What's your process for paying yourself in retirement? Let us know in the comments

That opening comment from Eric about how his and Laura's relationship has changed (for the better) since she pulled the trigger on retirement was fantastic. I think for all of us considering the same path that's a great piece of validation of the "why".

The unloading of that employment related stress that most of us don't even recognize is on us, is a HUGE relief. For the first time in our lives we begin to understand the meaning of "peace of mind".

@TwoSidesOfFI

Ай бұрын

100%

@sewnsew6770

28 күн бұрын

Have been seriously considering retiring for that reason But want to be sure money is there to support the family long term Looking out 30 years is impossible

I thought I would closely track my spending, but I have only been casually tracking my cash accounts. I had an idea how much I needed each year and after 3 years I have been spending a little less than that. I update my net worth statement annually, which lets me know if I'm staying on track. It's been a big change from how nerdy I was being before retirement.

Time freedom is a beautiful thing.

@TwoSidesOfFI

Ай бұрын

100%

We harvest dividends in taxable accounts. Then pull enough money from an IRA account for our needs/plans but minimize taxes based on stacking of capital gains and ordinary income.

Very helpful! Thank you

Great topic. Keep up the good work.

@TwoSidesOfFI

Ай бұрын

🙏

Thank you guys!

love your show and love Erns toolbox. I was looking for a cape based program for years before i saw some of his stuff online and your episodes really helped me understand how to use it.

@TwoSidesOfFI

Ай бұрын

Thank you for your support 🙏

Congratulations on rediscovering each other, Eric and Laura. I've noticed (2 months pre launch) that we have a new energy and perspective that IS like dating again.

@TwoSidesOfFI

Ай бұрын

Thank you! The countdown is on for you...congrats!

Always something new to think about when listening to your podcast. Great fun as usual. Thank you. Would love to know had Jason used the standard SWR (4% rule) what would the % have been last 2 years. I am hoping to use 3.5% but thinking it might ne too close to the edge.

Hi Jason. Have you looked back to compare where your portfolio would be using a 4% swr as is instead of a cape-based strategy? I know its still a small sample size, but curious to know how they stack up against each other.

Did not expect the blancolirio reference. I also watch all of his videos :)

@TwoSidesOfFI

Ай бұрын

he's great, right? too bad we cut out the part where we exchanged our respective imitations of Juan Browne

@alastairford7145

Ай бұрын

+1 for blancolirio - discovered his channel and yours during lockdown, and remain a firm fan of both.

Jason are you using the cash flow assist tab in your process? Thanks for the Safe Withdrawal Toolbox series. Good stuff!!

@TwoSidesOfFI

Ай бұрын

Details here: twosidesoffi.com/toolbox/

Great show fellas. All of our rental income just flows into our checking account and then we put anything left over in a High Yield SA and then when it builds up we just buy ETFs. I guess it's the opposite for us than for those who have money in different types of accounts.

@TwoSidesOfFI

Ай бұрын

Thanks Jeff...makes perfect sense for your AA heavily weighted towards RE.

Lads I don't understand half of what Yee are discussing, but it's always interesting

In flames 0:52 🤘 Nice! Super happy for her

@TwoSidesOfFI

Ай бұрын

\m/ jesterhead \m/

Love your podcast--love the banter! I started watching a few months ago b/c of your clear explanation of how to use the Big ERN's SWR tool. At your suggestion, I was playing around with the Case Study tab from the tool and saw that a Glidepath shows better returns for every starting year I randomly plugged in. Do you use a Glidepath approach for your portfolio? I'd love to see a future Podcast on Two Sides of FI on how to implement the equity Glidepath in retirement. Thanks!

Great show guys. Been wondering what you would consider to be a really big purchase in retirement (something fun like an expensive sports car or jewelry) and how you would feel about it after the fact (buyers r we Morse, etc). Keep up the solid. work.

I love listening to you both especially with your wives!

@TwoSidesOfFI

28 күн бұрын

🙏

Eric and Jason, great video. Curious, are you using an a (intercept) of 1.75% in the CAPE SWR?

@TwoSidesOfFI

Ай бұрын

Thanks! I use 1.50 as it's a little more conservative. :)

I’m just thankful that I will have a federal pension, and I don’t have to worry about downsizing my portfolio. I plan on living off of my pension and my wife’s pension, and never drawing a penny from our investments. Fingers crossed.

@TwoSidesOfFI

28 күн бұрын

Sounds great. Do you have a plan for the investments? Legacy, giving, or otherwise?

@janitoronfire

28 күн бұрын

@@TwoSidesOfFI my wife and I contribute to the C fund in the thrift savings plan. It's basically an S&P 500 index. We also have a small Roth each thru Vanguard. We have two rental properties and we will both a federal pension and social security. I am eligible to retire as soon as June 29th at the age of 56.5 She has 8 years to go before she is eligible at age 57. We plan to travel as much as possible to low cost countries.

Do you have a video or more info on the cape?

@TwoSidesOfFI

Ай бұрын

yes! check out kzread.info/dash/bejne/nYSXmtCgY9a_cpM.html and if you'd like even more background on the tool and how we use it, you can find all SWR content and links to related information at twosidesoffi.com/toolbox/

I'm interested in your tax spreadsheet. I'm still accumulating but I try and estimate quarterly with some assumptions during decumulation.

@TwoSidesOfFI

Ай бұрын

Here's the spreadsheet I mentioned in the video: bit.ly/taxspreadsheet

Curious, do we know the probability of failure of the values from the CAPE tab (say if you use an intercept of 1.5%)?

@TwoSidesOfFI

Ай бұрын

If you stay within the parameters of the tool, the failure rate is zero.

Great topic and fellow Karsten SWR sheet user. Question on the Target Withdrawal (%pa) result on the CAPE-based rule sheet. If you leverage the Cash Flow Assist tab fully (income/expenses populated) do you view that earlier result (%pa) as wiggle room in being able to spend more, x%? My results fortunately have a small 1-2% positive value there after I full leverage the Cash Flow Assist tab. thanks and enjoy the channel!

Is that CAPE withdrawal strategy jut for US investors? (CAPE is just for US equities?)

My wife and I both got a good chuckle with Jay's comment about Lori not wanting the details of the CAPE ratio spreadsheet. My wife says the same: "I don't want the nuts and bolts; are we doing ok?"

@TwoSidesOfFI

28 күн бұрын

😂

Keep in mind that the 2% average inflation rate, and other assumptions, are for the life of your plan. Just because inflation is high today doesn't mean it will be continually high for the next 30 years.

@TwoSidesOfFI

28 күн бұрын

Very true

What "bonds" do you own, bond funds or specific bonds associated with your timeline?

@TwoSidesOfFI

Ай бұрын

We're index investors, so own bond funds. We prefer the ease of this approach vs. laddering.

In Flames! Yeah!! 😀

@TwoSidesOfFI

Ай бұрын

Respect! \m/

@thurianknight

Ай бұрын

Also, I am just over 5 weeks from retirement. Watching you guys talk about your FIRE journeys for the last couple of years has been an inspiration for me.

@TwoSidesOfFI

Ай бұрын

Congrats, the countdown is on for you!

@TwoSidesOfFI

Ай бұрын

@@thurianknight Thanks so much for your support. You're in the home stretch! Best wishes to you

Where are you keeping things such as sinking funds for large items like a new roof or new a/c unit? I'm having trouble segregating emergency funds, long terms sinking funds and accounts for large dollar deductibles like homeowner's insurance.

@TwoSidesOfFI

Ай бұрын

Larger, long term sums are kept in money market funds in my brokerage acct, while shorter term expenses are kept in checking. I keep the latter organized in my budget (I use YNAB) as separate line items.

@KG-oe8oo

Ай бұрын

@@TwoSidesOfFI thanks! I think because my pot of money is so small, keeping them in cash or money market funds puts me over a 5% allocation to cash LOL!

@likethesky

Ай бұрын

That was going to be my follow up question for Jason @twosidesoffi which is: are all of your sinking funds a portion of your 5%? Meaning maybe 2-3% of cash is earmarked (but not usually spent) and the other 2-3% is just for monthly checks? I’m sure you’ve seen Karsten’s thoughts on buckets just being an illusion, so the only real need is to avoid rebalancing more often.

@TwoSidesOfFI

Ай бұрын

@@likethesky none of my sinking funds are a part of my 5% cash allocation. I also don't follow a bucket strategy.

@likethesky

Ай бұрын

@@TwoSidesOfFI hmmm, I don’t understand. Isn’t a bucket strategy any allocation to cash? (Other than monthly or quarterly cash raising from “whichever side (bonds or equities)” is needed to return you closer to your desired asset allocation, or equal from each if AA hasn’t shifted due to market?)

What do think of the critique of CAPE that Shiller's views on what CAPE value is a predictor of poor returns have been criticized as overly pessimistic and based on the original definition of CAPE, which fails to take into account changes in accounting standards in 1990s, which, according to Jeremy Siegel, produce understated earnings. (Right off of Wikipedia)

@TwoSidesOfFI

Ай бұрын

Karsten writes about this here (we like his thinking): earlyretirementnow.com/2022/10/05/building-a-better-cape-ratio/

Are you guys take into account that you can no longer spend so much, especially in the last years of your life? I'd rather spend the money at 60 than at 92. I've read the book with zero and find the whole thing extremely exciting and sensible. My grandparents are well into their 80s and spend almost nothing anymore...they did alreday the big world tour etc..

Re: the "morbid" process of decreasing your months-remaining-to-live on ERN's spreadsheet, what's the plan if you end up living, say, 100 months longer than anticipated?

@TwoSidesOfFI

Ай бұрын

this is why I've always picked 95 or 100. I don't have to worry about it. -J

I heard that comment from Eric at the end about leaving the show! I mean, understandably you may be too busy enjoying life! I keep hoping you guys will pick me for a case study in "how to do it all wrong but NOT be broke" LOL! Have all of your retirement in tax deferred accounts (traditional instead of Roth) without enough time to switch to Roth? CHECK! Have all of your assets that would have preferential tax treatment (stocks eligible to be taxed at capital gains rates) in your 401k so they are eventually taxed as ordinary income upon withdrawal while having all of your regular interest assets outside a tax advantaged account so they are ALSO taxed as ordinary income CHECK! Think you can time the market before finding the FIRE community and get out of the market at the exact wrong time while also getting back in at the exact wrong time? CHECK Pay off your 2.5% 15 year mortgage in 7 years rather than pay the minimum and invest the excess? CHECK! Overcomplicate your finances by spending an enormous amount of time tracking expenses and moving money to get every last bit of interest? CHECK! Can't figure out whether you will have plenty of money in retirement due to social security and a pension while also wondering if you will go broke and end up eating cat food and living in a cardboard box? CHECK! Seriously, it's not as bad as all of that but if you're ever looking for a case study, I'm still your gal! LOL! I did take your advice from a prior episode and changed the value of my real estate on my net worth statement from a loose current market value to purchase price. It was a gut punch to take that much value off (my house has easily doubled in value) but it was fun to see my net worth eventually come back excluding the increased real estate value.

@Billybobthor

Ай бұрын

If it’s any consolation I’ve checked a few of those off the list too. I think you have to make some mistakes along the way. The goal is to make small ones, like paying off your 3% mortgage early ✅, putting your money market cash into your taxable account ✅. And just be diligent with living modestly and saving and investing over the years. That’s actually the part that most people can’t actually put into practice.