Tag Archives: early retirement

FI Can’t Wait

First Day of School

First Day of School

About seven years ago, I found the blog Early Retirement Extreme and I was intrigued. Jacob, the writer behind the blog, is a bit extreme in his approach so I didn’t see myself following in his footsteps. Soon after that, I discovered Mr. Money Mustache, and his lifestyle and approach made it more palatable. Many other FIRE blogs followed and it seemed that they had attained this lofty goal. I was hooked and started to question: why not us?

The “WHY”

When I first learned about FIRE, I didn’t have any strong motivation to reach financial independence. Sure, I had a long commute and I didn’t really want to be stuck at the 9-5 job forever, but I didn’t hate my job. After my first son was born, life became much more hectic. With dropping him off and picking him up for child care purposes, I was away from home about 12 hours a day. I didn’t feel like I had much quality time with my family. Things got more hectic when we had our second child.

There are plenty of parents who have even busier and more inflexible schedules than me, so I sometimes feel guilty for complaining. However, seeing those who have attained FIRE has inspired me to want more out of life. Back in June, my first born graduated from preschool. He started kindergarten yesterday. After committing almost seven years to this FIRE journey, I still don’t see the goal on the horizon. There are still too many variables involved. How much will our expenses be with growing children? What will we do for health insurance/dental insurance? Also, we live in an high cost of living area making it extra difficult. Yes, that is by choice, but it would be also difficult leaving all our family and friends.

The Slap in the Face

As I mentioned above, I don’t hate my job. But would I be here if I didn’t need the money: absolutely not. While I can’t quit my job now, I’d be happy if I could have a more flexible schedule, and my position is an excellent fit for a flexible schedule as I mainly sit at my desk researching and writing. I don’t deal with the public and rarely have to meet or speak with colleagues. There is no reason not to allow telecommuting or flexible schedules. Also, while I may be biased, I do believe I have been a highly productive employee over the decade that I have been here. Many employers are shifting towards allowing flexible schedules as well as a work from home option. The governmental organization I work for has been pretty flexible with alternate work schedule in the past. Unfortunately, this governmental organization has decided to go against the grain and disallow most requests for flexible work schedules.

A month ago, I submitted a request for an alternate work schedule. Since my older son was starting kindergarten and my younger son was starting daycare, pick up and drop off was going to be a little challenging. I asked to work from 8:30 until 4:30, instead of the usual 9:00 until 5:00. With my long commute, leaving early would allow me to beat some of the traffic and get back in time to pick up my kids. Honestly, even if I wasn’t trying to get home earlier to pick up my kids, this schedule would save me a lot of unnecessary time wasted in traffic. I would be working the same amount of hours so no big deal right? My request was DENIED. And to pour salt on the wound, they couldn’t even spell my name correctly on the denial letter.

Sure, this really isn’t that big of a slap in the face. Plenty of others deal with a lot more B.S with their employer. I think having some F-You money stored away and having read others who have attained FIRE makes it even more difficult to deal with work stupidity. Sure, I would have loved to have said, “so you’re denying my request…I’m out!” However, I’m not ready to take that leap. Plus, I have a pension and it is a pretty strong pair of golden handcuffs which makes it even harder to leave. So I’m not planning on leaving, but I am focused on getting to FIRE quicker.

The “HOW”

For the first leg of my FIRE journey, I was focused on maxing out my deferred compensation plan and Roth IRA, entrusting the index funds I had to do the heavy lifting. I remain a big proponent of this strategy, but feel that it will take a lot longer to attain FIRE going this route being that I choose to remain in a high cost of living area. Maybe I’ve been bitten by the real estate bug, but I believe that using leverage will help me arrive at my goal quicker. It may be a little risker, but I’m willing to take on that added risk.

Sure, things didn’t go as planned with my latest real estate venture, but I remain undeterred. I don’t look at it as a failure, but as a learning experience. Also, while things didn’t go as planned, it wasn’t a disaster financially and things have stabilized. I plan on pushing forward investing in real estate and hope to share those plans in future blog posts.

Strive for FI or Take it Easy?

credit: Link Hoang

credit: Link Hoang

One topic that I’ve been obsessed about is the concept of reaching financial independence (FI) at an early age. It’s not about not working. It’s about spending time doing things that you want to do with your time. One obstacle that I face is that I live in a high cost of living city in NYC. Yes, I realize this is a decision that my family has made as moving to a lower cost area would definitely speed up our journey to early FI. However, we have no plans to leave the area because our family and friends are here.

I’ve always been a frugal person and a good saver. When I got my first job, I immediately signed up for my employer sponsored retirement plan. I also opened an IRA account thanks to the encouragement of my father. However, after reading stories of regular people reaching FI in their 30s and 40s, I started wondering if I could do it as well. While I had saved a good amount in retirement accounts, especially when compared to my peers, I was no where close to FI. I had to turbo-charge my savings and investing rate if I wanted to get there. I started to max out my 457 contributions and I increased my wife’s contributions. I also increased our contributions to each of our Roth IRA accounts as well. My wife and I are naturally frugal. Always have been. We had no consumer debt and never did. We were living well within our means, but having an audacious goal like early retirement/financial independence really motivated us to go from ordinary savers to extraordinary savers.

Saving Fatigue

Brandon from the Mad Fientist talked about how there were some dark times in his road to FIRE. He wrote that he went from being frugal to depriving himself and isolating him and his wife during his pursuit of FIRE. I am not facing that dark time. I am just uncertain whether early FIRE is attainable. And if it is not, would I be better off loosening the purse strings and coast to semi-early FIRE at age 55. If I was certain that I could hit FIRE, then by all means I’d push to get there. It’s hard to keep motivated when a goal is almost 10 years away. It’s even harder if you don’t know for sure if you’re reach it.

I’m already on track for semi-early retirement!

In my previous post, I wrote that I will have a pension at around age 55. I have no doubt that I would retire at that point. Actually, as a frugal family, I think we would be able to retire on the pension alone. But I wouldn’t want to do that. We save a good amount in our 457 plans as well as in our Roth IRA plans. Even if we loosen the purse strings, we would still save for retirement in these accounts. There is a calculator on my 457 provider’s website which tells you whether you are on track for retirement based on how much you think you’ll need, how much you’ve saved, and what you’re contributing to your retirement accounts. It tells me that not only am I on track for retirement at age 55, our savings rate exceeds what we’ll likely need in retirement. Of course, these are only estimates and being a bit risk averse, I’d prefer to overfund. Chances are if I don’t hit FI in my mid 40s, I’ll likely stick it out until age 55. Those golden handcuffs get stronger as the lure of a fully funded pension and subsidized health benefits might be too hard to pass up.

What would change if we ditched the early FI goal?

Many in the frugal and FIRE blog space write about value-based spending and intentional living. They write that if they came upon some extra money, they wouldn’t change anything with their spending. I have written that living a rich life doesn’t have to be an expensive life. That still remains true. But I would be lying if I said, my financial choices wouldn’t change one bit if I had an extra thousand dollars coming in each month.

No, I wouldn’t suddenly buy a fancy car or go out to expensive 5-star Michelin rated restaurants. That’s just not me. I’m never going to be a spendthrift wasting money on frivolous things. I do think that I would like to move to a bigger place at some point as we will likely outgrow our 850 square foot apartment. Housing is expensive here in this high cost of living area. This is the main area in our budget which would expand if we decided to loosen the purse strings. I’d be more likely to take on a higher mortgage or rent payment if early FI wasn’t the goal. I’d also be more likely to splurge on travel and entertainment activities too. And we’d be okay financially. We just wouldn’t be able to reach financial independence in our 40s.

Will I still want to retire early in 10 years?

Of, course I would, right? At first, it sounds like a silly question, but something that still needs answering. The main reason I’m obsessed with FIRE is because I feel like I have no time. My work days consists of a long commute as well as driving the baby to and from grandma’s for childcare purposes. By the time, I get back, it’s dinner time, bath time for the kids, and some household chores. When we wake up the next day, it’s the same routine. On the weekends, we try to run some errands while also making sure we do something fun with the kids. We also try to visit our parents. Many parents with grown children tell me not to miss these precious moments. Mr. Money Mustache and his wife retired early to rise their son together without the shackles of the 9 to 5 job. I’d love to have that freedom as well.

A lot can change in 10 years. By that time, my kids will be in the pre-teen to teenage years. Will they even want to spend that much time with good old dad? I haven’t really fleshed out what I would be doing in early retirement as it seems still far away. Sure, I’d love to spend more time on this blog, but would this blog still even exist? I would like to volunteer, spend more time with my wife, and travel. But, I have a decent amount of vacation days from my employer and my job isn’t too stressful. Is the extra freedom worth taking off my golden handcuffs? Would I enjoy spending a little more in the present rather than saving a whole lot for early FI?

So should I put the pedal to the metal and strive for FI or just take it easy?

Related posts: Just as I was facing this dilemma, I read some blog posts related to this issue. The blogger at Bayalis is the Answer said that you can’t fail at fire, because no matter what, you’ll get somewhere that is worth going. Likewise, Matt from Optimize Your Life, wrote that he is saving for FI because it gives you options even if you haven’t fully reached financial independence.

The Pension: My Golden Handcuffs

Working in government for New York State, I am fortunate to have very good benefits. One of the benefits is having a pension plan (defined benefit plan). All of my co-workers talk about their retirement date in terms of how old they are and how many years they have in the “system.” It has nothing to do with how much they’ve saved and many save very little if anything for retirement. They are solely relying on the pension program. Some don’t retire even when they have enough time in the “system” and are old enough, because they live above their means and cannot live on anything less than their current income.

Many who don’t have pensions are understandably envious of those who do have it. I am very fortunate to have one and I don’t want to seem like I’m complaining about this wonderful benefit, but there are a few downsides of the pension for me.

With a 401k plan, the money is often portable. You save money in it. Your employer makes matching contributions. It might take a year or a few years to vest, but the money your employer contributes is yours to keep. The gold plated pension of older employees has been watered down for younger employees. For new employees, the pension plan doesn’t vest until you’ve worked for the employer for 10 years. So if you leave before then, you get no pension. They’ve also increased the retirement age from 55 years old to 62 years old. I don’t like someone else deciding when I can or cannot retire. I’d rather make that determination based on how much I’ve saved and how much I will need, not some arbitrary thing like how many years I’ve got in the system.

Another issue with pensions is that if the company goes bankrupt, it’s very likely retirees will lose the pension or get a amount that is a lot less than they were expecting. I work in government which has a slightly lower chance of bankruptcy, though you can never discount it. Some states’ pensions are in better shape than others. If you work for the State of Illinois, well then, I think you might want to worry a little more. Currently, the state constitution in New York explicitly protects pension payments. However, that doesn’t mean there will never be an amendment to the state constitution.

Having that pension also makes it hard to pull the trigger on other job opportunities currently. I can’t say that I’ve really been wowed by another job which tempted me to leave or that I’m actively looking. However, when I’ve checked out prospective jobs elsewhere, a part of me does think, “if I leave, I won’t get that pension!”

As someone aspiring to become financially independent and possibly retire early at age 45 , the pension makes the decision to leave a lot harder. So what will my pension pay? If I stay until I am 55 years old, after having worked 30 years, I will get a pension which pays a yearly benefit of about 60% of your highest three-year average salary. Let’s say my highest three-year average salary is $100,000, I will get a yearly benefit of about $60,000. Yea, I know I know…I am very lucky to have this pension. However, if I decide to FIRE at age 45 with 20 years of service and let’s just assume the same three-year average salary of $100,000, the pension would only pay $29,200 based on the online calculator. Note: I would have to wait until age 55 to collect the pension. If I decided to leave at age 50 with 25 years of service, based on the same salary, I would collect $36,500. If I waited until age 54 with 29 years of service, I would get $42,300. Obviously, if I stayed until 54, I would just go one more year to get the full amount! Yes, having a pension is a wonderful benefit, but it can also be a handcuff, albeit a golden one.

Is there a golden handcuff holding you back from leaving your job? Do you have a pension and would you take the penalty to retire early?

The Secret Recipe to an Extremely Early Retirement

beach

Working in government, I have the benefit of a pension which makes it possible for many employees to retire at around age 55. The mainstream media always talks about how it’s impossible to retire so I counted my lucky stars that I would not only be able to retire, but retire at an early age. However, when I discovered the blogs, Early Retirement Extreme and then Mr. Money Mustache, where the bloggers wrote about retiring in their 30s, that sounded even better than retiring at age 55. (For purposes of this post, I’m going to say retire but I really prefer financial independence. Retiring doesn’t mean you stop working, just that you no longer NEED to work for money.)

Early Retirement is Simple

One of the most important blog posts I’ve read since learning about the possibility of early retirement is “The Shockingly Simple Math Behind Early Retirement.” Basically, it says that how long it takes you to retire depends on how much you can save. According to the math here, which assumes a rate of return after inflation of 5% and that you live off 4% of the nest egg in retirement, it will take 45 years to retire if you save 15%. However, if you save 50% of your income, you can retire in just 16 years! You can play around with the calculator here, but I think the early retirement/fi spreadsheet on Budgets Are Sexy is more detailed and a better predictor of when you can retire because it takes into account projected expenses in the future. Your expenses today may be greatly different from your expenses in the future, especially when some early retirees do so before they even have children.

Being obsessed with the Financial Independence and Retire Early movement (FIRE), I’ve read countless blog posts from various bloggers who have reached early FIRE or on the way there. While everyone’s journey is unique, you start to see some commonalities between those who are able to accomplish this awesome feat. Early retirement is simple…but it’s not easy! It takes discipline and dedication. Here are the factors that I’ve noticed in the journey of extremely early retirees:

Income

Now that the FIRE movement is getting more mainstream, the media has featured a good amount of stories focused on early retirees. Most people assume that you have to make an extremely high salary to retire so young. It cannot be disputed that earning a high income makes saving a larger percentage of your income easier. The gap between your income and your expenses are the two determining factors in how much you can save, and ultimately, how early you can retire. If you earn $100,000, it is much easier to live on half, compared to someone making $30,000 trying to save half and living on $15,000.

A couple of the early retirement bloggers are pretty transparent with their income in their explanation about how they reached early retirement so you can get an idea of how much they earned and how much they saved. Justin who blogs at Root of Good retired at age 33 and during his career, he made between $48,000 and $69,000 while his wife made between $40,000 to $74,000. Mr. Money Mustache started off making $41,000 and reached $125,000 while his wife’s income ranged from $44,000 to $70,000. Yes, they earned good incomes but many people earn this level of income or higher, yet live paycheck to paycheck and are no where near ready for retirement.

Resources

If you make a healthy income then you need to assess whether you are spending money on things that really bring you happiness, otherwise you probably have a lot of excess spending you can cut out to increase your savings rate. If you are not making much, then you need to work to increase your income or work on a side hustle. Here’s a list created by Mr. Money Mustache of jobs where you can earn over $50,000 which do not require a degree. Read it part 1 here and part 2 here.

Great Reads

Steve from Think Save Retire wrote a blog post titled Financial Independence is not Just for the Rich or Wealthy which really encapsulates the idea that high income isn’t the only way to reach FIRE.

The bloggers at Millennial Revolution have a couple posts breaking down how they reached FIRE which is very informative.

Also, listen to this Mad Fientist Podcast about Joe (aka Arebelspy a Mr. Money Mustache forum moderator) and his wife, who are both teachers and were able to reach FIRE.

Frugality

Having a good income is very helpful, however, if you don’t “mind the gap”, and constantly upgrade your lifestyle, you’ll never retire no matter how high your income is. Being frugal with your money is also an essential part of the equation. Some of the tips to save money that many early retirement blogs suggest are to live close to where you work to cut your commuting costs, bike to work, cook food at home rather than going out to eat, cut out cable and other excesses that don’t really add value to your life. The bloggers at Millennial Revolution argue that renting versus buying in overpriced housing markets is the key to retiring early.

Another assumption that many outsiders make about the FIRE movement is that these early retirees are living like paupers so they can save up enough money to continue living like paupers. They argue that they would rather continue working and “living” their life, buying nice cars and a big house, and filling that house with big screen TVs, and going on vacation once a year when their employer allows them to do so. What they don’t understand is that frugality has nothing to do with depravation and sacrifice, and everything to do with finding what is important to you, and living a rich life. A rich life doesn’t have to be life filled with consumption and spending. Clearly they need to change their mindset.

Great Read

Check out this great post by Mrs. Frugalwood explaining that frugal living DOES NOT mean deprivation: Frugality is not Deferred Spending.

Low Cost of Living Area

Living in a high cost of living area is probably my biggest obstacle in reaching early retirement. It is harder to have a high savings rate if you live in a location where everything is more expensive…especially housing. Of course, the reason most people live in high cost of living areas is because the income is often higher. The reason I live here is because it’s where I grew up and where our family and friends live. Because of the higher income in high cost areas, there are many early retirees or prospective early retirees who there, but most of them move or plan to move to lower cost of living areas after they retire.

The bloggers Mr. and Mrs. Frugalwoods lived in Boston, but moved to a homestead in Vermont. Jeremy and Winnie from Go Curry Cracker used to live in Seattle, but now travel the world, and often live in low cost areas in Southeast Asia and in Mexico. Kristy and Bryce from Millennial Revolution lived in Toronto and also now travel the world. The bloggers at Freedom is Groovy credit their move from Long Island, New York to Charlotte, North Carolina as one of the main reasons they were able to reach FIRE.

There are also bloggers who live in low cost areas and continue living there. Mr. Money Mustache lives in Longmont, Colorado and Justin from Root of Good lives in Raleigh, North Carolina. There is a common misconception from many people who live in high cost of living areas that moving to a low cost area means taking a significant pay cut and having to worry about the availability of jobs. They also picture low cost of living cities as some rural town in the middle of no where with nothing to do except going to watch high school football and the local bar. That’s just not true. There are many cities in the U.S with vibrant economies, a plethora of entertainment activities yet a much lower cost of living. According to Investopedia, a couple of cities with high paying jobs with a low cost of living are Houston, Dallas, Charlotte, Denver, and Austin. For instance, a good unit in an apartment complex in Austin, Texas will typically cost between $850-$1,000 per month to rent.

Resources

The blogger at The Frugal Vagabond created the website The Earth Awaits which is a great tool to find great cities you can live in based on your budget and you can filter based on other preferences like crime rate, pollution, and lifestyle.

For those living in high cost areas, check out my post Is NYC Really That Expensive? and the Frugalwoods’ post The Ultimate Guide to Frugal Boston Living.

Kids

Deciding whether to have kids and how many kids you want to have are very personal questions. While the cost of children may not be as expensive as some may have you believe ($241,080 or $446,100 in the Northeast), having children will no doubt add to your expenses. Having kids will also affect the amount of time you have to work on side hustles or to work overtime. However, having kids may also motivate you to reach FIRE at an early age. Mr. Money Mustache states that he and his wife wanted to retire early so they could be there to raise their child.

Great Reads

My wife and I love kids and always knew we wanted to have them. The delay in reaching FIRE because of those little ones is fine with me, but if you are not sure about having kids, you shouldn’t let societal pressures make that decision for you. Also, some parents feel like they should have a second child so the first child has a friend. Read the following posts if you’re struggling with those decisions.
Great News: You’re allowed to have only one kid! from Mr. Money Mustache
Why My Wife and I are Choosing to Remain DINKS from Think Save Retire

And if you think children are expensive, check out this post from Mr. Tako Escapes:
The Myth of the Expensive Child

Smart Investing

Stocks

Having a high savings rate is very important in determining whether you can retire early, but no matter how high the savings rate is, you’re not retiring if you stuff your savings under a mattress. You’ve got to let your money work for you. The early retirees who got there through investing in the stock market are mostly proponents of index investing. A lot of people probably assume that trading high flying stocks or that trading options or other complex investing strategies is the way to riches, but more often then not, you’ll likely lose more money than you’ll make.

Resources

To learn more about index investing, go to the Bogleheads wikipage which is investing advice inspired by Jack Bogle, creator of index funds. You can also get the book The Bogleheads’ Guide to Investing

I also recommend reading the Stock Series on Jim Collins’ personal finance blog or get his book The Simple Path to Wealth: Your road map to financial independence and a rich, free life

Real Estate

Investing in rental properties and living off the income produced by them is a great way to reach financial independence. Admittedly, I am a lot less familiar with this avenue but I am learning more about it and bought my first rental property a year ago. At first, I thought investing in real estate would be intimidating but the more I learned and the more I saw the benefits in the use of leverage and tax advantages, it became clear that investing in real estate is a viable path for many to reach FIRE.

Resources

Paula Pant who blogs at Afford Anything has a lot of posts relating to real estate investing. She has a fantastic post answering the most frequently asked questions about real estate investing, she has monthly income reports, and recently launched a course about this topic.

Another excellent resource is the Biggerpockets website and they also have a free beginner’s guide to investing, podcasts, blog, calculators and a plethora of other useful tools at your disposal.

Others who have used the power of real estate to reach FIRE are Chad Carson, Eric Bowlin, and Joe (aka Arebelspy).

Smart Tax Planning

Saving a large percentage of your money is great and so is investing it wisely, but if you can keep Uncle Sam from taking a big chuck of your money away, that is another big win. Taxes are definitely not an exciting topic and many people avoid it like the plague but not strategically planning your taxes is ignoring big savings. Make sure you do your best to keep your hard earned money!

Great Reads

Definitely read $150,000 Income, $150 Income Tax and Never Pay Taxes Again.

Also check out the Mad Fientist’s blog posts: HSA-The Ultimate Retirement Account and How to Access Retirement Accounts Early.

Work in Retirement

What? Isn’t the point of reaching FIRE to NOT work? No, it means that you don’t need to work but you certainly are welcome to work on things that you are passionate about and that are fulfilling. Since most early retirees are still young, capable, and intelligent (you’d have to be to reach FIRE early right?), it is likely that they may continue to do some type of work, and sometimes they will earn income from it. Mr. Money Mustache likes building things so in his retirement, he has earned some income building/renovating houses…he’s also earned a good amount of money from his very popular blog.

If you are as excited about the FIRE community as I am, check out the following lists of bloggers who have reached or on their way to FIRE:

Early Retirement Blogs for Everyone created by Joe from Retire By 40 and The Secret Fire Cult- And Why You’ll Want to Join It created by Julie from Millennial Boss.

Are you on the path to early FIRE? What other factors do you think are common among those who reach early FIRE?

New York Times: 7 Essential Money Questions Sure to Start a Conversation

Nytimes hq

Jonathan, the blogger from My Money Blog posted an article from the New York Times entitled 7 Essential Money Questions Sure to Start a Conversation and answered the questions on his blog. Ron Lieber, who wrote that New York Times article said that he found these seven queries tended “to stop people cold and get them to open up about whatever money they have and the emotions that wrap themselves around their personal finances.” I found the questions intriguing and wanted to answer them myself.

What lessons about money did you learn from your parents?

Lieber uses this question to determine if there is self-imposed guilt and whether your parents were role models. Some of the questions within that question he asks are:

Are you determined to maintain a certain social class or climb a rung up the ladder because you’ll feel less successful in your parents’ eyes if you don’t?

Are you unhappy in a white-collar career because your parents worked so hard to send you to college and you can’t bring yourself to quit?

If your children don’t go to a school as good as yours was, do you worry that you’re failing them somehow?

What specifically did your parents teach you that has helped? And how, in their silence about some aspects of money, could they have failed you?

As a child of immigrant parents, I do feel like I need to climb a rung up the ladder because I had so many more advantages. Like many immigrant parents, they sacrifice so that their children could have a better life. So, yes, there is pressure to advance to a higher social class. I went to a state university so I wouldn’t feel that I’m failing my child if they went to a school which wasn’t as “good as” mine, whatever that means. I don’t think the prestige of the school necessarily matters. As for what my parents taught me about money: frugality, saving, and investing. Growing up, my parents were always frugal with their money and those values were ingrained in my head. My parents opened up a savings account for me and encouraged me to put some of my birthday and Christmas money into it. Luckily, I was a good little saver even as a youngster. I would look at the passbook, see the balance increase and the interest accumulate (back in the day when interest rates were much higher) and get excited about saving. My father also opened a mutual fund for me and that’s how I got interested in investing in the stock market. It didn’t hurt that this was in the 90’s and the stock market returns were excellent. I would learn some tough lessons when the tech bubble burst.

What does the word “money” conjure up for you?

Lieber said that one financial planner told him a client answered, “food.” The client’s mother was an alcoholic and their food stamps would run out before the month was over. This client did not spend money even though she could afford it.

Growing up, my parents were always frugal. I thought I was deprived because we didn’t have cable television or cool sneakers like the other kids. So when I was younger, the word “money” meant the ability to buy things. Fortunately, I was still frugal, but I always thought that once I have saved enough money or made a certain income, I could splurge. I would have a luxury vehicle, nice house, and take exotic vacations. Nowadays, money to me means freedom. I want to buy Time with my money I want to buy my freedom from having to work for money. That is much more important to me.

How many children would you like to have when you retire?

The article says that one financial planner encouraged parents “to more carefully consider their future selves, the ones who will want to improve the odds of being surrounded by grandchildren — and having adult children who may be able to help in their old age.”

This is a bit of an odd question compared to the others. I wouldn’t expect my adult children to help me out financially in my old age, but yes, it would be nice to have them around. I’d also love to be surrounded by grandchildren. Currently, we have a 3 year old and a newborn, so that’s two. Will we go for number three?? I don’t know. We’ll have to think about that in the future. It’s a little hard to make a rational life-changing decision when you’re still sleep deprived!

How do you think your children feel about that?

Lieber says that a financial planner told him that she asks her clients this question, “knowing full well that parental anxiety has almost certainly rubbed off on the children as well,” and that by invoking “the little people, she finds, often gets adults to be more honest and vulnerable.”

I will take the question to mean, how will my children feel about our spending habits. My kids are still young but I think this will be a tough struggle. It is tough when you live in such a materialistic world where everyone wants to keep up with the Joneses. How do I explain to my kids why they don’t have the latest video games and the flashiest clothes? How do I teach them to value money and to not be materialistic?

Tell me about your financial situation when you first met.

Lieber says that this question is used by a financial planner when he senses tension between a couple relating to financial issues.

When I first met my wife, I was going to law school part-time in the evenings and working full-time during the day at a government job. I was already contributing to my retirement accounts, though I wish I had contributed more. I lived below my means and had some savings, but was in the midst of accumulating a lot of student loan debt. My wife had graduated college and started working for about a year. Neither of us made a lot of money and were both relatively frugal. I guess that’s one reason we hit it off. Just like we do now, we lived below our means.

What are the most important things in your life?

How would you live your life differently if you were completely secure financially? What would you change if you knew you only had five to 10 years left to live? And what would you regret if you knew you would die tomorrow?

“[I]f you get to the why and what motivates someone, everything else just fills in from there,” says Kevin Reardon, a financial planner. That means using the answer and working backward to set financial goals around these matters of great importance.

Family and friends are most important to me. I’m not sure how the writer defines “completely secure financially.” If he means financially independent, then I’d probably stop working, spend more time with family and friends, travel, volunteer, and hopefully find my passion! I would regret the time I didn’t spend with my close ones and the time I didn’t spend pursuing my interests. I would regret being too fearful to take the leap and do things outside of my comfort zone.

What does the prospect of retirement look like to you?

Rick Kahler, another financial planner said, “Retirement means doing what I want, when I want, with whom I want. Once we figure that out, a successful retirement is just a matter of filling in the activity calendar and inviting others along.”

I’m with Rick! I would love the freedom to do what I want, when I want, with whom I want!

What are your answers to some of these questions? Any questions in particular that you found intriguing?