July 24, 2025 • 17 mins
The hardest part of retirement isn’t always financial, it’s psychological. For many, stepping away from work isn’t a light switch, but a dimmer that adjusts over time. This episode of Root Talks unpacks what makes the retirement decision so complex, especially for high-achieving professionals whose identity is tied to their careers.
Through a real-life case study, the conversation explores how severance offers can become powerful “test drives” for retirement, offering space to reimagine life beyond work. Ari and James examine the impact of golden handcuffs— when financial incentives cloud what really matters: time, health, and meaningful connection.
If retirement feels more like a mental block than a math problem, this episode offers a new lens. Learn how tools like Tim Ferriss’s fear-setting exercise can help unpack the real risk of not of leaving work, but of staying too long.
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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.
The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements
Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
James, I've never had someone wake up and say today
is the day I've decided I'mgoing to retire.
I've had people, however, sayI'm over commuting, I'm over
deadlines, my boss is just atthe brim.
I just don't know how long Icould do this.
And then all of a sudden thatstarts to increase.
And then there's the hey, maybeI do have enough.
But it's very rare that someonewakes up and says today is the
(00:25):
day I have 2.2 million in assetsand I have my withdrawal
strategy ready and plan forhealthcare.
That doesn't happen.
So some of you are thinking it'sa light switch, there's a
retirement light switch.
That's really not how it works.
It's more of a dimmer whereit's over time you're starting
to feel maybe I do have thepieces to make it happen.
Maybe it's been on your mindsince you were in your 20s or
30s of.
(00:45):
I've always wanted to retireearly.
I just didn't know when thatday would come.
And now, all of a sudden, itmight be closer than you think
and it's hard to make thatdecision why You've just worked
the last 30, 40 years.
It would be weird if it was nothard, if you were to come to me
and I was your advisor and yousaid, ari, I'm just not worried,
yeah, I'm going to retire and,like, markets will do what
they'll do and I just have noconcerns.
(01:06):
That would make me very nervousbecause I'd want to make sure
you're aware that you're in agood spot.
But here's how to make surewe're thinking through
everything.
Today, what we're talking aboutis retirement and the choices
around it.
I believe, james, if everyonewas told here's exactly when you
have to retire, it wouldactually be easier on their
brain.
(01:27):
They wouldn't have to make thedecision themselves, and it's
easier to not have to do that.
So what we're going to talkabout today is exactly that.
Speaker 2 (01:34):
Agreed.
I've told the story before ofgetting let go from my last firm
.
So incredibly grateful thathappened.
If it was up to me to leave,probably wouldn't have happened.
Being let go best thing in theworld.
I think you have an example,ari, and we can actually work
through kind of specifics ofthis with some context.
Do you want to share thatexample?
Speaker 1 (01:52):
I do, and let me say I'm so grateful that you were
fired.
So this was from someone in theRoot Collective.
That's our free community withover 3,100 members, where you
can go and not just hear fromJames or myself but other people
who might be in a more similarposition to you in life, in age
and assets.
And this person says myposition has been eliminated and
(02:13):
I have the choice to retirewith 26 weeks severance or try
to find another position in thecompany.
I'm 60 and a quarter of myassets will come from stock and
dividends that will be convertedonce the company goes public.
If they go public, Take the 26weeks and test out retirement,
or should I work a couple moreyears with reduced pay?
(02:33):
He goes on to say he worked acareer for 25 plus years, so
there's a lot to unpack there.
Speaker 2 (02:41):
Yeah, and let's start with what do we not know?
I have no idea how much he hassaved.
I have no idea what's in hisportfolio.
I have no idea what it wouldcost to retire.
I have no idea where he lives,so we have no actual idea of a
lot of things.
But what we do know is kind ofwhat framework should you think
about this through or how shouldyou approach this decision?
And to me, the first questionis obviously could you retire?
(03:05):
You know this.
If this guy's asking this andhe has nothing saved and never
did anything before, okay, putthat severance into savings and
keep working.
There's just, it's an easyanswer, kind of like think of it
as a flow chart.
Are you undersaved?
If yes, go back to work.
No, you know, if you're good,if you have enough that you
(03:28):
could retire, this could be anincredible opportunity to be one
of the best things that everhappened to you.
Because that severance 26 weeksof pay that's six months of pay
.
What a perfect opportunity totry retirement before actually
committing to retirement.
The hardest part for most peopleabout retirement isn't actually
(03:49):
the financials.
You think it's the financialswhich is why you save and you
invest and you contribute Xpercent to your 401k and you
think that that's the thingthat's going to enable
retirement.
Until you've actually donethose things and you realize, in
addition to there being afinancial barrier, there's a
psychological barrier, and thepsychological barrier is holy
cow.
I've spent my whole lifecommitting 40, 50 plus hours of
(04:11):
each week to this work thing.
I don't actually know who I amwithout this work thing, and I
think for some people don'tstruggle with this.
They've got a great idea ofexactly what they would do,
where they would travel, whattypes of things they would.
That's awesome.
What they would do where theywould travel, what types of
things they would, that'sawesome.
But most people don't have that.
And the scary thing is okay,I'm going from to use your
analogy lights on to lights offovernight.
(04:32):
That's a very scary thing.
I know this thing, even if Idon't love work.
I know it and I know what I'mgetting If I flip the switch, if
I turn off the lights.
I have no idea what's on theother side here.
And what this individual has agreat opportunity to do is how
can you potentially test thosewaters, knowing you got six
months of runway?
You've got six months of runwayto support you while testing
(04:55):
out what retirement could looklike, because the thing about
retirement is, I don't think itshould actually be a binary
thing.
Traditionally, it's this thingokay, you graduate, you get out
of high school, you get out ofcollege, you start working.
You do that for 40 years.
One day you're just donebecause you saved up enough.
That's one way to think aboutit.
But how do we have a morebalanced life where we're not
waiting and deferring everythinguntil retirement, but we're
(05:16):
doing the things that we want todo along the way while also
saving for the future?
This could be a perfectopportunity to say spend four
weeks, spend eight weeks,hopefully, spend a little bit
more.
Spend 12 weeks, spend half ofwhat you're getting in severance
.
Just testing out what would youwant retirement to look like.
I've got some other thoughts onthat.
(05:38):
Before I go into that, ari,what other thoughts do you have?
Speaker 1 (05:41):
Just one big one.
And then don't forget yourthoughts, because I want to hear
them.
The biggest one I see is thegolden handcuffs.
When people reach out andthey're making 300,000 a year
and they know that they've runthe projections to understand
they're in a good spot to retire.
And then they've, they've toldtheir spouse they're ready, it's
probably.
They've probably done that fora few years and now it's finally
(06:02):
time.
And then all of a sudden, jameswalks in and goes you know,
we'll give you $500,000 more tostay because you're just so
important to the company andwe're going to miss having you
around and we just really valueyou.
And so now here he was ready toretire, but he's thinking to
him younger self now.
Do you know what I would havedone to make $500,000?
(06:23):
I mean, that would have beenlike 10 years of me working from
20 to 30.
And, oh my gosh, I justcouldn't see myself turning it
down Also.
And they start convincingthemselves what could I do to
get to this position again?
What if I didn't look at myexpenses properly?
What if inflation is this?
And starts telling his spouseyou know, maybe we should just
do this to be safe.
Now, how many years have we seenthat go on.
(06:45):
How many missed opportunitiesdid they legitimately miss, with
family or otherwise, because ofthis golden handcuff?
So it's something that we needto make sure we do good planning
around, because first you mustknow you're in a good spot.
But if you know you're in agood spot and now you're
presented this, we don't faultclients who take it.
We just want to make sure theytake it for a clear reason.
(07:07):
If they are taking it to go, ohit's so, we can have five more
trips.
That's very different from themsaying, well, we already know
we can take five trips, fivemore trips, we don't even have
the time to do that.
So there becomes a point wherethese golden handcuffs actually
make the decision more difficult.
We a couple of episodes.
Speaker 2 (07:23):
We these golden handcuffs actually make the
decision more difficult.
A couple of episodes.
We talked about the concept ofdifferent scorecards.
We think about financialplanning with just one scorecard
.
What is my financial wealth?
And this is just.
Don't think about it just fromthat.
This concept comes from a bookcalled the Five Types of Wealth,
where there's financial wealth,but there's also physical
wealth, there's mental wealth,there's time wealth.
There's, I think.
What have I not said yet?
(07:48):
If you're that individual whereyou get those golden handcuffs
and you're making $300,000,you're ready to retire and they
offer you $500,000 to stay, well, this is why it's good to have
a financial planner if you can'tdo this on your own.
This is why we exist.
Reach out to Root Financial ifyou're looking for someone to do
that with.
But how impactful is that?
What's the marginal benefit ofthat?
Now, if someone is 25 years oldand gets offered half a million
(08:11):
dollars per year, that'sinsanely beneficial.
The impact of that is probablygoing to fast forward your
financial goals tremendously.
But if you're at the latterstage of your working career and
it's cool $300,000 to $500,000,that's a big jump.
But realistically, is thatgoing to increase your
probability of being able to dowhat you want to do in
retirement?
(08:32):
Yes, it's going to add to yourportfolio, but do you need more
portfolio to do what you need todo?
So what's the actual marginalimpact on your finances?
Way less in your 60s than thatsame bump would have been in
your 20s or 30s even.
But don't stop there.
Sure, it's helped yourfinancial wealth, but you
continue to work.
How many more years of life doyou have left?
(08:52):
We really don't know.
But if you keep doing this onefewer, two fewer, three fewer
that you're fully free to dowhat you want to do.
What about relationships?
How many years left do youstill have with your parents?
How many times are you going tosee them before they pass, and
what's this going to do to that?
How many more times are yougoing to be able to go on those
trips with your whole familybefore everyone gets married and
has kids and it's harder to geteveryone together?
(09:14):
What about your health?
How much longer can you put offtaking care of your health,
putting off eating better?
How much longer?
So these are the types ofthings that, if we're just
looking at the financial side,we're missing out on the other
filters, the other things thatwe should be looking at to make
the best decision.
One of the things I thinkprevents most people in this
situation if I had to guess fromactually retiring isn't the
(09:38):
finances.
I think we justify it.
Oh, let's run one moreprojection.
Can I get my Monte Carlo scorefrom 95% to 96%?
Can we do?
That's just our logical braintrying to justify the fears that
we're facing, which it'stotally fine to face those fears
.
This is something you've neverdone before, that's fine.
I would be afraid if tomorrow Ihad to retire.
So what do you do?
(10:00):
There's a great exercise TimFerriss writes about this called
fear setting.
I've done this a number oftimes, where I'm going to try to
summarize I'm not going to dothe best job, but if you're
saying it's essentially thiswhat are your actual fears?
Your fear is not that you'renot going to make $500,000.
That's not a true fear.
The fear is what am I actuallygoing to do when I retire?
(10:21):
Will I still have friendshipswhen I don't get to see the
people that I see in the officeevery day?
Will I still have purpose whenI don't have the VP title or the
director title that I currentlyhave?
So truly define your fears, andthat takes deep introspective
work to say what is it that'sactually scaring me about this?
The fear could be financial,whatever it is.
(10:41):
Just make a list on theleft-hand column of a piece of
paper, define all your fears andso, really, this piece of paper
, divide it into three sectionsthe left column, middle column
and the right column.
And the middle column next toeach of those fears is the
prevent.
What could you do to preventsome of those worst case
outcomes?
What could you do to preventthat feeling of loneliness?
(11:02):
What could you do to preventthat feeling of I no longer have
purpose?
What could you do to preventthat feeling of maybe I haven't
saved enough?
There's things you could do,work with a financial planner to
do the financial piece, can youstart developing some
friendships?
Go to the community center, goto go join a pickleball league,
whatever it is for thefriendship piece?
Good, you know.
So there it starts to be thissense of okay, I've defined my
(11:24):
fears, what can I do to preventthat?
And then the third column hereis the repair.
Okay, assume, worst casescenario happens, you weren't
financially prepared.
This and I think this persondidn't have I think they used a
pseudonym, ari, who, yes, thequestion.
Okay, say his name is Tim.
Okay, one of Tim's fears is thefinancial piece.
(11:47):
He's going to prevent that bymaking sure he doesn't spend
over X amount and he's going towork with a financial planner to
do Okay, cool, he lists that.
But then, beyond that, tim,what could you do if that
doesn't prevent it?
What if your actual worst casescenario comes true?
Well, in this case, he's 60years old and he just goes back
(12:08):
to work.
Now, easier said than done, butit's, it's what it starts to do,
is it starts to properly?
It gives fear the properattention.
It's not overly inflating thisfear Sometimes, when our fears
are just kind of vague andundefined and we don't take the
time to express them, theybecome much bigger, but they're
only much bigger in our head.
(12:29):
It's the perception that's muchbigger.
And when you go through thatand say, okay, well, worst case
scenario, I could do this Worstcase scenario, okay, none of
those are actually that bad.
That's the first piece.
The second piece is separately.
What are the benefits of takingaction, tim?
What are the benefits ofpotentially retiring right now
and trying it out and seeing howit goes?
Think of what you could do withyour sense of adventure, your
(12:53):
sense of purpose, your health,your relationships.
Look at all those things andthen finally look at what's the
cost of inaction.
The cost of inaction if actionis test out retirement the cost
of inaction is wow.
What if I never actually takethe time, while I have my health
and my vitality, to find outwho I am and what I want to do?
What you start to paint is avery realistic picture of what
(13:15):
are the actual things.
You should be fearful of thefears that you started with.
What if I don't have enoughmoney?
There's some, you know.
If you've got a plan in placeand you do it, you should be
able to prevent those, hopefully.
But worst case scenario, youshould be able to repair those
if you monitor this and takesome steps to repair it.
That risk is now put in itsproper context the risk of what
(13:35):
if I never actually figure outwho am I, what do I want to do?
What is this life actually allabout for me?
What do I want to look back andnot regret one day that becomes
this much greater sense ofthat's the real thing.
I should be terrified of ofnever actually figuring out what
I want to do, because Icontinue to use work as this
excuse to distract myself and tofeel a sense of purpose, to
(13:56):
feel a sense of productivity,but it's not actually aligned
with what I want to do.
So look up fear setting, timFerriss.
Fear setting.
It's a very helpful thing to gothrough Anytime there's a major
decision I've done this a fewtimes specific to root financial
.
I've done it outside, and itjust helps to put fear in its
proper context and really whatit helps to do is it shows you
(14:18):
that there is no action thatdoesn't have any risk associated
with it.
Action comes with risk, but sodoes inaction, and oftentimes
it's the inaction that isactually far riskier, but we're
able to justify that and putthat out of sight, out of mind,
and keep ourselves doing whatwe've always been doing because
it's more comfortable, we knowit.
It takes us work to actually gothrough that.
Speaker 1 (14:41):
Beautifully said and very wise.
If you're willing, let us keepyou accountable.
Send a photo in and you can dothis anonymously.
You can send.
If you send a note to Ari atrootfinancialcom, you can, I
will be the one to see the emailof your piece of paper.
You do not have to worry, itwill not get posted in the
community.
If you want to share it withothers and be very transparent
(15:04):
and say hey, everyone, I did theexercise, I'm in the community
sharing what worked and whatdidn't, and how it really helped
or didn't, we are one community.
We just want to help each other,and it's one thing for James to
give great examples or myselfto give a story, but it does hit
different when you guys get tospeak with each other.
So certainly, make sure tocheck out the community.
Once again, we want to keep youaccountable and so sometimes
(15:27):
we'll make these episodes andwe'll say guys, there's
something that we think youshould really take away.
Nothing to do with working withRoots.
Just we want to make sure thatif you are in this position,
like hypothetical Jeff here orTim here, well, tim has been
given a great option where nowhe has the opportunity to test
out retirement.
We recognize a lot of you willnot have that same option.
(15:48):
It doesn't mean you still can'tprepare well.
What we don't want you to do isbeat yourself up thinking, oh
my gosh, I just feel like I'm sobehind my neighbors or my
coworkers, my friends or I'mnever going to be able to retire
.
We want you to even shift howyou think about that word
retirement.
So that is why we do everythingwe do here at Root.
Anything else in today'sepisode, james.
Speaker 2 (16:08):
That's it, Thanks everyone.
Speaker 1 (16:09):
Awesome.
Thanks everyone.
James has his own show, Readyfor Retirement.
We, of course, both work atRoot.
James has his video on YouTubeunder James Canole.
I have mine under Ari Taublieb,aka Early Retirement, which you
will see on YouTube.
I also have the podcast EarlyRetirement.
If you're interested in workingwith Root, this is, of course,
what we love to do.
(16:30):
It is holistic financialplanning, tackling all aspects.
If you head to our website,rootfinancialcom, in the upright
you'll see a little button thatsays see if you're a fit.
You can click that, You'll beasked a few questions and we'll
see you from there.
See you, guys, next time.
James, I've never had someone wake up and say today
is the day I've decided I'mgoing to retire.
I've had people, however, sayI'm over commuting, I'm over
deadlines, my boss is just atthe brim.
I just don't know how long Icould do this.
And then all of a sudden thatstarts to increase.
And then there's the hey, maybeI do have enough.
But it's very rare that someonewakes up and says today is the
(00:25):
day I have 2.2 million in assetsand I have my withdrawal
strategy ready and plan forhealthcare.
That doesn't happen.
So some of you are thinking it'sa light switch, there's a
retirement light switch.
That's really not how it works.
It's more of a dimmer whereit's over time you're starting
to feel maybe I do have thepieces to make it happen.
Maybe it's been on your mindsince you were in your 20s or
30s of.
(00:45):
I've always wanted to retireearly.
I just didn't know when thatday would come.
And now, all of a sudden, itmight be closer than you think
and it's hard to make thatdecision why You've just worked
the last 30, 40 years.
It would be weird if it was nothard, if you were to come to me
and I was your advisor and yousaid, ari, I'm just not worried,
yeah, I'm going to retire and,like, markets will do what
they'll do and I just have noconcerns.
(01:06):
That would make me very nervousbecause I'd want to make sure
you're aware that you're in agood spot.
But here's how to make surewe're thinking through
everything.
Today, what we're talking aboutis retirement and the choices
around it.
I believe, james, if everyonewas told here's exactly when you
have to retire, it wouldactually be easier on their
brain.
(01:27):
They wouldn't have to make thedecision themselves, and it's
easier to not have to do that.
So what we're going to talkabout today is exactly that.
Speaker 2 (01:34):
Agreed.
I've told the story before ofgetting let go from my last firm
.
So incredibly grateful thathappened.
If it was up to me to leave,probably wouldn't have happened.
Being let go best thing in theworld.
I think you have an example,ari, and we can actually work
through kind of specifics ofthis with some context.
Do you want to share thatexample?
Speaker 1 (01:52):
I do, and let me say I'm so grateful that you were
fired.
So this was from someone in theRoot Collective.
That's our free community withover 3,100 members, where you
can go and not just hear fromJames or myself but other people
who might be in a more similarposition to you in life, in age
and assets.
And this person says myposition has been eliminated and
(02:13):
I have the choice to retirewith 26 weeks severance or try
to find another position in thecompany.
I'm 60 and a quarter of myassets will come from stock and
dividends that will be convertedonce the company goes public.
If they go public, Take the 26weeks and test out retirement,
or should I work a couple moreyears with reduced pay?
(02:33):
He goes on to say he worked acareer for 25 plus years, so
there's a lot to unpack there.
Speaker 2 (02:41):
Yeah, and let's start with what do we not know?
I have no idea how much he hassaved.
I have no idea what's in hisportfolio.
I have no idea what it wouldcost to retire.
I have no idea where he lives,so we have no actual idea of a
lot of things.
But what we do know is kind ofwhat framework should you think
about this through or how shouldyou approach this decision?
And to me, the first questionis obviously could you retire?
(03:05):
You know this.
If this guy's asking this andhe has nothing saved and never
did anything before, okay, putthat severance into savings and
keep working.
There's just, it's an easyanswer, kind of like think of it
as a flow chart.
Are you undersaved?
If yes, go back to work.
No, you know, if you're good,if you have enough that you
(03:28):
could retire, this could be anincredible opportunity to be one
of the best things that everhappened to you.
Because that severance 26 weeksof pay that's six months of pay
.
What a perfect opportunity totry retirement before actually
committing to retirement.
The hardest part for most peopleabout retirement isn't actually
(03:49):
the financials.
You think it's the financialswhich is why you save and you
invest and you contribute Xpercent to your 401k and you
think that that's the thingthat's going to enable
retirement.
Until you've actually donethose things and you realize, in
addition to there being afinancial barrier, there's a
psychological barrier, and thepsychological barrier is holy
cow.
I've spent my whole lifecommitting 40, 50 plus hours of
(04:11):
each week to this work thing.
I don't actually know who I amwithout this work thing, and I
think for some people don'tstruggle with this.
They've got a great idea ofexactly what they would do,
where they would travel, whattypes of things they would.
That's awesome.
What they would do where theywould travel, what types of
things they would, that'sawesome.
But most people don't have that.
And the scary thing is okay,I'm going from to use your
analogy lights on to lights offovernight.
(04:32):
That's a very scary thing.
I know this thing, even if Idon't love work.
I know it and I know what I'mgetting If I flip the switch, if
I turn off the lights.
I have no idea what's on theother side here.
And what this individual has agreat opportunity to do is how
can you potentially test thosewaters, knowing you got six
months of runway?
You've got six months of runwayto support you while testing
(04:55):
out what retirement could looklike, because the thing about
retirement is, I don't think itshould actually be a binary
thing.
Traditionally, it's this thingokay, you graduate, you get out
of high school, you get out ofcollege, you start working.
You do that for 40 years.
One day you're just donebecause you saved up enough.
That's one way to think aboutit.
But how do we have a morebalanced life where we're not
waiting and deferring everythinguntil retirement, but we're
(05:16):
doing the things that we want todo along the way while also
saving for the future?
This could be a perfectopportunity to say spend four
weeks, spend eight weeks,hopefully, spend a little bit
more.
Spend 12 weeks, spend half ofwhat you're getting in severance
.
Just testing out what would youwant retirement to look like.
I've got some other thoughts onthat.
(05:38):
Before I go into that, ari,what other thoughts do you have?
Speaker 1 (05:41):
Just one big one.
And then don't forget yourthoughts, because I want to hear
them.
The biggest one I see is thegolden handcuffs.
When people reach out andthey're making 300,000 a year
and they know that they've runthe projections to understand
they're in a good spot to retire.
And then they've, they've toldtheir spouse they're ready, it's
probably.
They've probably done that fora few years and now it's finally
(06:02):
time.
And then all of a sudden, jameswalks in and goes you know,
we'll give you $500,000 more tostay because you're just so
important to the company andwe're going to miss having you
around and we just really valueyou.
And so now here he was ready toretire, but he's thinking to
him younger self now.
Do you know what I would havedone to make $500,000?
(06:23):
I mean, that would have beenlike 10 years of me working from
20 to 30.
And, oh my gosh, I justcouldn't see myself turning it
down Also.
And they start convincingthemselves what could I do to
get to this position again?
What if I didn't look at myexpenses properly?
What if inflation is this?
And starts telling his spouseyou know, maybe we should just
do this to be safe.
Now, how many years have we seenthat go on.
(06:45):
How many missed opportunitiesdid they legitimately miss, with
family or otherwise, because ofthis golden handcuff?
So it's something that we needto make sure we do good planning
around, because first you mustknow you're in a good spot.
But if you know you're in agood spot and now you're
presented this, we don't faultclients who take it.
We just want to make sure theytake it for a clear reason.
(07:07):
If they are taking it to go, ohit's so, we can have five more
trips.
That's very different from themsaying, well, we already know
we can take five trips, fivemore trips, we don't even have
the time to do that.
So there becomes a point wherethese golden handcuffs actually
make the decision more difficult.
We a couple of episodes.
Speaker 2 (07:23):
We these golden handcuffs actually make the
decision more difficult.
A couple of episodes.
We talked about the concept ofdifferent scorecards.
We think about financialplanning with just one scorecard
.
What is my financial wealth?
And this is just.
Don't think about it just fromthat.
This concept comes from a bookcalled the Five Types of Wealth,
where there's financial wealth,but there's also physical
wealth, there's mental wealth,there's time wealth.
There's, I think.
What have I not said yet?
(07:48):
If you're that individual whereyou get those golden handcuffs
and you're making $300,000,you're ready to retire and they
offer you $500,000 to stay, well, this is why it's good to have
a financial planner if you can'tdo this on your own.
This is why we exist.
Reach out to Root Financial ifyou're looking for someone to do
that with.
But how impactful is that?
What's the marginal benefit ofthat?
Now, if someone is 25 years oldand gets offered half a million
(08:11):
dollars per year, that'sinsanely beneficial.
The impact of that is probablygoing to fast forward your
financial goals tremendously.
But if you're at the latterstage of your working career and
it's cool $300,000 to $500,000,that's a big jump.
But realistically, is thatgoing to increase your
probability of being able to dowhat you want to do in
retirement?
(08:32):
Yes, it's going to add to yourportfolio, but do you need more
portfolio to do what you need todo?
So what's the actual marginalimpact on your finances?
Way less in your 60s than thatsame bump would have been in
your 20s or 30s even.
But don't stop there.
Sure, it's helped yourfinancial wealth, but you
continue to work.
How many more years of life doyou have left?
(08:52):
We really don't know.
But if you keep doing this onefewer, two fewer, three fewer
that you're fully free to dowhat you want to do.
What about relationships?
How many years left do youstill have with your parents?
How many times are you going tosee them before they pass, and
what's this going to do to that?
How many more times are yougoing to be able to go on those
trips with your whole familybefore everyone gets married and
has kids and it's harder to geteveryone together?
(09:14):
What about your health?
How much longer can you put offtaking care of your health,
putting off eating better?
How much longer?
So these are the types ofthings that, if we're just
looking at the financial side,we're missing out on the other
filters, the other things thatwe should be looking at to make
the best decision.
One of the things I thinkprevents most people in this
situation if I had to guess fromactually retiring isn't the
(09:38):
finances.
I think we justify it.
Oh, let's run one moreprojection.
Can I get my Monte Carlo scorefrom 95% to 96%?
Can we do?
That's just our logical braintrying to justify the fears that
we're facing, which it'stotally fine to face those fears
.
This is something you've neverdone before, that's fine.
I would be afraid if tomorrow Ihad to retire.
So what do you do?
(10:00):
There's a great exercise TimFerriss writes about this called
fear setting.
I've done this a number oftimes, where I'm going to try to
summarize I'm not going to dothe best job, but if you're
saying it's essentially thiswhat are your actual fears?
Your fear is not that you'renot going to make $500,000.
That's not a true fear.
The fear is what am I actuallygoing to do when I retire?
(10:21):
Will I still have friendshipswhen I don't get to see the
people that I see in the officeevery day?
Will I still have purpose whenI don't have the VP title or the
director title that I currentlyhave?
So truly define your fears, andthat takes deep introspective
work to say what is it that'sactually scaring me about this?
The fear could be financial,whatever it is.
(10:41):
Just make a list on theleft-hand column of a piece of
paper, define all your fears andso, really, this piece of paper
, divide it into three sectionsthe left column, middle column
and the right column.
And the middle column next toeach of those fears is the
prevent.
What could you do to preventsome of those worst case
outcomes?
What could you do to preventthat feeling of loneliness?
(11:02):
What could you do to preventthat feeling of I no longer have
purpose?
What could you do to preventthat feeling of maybe I haven't
saved enough?
There's things you could do,work with a financial planner to
do the financial piece, can youstart developing some
friendships?
Go to the community center, goto go join a pickleball league,
whatever it is for thefriendship piece?
Good, you know.
So there it starts to be thissense of okay, I've defined my
(11:24):
fears, what can I do to preventthat?
And then the third column hereis the repair.
Okay, assume, worst casescenario happens, you weren't
financially prepared.
This and I think this persondidn't have I think they used a
pseudonym, ari, who, yes, thequestion.
Okay, say his name is Tim.
Okay, one of Tim's fears is thefinancial piece.
(11:47):
He's going to prevent that bymaking sure he doesn't spend
over X amount and he's going towork with a financial planner to
do Okay, cool, he lists that.
But then, beyond that, tim,what could you do if that
doesn't prevent it?
What if your actual worst casescenario comes true?
Well, in this case, he's 60years old and he just goes back
(12:08):
to work.
Now, easier said than done, butit's, it's what it starts to do,
is it starts to properly?
It gives fear the properattention.
It's not overly inflating thisfear Sometimes, when our fears
are just kind of vague andundefined and we don't take the
time to express them, theybecome much bigger, but they're
only much bigger in our head.
(12:29):
It's the perception that's muchbigger.
And when you go through thatand say, okay, well, worst case
scenario, I could do this Worstcase scenario, okay, none of
those are actually that bad.
That's the first piece.
The second piece is separately.
What are the benefits of takingaction, tim?
What are the benefits ofpotentially retiring right now
and trying it out and seeing howit goes?
Think of what you could do withyour sense of adventure, your
(12:53):
sense of purpose, your health,your relationships.
Look at all those things andthen finally look at what's the
cost of inaction.
The cost of inaction if actionis test out retirement the cost
of inaction is wow.
What if I never actually takethe time, while I have my health
and my vitality, to find outwho I am and what I want to do?
What you start to paint is avery realistic picture of what
(13:15):
are the actual things.
You should be fearful of thefears that you started with.
What if I don't have enoughmoney?
There's some, you know.
If you've got a plan in placeand you do it, you should be
able to prevent those, hopefully.
But worst case scenario, youshould be able to repair those
if you monitor this and takesome steps to repair it.
That risk is now put in itsproper context the risk of what
(13:35):
if I never actually figure outwho am I, what do I want to do?
What is this life actually allabout for me?
What do I want to look back andnot regret one day that becomes
this much greater sense ofthat's the real thing.
I should be terrified of ofnever actually figuring out what
I want to do, because Icontinue to use work as this
excuse to distract myself and tofeel a sense of purpose, to
(13:56):
feel a sense of productivity,but it's not actually aligned
with what I want to do.
So look up fear setting, timFerriss.
Fear setting.
It's a very helpful thing to gothrough Anytime there's a major
decision I've done this a fewtimes specific to root financial
.
I've done it outside, and itjust helps to put fear in its
proper context and really whatit helps to do is it shows you
(14:18):
that there is no action thatdoesn't have any risk associated
with it.
Action comes with risk, but sodoes inaction, and oftentimes
it's the inaction that isactually far riskier, but we're
able to justify that and putthat out of sight, out of mind,
and keep ourselves doing whatwe've always been doing because
it's more comfortable, we knowit.
It takes us work to actually gothrough that.
Speaker 1 (14:41):
Beautifully said and very wise.
If you're willing, let us keepyou accountable.
Send a photo in and you can dothis anonymously.
You can send.
If you send a note to Ari atrootfinancialcom, you can, I
will be the one to see the emailof your piece of paper.
You do not have to worry, itwill not get posted in the
community.
If you want to share it withothers and be very transparent
(15:04):
and say hey, everyone, I did theexercise, I'm in the community
sharing what worked and whatdidn't, and how it really helped
or didn't, we are one community.
We just want to help each other,and it's one thing for James to
give great examples or myselfto give a story, but it does hit
different when you guys get tospeak with each other.
So certainly, make sure tocheck out the community.
Once again, we want to keep youaccountable and so sometimes
(15:27):
we'll make these episodes andwe'll say guys, there's
something that we think youshould really take away.
Nothing to do with working withRoots.
Just we want to make sure thatif you are in this position,
like hypothetical Jeff here orTim here, well, tim has been
given a great option where nowhe has the opportunity to test
out retirement.
We recognize a lot of you willnot have that same option.
(15:48):
It doesn't mean you still can'tprepare well.
What we don't want you to do isbeat yourself up thinking, oh
my gosh, I just feel like I'm sobehind my neighbors or my
coworkers, my friends or I'mnever going to be able to retire
.
We want you to even shift howyou think about that word
retirement.
So that is why we do everythingwe do here at Root.
Anything else in today'sepisode, james.
Speaker 2 (16:08):
That's it, Thanks everyone.
Speaker 1 (16:09):
Awesome.
Thanks everyone.
James has his own show, Readyfor Retirement.
We, of course, both work atRoot.
James has his video on YouTubeunder James Canole.
I have mine under Ari Taublieb,aka Early Retirement, which you
will see on YouTube.
I also have the podcast EarlyRetirement.
If you're interested in workingwith Root, this is, of course,
what we love to do.
(16:30):
It is holistic financialplanning, tackling all aspects.
If you head to our website,rootfinancialcom, in the upright
you'll see a little button thatsays see if you're a fit.
You can click that, You'll beasked a few questions and we'll
see you from there.
See you, guys, next time.
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