BiggerPockets Money Podcast

Finance Friday: Signs You’re Saving TOO Much for Retirement

7 snips
Nov 1, 2024
Guest
Ethan
Ethan, a 48-year-old tech entrepreneur, explores early retirement planning and financial strategies. He questions if he's saving too much for retirement and if he could retire by 55. They discuss how his expenses, currently at $20,000 monthly, could drastically drop once his kids are independent. The conversation also covers the balance between enjoying life now and future savings, while considering options like part-time consulting or real estate investing as income sources after retirement.
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ADVICE

Early Retirement Planning

  • Exclude investments from expense calculations when planning for early retirement.
  • Account for large expenses disappearing after children leave home, like tuition and childcare.
INSIGHT

Reduced FIRE Number

  • Ethan's current $20,000 monthly expenses could decrease to $5,500 after his children's expenses and mortgage are removed.
  • This significantly lowers his FIRE number, making early retirement more achievable.
ADVICE

Cash Holdings Evaluation

  • Evaluate cash holdings and consider reducing excess emergency funds.
  • Assess if the interest earned justifies holding seven months of expenses in cash.
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