Motley Fool Money – Retirement Tools and Affording Impulse Purchases

Host: Robert Brokamp
Guest: Sean Gates, Financial Planner, Motley Fool Wealth Management
Date: September 20, 2025

Episode Overview

This Saturday edition of Motley Fool Money focuses on two core themes:

• Financial impact of recent Federal Reserve rate cuts and their effects on savings, loans, and investment options.
• A deep-dive discussion on choosing high-quality retirement calculators, including what to look for, red flags, and tool recommendations.

Additional segments offer practical personal finance advice, like applying the “0.01% rule” for impulse purchases and tips to keep your job skills relevant in a slowing labor market.

Key Topics & Discussions

1. Federal Reserve Rate Cut & Financial Impacts

[00:00 – 04:40]

• The Fed recently cut its funds rate by 0.25% and signaled more rate cuts ahead.
• Quote:

  “We have two-sided risks, which means there is no risk-free path. Still, I think it’s likely that more cuts are coming.”
  – Robert Brokamp [01:06]

• Immediate effects:
  • Prime rate: Drops quickly, impacting home equity loans, auto loans, credit card balances, and possibly 401(k) loans.
  • Bond rates & mortgage rates: May already reflect anticipated cuts. 30-year mortgage rate is now 6.22%.
  • Cash & money market rates: Expected to drop further—consider locking in higher yields with short-term Treasuries or CDs.
• Personal Finance Tip: Consider the timing of CD or Treasury purchases for near-term savings.

2. REITs Turn 65: A Real Estate Investment Perspective

[04:41 – 06:02]

• REITs (Real Estate Investment Trusts) were created in 1960, providing investors access to diversified real estate portfolios.
• Highlight: REITs’ long-term returns (11% since 1972) are in line with the S&P 500, though their year-over-year performance can diverge, offering diversification.
• Yield comparison:
  • Vanguard Real Estate ETF (VNQ): 3.8%
  • S&P 500: 1.2%
• Current climate: Rising rates since 2022 have hurt REITs, but falling rates could become a tailwind soon.

3. The 0.01% Rule for Impulse Purchases

[06:03 – 06:21]

• Rule by Nick Maggiulli: If an impulse purchase is less than 0.01% of your net worth, don’t sweat it.
  • For $100,000 net worth: Spend up to $10 guilt-free.
  • $500,000 net worth: Spend $50.
• Insight: Used sparingly, this rule can help balance frugality with enjoying small comforts.
• Quote:

  “You’re likely not jeopardizing your future finances with purchases that are 0.01% of your net worth. ... For some people, the rule will say no...for others, it’ll give them permission to relax and, you know, maybe live a little.”
  – Robert Brokamp [06:18]

4. Choosing a High-Quality Retirement Calculator

[06:22 – 22:21]
Guest: Sean Gates

a) Why Retirement Calculators Matter

[06:58 – 07:59]

• Calculators help people avoiding professional fees get quick answers to complex questions like: Am I saving enough?
• Importance: “You can't do it in your head. You need some sort of tool to do it for you.” – Robert Brokamp [07:22]
• Visualization & year-by-year feedback help adjust plans as circumstances change.

b) What Makes a Good (or Bad) Calculator?

[07:59 – 12:13]

• Many tools are inaccurate—2018 study found “the majority of tools are inaccurate, making it dangerous for the public to trust tool outcomes.” – Robert Brokamp [08:06]

• Most calculators use conservative assumptions, which can scare users into over-saving.

• Key features to seek:

  • Shows year-by-year cash flows (income, tax, outflows)
  • Allows customization: account types (Roth, traditional, taxable), Social Security assumptions, investment return inputs, life expectancy, inflation.
  • Red Flags: No account Type distinction, uneditable defaults, lack of transparency, insufficient life expectancy settings.

• Quote:

  “If you can’t see what’s happening from your inputs as a resolution on the outputs, how do you address...course-correct?”
  – Sean Gates [08:46]

c) Tool Recommendations & Comparisons

[12:13 – 20:51]

• Calc XML Comprehensive Retirement Planning Module

  • Free, customizable, breaks spending into “go-go,” “slow-go,” and “no-go” years.
  • Distinguishes Roth/traditional/taxable accounts, inflation, salary raises.
  • Drawbacks: Little explanation, no support, assumes portfolio grows at fixed annual rate.

• Projection Lab

  • Highly customizable, $100–$150/year (with free tier).
  • Supports Monte Carlo simulation:

    “It’s a mathematical probability engine...gives you a chance of success, an average chance of success that each of those individualized trials run out at.”
    – Sean Gates [15:38]

  • Allows “what-if” scenario planning, easy data export/import for collaboration.
  • Drawback: Steep learning curve, can be overwhelming due to many customization options.

• Other Mentioned Tools:

  • Bolden (formerly New Retirement): Robust, $144/year, Motley Fool Ventures investor.
  • Maxifi: Developed by economist Larry Kotlikoff, $109–$149/year, great for Roth conversion analysis.
  • cFIREsim: Free, open-source, strong for “Financial Independence, Retire Early” (FIRE) planning.

• Advice:

  “Using a few of them is a good way to get a second or third opinion about your retirement. ... Retirement is such an important goal, it’s worth the money to put in that extra investment.”
  – Robert Brokamp [20:51]

d) Cautions & Final Advice

[21:13 – 22:21]

• Even well-done DIY plans can have 20% error due to compounding small mistakes over decades.
• Suggestion:

  “Do use these. They’re cheap, they help you get informed. But then enlist a community or a professional to help gut check your assumptions because there's going to be one that you missed.”
  – Sean Gates [21:34]

5. Job Market Update & Personal Growth

[22:46 – End]

• The job market is slowing; US job growth under 1% this year—the weakest since 2021.
• Historically, this pattern has signaled recession and future unemployment spikes.
• Actionable Tip:

  “I aim to be able to update my resume every year with a new skill, a new designation, maybe a new degree, or just some sort of accomplishment...”
  – Robert Brokamp [22:59]

• Example: Brokamp passed the Enrolled Agent exams as a way to improve professional competence and volunteer with the IRS's VITA (Volunteer Income Tax Assistance) program.
• Volunteering is suggested as both a resume booster and a path to helping your community.

Notable Quotes & Memorable Moments

• “[Retirement calculators] are purposefully overly scary. ... most people die with, well, more money than they need.”
  – Sean Gates [08:23]
• “If I see a calculator that doesn’t ask for the type of account, whether it’s Roth or traditional, that makes me a little suspicious.”
  – Robert Brokamp [10:09]
• “The simplest free tool is not always the most accurate. Sometimes, it's worth a modest investment to get robust features and more realistic projections.”
  – Paraphrased from Robert Brokamp [14:22 & 20:51]
• “...those small MIS inputs can make huge outcome differences in something like the tool.”
  – Sean Gates [21:34]

Key Timestamps

• 00:00: Fed rate cut & financial impacts
• 04:41: History & role of REITs
• 06:03: The 0.01% rule for impulse spending
• 06:22: Intro to Sean Gates & retirement calculators
• 12:13: Calc XML walkthrough
• 14:22: Projection Lab review
• 19:46: Other tool recommendations
• 21:13: Calculator cautions and final thoughts
• 22:46: Job market warning & personal skill-building advice

Takeaways

• Pay attention to falling interest rates; act now to lock in higher returns on savings.
• Use retirement calculators with robust, customizable features and transparency.
• Consider multiple calculators to “triangulate” your retirement outlook.
• Avoid putting too much faith in a single tool and always gut-check assumptions—preferably with a trusted expert or peer group.
• Be proactive about upskilling and giving back, especially as economic headwinds appear.

For more details, see the transcript or visit Motley Fool Money’s website.