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Once you’ve reached retirement age, your free time is yours to do as you wish. You can spend your days doing things around the house, going on day trips and vacations, or spending quality time with family and friends. You might invest more time in hobbies and other interests. Sometimes, your hobbies, like the ones … Read more
Retiring by age 65 is a goal many people share, but it requires careful planning and preparation. Having the right tools and habits in place is essential to ensure a smooth transition into retirement. By focusing on these key elements, you can retire on time and enjoy the freedom and stability that come with a … Read more
It’s been a while since I’ve done a reader case, so here goes! Who do we have in our mail bag this week? Hi FireCracker! I’ve been reading your blog for about a year. Just finished reading your book which I love. A lot of it resonates with me as my parents immigrated to the US from Vietnam. My father was lucky to get education in the US during the 70s but then was put into re-education camp when he came back to Vietnam at the end of the war. My parents then escaped Vietnam while my mom was pregnant with me, […]
The post Reader Case: How Do I Get My Money Out in Retirement? appeared first on Millennial Revolution.
Most people look forward to retirement. Even those who know they’ll be on a limited income look forward to the day when they no longer need to work. However, sometimes what looks like a great thing in the beginning can start to get old after a while. Sometimes, tight finances weigh on you, and you … Read more
After the previous post of “how to organize a FIRE meetup“, and after the previous FIRE meetup in October in Leiderdorp, I have now teamed up with Ms. Hoefnix. And we have news for you! We have now planned FIRE meetup February 2025. See below for the details!
Update 17-11-2024 – 21:30: We sold out Saturday in less than 4 hours, so we added a Sunday meetup too. Which we also sold out in a few hours. What the actual F… I’m so sorry for all those that were interested, but didn’t register yet. You can still find a place on the waiting list for both days, but they are growing rapidly. Think we need to look for a bigger venue next time…
The program for the day is as follows:
12:30 – 13:00: Doors open
13:00 – 13:45: FIRE for beginners (by me!)
14:15 – 15:00: The Boring Middle, what to do with it? (by Mevrouw Hoefnix)
15:30 – 16:30: Discussion panel with 2 or 3 FIRE peeps (to be confirmed) with the cheerful topic ‘how to FIRE when the world is dire’
16:30 – 18:00: Drinks!
18:00 – 19:00: Final drinks and cleanup (we have to be out by 19:00)
19:00 – ???: Dinner. If you are hungry from all that money talk, we can check the options depending on the number of people interested to join. Dinner costs are not included in the entrance fee and participation is obviously voluntary.
We found a venue in the city center of the lovely town of Culemborg. Which is accessible via public transport, but also allows for free parking close to the venue. In short, no reason not to join.
February 1st and 2nd, 2025 from 12:30 until 19:00-ish. With the option to go out for dinner with the hard-core folks that will also stick around.
The usual good spirits, a desire to talk money, investing and life, and a desire to talk like Dr Doom during the discussion panel.
Because we had to obtain a venue, and because you will be well catered for, we do required a €15 per person entrance fee.
This particular event will be held in completely in Dutch. I do apologize to my international readers, but there will be another one organized in the future that will also accommodate the English speakers among you.
As there is limited space available (max 25 guests), and because there are costs associated with the venue and the catering, we do require registration this time. Please note that your personal details (name, email) will be kept highly confidential and will only be used for communication of fee payment and location details.
As noted in the introduction, both events are now officially sold out. But you are welcome to put yourself on the waiting list (as long as you realize that they are rapidly growing too).
February 1st registration:
https://forms.gle/5kmGkQjarojQAQ4x9
February 2nd registration:
https://forms.gle/dr9bTHErxTJL4aCH8
Hope to see you there!
The post FIRE Meetup February 2025 appeared first on Cheesy Finance.
Several years ago, I made a “killer” Black Friday score. I’d been eyeing a sleek set of headphones, and after … Read more
What happens when you spend three decades talking to retirement experts? You learn that most of what people think they know about retirement planning is oversimplified or wrong.
Christine Benz, director of personal finance and retirement planning at Morningstar, joins us on the Afford Anything podcast to share what she’s discovered after 31 years of interviewing experts across personal finance, tax planning, and Social Security.
One key insight: The standard advice about withdrawing 4 percent of your portfolio annually in retirement misses the mark. Real-life spending isn’t that simple. In your 60s, you might spend more on travel. By your 80s, healthcare costs often rise.
Benz suggests creating separate “pots” of money for different purposes – like a travel fund you aim to deplete within your first decade of retirement.
Want to protect against market crashes early in retirement? Benz recommends keeping 5-8 years of planned withdrawals in cash and high-quality bonds. This prevents having to sell stocks during downturns.
We talk about why retirement doesn’t need to be all-or-nothing. Instead of going from 40 hours to zero, Benz describes how many people benefit from a phased approach. This might mean keeping the parts of your job you enjoy while dropping the rest, or finding new ways to use your skills.
The conversation shifts to housing choices. While many assume retirees move to Florida or Arizona, the data shows most stay put. Those who do move often end up near their oldest daughter. And while single-family homes tend to make people happier until around age 75, apartment dwellers report more satisfaction after that — largely due to increased social interaction.
Benz shares her own retirement planning process. Despite being a retirement expert herself, she works with an hourly financial planner who tells her she’ll likely struggle to spend as much as she could in retirement. It’s a common problem — after decades of saving habits, many retirees find it psychologically difficult to spend their money.
The interview wraps up with a discussion about relationships in retirement. Research shows that while older adults often have smaller social circles, these relationships tend to be deeper and more meaningful. They’ve pruned away the “good enough” friendships to focus on their closest connections.
Benz’s insights come from her new book “How to Retire” and her work at Morningstar, where she creates free model portfolios and hosts The Long View podcast. Beyond the financial aspects, she emphasizes that successful retirement planning involves thinking about purpose, relationships, and how you want to spend your days — not just your money.
Timestamps:
Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.
0:00 What 30 years of retirement expert interviews reveal
1:34 Why spending in retirement is harder than saving for it
3:12 Beyond money: need purpose, not just leisure
4:00 The challenge: planning for an unknown time horizon
8:52 Should market fears delay your retirement?
13:42 How much cash and bonds to keep safe
15:49 When bonds don’t protect against stock crashes
18:33 Phased retirement: keep what you love, drop what you don’t
29:24 Take mini-retirements throughout your career
33:20 Spending shifts: from travel to healthcare costs
46:14 Why most retirees don’t actually move
57:31 After 75, apartment living beats houses
1:00:42 Friendship patterns change: quality over quantity
1:04:58 Virtual vs real-life connections
1:06:25 Where to find more info
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The Big Picture On Rent To Retirement:
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(Guest article by Michelle Cornish, CPA)
Most North Americans aren’t on track for retirement, according to a recent survey conducted by Bankrate.
I spent sixteen years working in public accounting, where I helped people with their taxes and retirement planning. Over and over, I found that people fear they haven’t saved enough for retirement. Nearly everyone wonders, “Do I have enough?” “How do I know my 401k won’t run out?” and “What happens if the stock market crashes right after I retire?”
The good news is that there is more than one way to retire comfortably. One way is to start investing in rental properties before retirement.
Consider three of the ways rental properties can ensure a comfortable retirement:
Stocks typically must be sold to supplement retirement income, and bonds eventually finish paying out. In other words, traditional nest eggs risk running empty at a certain point, but rental properties keep paying indefinitely.
Let’s dive in and take a closer look at these advantages of rentals for retirement, shall we?
Rental income is a great supplement to other income you may have in retirement. It can even provide the bulk of your retirement income!
Ideally, you’ve owned the property long enough that the mortgage is paid in full. This increases your monthly cash flow because you don’t have to worry about paying the mortgage out of the rental income you receive.
If the property has been well maintained over the years, then your only major repair bills should be CapEx (capital expenditure)-related. You can also increase the rent to raise yourself. Just ensure you stay within the confines of your local and state landlord-tenant laws. There are often rules regarding how often you can raise the rent and by how much.
If you feel like being a landlord is too much work, consider whether you’d rather bust your butt to contribute to that 401k… or find a job that even has a 401k plan. There are tons of great resources for landlords to help make it simple. Check out this landlord survey with many great tips, including 5 critical factors to consider when screening tenants.
Thoughtful planning around these aspects of rental property ownership can help create a more stable retirement income stream.
| Considerations | Impact on Retirement Planning |
| Property Management Options | Hiring professionals reduces time commitment but affects income |
| Tax Advantages | Multiple potential deductions available for rental property owners |
| Emergency Fund Planning | Essential to maintain reserves for unexpected vacancies |
| Insurance Requirements | Additional coverage needed compared to standard homeowner policies |
| Long-term Wealth Building | Benefits from both rental income and property appreciation |
| Location Strategy | Property values and rental demand vary by neighborhood and region |
| Maintenance Schedule | Regular upkeep helps prevent costly repairs and maintains property value |
Unlike lump sum pension payouts, when you own rental property, it’s up to you when you receive a lump sum payout. A lump sum payout from real estate investing occurs when you sell your property. The payout amount will depend on how much the property has gone up in value, how much of the mortgage you have left to pay, and how much capital gains tax you will owe on the sale. However, in the U.S., long-term capital gains tax rates (0%, 15%, or 20%) apply depending on the household income.
Here are ten things you can do yourself to increase the value of your property as much as possible.
Tax laws can vary depending on where you’re located, so consult with a tax professional before your sale is complete or even before you decide to sell the property.
Be sure to consider timing and taxes before selling any properties. If you own more than one rental property, you may want to time the sales so they end up in different taxation years so you can save the most tax (and keep the most cash) from each sale.
If you have equity in your rental property but are not ready to sell yet, or if you’d prefer to pass the property on to your heirs but still need a quick influx of cash, you can always borrow against the property’s equity. This can be a risky move, though, so make sure you know what you’re getting into before you do it.
A major advantage of an equity loan is that it’s not considered income, so you won’t be taxed on it. But you need to pay it back with interest, so proceed cautiously.
You’ll also want to know what will happen to the debt when you die, especially if your goal is to pass the property on to your heirs. A required loan payout on death (like in a reverse mortgage situation) may force your family members to sell the property, which is not what you want.
If you are considering borrowing against your rental property, do so cautiously. It’s critical to fully understand the contract terms, required repayments, interest rate, and what happens to the loan when the property transfers to your heirs. Work with a reputable lending professional you know and trust, or get a referral and triple-check their references.
Let’s tackle the question that keeps many aspiring real estate investors up at night – how many rental properties do you actually need for a comfortable retirement? The answer starts with understanding your target monthly income. Calculate your expected monthly expenses in retirement, then add a 20% buffer for unexpected costs and inflation.
A practical approach is to work backward from your target monthly income. For example, suppose you need $5,000 monthly in retirement income, and each property generates an average of $500 in monthly cash flow after all expenses. In that case, you’d need approximately 10 properties to reach your goal. However, remember that property values and rental rates vary significantly by location.
To calculate potential cash flow, use this simple formula:
Monthly Rent – (Mortgage + Property Taxes + Insurance + Maintenance Reserve + Property Management) = Monthly Cash Flow.
For instance, a property renting for $2,000 monthly might have $1,500 in total expenses, which leaves you with $500 in cash flow. To be conservative in your calculations, factor in vacancy rates of 5-10% annually.
I’ve noticed that investors who take their time choosing properties usually come out ahead. Let me share what I’ve learned about picking the right properties for retirement income.
First, you want to look at the neighborhood’s future, not just its present. Is the area growing? Are new businesses moving in? When will these changes occur? These kinds of changes can mean good things for your property values and rental rates down the road. Many investors I know make good money just by spotting these trends early.
As for the property, consider the big-ticket items that can affect your retirement income. How old is the roof? What about the HVAC system? Although these aren’t very exciting questions, they’re important ones. Trust me, the last thing you want is to drain your retirement savings on major repairs when you should enjoy that rental income.
Also, there are other factors you can consider – who are your future tenants likely to be? Are you near a university that ensures a steady stream of renters? Or, maybe you’re in a family neighborhood where tenants tend to stay longer? Knowing this helps you choose properties that will keep bringing in that steady income.
So, take your time, do your homework, and remember that each property is a long-term part of your retirement plan.
I’ve seen investors use several different approaches, and each has its place in your retirement strategy.
Traditional mortgages are what most people think of first, and they’re certainly common for a reason. You’ll typically need to put down 15-25% of the purchase price. While this might seem like a lot of cash upfront, it’s actually a great way to leverage your money to control a more valuable asset.
Another one is the self-directed IRA accounts; they let you use your retirement funds to invest in real estate. It’s a great option if you’ve already built up some retirement savings but want to redirect them into rental properties. Just be careful, though—there are strict rules about using these properties, and you’ll need to work with a qualified custodian.
And then there’s the 1031 exchange – an option I’ve seen many successful investors use. Think of it as trading up your properties without taking a tax hit right away. You can sell one property and buy another of equal or greater value while deferring those capital gains taxes. However, always consult with a tax professional (as I always told my clients) before entering a 1031 exchange, as the rules can be tricky.
A reverse mortgage works differently than an equity loan. Generally, you borrow against the property’s equity with a reverse mortgage, like a home equity loan. However, unlike a home equity loan, the balance of the reverse mortgage goes up over time instead of down, which is why a payout is required when you die.
You can’t get a reverse mortgage on a rental property, but you could get a reverse mortgage on your own home and use that to purchase a rental property if you’re late to the retirement game and wish you had purchased one when you were younger.
Still, you could probably accomplish the same thing with a home equity loan at a lower interest rate. Be sure to research your options carefully.
It’s important to make sure a rental property is the right investment for you. Before investing, ensure you understand how to calculate your net cash flow from the rental to avoid a bad investment.
Of course, as a CPA, I have to mention tax consequences. They are always there, lurking in the background. Rental properties come with some excellent tax deductions, but when it’s time to sell, be prepared to pay the tax collector. To be perfectly safe, contact tax consultants for changes, as they happen all the time and it can be hard to keep on top of all of them.
Before you get carried away with your real estate investing, read these important lessons and always check with a certified tax professional who knows the ins and outs of real estate investing to ensure you’re getting the most up-to-date tax advice possible. Tax laws change constantly, and you don’t want to be caught off-guard!
The post Rent To Retirement: Building Wealth Through Rental Properties appeared first on SparkRental.
We have some amazing mentors in the Millionaire Money Mentors forums. Some of them are even accomplished authors!
Over the next few months I’ll be sharing excerpts from some of these authors’ works.
Today we have an excerpt from F.I.R.E. for Dummies — a book that I loved reading and is now my go-to for introducing people to F.I.R.E.
It’s written by one of the mentors in the forums and makes for a great Christmas present (if you need any ideas).
The section today covers some basics of F.I.R.E. that often aren’t discussed on other sites, which is why I like it. It will be pretty basic for most ESI Money readers, but I wanted to share this so you can see how it starts from the ground floor — which makes it a perfect gift for those in your life who “just don’t get this FIRE thing.”
With that said, let’s get to today’s excerpt…
—————-
There is no doctrine or fixed set of rules you need to agree to in order to be a part of the F.I.R.E. community. There are, however, some common tenets to help achieve the primary goal of buying your time back and creating freedom in your life.
Here are some of the philosophies of F.I.R.E.:
Many people would choose to spend their time in different careers and jobs if money were not a factor.
If all careers and jobs paid the same amount of money, would you change yours? Do you feel stuck in a job you don’t love, or would you simply like to do the work you love on your own terms without being beholden to an employer?
F.I.R.E. is a whole community of people who reject the default construct of work and retirement. Thinking differently about the balance of labor, leisure, and life leads many people to want more freedom to define this themselves.
Most of the F.I.R.E. concepts are simple and aren’t new. They are just updated versions of the advice from wise people — parents, grandparents, and other influential people — who came before you.
If you’ve read the book Your Money or Your Life by Vicki Robin and Joe Dominguez, you had an early glimpse into what financial independence and retiring early looks like. Just think about the legacy this iconic pair built and how many people they’ve touched since reaching F.I.R.E.
If you’ve never imagined having an identity that did not include your job or career, you’re not alone. But there’s a lot of power in creating your own identity with you as the lead character and everything else in a supporting role.
There are many different reasons people navigate toward F.I.R.E. Here are some examples:
What’s on the other side of F.I.R.E. can motivate you more than what you’re moving away from. Think about your “why.”
Every person’s why is different than the next person’s. One of the great things about F.I.R.E. is that it’s flexible, and there’s not one precise way to do it.
My why for F.I.R.E. was to follow my big dream of creating a financially literate society. I know. I have a lot of work to do, but it’s work I love, and I couldn’t do it the way I want while at my full-time job. I tried, and it just became progressively more exhausting to do both.
Don’t let what the larger F.I.R.E. movement does dictate your goals. You are unique, and the only person who can design what time freedom looks like for you, is you.
As aspirational as F.I.R.E. may seem to me and you, it doesn’t always get a fair shake from other people. It’s healthy to take a critical look at things and examine a situation from other perspectives.
In the early days, there were some stereotypes assigned to the F.I.R.E. movement. As a member of the F.I.R.E. community, I could understand where they came from, but like most stereotypes, they were overgeneralized.
Here are some examples of the stereotypical perception of a person who could achieve F.I.R.E.:
There’s a lot more I could add to this list, but I got depressed just looking at some of these because I definitely don’t fit the mold, and you may not either. These descriptors in no way fully represent the F.I.R.E. community.
The source of these stereotypes was probably clickbait articles or other media content with limited scope.
I remember my first exposure to a diverse voice talking about F.I.R.E. on a major media platform. It was Jamila Souffrant, host of the podcast Journey to Launch and author of the book Your Journey to Financial Freedom (Hanover).
I admit that I was a skeptic when I first started exploring what F.I.R.E. was all about (back in 2014). I read some salacious headlines that got my attention, but my curious nature led me to do a lot more digging than reading a single article.
I started diving into it by devouring all the F.I.R.E.-focused podcasts, blogs, and books I could find.
I recall platforms with names that focused on the more extreme parts of F.I.R.E. like frugality or minimalism. Years later I felt that focus shifted toward things like simplicity, choice, and the wealth part of F.I.R.E. from sources like these:
Needless to say, there are a lot more platforms, resources, and communities where you can learn about F.I.R.E. I mention many throughout this book and offer a list of some of my favorites in Chapter 21.
———————–
That’s it for today…just a taste of the book for now to get us started.
Future excerpts will be much more detailed and lengthy, so brace yourself for some good stuff coming for the next several weeks!
The post The Basics of FIRE appeared first on ESI Money.
I’ve seen it over and over again with clients: they reached financial independence at some point in their 50s or 60s. And then, years later (maybe several years, maybe a decade or more), they inherited a whole bunch of money from their parents. And it’s not that the inheritance does nothing for them, but it really doesn’t change their lives dramatically, despite being a very large sum.
Christine Benz recently discussed the implications of a large inheritance and how it often means that there were missed opportunities, whether for spending on oneself or for more impactful giving to loved ones at an earlier point.
Thanks for reading!
Read the answers to this question and several other Social Security questions in my latest book:
| Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less |
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