Early Retirement Check-Up With Financial Planner


This past Friday was our annual “check up” with our Financial Planner.  Mr. Fire Station has worked with him over the last 10 years, when an early retirement was just a dream.  

I’ve estimated that only 2% of people retire by fifty years old, so it is no surprise that he has always taken a cautious tone to getting us ready for early retirement.  He was good to point out early on that the biggest challenge people have with retiring early isn’t financial – it’s lifestyle.  

Here are some quotes from our meetings over the years – I went through our old reports from him last week, where I usually write notes in the margins.  We discussed the possibility of retiring at 50 the first time we met.

  • 2005: “Your % savings level probably puts you in the top 1% of all savers.”
  • 2006: “With good luck & strong saving, a retirement at 55 is possible, not many people retire before then.”
  • 2007: “It’s a challenge to get to early retirement, but your savings have more than doubled in the last year”
  • 2008: “Oh, trust me, [Mrs.FireStation] – you don’t need to clip coupons anymore”
  • 2009: “Despite the decline in the stock market, with your strong saving, you’ve been able to maintain your overall net worth.” [big promotion the year before]
  • 2010: “Put it this way, you’ve won the money game” [my favorite comment]
  • 2011: “There’s a good possibility you could retire at 50.”
  • 2012: “To what you need to retire at 50, you are basically there already”
  • 2013: “The question you need to ask is not financial – will you be happy without a high-powered job?”
  • 2014: “I feel very confident that you have saved enough to retire at 50.”
  • 2015: “You made It – now don’t do anything highly speculative that messes it up”

In terms of conversation, we also followed up on some of the items I mentioned in my Stock Market Moves for Summer blog post from a couple of weeks ago.  We discussed and decided …

  • To put more, not less in equities – given my age and some JP Morgan charts that show the market in a relatively “average” valuation looking at the S&P 500’s forward price to earnings ratio (@ 16.4 vs historical 15.7 average).
  • To not put more focus on International stocks, given that about half of the S&P 500’s revenues come from foreign markets, and we have a strong S&P 500 position now.
  • To maintain a short-term cash position equal to about 3 years of expected early retirement spending.  We have about that much cash today, and it will (hopefully) float us through any downturns.  We’ve had 7 good years of stock market growth – a 10% correction or pullback is historically common over the course of a decade.
  • Keep our current mix of index funds and actively managed funds.  We don’t see eye to eye on this, because he has always leaned more toward actively managed funds, while I prefer low-cost index funds.  He felt that over a 10 year period, they likely would settle out similarly (despite the added cost of a fund manager).
  • To not look at “stop limit” activities.  His POV was that they often cause more hurt than help.  They can take you quickly out of a market downturn, but could you leave you sitting on the sidelines during a quick, successive upturn.
  • To manage spending in early retirement in concert with market returns.  Flexibility will be the key as not every year will be good, and not every year will be bad.  A lot of our spending is discretionary, so if we need to delay a car purchase, an overseas trip, or a house upgrade, so be it.
  • Not getting goofy and investing in a speculative business, becoming a restaurant partner, or doing anything “cute” with the money we’ve been able to nest egg.

Overall, it was a satisfying meeting and fun to look back on the 10 years we have been working together.

Image Credit: Pixabay

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