so I could, I could add money in for the mortgage because that's okay. But we basically got it to the point where my take home pay by adjusting our savings rate was exactly in line with what we thought our retirement spending was going to be minus the adjustments because we were still working. Hope that makes sense to everybody. Because what it does, it automatically forces you to say, okay, you can't spend more than what's in your checking account and you got to do it for a year without transferring any money from savings. Can you do it? It's a great way to test it because like you said, oh geez, that car repair, you know, things pop up, up, and it's a real eye opening experience. Instead of just working on a spreadsheet. Live it and see if you can live with it. And, and you can automate that by, by adjusting your savings rate to get your take home pay to match what you think you're going to spend. You don't have to worry about it. You just say, okay, I've got, I can only spend what's in my checking account. Am I going to get into trouble? Really easy to do.

[Mindy Jensen]

Yeah. And the best time to discover that you are in trouble is when you still have a job.

[Fritz Gilbert]

Exactly.

[Mindy Jensen]

All right, Fritz. Fritz, this was fantastic. I am so excited that you had time today to sit down and chat with us about this. Please tell our listeners where they can find out more about you.

[Fritz Gilbert]

Yeah, I'm at the retirement manifesto. You can look it up or type my name in Fritz Gilbert in Google. I'll pop up all over the place. But you know, I'm around and I really appreciate you guys having me on the show. I love your show and it's great, man. It's been probably three or four years ago, I think, since we talked. And Mindy, I saw you at Economy last year, so it was nice seeing you. We keep in touch. Scott, nice seeing you again. And I really appreciate you guys letting me share some of this stuff. I think, you know, the takeaway I would give to your listeners is if you're focused on the financials, great. But recognize they're necessary, but they're not sufficient.

[Scott Trench]

Awesome. And you are both an expert on the non financial aspects of retirement and the financial aspects of retirement. It's been really a privilege to learn from you today. Thank you so much for sharing and thank you again to the Economy Conference for allowing us to repurpose or reuse or reshare the presentation that you put together at Economy.

[Mindy Jensen]

And if you missed the Economy conference this year, go to economyconference.com and sign up for the newsletter. And that's economy e c o n o m e conference.com Diana will love to see you next year in Cincinnati. All right, Fritz, thank you so much for your time today and we'll talk to you soon.

[Fritz Gilbert]

Thanks again, guys. We'll see you.

[Mindy Jensen]

All right, Scott, that was Fritz and that was his retirement manifesto. What do you think of the episode?

[Scott Trench]

He's just fantastic at what he does. I love this about the FI community. Right. And of course, you know, we got a got a comment on this that was a little snarky in a recent video about, oh, everyone who achieves financial independence goes on to do a podcast. Well, some people who go on to achieve financial independence go on to write 400 or 500 or a thousand pieces of content, obsessing over philosophical topics related to that. And they become very good in those areas of personal finance and thus wonderful guests for our podcast because they've thought about and put so many hours into working and reworking mental models around early retirement. That's exactly what Fritz has done. It's a big service to the community. Many other people go on to make contributions in fitness or community service or travel or whatever it is in their community or whatever, their workplace or their, their, their spiritual pursuits or whatever. And they're just not as relevant to the Bigger Pockets Money podcast. That's why you don't see them here. I just absolutely love this. It's so wonderful to talk to yet another just master in their arenas in terms of the mental models and frameworks and thoughts thought that they've put into solving real problems for this community.

[Mindy Jensen]

I really love talking to people who are on the other side of retirement because so many people who have this podcast and have their blogs, once they hit financial independence, they kind of stop talking about it. So I love the lessons that he's learned, sharing them with our audience who is mainly on this side of retirement. So I am thankful that he's here. I am thankful that he shared his teachings with and thank you Diana from Economy Conference for letting us share this as well, because not everybody can get to Economy. They only have 500 tickets. Scott, you mentioned that you your take a hike is to sit down in a beautiful setting and hypothesize about what your life is going to look like. And you went one better. You set up a goal setting worksheet that I want to share with our listeners completely free of charge. You can go to biggerpocketsmoney.com goals to get this worksheet. You don't even have to give us your email, but you can if you go to biggerpockets money.com you can sign up for our newsletter anywhere.

[Scott Trench]

Thanks, Manny. Yeah, that's the same worksheet that Virginia and I use. That's the exercise, right? Be at peak state, be energized, feel good, and then set your goals. Don't do this after, you know, several drinks on a Friday, after a very long week of work. Do it on Saturday morning after, you know, you've had your coffee and your workout and there's ideally something that you've driven to that's, you know, 10, 15, 20 minutes away in a beautiful backdrop that tends to actually say, oh, there's something more to life, like what do I really want? Or I've already got it and I'm happy even though I've removed myself from those circumstances. Like it's just very powerful when you're actually doing this exercise and it's not this like high stakes thing you have to nail on the first try.

[Sponsor Voice - Pine Financial Group]

It's, it's the first iteration of many

[Scott Trench]

and I think that that lowers the, the barrier to actually getting this, this important piece of work done.

[Mindy Jensen]

Yep. And it's, it's a beast of a document, but I think it's really, really helpful to.

[Fritz Gilbert]

It's eight pages.

[Scott Trench]

It's not that big of a. Yeah,

[Mindy Jensen]

but you're making people think about a lot of things. Carl and I started it and let me tell you, we have not finished it yet.

[Scott Trench]

That's true. Defining what you want is a hard challenge.

[Sponsor Voice - Pine Financial Group]

That is true.

[Mindy Jensen]

This worksheet is a great place to start because it gives you things to think about that I would not have been thinking about at my current space. So we're still iterating on it. You're right. It definitely doesn't have to be a perfect document the first time through. But it gives you so many things to think about and I think that's a really important step. So again, biggerpocketsmoney.com Gold to download this document.

[Scott Trench]

One important follow up there I want to, I want to share real quick is that word iteration. At BiggerPocketsMoney.com we are attempting to build the best tools and resources, free or paid on the Internet. And that will be a forever pursuit. So this workbook we just shared is a iteration that we will hope is among the best free tools. If not, you know, as good as any paid goal setting workshop you could find out there there. And we will iterate on it as we get feedback. So you come back six months or a year from now, hopefully we'll have made some improvements to that. Same thing with our personal financial statement. Same thing with the software that we're creating. That's free. All of this is free in the sense that we're not, we're not saying you have to exchange your data or information. They're all, all of our tools and software are essentially front end right now. So there's no data stored.

[Sponsor Voice - Pine Financial Group]

Go use them.

[Scott Trench]

We want to build stuff that actually is used by people and then we, we want to add value. And you know, you're welcome to join our newsletter list if you want to. We hope to send you some valuable

[Sponsor Voice - Pine Financial Group]

stuff but you do not have to

[Scott Trench]

in order to access any of this. So that's our goal is provide really free, valuable content and iterate on it forever to keep improving it as we learn more.

[Mindy Jensen]

And if you have any comments about what you are seeing on biggerpocketsmoney.com you can email scottiggerpocketsmoney.com or [e-mail] please help me iterate. All right Scott, with that, let's get out of here. That wraps up this episode of the BiggerPockets Money podcast. He is Scott Trench I am Mindy Jensen saying Peace out Stout.

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