Q&A: The Unintended Consequences of Early Retirement

28:22And that's what crystallized intelligence is all about. And that, if you develop it, if you pay attention to it, you don't struggle to stay on your first curve, then happiness is in store for you. But you have to know how to develop it. You have to know how to cultivate it and you have to know how to use it. So would it be accurate to describe crystallized intelligence as the synthesis of many ideas across multiple disciplines that emerges over time? Yeah, it's also known as wisdom. So one of the things that you notice when you talk to somebody who's wise, they tend to be older. I mean, there are some very young wise people, but you notice that the people who are the wisest people you've ever met, it's like your grandma, why?

28:59Because your grandma's been around the block a thousand times. She's seen everything. She's had every experience and she can use all the information that she's got. She can't come up with a recall of somebody's name in 74 milliseconds, but she knows a whole lot of people and knows a whole lot of things. And then she can put them together into a coherent storyline and give you unbelievably good advice. That's what it means to have crystallized intelligence. Now, you can synthesize knowledge across many fields. You can tell stories based on other people's work. Here's the weird thing, Paul. When I first got my PhD, I'm an economist.

29:29I was writing this mathematical theory that today I don't even understand. It's like it was a different person writing these papers. But now I write for the Atlantic and I'm looking at everybody's research. I'm reading 15 academic journal articles a week written by these hotshot, brilliant young scholars. And they don't really know the significance of their work. They don't really know how you could apply it to your life. Now, when my fluid intelligence was really high, I was writing papers like that. Now, when my crystallized intelligence is a lot higher because I'm 57 years old, I can take other people's big ideas and put them together into a storyline and tell you how to use it.

29:59And I'll take this eight days a week because I actually can give people ideas on how they can live happier, better lives based on the best science. And I couldn't do that when I was creating the best science. That was me inadvertently plugging your show, Paula. Well, thank you. Go back and listen to that whole interview. I want to hear more of that. The biggest takeaway that I got from him, and I think he's brilliant, is he talks about the distinction between fluid intelligence and crystallized intelligence. And when you are young, you have this fluid intelligence that allows you to pick up deep skills quickly.

30:36So when Arthur Brooks was in his 20s, he was a renowned musician. He played at Carnegie Hall. In fact, he famously fell off the stage at Carnegie Hall and damaged his instrument. As he got older, he realized that he was not able to do the deep hours and hours of deep study on a musical instrument that he could when he was 19, but he could synthesize between disciplines in ways that he couldn't when he was younger. In fact, he says that for many professions that require synthesis across multiple disciplines, so interdisciplinary or multidisciplinary disciplines, people in those disciplines tend to thrive at later ages.

31:23And if you think about running a business, running a business is the ultimate multidisciplinary discipline. So it's no surprise that some of the best business leaders are older. The CEO of NVIDIA is in his late 50s, early 60s, and he's considered young by the standards of a Fortune 500 CEO. Warren Buffett is in his early 90s, and he is the active CEO of Berkshire Hathaway. And for anyone who doubts that a person in their early 90s could operate a business that is as robust and as profitable as Berkshire Hathaway, just go to the Berkshire Hathaway annual shareholders meeting in Omaha every year or watch a taping of it if you don't want to go there personally.

32:16Every single year, Warren Buffett gets up on stage in Omaha with Coca-Cola and peanut brittle, and he sits there for six to eight hours, totally unscripted, and answers questions. This is a point, by the way, that Chamath Palihapitiya made on the All In podcast. This observation is coming from him. He sits there for six to eight hours, unscripted, and on stage in front of all of his shareholders in Omaha, answers questions about Berkshire Hathaway. And if you have any doubts that a person in his early 90s is capable of running Berkshire Hathaway, just watch that shareholder meeting. Watch him talk eight hours unscripted about his company.

33:00And if you as a shareholder doubt his capacity, then you're free to sell your shares afterwards. But nobody does because there's enormous confidence in him, even in his early 90s. In fact, it's funny. There's a lot of trepidation about what happens when he's gone. Exactly. Are we going to hand it over to the kids? We don't want to hand it over to the kids. Right. And by kids, we mean anyone. Oh, he is 93 years old. And by kids, we mean anybody in their 70s. We don't want to hand it to those whippersnappers. They don't know what they're doing. So again, I want to give proper attribution to that observation.

33:35That attribution comes from Chamath. But it's a brilliant observation because it highlights that if you have the right attitude, if you have good health, both physical and mental, and if you are in the proper field, If you are in a field like running a business, which is by its inherent nature, interdisciplinary, multidisciplinary, and requires synthesis across a broad range of ideas, you thrive at that in your 60s, 70s, 80s, 90s. Yeah, for Betty, if running a business freaks her out, I mean, he talks about just the concept that older people are generally better storytellers. Right. Older people are able to be better coaches, taking the things that they learn and coaching other people.

34:27Sometimes there are people that are, you're talking about entrepreneurs. There are people in every business that are intrapreneurs. And in fact, businesses rely on intrapreneurs, people inside the business who kind of act entrepreneurial because they're really helping everybody be better at their jobs to get where they're going. I mean, I would think then older people would usually be then better in the human resource function, right? Because they're taking all this stuff that other people already created. They don't have to create something new. They're teaching people how to more effectively use the things that are out there.

34:58And that type of crystallized knowledge is something that the world, I think, largely, there's always going to be people that don't, but largely understands are going to be great and maybe better than younger people in that role. The big thing here, though, I want to go back to, Paula, is this is all about confidence. Because I heard, and maybe this is misplaced, but Betty didn't sound confident. And I think that that starts with learning where your strengths are and really then being able to go into an interview situation or a strategic job search where you have confidence. I think competence builds confidence.

35:38And so getting competent about where your strengths are is going to give her the confidence she needs then to find that work that she'll find both rewarding and profitable. Yeah. Betty, I don't know what you did for work prior to this, but I wonder if the first step is figuring out what service you want to offer from this point forward. Where is that intersection of what you're interested in, what you want to be good at, whether or not you have a skill in a particular domain yet. What is it that you're interested in? What is it that you want to learn and you want to become good at? And how does that intersect with what the world needs?

36:21You find that Venn diagram intersection, what interest, skill, and what the world needs, find that Venn diagram, what the world needs and what the world is willing to pay for. Find that Venn diagram intersection. That is the service that you offer. And the beauty of running a service-based one-person in business, the beauty of being a remote contractor who offers a service is that there is no startup capital that you need, literally none. The thumbnail designer, the leading one that I'm most likely to hire, I found him on Twitter. I found him on Twitter because he was building these mock thumbnails and he was tweeting them and he would tweet them.

37:03He was following all of these other Twitter accounts that tweet about YouTube thumbnail design. There was one particular account that said, hey, unofficial design contest, drop your design in the thread below. And so I just looked through that thread below and I found his and I was like, wow, the people who are dropping thumbnails in this thread self-select as the type of people who are following a thumbnail design account, right? So these are already people who are into thumbnail design. And among the people who have self-selected here, I'm looking through this thread of a bunch of thumbnails.

37:40And my personal taste is I think that this guy's is the best. So I looked at his account and his account had a line in it that said, I'm open for work. I'm open for contracting, DM me. And I'm like, done. So I DM'd him and said, hey, I love your design. Here's my YouTube channel. I'd like to talk to you about potentially working together. What would it take? Yeah. As of the time of this recording, we have not struck a deal yet, but I'm certainly interested in hiring him. And you think about, I don't know how old he is. I don't know what country he lives in. I don't know anything about him other than I like his thumbnails.

38:16I don't know where he went to school. I don't know what education he has. If he has any, I don't know. I don't care. Doesn't matter. Can he make good thumbnails? Yes or no? That's all that I'm hiring him to do. So Betty, what is the skill that you either have or want to develop a very specific tailored skill that you can offer online with no startup costs, right? No initial capital. It'll cost your time, but it won't cost you any money. What is it that you want to throw yourself into? And this can be the beginning of a multi-decade new passion, a service-based business that costs nothing to create other than your time that you absolutely love because you have autonomy, you have mastery, and you have purpose, right?

39:11Those are the three attributes that make people love their work, autonomy, mastery, purpose, and mastery. If you're learning a new skill, You are developing mastery in that skill every day. That is inherently gratifying. Autonomy, great. You're working for yourself. There's the autonomy. And then purpose, if the service that you're offering is serving great clients who are working towards a mission that you believe in, there's your purpose. But I agree with Joe. It's rooted in confidence. And confidence comes from competence. And competence comes from putting in your reps. Thank you, Betty, for the question.

39:47Next, we're going to answer a question from a listener who thinks that she might be able to save$600 a year on a benefit that she's paying for that she might not need. Is she right? And after that, we are going to discuss a question that comes from someone who is grappling with the unintended consequences of early retirement. All of that is up ahead, but first. The holidays are such a busy time of year and I want to give my family one last relaxing weekend away before the new year. We can't wait to get out and experience life in the wide open spaces of Lancaster County, Pennsylvania filled with locally owned shops, fantastic farm-to-table dining and one-of-a-kind experiences.

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42:14Welcome back. Our next question comes from Noelle. Hi, Paula and Jo. This is Noelle in Tennessee. Thank you for taking my question. Really big fan of the show. My question is about how to know when you don't need life insurance anymore. I am 40 and my husband is 49. We do not have any children. We own our home and we don't have any debt. We plan to retire at 50, which is next year for him and in 10 years for me. And the plan is to live off of my income until I retire, which is$80 ,000 a year. And then when I retire at 50, he will be 59 and a half and we can start taking minimum distributions from his retirement accounts.

43:00We were recently discussing his whole life insurance policy because I'm not a fan of whole life and it's pretty expensive. We pay$52 a month for$100 ,000 whole life policy for him. And I would like to cancel that policy so that we could invest that money instead and make more off of it. But then we're not sure if we should cancel my life insurance policy. I have a term life insurance policy for myself of$100 ,000. We pay$16 a month for it. I believe that that should stay at least until I retire because in the next 10 years, if something happens to me, he might need that income so that he doesn't have to return to work after retiring early.

43:46We have$33 ,000 in cash savings and$504 ,000 in investments between our 401k, Roth, brokerage, and HSA. I hope that was enough details. I'd love to hear your answer. Thank you. Noelle, first of all, congratulations on being so close to an early retirement. One year away for him, 10 years away for you. That is absolutely incredible. Steve, can we get a round of applause?

44:19Noelle, Joe and I actually have not discussed our answer to this beforehand. So I'm going to state what I think. And I'm curious to know, will Joe and I agree or is this going to be like ding, ding, ding, fighting match? But my take is, Noelle, I think that you are spot on. I think cancel his whole life insurance policy, maybe keep it until he retires, which is coming up in a year, but I would cancel it when he retires. But keep yours because term life insurance,$16 a month, it's great coverage for the next 10 years. If something were to happen to you, if the worst were to happen, he might still need to find work again.

44:59but he would at least have a runway of more than a year before that happens. So if something were to happen to you in the next 10 years, your income is$80 ,000. That's the income that he would need to replace. So even after funeral costs, even after all of those other expenses, he would still have a runway of a year, really over a year, more than a year, to look for another job. So I think that keeping term life insurance on you for the next 10 years is a great idea. I don't see any reason to have it on him. My answer is actually, Paula, very close to yours. And just to cut to the final answer, the answer is I don't know.

45:45Ooh. But let me tell you how you think about this because much like I don't like target day funds because it takes away from us knowing about how our money works, which makes it less, our plan less sticky. Also, I don't like life insurance rules of thumb because of the fact that it's not that hard to know how life insurance works and really how to make a good life insurance decision. And once we know kind of the methodology of how to think about life insurance, we will make a good life insurance decision. Here's how we do that. We start off with kind of, Noel, what you were talking about. I want to keep mine because if I pass away and I'm the one that's going to keep working, he may need that money.

46:32The A number one question is how much money will the other person need or the family need or your community need, whatever your goals are, when you pass away, how much will they need to make it through to be financially independent? So as an example, when we look at his life insurance, we know that you have enough with you working for financial independence to still be viable without his work. And I'm assuming that, Paula, I'm assuming that their plan lands them 10 years from now based on the lifestyle that they want to get financial independence. If it's not, and it turns out they're actually going to be behind and they don't have enough, well, number one, they need to change the saving strategy then.

47:21But then number two, you might need to keep the life insurance in place. I do firmly agree, Paula, with what you said though about whole life insurance. The chance that they're going to need this insurance for their entire life is probably zero. So while I can make a case for whole life insurance in some scenarios, and I think you can too, those are very few scenarios. What I would do is this, if it turns out that you do still need life insurance on him, either way, I would cancel it now, but I wouldn't do that first because often what I've found is that people have, sadly, medical diagnoses that they don't know.

48:00They have things going on inside their body, they have no idea about. Now I've seen people cancel life insurance first, and then they go, Paula, and they go to grab the new term life insurance policy that they could have that'll save them not the$52 a month, but maybe a huge percentage of that because you could still get term life insurance for a much cheaper cost than$52 a month. But they cancel the first one, they go to get the term life insurance and they get denied or they get raided, which means it's going to be super expensive. And you ask why? And they're like, well, the medical test that you took showed that you have these problems that you didn't know about.

48:33You don't want that shock. So what I would do first, and this is the appropriate order of operations, apply for the new life insurance if you need it. Step one for him, apply for term life insurance. Make sure that you have it. The second that you have it, then cancel the whole life insurance policy. And you'll get two cool things that happen. Number one is you'll recoup that$52 a month that you can apply toward the term life policy or to your life. But then you also get all that cash back from the inside of the policy because a whole life policy is fueled by cash value. There is money that's being saved inside of this policy that is meant to propel it after you stop paying for it.

49:17So people often will hear this term for life insurance. It's paid up whole life paid up really should be prepaid. I just prepaid for my later years of life early on when the cost of insurance internally was much less to make sure that I have coverage for the rest of my life and the insurance company can afford to pay me when I pass away or pay my family when I pass away. So I think the first thing is this very simple analysis of, is there enough money for financial independence? If there is, and Paula, I kind of agree with your gut, there probably is because I feel like Noelle's done this work.

49:50If they have done it, they're sure that they don't need that. Kill the policy. You're good. On hers, same thing. She has term life insurance, which is probably the right type of insurance. But do they have the right amount? That right amount is going to be based on what's the amount that he would need if she passes away. Now, the bad news is that's going to be a diminishing number over time. So there will come a time when you're paying for life insurance that you don't need the whole thing. You might have half a million dollars of life insurance and you only need a hundred thousand at that time.

50:21It isn't worth usually going and get another policy because as your age goes up, the cost per thousand of term life insurance goes up. It's still wasteful, but not nearly as wasteful as that whole life policy is. I don't know if I would bother switching from hold to term because he's about to retire. If he's a year away from retirement, may as well hold onto it for another year or another six months. I don't know why you would do that. If you don't need it, you don't need it. Yeah, just the effort. What I'm saying, Paula, is not, I'm not saying have term life insurance for a year. I'm saying if they haven't truly run the numbers on financial independence and they go, hey, he's retiring next year, but Noel working 10 years does not get us where we need to be.

51:07Well, then there still is a life insurance need. Based on Noel's question, I'm assuming they've run the numbers on financial independence. they know that he can retire in one year and she can retire in 10 years and the numbers work out. Yes. Assuming that they remain healthy and happy, the numbers work out. Then I would assume that your assumption about the assumptions would be then correct. We would not need to go to term life insurance at that point. In fact, I would cancel the policy today. His policy. Yeah, his policy. Yeah. So basically, Joe, you're agreeing with me. cancel his policy, but she should get term life insurance for the next 10 years.

51:48You're agreeing with me and I'm agreeing with Noel. I'm agreeing with what Noel suggested. Yes. We're all agreeing with you, Noel. Yeah, exactly. Because Noel's smart and she's doing the right thing. Yeah. So that's the second question, Noel, is, is that policy you have now sufficient to make sure that he still gets financial independence? Because a lot of the time people base their, because they're using rules of thumb in their life insurance, and I'm not talking to Noel, I'm talking to the community here. We base it on, do I have enough money to get through the next 10 years? Well, we don't just need that.

52:17We also need that savings that Noel was going to probably continue to do to make sure the two of them together had enough money for financial independence 10 years from now. And I think you need an additional buffer. I mean, when it comes to life insurance, the precipitating event, meaning the passing of someone, often incurs costs. I mean, there are often big medical bills that happen at the end of life that have copays and deductibles associated with them. And then there are funeral expenses. Death is not cheap. And so in addition to your normal day-to-day budget, there's some extra cost buffer that you need to cover the cost of death.

53:03I hate to say it that way, but that's what it is. The good news is when it comes to term life insurance, that additional cost, I like a little slop on the upside, meaning give the person a little more. While people are grieving, you're not going to want to think about your asset allocation and making sure your money's in a high yield savings account. You don't have to think about anything. So I will slop for bad diversification and underperforming assets. I would also slop for, we don't know what is going to happen. When people are grieving, that's when your path becomes more uncertain. The one time when I was a planner that I had a really hard time helping people manage their affairs was when they were grieving, was because of the fact that I didn't know which way they were going to go.

53:53Some people bury themselves in their work and they go 24-7, get tons of overtime. And the side hustle's rocking because they just don't want to think, they just want to do. Other people just want to go away and be alone and not be with work. And everybody's different. And so I like slop on the top end over and above what you quote need, what we call the capital needs analysis and financial planning above that to also mitigate the risk that you decide that you want to do nothing for a little longer. Yeah, we talked about that in a previous episode when we talked about how to handle an inheritance, that if a person is grieving, assume that for at least one year that person is not going to do anything significant monetarily.

54:41And in fact, that person often shouldn't do anything significant monetarily. Don't make any big investments. Don't make any big moves when you're in grief. And the good news here is if you're in decent health, the cost of insuring that is the additional amount, assuming you get the base amount that you need, the capital need analysis approach, insuring a little bit more is not a big deal. And the difference, just to tell people why whole life insurance is so much more expensive than term life insurance. Paula, we're saying to cancel this whole life policy, just categorically cancel it. And yet out of the other side of our mouth, we're saying, you can be sloppy with terms, just buy more, buy more.

55:25People are wondering, how can we do this? Why could we make that recommendation? Well, here's the thing. People will say a whole life insurance is a ripoff. It's not a ripoff. It's doing exactly what it says it's going to do. It is going to insure you for your whole life. So if the insurance company has an expectation that they're going to have to pay a death benefit to somebody, well, they need to recoup that money to stay in business. So if there is a one-to-one ratio between the number of policies I have and the number of death benefits that they're going to pay out, I have to have a much higher cost of insurance than a term policy.

56:02These are old numbers. So the numbers may have drifted, but I believe the number is between three and 4 % of all term policies actually pay out the death benefit. And the reason is when the average person passes away, the term life insurance has expired. It's gone. The term has ended and you don't replace it because like in Noelle's case with her husband, they finally reached the point that they don't need it. So it's great duct tape at a low cost for you and it's cheap for the life insurance company to do. So it's very easy for me to say you can be sloppy with term life insurance, where I wouldn't do that in a million years with whole life insurance.

56:40You want to be very careful every dollar you buy. Because Noelle is essentially hedging the risk that she will pass away between the ages of 40 and 50. By virtue of buying a term life policy, the risk is she might pass away between the ages of 40 and 50. The insurance policy covers that risk. If she passes away after the age of 50, she and her spouse already have a plan financially of how he will handle that. And so that risk no longer needs to be hedged by an outside third party. Whereas with whole life, it's guaranteed you're going to die sometime. So, Noelle, we have good news, which is that was the world's longest way of saying yes.

57:23Yeah, yeah. I think Noelle's instincts, Noelle's analysis is spot on. I agree with everything she suggested. And Noelle, congratulations on being so close to retirement. That's incredible. Huge, huge props to you and to your husband. Big step. So thank you, Noelle, for the question. And then coming up, Joe, we are going to answer a question, tackle a question also about early retirement. And this is about some unexpected consequences of early retirement, specifically as it relates to the money that you can take out from Social Security, your Social Security benefit. it. How does that get wonky when early retirement enters the picture?

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59:23Our final question today comes from an anonymous caller who goes by the moniker Sleepless in San Antonio. Hi, Paula. I wanted to call to ask about how to think about the impact of FIRE on Social Security benefits. So I looked up my Social Security benefit recently, and it looks like currently the government estimates that I would receive just over$3 ,800 a month in Social Security if I retired at full retirement age. It looks like the way they calculate this, though, would be the average of the top earning 35 years of my working years. So let's assume that I'm 35 and I plan to fire at 45. In that case, I would have less than 35 years of working years.

1:00:27And so would the estimated benefit from the Social Security currently? Should I lower that amount in my calculations of what I could expect for fire? I wanted to check in with you on this and also whether it would ever make sense for someone to delay their fire plans in order to achieve more in Social Security earnings in their later working years. Thanks, Paula, for everything you do. Sleepless in San Antonio. Thank you for the question. And before we get to the answer, we've got to give you a nickname. Joe, I named - We can't just call her sleepless? Sleepless. Insomniac. Joe, I named Betty.

1:01:18So it's your turn to name Sleepless in San Antonio. Well, the classic movie Sleepless in Seattle stars Meg Ryan, the Meg Ryan. And how can you go with any name other than Meg then? It's gotta be Meg. Meg, all right. Well, Meg, to the latter part of your question, should you delay early retirement for the sake of getting a higher social security benefit. My question back to you is, why do you need it? Retirement, voluntary retirement, is the conscious decision to earn less than you otherwise could and build a lower net worth than you otherwise could because you have made the conscious choice that other things in your life are more important, whether that's family, friends, hobbies, health, Whatever it is, you've made the conscious choice that time and freedom are more important than earning more and building your net worth.

1:02:17And you have enough assets that you can make that choice. Whether it's framed as, should I work longer to get a higher social security benefit? Or whether it's framed as, should I work longer to make more money, which I can then invest to have a bigger portfolio? I mean, six of one, half a dozen are the other. And frankly, between the two, investing your own money in order to grow your portfolio is actually more efficient and will give you a bigger payout at the end than just trying to beef up your social security account, assuming that you adequately save a substantial enough portion of each paycheck, which if you're talking about early retirement, you do.

1:02:58So why, in the context of making this conscious choice that you're going to trade your money for time, would you reverse that unless you need to? It doesn't sound to me, based on your question, that there's a need there. Well, I don't like chasing additional benefits just for the accomplishment of more, to your point, Paula. I think if we start with the intention, what do I truly want in my life? And then see if that works out. If it works out without it, why then do I add strain and complications and friction to this wonderful life that I'm designing so I can get an additional benefit, which is not additive to that life I'm trying to create?

1:03:50which I guess brings up the question, when do we chase benefits and when do we not chase benefits? I think what you and I just talked about is when you don't chase benefits. I do think sometimes, you know, if you're retiring early and you go, wow, this healthcare thing is just kicking my butt. Is there a way for me to still get healthcare benefits and have largely an early retirement? Is there a middle ground? I can stop doing the thing I don't like doing, get the life that I want, and maybe have a little bit of a quote mortgage on it, right? Where I have to take on a job or role or something that supplements it.

1:04:29I'm thinking specifically about my father-in-law retired before he was eligible for Medicare and he didn't have insurance from his company. And he thought long and hard about still working another five years to bridge that gap, but he didn't like the work anymore. He was done with that work. What he liked was kids. And he thought that being around youth was really fun. He was a gregarious guy. My kids, by the way, when he was alive, didn't even call him grandpa. They called him Papa Dave, like he was a mafia figure because he was so funny. And he was a larger-than-life person and kids loved him.

1:05:06And he got energy from being around kids. He became a bus driver, Paula, because every day he would get just a couple hours of kids and kids loved him. Like I know there's a lot of people listening going, I wouldn't be a bus driver. Like, no, thank you. But you know, it's cool. He got to work part time. He got to be around kids and he got to do the rest of the day doing what he wanted to do. And the school system paid for his health insurance. Hmm. So he was able to bridge the gap by finding something that was additive to the design he was creating for his life. So I think in that case, if it's additive, then chasing benefits is perfectly fine.

1:05:47How do I find a way to make this dream of not working here anymore work? Well, I can maybe piece it together that way. I like that. But if I'm just in search of more, I had a client and I will just call him Mike. He came to me, he and his spouse, because they knew that he could retire. They weren't certain, but they thought he could retire. I ran the numbers with them, made sure there was no mistaking the math and he could retire. He would not retire Paula because he was getting excellent overtime. And he goes, you know what? They keep saying the overtime is going to go away. So when the overtime goes away, that's when I will retire.

1:06:25Well, the overtime just stayed and stayed and stayed. And then all of a sudden I get a call out of the blues that they need to meet with me right now. They find out that Mike has gotten this diagnosis that he's going to die in a year, but good news. The next six months, he's going to feel pretty healthy. So all of a sudden this trip to Alaska, they've been putting off because Mike couldn't put off the overtime. They decide that they're going to do it now. And I see Mike change and all of a sudden he is happy. He's sick, but he's happy. His spouse is so freaking happy because she never liked him doing the overtime thing anyway.

1:07:01Right. She's like, you got to retire, Mike. Well, he's finally going to retire and they're going to do all this great stuff in the next six months. They're going to pack as much life in as they can. But then Mike goes for a second opinion and he finds out that he has an even rarer condition than he thought. And Mike is not going to die. Mike, if he takes this treatment, can live for a long, long, long, long, long time. And he's got this rare thing that is going to be kind of painful, but Mike is going to live. And guess what Mike effing did? Oh, did he stay in his job or return to his job? That overtime.

1:07:37He got that overtime. There's not more hours. His spouse and I, Paula, beat the hell out of him. We were so angry. His spouse, especially was, as you can imagine, was just angry. Watching Mike waste his life just in pursuit of more. And he had enough and he had this dream and he was so happy. It was very frustrating. I think we sometimes overestimate the money and how, especially in our community, you know, because we're mostly money geeks, right? We overestimate the power of what the money is. And I need more money. I need more money. but that other resource of time, we just don't get it back.

1:08:15So pursuing more so I can get more social security, I would build the plan around less social security. And if you can do it, screw social security. Who cares? Let it go. Yeah. Yeah. What do you need it? What's it for? But yes, if you're in the fire movement, you will have less social security is the direct answer. Exactly. If you're in the FIRE movement with a definition of early retirement as the cessation or reduction of income, then you will not only have less social security, you will also have a smaller portfolio than you otherwise could have. You will also have a smaller net worth than you otherwise could have.

1:08:53Your balance sheet at the end of your life will be smaller than it otherwise could be. That is the tradeoff for - All these positives. Yeah, exactly. Yeah, for the trip to Alaska. That life might be longer because you get to spend more time at the gym. That life might be happier because you get to spend more time traveling or with your family. But I can't even promise that. I mean, heck, it might be happier. It might be more miserable because you've just got time on your hands to endlessly ruminate, right? It could go in either direction. It could. Simply not working does not ensure happiness.

1:09:34If you decide to spend the time playing video games and scrolling social media and fixating on all of the wrongs that have been inflicted upon you, then yeah, you might not be working anymore, but you'll still be unhappy. So it isn't that early retirement brings happiness, but it does bring flexibility. It brings freedom. It brings time. And what you do with that is up to you. What if your goal is to play video games, Paula? Oh, well, you know, if you are genuinely passionate about it, right? If you are a video game enthusiast and you start a YouTube channel about video games, that's different.

1:10:17That's a completely different thing. You're talking about just wasting time. I'm talking about unconscious habits, the stuff that you pick up mindlessly. Yeah. Yeah. The distinction is not the... It's the same as just watching Netflix because you got nothing to do. Yeah. It's the distinction between the person who mindlessly watches Netflix versus Roger Ebert, somebody who's passionate about cinema. Those are two very different categories. It's funny. I'm reading a great book right now by Twyla Tharp. The Creative Habit is the name of the book. Highly recommend the book. It was a bestseller, so I'm not the only one that says this is a great book.

1:10:54But I finally, I'm reading it a little bit late. We'll put it in the show notes. But Twyla talks about how she loves cinema. And she, Paula, conscientiously does not watch movies. Because she knows that if she did, she would do nothing else. And she is so creative in so many other areas. And she found that her love of cinema is actually a barrier. So just us bringing up Netflix and talking about movies and your love of cinema. She loves cinema, but she clearly loves being a choreographer and ballet way more. She's so good at it. She's like, I would create nothing if I watch movies because I love movies so much.

1:11:32It's all I would do. Wow. And there are some of those things, I think, in all of our life where we're like, you know what? If I actually cut out this thing, even though I, quote, love it, how many things I love more would blossom? Cut the good to make space for the great. Isn't that wild? Right. Yeah. I hadn't really thought about that until I read Twyla. I was like, why would you do that? And I read it. I'm like, wow, that's a pretty powerful statement to yourself going, you know what? I think I can play for more. Right. Cut the good to make space for the great. So much of regret comes from settling for good enough, not taking enough risks, not striving for bigger.

1:12:10And I don't mean bigger in terms of income or net worth. I mean bigger in terms of the vision, the imagination of what could be. And that is so much bigger and more compelling than some boost to Social Security. So, sleepless in San Antonio, Meg, if you're going to early retire, do it with gusto. Do it full on. Embrace the lower benefit. That's the point. that's exactly the trade-off that you're consciously choosing what i love here paula knowing what you're trading and willfully trading it away yeah is a pretty powerful cool thing yeah saying you know what less social security i'll take it exactly 100 worth it yeah yeah well joe we have done it again unbelievable absolutely where can people find you if they have not heard enough and they want to hear more of your ideas.

1:13:12Mark Cuban did an interview recently where he talked about how when the market collapsed between 2000 and 2002, he avoided that and he used a strategy using options. So we talk about how Mark Cuban did it and we help you answer the question, should I do that too? Because I feel like whenever somebody sees these strategies, they're like, oh, maybe that's something I should be doing. So we talk about unintended consequences. is we'll walk through that too. Perfect. So that is all on the Stacking Benjamins podcast, available anywhere that the finest podcasts are found. Only the finest. Absolutely the finest.

1:13:50Well, thank you so much for tuning in. If you enjoyed today's episode, please, number one, share it with a friend, a family member, a neighbor, a colleague, your dog walker, your babysitter, your mom's grandma, second cousins, third grade teacher. share it with everybody that you know. It is the single most important way that you can spread the message of strong financial health. Number two, please make sure you're following us in Apple Podcasts and Spotify. And number three, please subscribe to our newsletter at affordanything.com slash newsletter. You can also chat with members of the community by going to affordanything.com slash community.

1:14:31Thank you so much for being part of this community. I'm Paula Pant. I'm Joe Salcihai. And I'll meet you in the next episode.