Who Wants to *Literally* Be a Millionaire? (Bestie Ep) #1080

Summary

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Podcast Summary: How to Money – Who Wants to Literally Be a Millionaire? (Bestie Ep) #1080

Hosts: Joel & Matt
Released: December 26, 2025
Theme: Rethinking Retirement Wealth—How Much Do You Really Need to Become a Millionaire?

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Episode Overview

In this episode, Joel and Matt tackle one of personal finance’s most persistent questions: Is becoming a millionaire still a meaningful or attainable goal for most people? The hosts dig into the mythology and realities of the $1 million retirement nest egg, break down misleading headlines, and offer practical frameworks for defining “enough” and building wealth purposefully for your circumstances. Listeners will find nuanced discussion, actionable advice, and encouragement for anyone charting a path to financial independence—jargon-free and bestie-style.

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Key Discussion Points & Insights

1. Cultural Obsession With Millionaire Status

• The episode starts with reflections on classic game shows like “Who Wants to Be a Millionaire?” and cultural touchstones that shape our money goals.
• Joel: "Like millions of people—oh yeah, like tens of millions of people probably were tuned into Regis Philbin hosting Who Wants to Be a Millionaire...a cultural moment." (02:45)
• They question if “millionaire” is a meaningful target or an arbitrary status symbol that's become less relevant.

2. The Flawed Pursuit of a “Magic Number”

• News headlines and surveys increasingly suggest $2M, $3M, or even $5M is needed for comfortable retirement—figures that can be discouraging and demoralizing for everyday savers.
• Matt cites: "A recent article from Fortune magazine...the 'experts'...don't believe that a million dollars is enough, that you actually need closer to $2 million...When you are faced with that headline number, I think it can feel defeating." (07:57)
• The hosts argue that these figures can breed financial nihilism or “lottery mentality” among those who feel left behind, and “one more year syndrome” in those who are already ahead.

3. Reality Check: What Do Americans Actually Retire With?

• The average retirement account for Americans 65+ sits at just $280,000 (according to Vanguard)—far below scary headline numbers.
• Joel: “To say that you need a million dollars to retire, or $1.9M like the experts say...it almost feels ridiculous, because so many people are able to get by in retirement with a whole lot less.” (14:05)

4. Happiness, Contentment, and Comparisons

• The disconnect between how much people have versus how much they think they need can breed dissatisfaction.
• Matt: "A much higher percentage of Americans believe they need to have a lot more...than Europeans think. It’s almost as if we've set our standards too high and doomed ourselves to failure." (15:05)
• They discuss how social comparison (e.g., influencers on “private jets”) and unrealistic expectations impact satisfaction.

5. Mindset and Planning: What is “Enough”?

• Focusing on your actual needs, rather than arbitrary goals, is essential.
• Recognizing that life stages, family size, health, and housing all shift expenses over time: "Giving yourself a certain amount of wiggle room, just a certain amount of margin for error as you plan and save for the future, that's really important." (22:21)
• It’s better to use a “Sherlock Holmes” approach—observe your own lifestyle and investigate thoughtfully, rather than blindly following prescriptive rules.

6. Factors That Alter the Retirement Equation

• Lifestyle Creep vs. Expectation Shifts: Hosts differentiate spending more intentionally from aimless lifestyle inflation.
• Debt & Inflation: Planning must consider evolving debts and the unpredictability of inflation—recent years have shown “nobody would have guessed...inflation numbers nearing double digits.” (26:10)
• Location Autonomy: Willingness to relocate can drastically affect how much you need—e.g. retiring in Mississippi vs. Hawaii, or even moving to Panama or Thailand.

7. The Mythical Retirement "Leap"

• The “all or nothing” mindset—working full-bore vs. doing nothing—misses the value of phased retirements, part-time work, and purpose-driven living.
• “Retirement can be...a choose-your-own-adventure…The more flexible you can be, the more likely it is that you won't even need a million dollars in that 401k.” (34:53)

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Notable Quotes & Memorable Moments

• On Defining Enough:
  “Building wealth and then feeling comfortable enough to slow down and enjoy some of what you've been able to amass…requires two different skill sets.” — Joel (10:52)

• On Pursuing Wealth Wisely:
  “Most millionaires…achieve that millionaire status purely directly by investing in retirement accounts through work. It’s crazy, but it’s true…slowly but surely by making those contributions with every paycheck.” — Joel (44:28)

• On Compounding:
  “It can feel like you're moving just at a snail’s pace…but then it feels like you're moving feet at a time, maybe after a decade…that is the power of compounding.” — Matt (42:55)

• On Social Security:
  “To assume that there's not going to be any Social Security would be highly unlikely…Heads will roll before entitlements are [gone].” — Matt (54:13)

• On Trade-offs:
  “There are no solutions. There are only trade-offs. … We're often looking for a way to simplify things. … There are no simple, easy answers.” — Matt quoting Thomas Sowell (54:17)

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Practical Frameworks and Takeaways

Calculating Your Number

• The 25x Rule: Annual expenses x 25 = ballpark retirement nest egg. E.g. $60,000/year = $1.5M saved. (40:34)
• Adjust upward for future inflation and changing expectations.

Track Your Progress—But Not Your Self-Worth

• Calculate and update your net worth annually or semi-annually (using a spreadsheet or Empower app). (42:06)
• Don’t confuse net worth with self-worth!

Harness Compounding

• Small, consistent contributions are more important than huge one-time efforts.
• Max out retirement accounts if possible:
  “If you sock away 15+ percent of your pay, plus a company match, over the years and the decades, you’re going to easily achieve that status.” (44:28)
• The Rule of 173: Multiply a recurring monthly expense by 173 to see its 10-year compounding cost if invested instead. E.g., $100/month = $17,300 in a decade. (51:08)

Mind Your Lifestyle Choices

• Big retirement numbers are only “needed” for big lifestyles.
• “Retiring” can also mean scaling back, pursuing hobbies, volunteer work, etc.—not just sipping cocktails on a private beach.

Don’t Discount Social Security and Other Income

• Most Americans will get at least 75% of their expected Social Security. This significantly reduces how much you need to save on your own. (54:13)
• Factor in potential pension, part-time work, rental income, etc.

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Important Timestamps

• [03:46] – Episode’s purpose: Is a $1M retirement nest egg a good/attainable goal?
• [07:57] – How scary headlines ($2M, $3M needed!) can demoralize savers.
• [14:05] – Actual retirement figures are far below media “goals.”
• [22:21] – Why your needs and “enough” will change with life stages.
• [34:53] – Location and lifestyle have massive impacts; flexibility is key.
• [40:34] – Calculating your number using the 25x rule, and its caveats.
• [44:28] – Most millionaires get there by simply maxing retirement accounts over time.
• [51:08] – Rule of 173 and other practical ways to plug leaks & boost savings.
• [54:17] – No perfect solutions—only trade-offs; quoting Thomas Sowell.

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Tone and Style Highlights

The hosts keep their trademark warm, conversational banter, sprinkling deep dives with relatable pop culture (game shows, music call-backs, beer reviews), humor, and empathy for both anxious beginners and the already-comfortable.

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In Summary

This episode of How to Money deconstructs the “millionaire” yardstick and guides listeners toward a more personal, realistic, and sustainable approach to financial independence. The message: You almost certainly don’t need as much as you think, and building wealth is more about consistent habits, flexibility, and enjoying the journey than hitting any magic number. Don’t let headlines or comparisons derail your plans—find your personal “enough,” invest steadily, adapt as your life evolves, and remember to enjoy living along the way.

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Best Friend’s Out!

Transcript

[A]

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[B]

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[B]

Hey, it's Joel and Matt from how to Money. I was just in Seattle, Matt, and honestly, it's one of the greatest cities in the world, particularly in the summer. I went on this run by the water. We hopped a ferry across Puget Sound. Just an unforgettable trip.

[C]

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Find a co [e-mail] host this episode.

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[B]

To how to Money. I'm Joel.

[C]

And I am Matt.

[B]

And today we're asking the question, who wants to be a millionaire?

[C]

So I just tried to do my best game show host voice. Did it show? Did it come through?

[B]

You're the next Drew Carey.

[C]

Oh.

[B]

Oh, am I?

[C]

The Price is Right.

[B]

That's right.

[C]

So I was first thinking about. He also hosted Whose Line Is It Anyway?

[B]

Oh, yeah. Did you.

[C]

And before him, somebody I forgot who used to be the old host wasn't there somebody else?

[B]

Bob Barker on Price is Right?

[C]

Oh, no, I'm thinking of the improv.

[B]

Oh, okay.

[C]

Did you watch a lot of game shows growing up? I know you did the Price is Right. You talked about how you used to watch that with your grandma, right?

[B]

I watched some. I definitely. I mean, who Wants to Be a Millionaire was classic. Well, that was a cultural moment. And I'm not sure if people a whole lot younger than us remember it, because the show came out, what, like 99, late 90s, early 2000, for a few years. Like millions of people. Oh, yeah, like tens of millions of people probably were tuned into Regis Philbin hosting who Wants to Be a Millionaire every. What? I don't know, a couple nights a week. They even, they even made it. And like, was that the last great.

[C]

American game show where everybody was watching before the networks? Because after that it was all network based and everybody created their own game shows and things split off from there. But it kind of felt like when folks would sit down and all watch the same news program together, this is like the last game show where folks did that. But yeah, I never, never really got into it.

[B]

I love game shows, though. I really do. I think they're fun.

[C]

And so Top Chef, is that technically a game show? Yeah, they're competing.

[B]

It's like kind.

[C]

Tom Colicchio, Gail Simmons, Hugh Atchison, like all those judges. Those are, those are my people. Kate and I used to. I probably watched more seasons of Top Chef than any other program other than maybe the Office.

[B]

Yeah, Scrubs. The whole point of this show, by the way, is not to wear monochromatic suits and ties like Regis Philbin used to do, may he rest in pe. But it really is to talk about, like, if you want to become a millionaire, like, how do you get there? But also, like, is that a good goal to have? And there are different inputs that we see all the time in financial media about how much we're supposed to be saving and investing for the future. And I think so. It can be off putting and downright demoralizing. So how much do you actually need? We're going to kind of give a framework for that in regards to how much you should be looking to garner in a nest egg for retirement. That's. That's kind of what this episode's all about.

[C]

Did you ever listen? Okay, one last question, one last reference.

[B]

I need to phone a friend.

[C]

No, I was going to the Barenaked Ladies if I had a million dollars. Do you remember that song?

[B]

I do.

[C]

Back in the day, they're more known for. One week, was it.

[B]

It's been one week. The 90s music still. Still rocks.

[C]

Still pretty good.

[B]

Yeah. But, Matt, real quick, before we get to the kind of millionaire discussion that we want to have the actual meat. Yeah. Just. I wanted to quickly mention that listener Silas actually created a. An Excel spreadsheet. So we had another listener actually create a sp for the beers that we've had on the show that we'll also put in the show notes. But Silas, he just made a new Excel spreadsheet about literally all the how to money episodes. And he's categorized them so that you can easily find. If you're, like, looking for an episode on transportation or cars or on investing or saving or whatever, you can just kind of look through there and filter and see which episodes fall under that category. So big thanks to Silas for making that. And hopefully it should help listeners who are trying to either find a past episode they found maybe helpful or who are new to how to money and they're kind of trying to figure out, like, well, okay, but I need help with this. Where do I go to get the. Cause we have, like, a ridiculous catalog at this point of, what, 650 plus episodes? It can be hard to sort through. So big thanks to Silas for making that a little bit easier for a lot of folks out there. That's right.

[C]

And maybe one of these days, we'll have an ultimate spreadsheet that combines beer and the money topics by category and by abv weight and style of beer.

[B]

And by how long your hair was at the time of recording, too.

[C]

Let's quickly introduce the beer that you and I are going to enjoy during this episode. This was a double clutch. This is a nitro oatmeal stout. This one is by Gruner Brothers Brewing, again, sent to us by Katie. So, Silas, thank you. And Katie, thank you. This episode could not have happened without the help of both of y'.

[B]

All. Yes, sir.

[C]

So thank you so much.

[B]

All right. But let's get into it. Matt, who wants to be a millionaire? And when we're contemplating this topic, it made me think, for some reason of Sherlock Holmes, who is a literary character of high esteem. We've all heard of this guy. Heard of him?

[C]

Yeah. Most deaf.

[B]

He solves mysteries. And I think I feel like the. I still remember in the hospital, I think we were having our first child. Emily and I watched the Benedict Cumberbatch Sherlock Holmes series, which was really, really good.

[C]

That was like, what? Yeah, like, while Emily was in labor.

[B]

Not in labor. It Was like pre labor, like getting ready. I don't think she.

[C]

Now she hates Benedict. Can't watch any of his movies.

[B]

Exactly. Sorry, Benedict. I'm sure you're a nice guy. Well, the cool thing though, about, like Sherlock Holmes is that he uses inductive reasoning to solve his cases. He begins with observations which propel him in the search for the truth. And so deductive reasoning, on the other hand, begins with a hypothesis and then uses facts that you accumulate along the way in order to confirm a theory. But when we're talking about how much we need in retirement and if a million dollars is actually going to be enough, you and I would say that the Holmesian approach is most helpful. Taking that Sherlock Holmes approach and do some observing and then start asking some questions based on what you can observe. And hopefully this endeavor helps you gain a better understand of what your goals should be and how they're going to influence your actions. Now, I think it's starting from that randomly concocted end goal actually does us a disservice, really, when we're trying to figure out what we should be saving for retirement. That's true.

[C]

Yeah. And by the way, were you a fan of the Robert Downing Jr. Version of. Oh, yeah, that, that Sherlock movie.

[B]

That was a great one too.

[C]

I like that one because I feel like it was way more action based as opposed, you know, he's like jumping out of buildings into rivers and canals or whatever.

[B]

Well, Guy Ritchie, that was like probably the last great thing he did.

[C]

That's right. Yeah. That's why I like that one man.

[B]

He made so many good films earlier.

[C]

Had a string of hits.

[B]

Yeah.

[C]

But so basically, when it comes to investing, if you haven't started investing yet, you, you might be seeing some headlines out there, right. That say that you need to have a ton of money set aside in order to quit your job in order to actually retire someday. A recent article from Fortune magazine, they basically said that the quote, unquote experts, that they don't believe that a million dollars is enough, that you actually need to have closer to 2 million, technically $1.9 million set aside, which is. That's a ton. And like when you are faced with that much like that sort of headline number, I think it can feel defeating. Right. Like sometimes these stories, they can do more harm than good. Instead of encouraging someone to get their act together, they actually might think that they're just a total lost cause, that it's hopeless and they're gonna maybe just end up throwing in the towel.

[B]

Yeah. Like if you've barely started, and you see that headline number, you just say.

[C]

Screw it by end up winning the lottery.

[B]

What's the point? Yes, exactly. I think it does kind of encourage that lottery mentality to a certain extent.

[C]

Yeah. But, you know, we're going to dispel some myths today, and we're going to explain how retiring with enough money on hand is actually more attainable than you think. And we're going to talk about how, you know, hitting that $1 million mark, which, by the way, it actually might be more than enough. But even still, how it is impossible when you have decades of time to get there, when you've got time on your side in particular, it is very achievable.

[B]

I like how you mentioned the lottery thing because it is true. I think a lot of people in. You think of people who buy lottery tickets as making a horrendous mistake, and it is true that. That you're. You're very, very, very unlikely to win the lottery. Right. The odds are heavily stacked against you, and a lot of people spend way too much money on lottery tickets, inhibiting their ability to. To grow wealth. But some people in some of the most impoverished communities, it feels like that's their only way out, is to win the lottery, and not by investing rarely. Because they see headlines like this, I think, and it leads them to believe, well, there's no way that my, you know, 50 bucks a month is actually that. Which is all I can stomach to invest, is actually me here. And it's completely demoralizing. And I think it does actually lead to some of those more risky approaches to wealth building because they just don't think this is for them, which I get. Like, makes sense. Yeah.

[C]

They're quite literally going for broke because to them, that seems like the most logical path forward as opposed to amassing this impossibly gigantic number.

[B]

Yeah. And there might be another subset of folks, though, maybe on the opposite end of the spectrum, who are further along in their financial journey. Maybe you're listening and you do have close to seven figures in the bank. And maybe you're still only in your mid-30s, which is amazing. Dang. Yeah. You've done. You've done a lot of hard work. Good for you. Yeah. And so you're crushing it. But even some of those folks, they might be under the impression, Matt, that they need a whole lot more invested in order to comfortably retire. They might have done a whole lot of heavy lifting already, but they might say, I've still got decades of hard work ahead of me. They might Fall victim to that one more year syndrome, which kind of seems to never end. You keep kicking. You keep kicking the can down the road. And so building wealth and then feeling comfortable enough to slow down and enjoy some of what you've been able to amass. That requires two different skill sets. And so for those folks, we want to hopefully ease your mind a little too, you know, helping you to see that it's possible to overdo it and that it is possible to over plan, to over save, to over invest, and to overwork, creating a different kind of financial imbalance that is hard to overcome. That's true.

[C]

Yeah. And so there's a recent survey as well, found that more than seven in 10 investors, they say that they need between three and five million dollars on hand in order to be able to retire with ease. And, you know, that's an even more daunting task than just saving up a cool mill. But so much of these responses are based on feelings. They're not actually based on facts. And personal finances are so individual, they're so complex that it is hard to come up with just a simple formula to help everyone out there to know exactly what they need to save in order to retire comfortably. But we want to do our best to give you some guideposts so that you better understand what it is that you should be shooting for. Is it a million? Maybe that's the right amount for some folks out there, but others might really want to sock away multiple millions of dollars. And I think others can easily do retirement well on a six figure nest egg. It all depends on a number of factors and we'll be diving into that during this episode.

[B]

Yeah, I wish there was a calculator that kind of knew some of that future for you. Like, hey, you're probably going to encounter these health issues. And guess what? You know what? You're probably going to live to the ripe old age of 91 or so. Like, if you knew some of those things and you could plug those into a calculator, you can more easily understand exactly how much you need to save. But we don't have a horoscope, right? Or is that a horoscope? Is that what that. Yeah. Yeah. Okay.

[C]

Tells you the future or. Yeah. What's going to happen based on your month that you're born in?

[B]

I haven't had my tarot cards read recently, and so I don't know what's going to happen in the future. And because of that, we have to make kind of some educated guesses and we have to make sure that we're sacrificing enough for our future selves, but we're also trying to strike that balance constantly while we're doing it. Right. And let's talk about, let's dig into a little bit of data here, Matt. We've talked about a couple of headline numbers that some people assume they need to have or the experts say they need to have. And so that can actually, I think, inhibit people's ability or desire to start saving ahead.

[C]

We talked about some headlines, we talked about some surveys. But what are the facts, Joel?

[B]

All right, let's talk about the facts. So it might be helpful and reassuring to look at the data about how much Americans actually have saved, like what they have in their 401s right now. And so the average overall balance inside of 401 accounts is just a hair $100,000. But then when we're talking about retirement, those people should have more money, right, than just the average 401k account balance. And so the average person who is 65 years or over has $280,000 in their retirement accounts. This is according to Vanguard. The facts on the ground really fly in the face of some of these numbers that we've cited already. Like to say that you need a million dollars to retire or $1.9 million like the experts say, or like the feeling that those people have, say I need million in order to retire comfortably. Well, it almost feels ridiculous because so many people are able to get by in retirement. Maybe they're not taking like that goes.

[C]

Contrary to what millions of people are actually doing right now.

[B]

So these people have not even high six figures, right? Like we're talking $280,000 on average. That's what a lot of folks are retiring with. And they are able to make ends meet. Maybe they're not taking like cruises on the Danube three times a year. Maybe, you know, maybe they're not taking private jets to Tahiti. I don't, I mean, these are the kind of sacrifices that people make when they don't have millions and millions of dollars in their retirement accounts when they retire. But they're still able to live, many of these folks, a lovely existence on a whole lot less than a nest egg of multi millions that a lot of people just assume they have to, they have to have saved up.

[C]

So, you know, it seems that there's like something of a disconnect between the amounts that Americans have invested versus the amounts that they think that they, that they need. And you know, we're not going to spend much time on happiness here. But I wonder how much of a factor this dissonance plays in happiness in life satisfaction. You just mentioned like the, the Euro river boat cruises.

[B]

It makes nice. I've never been on one.

[C]

When you look at the list of the world's happiest countries, dude, there are about a dozen European countries that rank higher than the US And I'm not sure if it's a coincidence or not, but a much higher percentage of Americans believe that they need to have a lot more, like a ton, more than just a million dollars set aside than Europeans think. It's almost as if we've set our standards too high and almost as if we've doomed ourselves to failure. So of course you're going to have a country full of folks who are significantly less happy than their European counterparts if they feel like they are constantly missing the mark, if they feel like that they are regularly coming up short in a certain way. I wonder if the different expectations that we set for ourselves as a country, how that might that right there might be actually leading us to have just lower levels of satisfaction and happiness.

[B]

Yeah, I think when you have this visceral feeling that you're behind the eight ball all the time, and I think that's the way a lot of Americans feel. And I think it means for a lot of people that their expectations are too high. And I don't know what makes people feel like they need four or five million dollars in order to be able to retire with ease when a whole lot of people are doing it well with a whole lot less. Maybe it's the comparison game that we are apt to play. Maybe they don't play.

[C]

Yeah, Cribs, you know, that's what kicked the whole thing off.

[B]

Yeah. Was that exhibit hosting that back in the day or is he doing the Pimp My Ride? I don't know.

[C]

I think he did Pimp my Ride.

[B]

Okay, if you want all the fancy stuff in retirement, then this is how much you're going to need to save up. But the truth is it's not that extreme. And I do think you're right that having lower expectations is going to lead to less consternation around how much we need to actually save for retirement. And I think we can be happier saving less, enjoying more of the day to day and not feeling as overwhelmed about creating some massive multimillion dollar nest egg. But it's also hard to figure out exactly how much you need to save. And so next we're going to talk about a wide variety of factors that will influence how you think about how much you need to have saved up, including debt and inflation, which has changed the dynamic for a lot of retirees. We'll get to our thoughts on those fronts. Right.

[C]

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[B]

Yeah, man, it was amazing. I went for one of the most glorious runs of my life. Along the waterfront. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water. Beautiful.

[C]

I love it, man. Yeah, for us, our road trip through.

[B]

Charlottesville was a highlight.

[C]

We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[B]

Plus, with a kitchen like that, you save money eating out.

[C]

Yes, exactly. That's what struck me. What seems normal to a homeowner. It can be the thing that makes a guest's trip really special.

[B]

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[C]

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How to Money listeners get 20% off any yearly plan with code howtomoney20 visit lodgify.com to get started. All right, we are back from the break and we're gonna get to I guess more of the practical application side of our episode here in a little bit. But first we wanted to spend a minute talking about just mindset and how it is that we should be thinking about wealth and having enough. And so a question you might be asking yourself is whether or not you even need to hit millionaire status. Because that's going to depend on a number of different factors out there that we're going to get into now. Because if you are in your early 20s, I think it might be easy to think that you won't need that much or that the fairly inexpensive lifestyle that you're able to happily live now that it's going to suit you well, you know, 30, 40, even 50 years down the road. But the truth is that that might not be the case. Things might cost more money or I guess not things, but just what your life looks like might evolve over time.

[B]

Because you're less into the hostel and you might want a hotel room instead. And you know what that is?

[C]

I want my own room.

[B]

I think that is one of those changes in expectations that is normal and okay. Sure. And I think it's, I don't have any problem. I think it's kind of cool when people in their 50s or 60s still want to do the hostel lifestyle. More power to you. But there's a lot of people who their expectations do change a little bit over time. And I think there's a difference between those expectation changes and lifestyle creep.

[C]

I think that's the biggest argument against the that economist that put out the consumption smoothing model where he was talking about oh no, you're going to consume a lot. Like go ahead and consume more relative to how much you are able to make and invest early on. And then you're just going to maintain that over time because I think it's really tough to maintain that as you get older. There are certain things that you're not willing to partake in that you're not willing to participate in in order to just simply save a buck and I.

[B]

Look back to those ways in which I was hyper frugal back in the day, and I'm glad I didn't inflate, not only because it helped me to save more, but because felt like it.

[C]

Would have gotten too out of hand. Right.

[B]

Yeah. I like that I had to do.

[C]

It a runaway train.

[B]

I like that I had to do it on a shoestring budget when I was, you know, 19, 20, 21, that I was finding free places to stay, that I was trying to do it as inexpensively as possible. I saw it as a game. And now it's kind of nice that I can afford to ramp up my lifestyle at least a little bit. You know, I'm not going out of hand, but I'm glad I didn't do it back then.

[C]

And so, I mean, that's like lifestyle from, like, just how you're spending, maybe additional money. But even like you and I, man, like, we're frugal dads. And even still we found that life gets more expensive as you have kids.

[B]

Sure.

[C]

And, you know, we're not doing private island vacations with our family or anything like that. Not yet. But we're also not finding the absolute cheapest option on everything when it comes to our family and our kids.

[B]

I'm not couch surfing anymore, Matt, even though I did back in the day.

[C]

Well, definitely it'd be hard to do that with your kids in tow. I'm not sure how well that would fly with the folks that you would visit. But. But bottom line, I think just giving yourself a certain amount of wiggle room, just a certain amount of margin for error as you plan and save for the future, that. That's really important.

[B]

And that's what sometimes in the fire movement, it's just bland. And we'll talk about specific numbers in a little bit, but it's 25 extra expenses. And it's like your expenses today or your expenses further down the road because they might not be the same. And so you have to take that into consideration. I think something else that's important to mention here is a higher savings rate has multiple benefits. It's not only that you're able to sock away more money, specifically hopefully into those retirement accounts, letting that money compound for you for years and decades. But it also means that you have a lower amount of monthly outgoing funds. You basically have less to fund for retirement if you're keeping your budget more in check. And call me conservative, Matt, but there's something comforting, I would say, about saving a bit more than you think you're going to need leaving yourself more margin and the ability to change your mind on things. And so, you know, this likely means exceeding the savings rate that you might think you need in order to garner yourself more cushion. Because maybe, yeah, I just mentioned fire. Maybe you discovered the fire movement five years ago and you quickly calculated some back of the napkin math and you determined, hey, I only need $300,000 set aside to quit my day job because my expenses are so infinitesimally small.

[C]

I'm go for that lean fire because.

[B]

I live in my mom's basement, and that's all I need.

[C]

Fire, by the way, financial independence. Retire early. Yeah. Is what that stands for.

[B]

But let's say your mom says, I don't want you in this basement any longer, I'm kicking you out. Well, all of a sudden your expenses go up. And so, yeah. And even if you discovered it five years ago, your life has already probably changed since that inflection point. And my guess is in the last five years, with the reality of inflation, but maybe even just the reality of the fact that you want different things out of life, the amount that you need to save has changed. Maybe you've gotten married since then, maybe you bought a house, maybe you had a couple kids. And if so, I can pretty much guarantee that what looked like a lot to you five or ten years ago just isn't going to cut it today. And so, you know, we. I think we want to set up those both ends of the spectrum, mat that some people tell you you need $5 million to retire, or a lot of people think that that's not true. But then other people think I'm going to be able to retire with 400k in the bank at the ripe old age of 42. And that might be. Be a bit naive as well.

[C]

He might be pulling the trigger a little too soon for you to do that. But that's totally. Dude, When Kate and I first discovered fire, that's essentially our story. We did some math while we were in the car and we were like, oh, man, based on these projections, we're going to be able to retire in five years.

[B]

I love that it was car math that you did. Oh, yeah. We're just sitting in the car talking.

[C]

Having spitball of numbers, a discussion. We were all at my job. We were on the way to a photography job. And I still remember that conversation that we had as we talked about Downton Abbey, because they were. That's how they were able to. They're living off the estate, living off the fat of the land. But yeah, as you get older, your responsibility, you basically, you just gain more responsibilities. And oftentimes you are. You've got other folks in particular that are counting on you to be able to not be selfish and to be able to work hard and to earn money. And you know, I think it's also worth thinking ahead a little as well and just thinking through maybe how much debt you might still have hanging around once you are ready to quit work. Because if you still have a mortgage, well, if you've got a crazy low rate and maybe you are still able to earn more, just a plain old savings account, well, that's not necessarily going to be a bad thing to still have a low rate mortgage. But if you've got high interest rate credit card debts, well, that's going to certainly change the dynamics.

[B]

And you still got student loans hanging around. That's another thing that a lot of people are finding that especially people in. There are more people in retirement now with student loans than ever before.

[C]

Yeah, yeah. And you mentioned inflation as well. Don't forget the fact that just the costs of basic goods and services are constantly changing. You know, we've seen costs skyrocket over the past couple of years. Nobody would have ever guessed that we were going to see inflation numbers nearing double digits. And so planning for the future, it involves projecting, even though it's impossible to be 100% accurate about what our future is actually going to hold. Again, this is when having some additional padding, some of that additional margin, that's going to really come in handy.

[B]

Yeah, I'm all about some extra cushion, extra margin, oftentimes even just for kind of what it does for you from a mental perspective.

[C]

Take some of that stress off me.

[B]

Yeah, it's like what if the market does, you know, underperform for a little while? Or what if my, you know, costs do exceed what I thought they were going to exceed? Having that extra cushion means you don't have to freak out.

[C]

What if I graduate from craft beer to fancy wine and I am taking private jets to islands?

[B]

Joel. Right. I know. I mean, if you need a little.

[C]

More money in the bank, it's going.

[B]

To massively change how much you need to save, that's for sure. And so there's part of us, Matt, that wants to err on the side of having more just in case. But I will say this too. We also think that a majority of Americans probably don't need to have as much socked away as they think, especially when we're talking about those People who think they need 3 to 5 million. And I would say a lot of people are more in touch with the lifestyles of the rich and the famous than we are our own actual desires. Right. And so we kind of see the. I was just reading a story the other day about influencers. Not just renting time on a private jet to take a picture, but literally rooms that make it look like you're on a private jet in order to take a picture.

[C]

Oh, I've seen that there's like a first class cockpit somewhere that you can go and rent time at where you can take selfies.

[B]

And it only fuels. So dumb, I think, the desire for everyday ordinary people to say I need that, even though what that is is.

[C]

Fake, it fuels that unhappiness. Yeah, yeah. Going back to what we're talking about.

[B]

Before and then it feels that like I think I need more than I actually do and creates this perpetual, just devastating cycle for people. But like, what lifestyle do you expect to live in retirement? I think that's a good question for us to be, to be asking ourselves. Like, and you and I were, neither of us are about trying to be filthy rich and that private jet lifestyle just has no appeal to either one of us. But realistically, thinking through what expenses you're likely to have when you do stop working, I think is important. If you're the kind of person who's more inclined to go on hikes, to volunteer to hang out with, maybe grandkids or something like that, that you probably don't need as large of a nest egg as someone else who wants to travel extravagantly, like hit every continent and you know, or, or wants to move to a beachfront estate, those are different calculations that we have to make. So if you can need less, if you can be content with having fewer things and, and not making those big opulent purchases, it of course extends directly to how much you're going to actually need to have saved up for your future. Yeah.

[C]

Actually, so on that note, I think it's important to mention that being a millionaire, it often really doesn't look that impressive. In fact, I think you'd be hard pressed to recognize an actual millionaire most of the time because they don't advertise it with the things that they buy or the things that they wear, you know, the things that they're consuming, they often just look like your average middle class individual. But they are living that stealth wealth lifestyle that we, we actually talked about this back in episode 650. But there's just a massive difference between lifestyle creepy and intentionally choosing to spend more money as you get older. It makes me think back to our conversation with Jesse. He's the founder of ynab. You need a budget. And he talked about as he, I think his splurge was going to be some nice leather boots. And he also talked about working in his wood shop. Not necessarily because it is making him money, not because it's a side hustle, but because it's just something that he simply enjoys. It's something that he is willing to pour more resources into even though from a financial standpoint, doesn't really make a whole lot of sense.

[B]

Well, he also said it wasn't lifestyle creep to move out of that crummy apartment that they were in that had mold growing in the corners or whatever.

[C]

Oh, that's right.

[B]

That was literally just a choice that they made. And as their income grew, they had the ability to choose something different. And it wasn't a bad idea to get the heck out of there, especially with how many kids they had, I'm sure they had.

[C]

But you can still retain that frugal nature. You can still continue to save and invest your money even if you spend more in a particular area that's going to be more important to you.

[B]

Yeah. And I think as you get older, as your nest egg grows, the calculation that you have to make when you're making bigger purchases change, it changes and it actually, it gets easier to spend in certain ways. I think. I was talking, I had a conversation with a friend recently. He went to a concert, Matt. They had $20 beers, $20 for a local craft beer. And this is in California where everything's more expensive. But it just made me think like when I was in my 20s, there's no way I would have allowed myself to spend that much. I knew that I needed to be investing more and more. I am now 39 and I enjoy a craft beer. And so if I'm out at a show, I might allow myself one. One maybe. But even at 20 bucks, like it hurts my heart to kind of pour that much into a one time beverage while I'm out. That's true.

[C]

Yeah. So I think another problem too is just the way that our country views retirement. Because oftentimes I think it's presented as like either this black or white thing, like you are either working as hard as you possibly can or you're retired and you're doing nothing. But we just think that that's a false dichotomy and that there are other good options out there. So like consider how happy you might be just by dialing back at work a little bit, but still earning a paycheck where you're still, like, you still have an earned income. It comes down to how it is that folks view what a lot of.

[B]

Folks call retirement, which is still, as we've talked about, a relatively new phenomenon. Like, it's not like retirement has been around for forever, so.

[C]

But we've certainly gotten used to it.

[B]

Ye over the past 50 years. Well. And we've created a really dialed in definition of it that doesn't necessarily have to be the case. And in all likelihood it shouldn't be the case. It's actually probably a bad definition.

[C]

I think so.

[B]

Yeah.

[C]

And so essentially what we're talking about here is transitioning from working a whole lot to just working a little bit less as opposed to going like, quitting work cold turkey. And I think this makes sense from a financial standpoint. Right. Because you're able to like, gradually come down from that income. But this also makes sense from like, what your days are going to look like perspective as well, because I think it's just so hard to imagine going from working 50 plus hours a week, like a lot of Americans are, to sitting around doing like, who knows what. And that's because we're a society of specialists. I mean, not just in the U.S. but I think a lot of countries are taking this path. A lot of us are really good at our jobs. And because of that, it's the main focus. And unfortunately, we just haven't put much effort into developing our other interests that.

[B]

Make life rewarding and that make retirement rewarding too.

[C]

Yeah. And I think we need to intentionally cultivate and to essentially design, like in our minds, like, this can either be a mental exercise or like just, I guess, literally writing it out or living it out on the weekend. Like, what could this look like?

[B]

Cause it's.

[C]

I think that maybe that's the difference. Maybe that's the problem is that folks, they go Monday through Friday and they're working hard, hard, hard, and it's crazy. And then on Saturdays and Sundays, they go crazy watching sports all day and they're thinking, well, I don't want to do that like seven days of the week. And so instead, like, because it is sort of a black and white thing, maybe it would be helpful to actually map out, to design what your life would actually look like. And I think that as a society, that's something we could do more of as well, is to find ways to cultivate and foster some of Those other interests outside of our work.

[B]

Yeah, having other things than work that make you tick is important the whole way through life. But when you get to retirement, if you don't have those things, boy, it makes retirement a whole lot more difficult, I think. Yeah, I think makes that's why a lot of people do go back to work because they're like, retirement was boring. I don't think it has to be. I really think if we're a little more intentional about cultivating some of those hobbies, some of those interests along the way, we don't have to be scared by retirement. I think it can be a good thing. We can lean into it really, really nicely. But yeah, that all to nothing, that cold turkey like you said, I think is understandably scary for a lot of people who aren't quite prepared. And let's talk about autonomy as well, Matt, because I think it's important to mention that retirement can be it's not this all or nothing thing and it can be kind of more of a choose your own adventure and choose how you approach it. It and our listeners and everyone out there is more in control of their future than they might feel like they are in the moment. And so when it comes to dialing in how much you need to save and invest for retirement, well, you have the ability to change a lot of factors in what retirement is going to cost you. So for instance, just because you live in a high cost of living state at the moment, it doesn't mean that you'll need to stay there when you reach retirement age. If you live in California right now, that doesn't mean you have to stay there when you reach retirement age. Some states don't tax your retirement income at all and that might influence you about where you decide to live. You might opt to stay close and not move anywhere because family and community are important to you. And those you don't want to move away, even though it's not necessarily the cheapest place to live. But the more flexible you can be, the more likely it is that you won't even need a million dollars in that 401k when you retire. And so if you're willing to make significant changes like moving to another state or maybe moving to another country altogether, you're going to find that your nest egg is going to be able to stretch much further than your current expenses might lead you to believe. It's a vastly different thing to retire in Hawaii than it is in Mississippi. Matt, when you look at the numbers like I think some recent stats just came out about that.

[C]

It might even feel like a different country. Moving from Hawaii to Alabama.

[B]

They're very different places. Very different places. But on top of that, you might move to. Choose to move to Thailand, Panama, Colombia, some of these really inexpensive places for expats where your dollar go. Maybe you're wanting to live that Caribbean lifestyle, but do it at a fraction of the cost. And that means you won't have to save or invest nearly as much either. There are other decisions you can make in that kind of choose your own adventure. Dial in how much you need for retirement scenario. But I think about, like, the cost of living and where you choose to live in retirement makes a massive difference. If you're able to even, like, sell a home that's worth $800,000 and then you rent a little beach shack in Panama for 1200amonth, just think about how long you can last even without having saved and invested much at all.

[C]

That's true. And you're just touching on location. Right. I think there are so many other things we also have control over. Just like the going back to designing your life and the different hobbies that you might want to pursue. Heads up. If you're going to get into golf, it's probably going to cost you a lot of money. And so you have control over whether or not that that's something you pursue. I was joking about getting into fancy wines a second ago, but this is a part of the reason why I actually have intentionally avoided. I feel like I put blinders on when it comes to nicer wines, because when I do have a nicer wine, I really like it and I don't want to learn more about it because if I get really into it, it's going to be something that I'm afraid I'm going to find myself pursuing even more.

[B]

Choose to pretend they don't exist, literally.

[C]

I absolutely do. I'm still willing to buy a decent bottle that's on sale there at Costco. But there are a lot of different things that we have control over. And I think it's important to remind ourselves of that as we are thinking ahead to our future. But we've discussed basically how it is we should be thinking about retirement and how much money we should be setting aside for the future. But we're going to dive into some of the practical steps. We're going to get into some of the nuts and bolts. That way you can legitimately determine how much it is that you're going to need to set aside for retirement. We'll get to that right after this. This message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, Navy Federal knows that you strive to do everything you can to bring cheer and joy to your loved ones. And as a credit union dedicated to serving all veterans, active duty and their families, they understand that every little bit counts.

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[B]

Yeah man, it was amazing. I went for one of the most glorious runs of my life along the waterfront front. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water.

[C]

Beautiful. I love it man. Yeah, for us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[B]

O plus with a kitchen like that, you save money eating out.

[C]

Yes, exactly. That's what struck me. What seems normal to a homeowner. It can be the thing that makes a guy guest trip really special.

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Whether you manage one property or 10, Lodify helps you run your rental like a real business. How to Money listeners get 20% off with code [e-mail]. Alright Matt, let's keep going. Let's talk about becoming a music millionaire. Whether or not that's a good goal. It is for some, it's not for others. Some people do need to save up 3 to 5 million if you're going to live that lavish retirement lifestyle that you've been dreaming of. But other people need a whole lot less. But we've talked about the need for flexibility. Makes me think of my mother in law who said, you know what we want to do? We want to retire and get in an rv. They bought the rv, they lived in it for six months and they said we hate this thing and they had to ditch it. And so you don't know really what your retirement lifestyle is going to look like until you get there. And so you have to plan kind.

[C]

Of, you might think, you know, yeah, but you may not.

[B]

And you got to plan for kind of a multitude of potential circumstances. But let's now talk about kind of some of the practical steps. Even though there's a lot of unknown when it comes to planning for our retirement future, some of the practical steps to get to the end goal that makes the most sense for you. And so we would say first calculate how much you might need. And I stress might because there are still so many unknowns like we've talked about already. Instead of throwing in the towel because 3.9 million feels like an impossible goal or just, you know, saving as much as humanly possible, even though you wish you could be spending a bit more in the here and now, use some math to your advantage. So use data to help you understand what your actual needs are likely to be. And I mentioned this briefly earlier and I talked about how it's an imperfect calculation, but 25x your likely annual expenses gets you a decent understanding of what you should likely be shooting for. And again because of inflation, because of time, a variety of factors, the fact that it's but it's hard to predict what our outgoing expenses are going to be every single month with accuracy, especially when we're talking about 30 years down the road. It is imperfect, but it is helpful. So for example, let's say you're spending $35,000 a year as a family annually right now because you're hyper frugal. Well, you might want to say, what if it was $60,000 by the time we get to retirement? $60,000 times 25 gives you $1.5 million. Maybe that's the number you need to be shooting for. I think it's at least a good rule of thumb. Then it's a good starting point.

[C]

That's right. Yeah. And so the 25 times rule is based on the safe withdrawal rate of 4%. And we're not going to dive into like the research and all the studies that this is based, but just know that the 25x rule that, that is based on the safe withdrawal rate of 4%. And a practice that we would recommend is for you to track your net worth if this is not something that you're already doing. We, we talked about this back in episode 257. And also your net worth is not going to go up like clockwork every single year. But the general trend should be up and to the right. By the way, don't start to think that your personal worth is tied up in your actual net worth and how much money you have. That's, that's a bit ridiculous. But do add up your assets, add up your liabilities, and do the math to figure out your net worth on an annual or a semiannual basis. You can do that this either manually or you can check out Empower, that was. It used to be called personal capital. But that's another great way to automatically track that. But it is just a great way to follow your progress and to see how you're doing over time. Because it's amazing how. Maybe it's not amazing actually. Maybe it's discouraging how it can feel like you're moving just at a snail's pace, how you're just moving inches in those first few years, but then it feels like you're moving feet at a time, maybe after a decade, much bigger strides. I can't imagine what it'll look like, like for us, like when we get to be Warren Buffett's age and by the way, the vast majority of his wealth, it's come after retirement age, thanks to the power of compounding returns. And so hopefully when you calculate how much you need to have set aside in your portfolio to retire, right, you multiplied your annual expenses by 25 in order to figure out that dollar amount. Hopefully you are encouraged. But even still, I think there might be some individuals who might be slightly discouraged because it still feels like this massive sum of money. But I just touched on compounding returns. And what I want to highlight here is that because you might be saying to yourself, there's no way I'm going to be able to close that gap. This is how much I have currently. I did the net worth thing. This is how much I need, how it's like I'm not going to be able to bridge that gap. And what I'm here to say is that it's not completely up to you in order to set us. It's not savings, right, like we're talking about investing here. So it's not how much and how hard it is that you can work in order to bridge that gap. It also comes down to how hard your money is going to work when it comes to bridging that gap and making up the difference.

[B]

The amount of money you're going to have in retirement is going to be far in excess of what you contributed because of compounding returns. Let's talk about that. One of the most practical ways to get to the point where you have enough in retirement is to stick money into those tax advantaged retirement accounts accounts. And most millionaires, Matt, they actually achieve that millionaire status purely directly by investing in retirement accounts through work. It's crazy, but it's true. A lot of people assume that it's through an inheritance or through having some big time job. But no, that's not the case. There are so many retirement account millionaires that make up a big bulk of the millionaire class they got there over the decades. And so if you're contributing something like 2, 3, 4% of your income into a retirement account account, it's probably not going to be enough to propel you towards millionaire status. Unless your salary is ridiculously high, in which case, true, you probably are going to need more money because you're spending most of that. But if you can sock away 15 + percent of your pay + snagging a company match at the same time, that will make it quite likely that over the years and the decades, you're going to easily achieve that mantle. You're going to be able to have that status of retirement account millionaire. And so in 2023, workers can contribute a maximum of $22,500 per year to tax deferred plans like a 401K or a 403B, which would translate to, if you did this over 30 years of your working career, $675,000 of total contributions. But if you do quick math, assuming a 7% annual return, which is pretty online historically, the contributions would grow to be worth over $2 million over those decades. So we're talking about saving up basically less than a third of what you would have over time, which is pretty cool. So, granted, 22.5 is a lot to be able to set aside to invest in a single year, and especially trying to do that every single year over 30 years, not necessarily easy, but it just goes to show you, even if you did, if you did half of that, you would be over a million dollars in those decades. So just important to note that this is one of the easiest, best ways to get there, slowly but surely by making those contributions with every paycheck.

[C]

When it comes to, like, a way to illustrate compounding growth is imagine a pond, and it's got a lily pad there. The pond. And at the end of the month, right? So say you're starting out on day one. Say by day 31, the pond is going to be completely covered in lily pads. This is a lily pad that likes to multiply by 100%. It doubles every single day. And if you were to ask somebody, okay, hey, when is that pond going to be halfway covered in lily pads?

[B]

A lot of people would say day 16.

[C]

The way our minds work, we think linearly, and we think, oh, yeah, I'm about halfway through the month. When in fact, if you think about it for maybe a second longer, you realize, oh, no, no, it's literally day 30. It's the day before the last day of the month that the lily pads only cover half of the pond. And so that is the power of compounding. Granted, you're not, like, you're not going to see 100% returns within your portfolio. But the idea here is just to illustrate the power of compounding. Angel, you were just talking about how you would sock away $675,000 in total contributions if you have a workplace retirement account, and how that's much less than the 2 million total that you would have at the end of your working career. But if you don't have access to an actual workplace retirement account, you can still become a millionaire by only simply maxing out a Roth IRA. And so instead of socking away just over $22,000 a year, you've only got to invest 6,500. And you do that for roughly 37 years. And it's very, very likely that you're going to have seven figures on hand. And so keep that in mind as well. You don't have to have have a 401k with a sweet match in order to hit that millionaire status. And another Recommendation for folks turn on automatic increases for your contributions. The amount that you are putting towards retirement. If you do have a workplace retirement account and this is just a simple way to that you are going to be able to set it and forget it. You just make that, that quote unquote hard decision just once and your contributions are going to increase maybe 1 or 2% each year. Man. Like when Warren Buffett, he was asked about why more people don't copy his approach when it comes to investing. He said that it's because nobody wants to get rich slowly. And man, he is totally right because the sexy, the unproven route it holds appeal to so many folks. But nobody wants to map out a game plan for the next 30 years. But it is going to be the most sure fire way to actually become a millionaire.

[B]

Yeah, a lot of people say they envy Warren Buffett or they look at him with admiration, but most people don't want to follow that path. That's the allure of crypto, right? That's the allure of NFTs or single stocks. It is to be able to go to the moon really quickly. But most people end up getting burned and it only prolongs their ability to reach financial independence to meaningfully build wealth for their future. And getting rich slowly is the surefire way to do it. But you're right, it takes more time than most people want to give. And this is an instance, Matt, when it really pays to keep things incredibly boring by investing in low index funds. Which yeah, investing doesn't need to be sexy and shouldn't be sexy if you want to become a millionaire. If you want that super fun investing, the lights, the bells and the whistles, you're less likely to get there. And instead we want you to focus on ways that you can afford to increase those contributions over time. How can you dial those up little by little over time? You talked about automatically increasing contributions every year. I think that's one good way to do it. Also, I want to make an argument for being frugal and being able to invest more of your income over the years and decades because it really adds up. And I think one thing that can help us to do that, we just talked about it in a recent how to Money newsletter was using the rule of 173 to your advantage so you can see how much current recurring expenses are actually costing you. The truth is we all have small leaks in our financial lives and a lot of them are happening on a recurring basis, like subscriptions that we sometimes even forget about. But plugging a bunch of small leaks, it doesn't feel like it's going to have a massive impact over just the course of a single month. But the rule of 173 helps us understand just how much those recurring drips are costing us over the course of a decade. Because that helps us see not just how much is leaving our account, but that amount plus the market returns we're missing out on. So how do you use this rule? Well, just multiply that monthly expense by 173 and you'll see the amount of money you would have had over the course of a decade had you reigned in that expense and invested it instead. So let's say you are spending too much eating out, which is a problem for most Americans. Let's say you spend a hundred dollars less on eating out, you're able to cut that budget back. That's $17,300 more in your retirement account after just 10 years. Which just helps put a small leak in perspective as to how much you could actually grow that money over time if you were to do something better with it instead of using it on Uber eats and all that stuff.

[C]

That's true. And by the way, you said cut back a hundred dollars. You didn't say just to eliminate it complet still go out to a restaurant here and there, but the ability just to rein in some of your of your expenses. The rule of 173 helps put that in perspective.

[B]

Well, like we talked recently on a Friday flight about how Americans are spending more eating out than they are on groceries. And if you would just flip that equation a little bit, you can easily find 100 bucks.

[C]

That's right. Yeah. And so these different calculations, like these are just simple rules of thumb that it shouldn't be the final say as to how much you're going to have after 10 years or how much you need to have have set aside for retirement. But they should help you to have a decent understanding of how much you'll need to set aside. But the bottom line is that there are so many other considerations like whether you're going to have other sources of income beyond what you've invested in retirement accounts. You need to consider how much you're going to be receiving in Social Security payments that are coming in. Do you have some rental property, do you have some pension income? Maybe you're going to continue to work part time like we talked about earlier, as you might be considering some different ways to transition from that full time high paying job to that maybe doesn't pay quite as Much. So the more flexible you can be, the more options you'll have. And you certainly want to make sure that you take into account some of the additional sources of income that you're going to have in addition to how much you've socked away for retirement.

[B]

Yeah, I'm glad you mentioned Social Security. That's one of those things too, that you have if you're more flexible, if you can delay, you know, if it makes sense for you to delay. And then if you can delay taking Social Security until later 60s or you hit 70, which almost nobody does, but if you do that, you can get a guarantee, guaranteed 8% return every single year you wait to take it. And that can make a massive difference in the amounts you're able to collect in that check. Meaning you have to invest less for your future, too, because Social Security is carrying more of the burden. It's meaning more of your monthly expense. And a lot of people, I think, especially younger folks, they're down on the role that Social Security is going to play in their retirement. And we certainly don't want that to be your main source of income when you stop working. We want you to be proactive, taking care of your retirement future now as you invest for the long haul. But for a lot of retirees, Matt, it is. It is the main source of income. And so even with the awkward spot that Social Security is in from a political perspective, you and I, we've talked about this. We still expect that at minimum, you're going to get paid 75% of the amount that the Social Security administration says you're due. We need to make changes to shore Social Security up for years and decades to come. And there doesn't seem to be the political will to actually make that happen. But for those, even for gen zers out there thinking, well, I'm not counting on Social Security, I mean, I think you need to invest and save for your own future. And you don't want to count on it exclusively, of course, but to assume that there's not going to be any Social Security would be highly unlikely. There would be some.

[C]

Yeah, Heads will roll before entitlements are.

[B]

There are going to be a lot of politicians at office if that's the case.

[C]

Yeah. So let's close this with the great words of Thomas Sowell. And he's got a quote where he says that there are no solutions, there are only trade offs. And I think that it's no surprise that we're drawn to different headlines that tout specific numbers that we should be Shooting for. I think we're oftentimes looking for a way to simplify things. Right. Like, like we live in a very chaotic world and when there is chaos like this, I think we are as individuals, we try to create some clarity and we try to attach our goals and our sights to something that feels very tangible. Yeah, saving for retirement, that is, that is not an easy endeavor when it comes to cobbling together multiple sources, whether that's through your Roth IRA, maybe a little bit, a little bit of 401k, maybe a little bit of rental income, a little bit of Social Security. It is complex and it is difficult. And because of that, oftentimes we are looking for just a very simple, easy answer. There are no simple, easy answers. But hopefully we have been able to reframe how it is that you think about retirement and that that will give you some actionable steps to help inform how it is that you think about retirement, but also actual steps that you can actually take that will allow you to get there to not just feel like you're going to be prepared for the future, but to actually get prepared and to be prepared by the time you reach those later years or to.

[B]

Realize that you already are preparing well because you're already investing 19, 20% of your income and you're like, I'm, I'm well on my way. It feels like I need to do more, but maybe I don't.

[C]

Yeah, you happen to strike it just right. You're not over saving. Somehow you are living life in the here and now. You are finding balance while also saving for the future.

[B]

You've reached that Goldilocks level, which is great. But I think, yeah, going back to kind of what I talked about at the very, very beginning, that Sherlock Holmes approach, like do some observing, ask some questions and keep doing that over the years. It's not, I don't think it's a one time conversation or a one time thing. You have to kind of keep going back to that. How are we doing on our progress?

[C]

Constantly evolves.

[B]

And that's why you mentioned tracking your net worth. That comes into play too. But the more we're kind of following along and seeing how we're doing in our progress and are we continuing to save and invest at the rates we hoped, at the rates we need to in order to achieve the goal that we have, that's going to be different than everyone else's goal because we all have hyper unique situations. I think that that's an important ongoing conversation. But Matt, let's get back to the beer we had on this episode. This was kind of called Double Clutch Nitro Oatmeal stouts. This was from a brewery in Wyoming called Gruner Brothers. What was your take on this one?

[C]

I would say it was incredibly smooth with the nitro that they had in this can. So any, any beers out there that are. They're not fermented, they're just, I guess pumped with nitro. They're going to come out really silky. If you're a fan of Guinness, you would be a fan of this beer because it's not carbonated with CO2 actual carbonation, but it's with nitro.

[B]

Yeah, it does, I guess.

[C]

Is it nitrogen dioxide?

[B]

Is that the I gu. The two things I wrote down were Guinness and silky, like what you mentioned both words because it does have massive Guinness vibes with a little more of an oatmeal vibe going through because it is an oatmeal stout. So. But yeah, if you like Guinness, this is kind of one of those beers.

[C]

It would be totally up your alley.

[B]

You would love. I personally do like Guinness. I typically, I don't drink it very often. It's been a long time.

[C]

Same.

[B]

But as. And by the way, did you realize Guinness is actually one of the lower calorie beers out there? Surprisingly, people don't think so.

[C]

Interesting.

[B]

Because it's so, it feels so heavy and bready and stuff like that.

[C]

People think that it's heavy.

[B]

Yeah, but it's not. It's actually locale. But yeah, I think Guinness is a great beer and I think this one was kind of in that vein. Just as good. Probably a little bit better actually.

[C]

Well, it's called double clutch. Do you know what that's referring to?

[B]

Is it like an old van or. It looks like some sort of old truck that had two. Two clutches?

[C]

Well, yeah, yeah. So I think with like. I think tractor trailers still have to do this, but you have to double clutch, which means you have to push the clutch down in order to pull out of the gear, but then you have to repress it again in order to get it into the next gear. So it's double clutch.

[B]

I will say I miss driving a manual transmission car. I will do it again someday. And I hear that coming back into vogue a little bit.

[C]

Did I, did I tell you about driving my buddies? He's got like a. It's like a 70s or maybe early 80s FJ. Toyota FJ. Oh, no, obviously it was a manual four speed, but definitely drives like an.

[B]

Old truck or like an old tractor basically.

[C]

And I will say I'm pat myself on the back. I didn't stall out once.

[B]

Look at you. Yeah, I probably would stall. Like, it's been so long. It's been so long.

[C]

So long for me as well. Yeah. I was so nervous trying to parallel park an old FJ on a city street. Yeah. I was sweating bullets.

[B]

I get it. I would be too. I would be too. I still remember those first days driving Emmanuel. It was not pretty. I stalling out on main roads and stuff like that.

[C]

Stalling out on a hill.

[B]

Yes.

[C]

What's more terrifying than that's the worst.

[B]

Especially when someone's like, right up on your bumper, you're like, I'm going to kill them.

[C]

Yep.

[B]

Yeah.

[C]

Please back up.

[B]

All right, well, that's going to do it. For this episode. You can find show notes, links to some of the resources we mentioned up on our [e-mail] don't forget about the how to Money newsletter. Just go to howtomoney.com newsletter. Sign up for that. It's free, it's fun, it's informative, and you'll get it in your inbox every Tuesday morning. But Matt, that's going to do it for this episode. Until next time, best friends out.

[C]

Best friends out. Did you know Microsoft has officially ended Support for Windows 10 upgrade to Windows 11 with an LG Gram laptop? Voted PCMag's Reader's Choice top laptop brand for 2025. Thin and ultra lightweight, the LG Gram keeps you productive anywhere. And Windows 11 gives you access to free security updates and ongoing feature upgrades. Visit LGUSA.com iHeart for great seasonal savings on LG Gram laptops with Windows 11. PCMag reader's choice used with permission. All rights reserved at CVS.

[A]

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With an IFIT contract worth $250,000.

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This is where mindset comes in.

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Someone will be eliminated.

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Is an iHeart podcast. Guaranteed human.