WEEK 6 ICEBREAKER – WHat IT TAKES TO “GO FIRE”

What is really involved in “Going FIRE”. Do you simply save 25 times your annual spending then walk into work and tell your boss to “piss off”? Find out “how to FIRE “with these videos.

To Retire Early with $2.5 Million We Took These Actions (13 minutes)

Key Takeaways

• Calculate you FIRE Number
• Calculate your Savings Rate – perform a quick and dirty calculation. Don’t obsess about creating weighted values to account for pre-tax vs post-tax savings.
• Create an Investment Plan, maximize Retirement Accounts first, then other tax-preferred accounts, then taxable investments
• Understand your Withdrawal Plan aka your “Draw Down Strategy” particularly if retiring before age 59.5, for example a Roth Conversion ladder, 72T – taking at least five substantially equal periodic payments (SEPPs), Dividend Stock payments from a taxable brokerage account, then later Pensions and/or Social Security
• Develop a Phased Plan if you plan to retire before age 65. Medicare and Social Security start in your 60s, plan how you will support yourself throughout the different phases of your retirement. Consider that you may need more support in your later years, from hiring people to clean your gutters to an assisted living facility.
• Plan for Worse Case Scenario – hold sufficient insurance, have a plan to support elderly parents if necessary, create your plan if your kid goes to private college instead of a state university
• Create a Side Hustle – develop multiple streams of income, these will speed your progress toward financial independence as well as provide protection from misfortunes, such as a layoff. These could also be restarted in early retirement during market downturn years if you would like an additional financial buffer.
• Optimize your Money Mindset – think positively and creatively about how to reach your financial goals

Discussion Questions:

Does FIRE seem overwhelming? Or totally achievable?

What would you do if you did not have a “day job”?

Why Financial Flexibility Is the Most UNDERRATED Key to Financial Success (17 minutes)

Key Takeaways

There are a ton of numbers flying throughout this video. In summary, if you are able to significantly reduce your spending in retirement during market downturn years, you can:

A – Withdraw money at a significantly higher rate during good and average market years

OR

B – Retire with significantly less money saved

Discussion Questions

This concept lends itself to some interesting creative solutions.

Perhaps you love hosting friends and family. Maybe you live in a sweet house with lots of spare rooms in a vacation town and spend the good market years hosting family and friends to week-long visits with fun barbeques and clambakes. Then during market downturn years, you retreat to the tiny house on the back corner of your property and rent out the big house, and spend the year inexpensively visiting the family and friends you hosted during the good years.

What creative solutions can you think of to significantly reduce spending during market downturns during retirement?

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