Stephanie McCullough (00:06):

Welcome to Take Back Retirement, the show for women 50 and better, facing a financial future on their own. I’m Stephanie McCullough, and along with my fellow financial planner, Kevin Gaines, we’re going to tackle the myths and mysteries of “Retirement.” So, you can make wise decisions toward a sustainable financial future. Through conversations and interviews, you’ll get the information and motivation you need, to move forward with confidence. And we’ll be sure to have some fun along the way. We’re so glad you’re here. Let’s dive in.

Stephanie McCullough (00:34):

Coming to you semi-live from the beautiful Westlakes Office Park in suburban Philadelphia, this is Stephanie McCullough and Kevin Gaines of Sofia Financial and American Financial Management Group. Say hello, Kevin.

Kevin Gaines (00:51):

Hello Kevin.

Stephanie McCullough (00:52):

Today we have a guest, another in our series of Real Retirement Stories. This is KT. I met KT at a conference. She happened to reveal that she was about to retire at quite a young age, and I hounded the poor woman until she agreed to talk with us on the podcast about how she got there. She has very generously agreed to, if we don’t share her last name so she could speak freely, to share with us kind of how she got to where she is today, retired at the age of 54.

Kevin Gaines (01:25):

So, if you think back a couple episodes ago, episode 19, we talk about what if you want to retire, quote, unquote, early or before the traditional 65. KT did it, so let’s talk to her and learn.

Stephanie McCullough (01:37):

Here we go. KT, welcome to Take Back Retirement.

KT (01:44):

Thanks so much, glad to be here.

Stephanie McCullough (01:46):

I think it’s just so generous of you to be willing to share your retirement story with us.

KT (01:51):

Well, as you pointed out, I’m retired, I have nothing else to do.

Kevin Gaines (01:54):

We’ll have to use that as the tagline for this episode. I’m retired, nothing else to do, let me go, come on a podcast.

KT (02:05):

It’s not true. It’s not true, but it does sound funny.

Stephanie McCullough (02:08):

Yes. So, you are significantly younger than kind of what people think of as the default retirement age. And we should address the fact that, that’s an outmoded notion, and yet a lot of people still kind of hold onto that idea of 65 or somewhere around there, as retired. So, when did you first decide that retiring early was something that you wanted to try to do?

KT (02:31):

Sure. It was probably about 10 years ago. I’m 54 now, so I was about 45. And really at that point, I’d been working since I was 14 years old, worked my way through college and never took any time off, including when I gave birth, practically. But I had always sort of imagined that I’d worked till I was 70 plus. And so, about 10 years ago, a little over 10 years ago, I met my now husband and we started dating and he’s 12 years older than I am. So, as soon as we started getting serious, I started thinking, “Wow, there are things we want to do that will be better served if we’re younger, rather than older. We’re both motorcycle riders. So, we want to crisscross the country a couple of times on motorcycles and I didn’t want to make him wait till I was of traditional retirement age before we did that. So, that’s when I started thinking about it.

Stephanie McCullough (03:31):

I love that. It’s always good to have something fun to motivate you.

KT (03:36):

Yes. And thinking about doing that, was fun. And it really, it’s funny having him in my life, I’d always been so focused on work and he really introduced a lot of fun into my life. So, it made it exciting to think about getting out early.

Stephanie McCullough (03:54):

Yeah. Give us some context on where you were in life at that point, when you first started realizing like, “Oh, maybe I don’t have to work till I’m 70.”

KT (04:01):

Yeah. So, I had recently gotten divorced from a 16-year marriage. I had joint custody of my kids. They were 13 and 10 at the time. And my ex-husband and I, we both came from families where there wasn’t extra money. We had certainly enough food on the table and a roof over our heads, but there was never any extra. And our responses to growing up like that were very, very different. So, mine being, I was a saver, very much a saver and his being very much a spender. And as you can imagine, those two did not align so well.

KT (04:39):

And, that was a big challenge in our marriage. So, that was sort of what was going on. And so, we ended up getting divorced, and part of that divorce was I had been the higher earner in the relationship and had to hand over a big check.

Stephanie McCullough (04:53):

Eh.

KT (04:53):

So, it was an interesting time. But so, I was about 45 when I’d just gone through this divorce. I had just bought a house with almost nothing down, just so I could have a place to raise my kids nearby and we could co-parent. I had about $225,000 in retirement accounts. And yeah, I started thinking about, “Well, okay, what if I got out early?” It was an interesting time.

Stephanie McCullough (05:19):

Yeah. To go from kind of being back on your heels financially to wanting to really get ahead of the game.

KT (05:28):

Yeah. It was. I really dug in and I started spending more time at the bank getting to know the guy who was the private client advisor, which I credit him for helping me see that I could do things a little differently and get out early. I ended up leaving that relationship with that, because I found the bank really wasn’t acting as a fiduciary and my money wasn’t growing as quickly as I would have liked. And-

Stephanie McCullough (05:58):

Uh-huh.

KT (05:58):

… that was a big lesson to learn right there about not giving up your power anymore.

Stephanie McCullough (06:05):

Yes.

Kevin Gaines (06:07):

So, was it just meeting your husband that got you thinking about stepping out early, or where you really starting to have these thoughts before you even met him going, “Is it possible?”

KT (06:20):

No, quite honestly, no. I really did think I would continue to work. I come from Italian immigrant background and you just worked. You just kept working. Like retirement, I really just thought I would keep working. Honestly, it was not a thought. It wasn’t a thought until I met this man, I started seeing different possibilities for my life. My kids were getting a little older. They still needed me, but they were 10 and 13. So, I could sort of see that things would be different in the future. As I mentioned, I was a saver, so fortunately I had been putting little bits of money away in 529s for the kids ever since they were born. And in hindsight, that was certainly one of the best decisions I could have made. But no, Kevin, I never had any plans to get out early.

Kevin Gaines (07:09):

So, would it be fair, because this is a little self-serving statement here, because this is one of our overriding themes here is, you develop this idea of wanting to retire early because you found something to retire to, not retire from? Would that be-

KT (07:23):

Yeah.

Kevin Gaines (07:24):

…a fair statement?

KT (07:25):

That would be a fair statement. And it’s funny, you sort of mention that because so many people, as I’ve gotten much closer to retirement, they’re like, “Oh, well, what are you going to do?” Like, “what’s your second chapter, what’s your this, what’s your that?” And honestly, the first part of it was, I just want to rest. I want to rest for a while. It’s been an interesting journey. I mentioned my ex-husband, he actually ended up passing away five years ago.

KT (07:53):

And, one of the other sort of pivot things in the whole divorce and whatnot was we had bought a house before the real estate market crash. It was a $650,000 house. When we got divorced, it was 2011. The value of it was about $450,000.

Stephanie McCullough (08:11):

Uff.

KT (08:14):

Yeah. And so, mortgage was underwater. The judge awarded him the house. And yet, of course, the bank really liked having my name on that mortgage. So, there I was, he passed away in the middle of all this, and I had a very large mortgage with really no ownership attached to it. It was an interesting time.

Stephanie McCullough (08:37):

Oh my gosh. That’s really-

KT (08:38):

Messy. It was messy.

Stephanie McCullough (08:40):

That’s the word.

Kevin Gaines (08:41):

That’s probably a nice way to say it.

Stephanie McCullough (08:43):

Oh my gosh. Yeah. So, what were your big sources of inspiration? Did you have people or role models that you kind of saw and wanted to emulate on your journey towards getting out?

KT (09:00):

Yeah. I think and again, even though I have very mixed feelings about my Chase Private Client experience, the gentleman that I worked with there really was the one that first put the idea in my head, that I truly could find a way to make my investments work toward getting me out early. So, it really started there. He started running the Monte Carlo Simulations and showed me, “if you do this, here’s what it looks like year-by-year, by year.”

Stephanie McCullough (09:29):

Yeah.

KT (09:29):

And so, that was where it started. I then really just started searching the internet. I found sites like Mr. Money Mustache and the whole FIRE movement. One of the early books I read was Your Money or Your Life, and it kind of went from there. Early on in my career, a boss had recommended to me The Millionaire Next Door, which-

Stephanie McCullough (09:54):

Yeah.

Kevin Gaines (09:54):

Mm-hmm.

KT (09:54):

…I read and it made a big impact on me, but I really never saw myself in it. I saw myself in it in terms of being frugal and thrifty, but I didn’t see myself in it, in terms of building a million dollars in net worth. So, those were some of the early things that inspired me. And really from about, I would say, as I mentioned, my net worth was about $225,000. And, that was between my husband and I at the time.

Stephanie McCullough (10:21):

Oh, yeah.

KT (10:23):

So, I had a long way to go, but I was fortunate. I was well salaried. And again, I had learned to live below my means, and not suffer from lifestyle creep and I was able to put away a lot of money.

Stephanie McCullough (10:41):

I think one of the things that people always get stuck on is this idea of, “I don’t want to sacrifice my enjoyment and my life today for some potential future thing.” Like, “I don’t want to live on rice and beans for 10 years for the possibility of this.” Did you really feel like you had to scrimp to put that money away?

KT (11:00):

So, yes and no. No in that, no, I didn’t live on rice and beans, but I started being extremely thoughtful about how I spent all of my money. There was no discretionary money that I didn’t think about, that I wasn’t careful with, where I’d have girlfriends that we could go out to the store and they would drop $500 on two pairs of shoes and a purse.

KT (11:25):

I’d go to the secondhand store, I’d go to the thrift store, I’d go to the consignment store. Or I would just say, “You know what? I’m going to make do with what I have, because I have a light at the end of the tunnel that I’m trying to get to.” There are tradeoffs, but I didn’t live on rice and beans. I didn’t do anything excessively frugal, but I did do things like when the tax refund came, I just forgot about it, put it in the bank account and let it keep growing. When I got a raise, I did the same thing. When I had sales commissions, I did the same thing. I essentially pretended I didn’t have it.

Stephanie McCullough (12:01):

Yeah.

Kevin Gaines (12:03):

What were the hard parts of doing this? Was there, you just every so often, it’s like, “I really would like to go out to dinner more?” Or just like one-time things? Or was there like a nagging thing that you had to keep tamping down to get the bigger goal?

KT (12:21):

I don’t want to say nagging because that would put it in the wrong light. But so, I was divorced and I shared custody of my kids. So, I had always been the more frugal in the mother-father relationship, and that obviously continued once I was out of the marriage. So, taking the kids to Walmart, I distinctly remember them being like, “But mom, why can’t we have this, and this and this?” And I finally had to say to them, I’m like, “Look, I know when you’re at your dad’s, you get all those things. I’ll always make sure you’ve got good food, I’ll always make sure you’re cared for, but no, we’re not going to buy all those extras because mom’s got a budget that she’s got to keep to.”

KT (13:08):

And, the other thing I did with my kids is I shared that budget. I was way more open with them than I think most people are. They sort of understood that I made a good salary, but I would sit them down and literally walk them through where that salary went, from the taxes to here’s what the mortgage costs, to here’s what it costs to put the lights on and here’s why I’m always trying to tell you to turn the air conditioner up a little higher, because this is how it affects our overall budget.

Kevin Gaines (13:38):

So, how are your kids today with money?

KT (13:41):

Very good actually. It’s funny, so they’re 23 and 20 right now. And, they’re very aware of putting money aside for the things they want in the future. My oldest just has his first real job. He just graduated college and he’s got his first real job. My youngest is still in college, but he’s managing his money and living in an apartment, and has a job and has a budget that he mostly keeps to.

Stephanie McCullough (14:13):

That is very impressive.

Kevin Gaines (14:16):

At that age, that’s not the easiest thing to do, so it sounds like you did a good job.

KT (14:21):

Thanks. I don’t know if I did a good job, but a good job was done and they’re great kids. I’m very lucky. The other sort of interesting thing that I’ve done with the kids is, I mentioned that I got them both 529s. For every semester, I set up basically a new contract with each of them. And in that I outline, “here’s what I’m paying, here’s what your scholarship is paying, here’s what I expect you to come up with and here’s what I expect the outcome to be.”

KT (14:55):

And we revisit that every semester, because I point out to them that just like the school will not renew the scholarship if they don’t meet certain benchmarks, mom won’t either. So, I think it’s helped serve as this isn’t just money they get to blow on four years of fun. It’s, “mom worked hard for that money and they will too.”

Stephanie McCullough (15:22):

Was the outcome just in terms of grades or were there other components to that?

KT (15:28):

Oh, really just grades.

Stephanie McCullough (15:29):

Yeah.

KT (15:30):

I wanted to emphasize that if the school and I were investing this money in them, that they needed to take it seriously and spend their resources carefully as well.

Stephanie McCullough (15:43):

Very cool. Oh, I wanted to say you mentioned the FIRE movement, I’m not sure everyone listening might know what that is. Do you want to define what that stands for?

KT (15:56):

For sure. So, the FIRE movement is financially independent retire early. So, F-I-R-E. A lot of people attribute it to the whole, Your Money or Your Life sort of starting there. And Mr. Money Mustache and JL Collins from The Simple Path to Wealth is some of the real early proponents of this, but basically saving enough money, so that your investments can pay for your life and you don’t have to depend on outside work anymore. You don’t have to depend on working for an income.

Stephanie McCullough (16:29):

Mm-hmm.

Kevin Gaines (16:30):

Yeah. Because the FIRE movement is fairly a popular conversation on the internet. Beyond the books and your initial resources, did you find a lot of groups and communities that you could bounce ideas off of, get advice from? Did you go down that route?

KT (16:49):

So, I didn’t get involved in the communities. I am technically, I’m a member of one of the Facebook communities, but it’s not something I participate in. What I probably did the most of is just being a sponge, just learning and chasing down different rabbit holes on the internet and in some books. But without too much time passing, I could see that some of them were much more sophisticated than others. By that I mean, in the FIRE movement, there’s this whole thing about the 4% rule, which basically talks about if you can create an investment pool of 25 times the amount of money that you need every year, that you can pull 4% a year and that’ll pay your expenses indefinitely. What I found though, there’s a lot of nuance to that. And one of the nuances and Kevin, you had talked about this on one of your episodes, taxes, right? And, no one…

KT (17:48):

Until you spend time reading some of the bloggers that are more sophisticated and more knowledgeable, you don’t necessarily realize that taxes need to be part of that equation of how much money you need, when you do this whole big calculation to figure out how big the pot of money needs to be. So, point being, you really need to spend a lot of time critically evaluating the different sources of information, because some of them are just parodying little pieces that they’ve heard. But then, there are a lot of other bloggers and podcasters that are really quite knowledgeable and have spent a lot of time developing these theories, and can explain them a lot more clearly so that you can follow them without getting in trouble.

Kevin Gaines (18:29):

Well, Stephanie and I are sitting here laughing. So, even though this podcast is just a podcast, we do have video, so we can see everybody talking. And, as KT’s bringing up this thing about 4%, Stephanie and I, our faces are just laughing because this is a huge conversation in the advisor community is the 4% rule. Pros and cons, will it work for this? Can it work for that? And, it’s a huge discussion in ways to modify it and make it better. So, when you’re out there, if you do go out on the internet, looking for stuff about the 4% rule, you’ve heard us reference rabbit holes before. The discussion about the 4% rule, that just might be a meteor crater.

KT (19:14):

Yes.

Kevin Gaines (19:16):

Such a wide range of discussion to be had with that.

KT (19:20):

It is, and there isn’t a real one size fits all. Everybody’s got to be really thoughtful about what their life and what their needs are, what crazy thing is going to come up in their life 20 years from now. And, I tend to be way more on the conservative side of things. The 4% rule just helped me get my head around what it could look like. It’s sort of a good rule of thumb but personal finance, obviously is so much more involved.

Stephanie McCullough (19:52):

Yeah, no, I appreciate your pointing that out and mentioning to critically evaluate sources of information.

KT (19:58):

Yeah.

Stephanie McCullough (19:58):

Because, there are a lot of people out there purporting to be experts. And, you want to go in like anything with some healthy dose of skepticism until you kind of vet what you’re looking at.

KT (20:09):

Mm-hmm.

Stephanie McCullough (20:10):

KT, along the way, did you have any hiccups? Did you have any pivots? Did you have a particular date or age in mind when you thought you would be able to retire? And, did that work out as you planned?

KT (20:21):

Yes. With the slight exception of, I probably stayed a year longer than I originally planned because of the pandemic.

Stephanie McCullough (20:31):

Yeah.

KT (20:32):

But probably the biggest pivot for me, so I mentioned when I started down this path, I was working with a bank financial advisor and really 55, 56 was sort of the age that he was targeting for me that I could get out, 54, 55, 56, depending on how things felt. The big pivot in the middle of all this, one part of it was obviously when my ex-husband passed away and I had to deal with this $450,000 mortgage in my name that like, “Holy cow, this could tank me.” But got through that, was able to fix up the house, sell it and went to paying off his debts and all that.

KT (21:14):

But the other big pivot was really taking my power back and moving my money out of Chase and their nifty little private client program, and taking over and making my own decisions from there on out. That was the biggest pivot. And, I think that made a huge difference to where my money is now. One of the things as you invest money is you have to understand that the fees that are behind it and how the community that’s supporting you is earning their living, as part of this whole puzzle.

Stephanie McCullough (21:50):

That’s a big one. We always tell people, “Ask how the financial professionals get paid, because they’re not doing it out of the goodness of their hearts. They’re not a nonprofit.” That fancy suit, and cufflinks and that sports car they’re driving came from somewhere.

KT (22:03):

Exactly.

Kevin Gaines (22:06):

Don’t look at me, I don’t have a sports car.

Stephanie McCullough (22:07):

I’m not looking at you. I know what you drive.

KT (22:12):

But you’re right. But I think just as a side note, as I mentioned to Stephanie, I’ve listened to your podcast since the beginning or since I heard about it, and then I went back and listened to all the beginning episodes and it’s really, you offer a lot of great, valuable information and get people thinking about some really important issues. Like the elder law and the senior care, I’m dealing with some of those issues myself now. And, it’s really valuable stuff that you guys are sharing.

Stephanie McCullough (22:41):

Thank you.

Kevin Gaines (22:42):

So, if there’s one takeaway our listeners are going to get from this podcast, it’s that our podcast is great. Take nothing else away, make sure you get that.

Stephanie McCullough (22:54):

We will highlight that quote in our social media posts.

KT (22:58):

There you go. Absolutely.

Stephanie McCullough (23:00):

KT, what advice would you have for women who might dream of going down a similar path that you did?

KT (23:05):

Yeah. So, there are really a couple of things and it probably all comes from don’t give away your power. And if you have given it away, take it back.

KT (23:15):

So that’s sort of my overarching, that’s what I tell people. And, that involves things like track your spending for at least a year, really understand where your money’s going and how you can impact that, track your net worth. Tracking my net worth on a month-to-month basis was something I started very early on and it’s been life-changing for me, truly life-changing. In fact, I don’t think I would’ve had the courage to leave that financial planner and go into a different situation, if I hadn’t been tracking my net worth and realizing that my money just didn’t seem to be growing as much as the market seemed to be growing. So, those are two things. Kevin, probably near and dear to your heart, learn about taxes and not just how taxes are affecting you right now, but how the taxes will affect you later.  [Karen – maybe we can make a bullet list of her tips?]

KT (24:08):

I pulled down the little fill-in-the-blank spreadsheet you guys have as a free resource on your website. And, that’s one of the things it sort of leads to is, okay, what happens to this money when I take it out? What part of it do I lose to taxes? And, all of those things are so important to think through. Don’t incur debt. Don’t let the mortgage broker tell you how much you can afford, you decide how much you can afford. Learn about expense ratios and fiduciaries, and don’t buy new clothes until you have an emergency fund.

Stephanie McCullough (24:45):

Oh, I like that one.

Kevin Gaines (24:46):

That’s a good one.

KT (24:46):

Oh, and check your credit. Check your credit every single year.

Stephanie McCullough (24:51):

Yeah, that’s an important thing too.

Kevin Gaines (24:53):

Now getting back to the tax question, imagine that, me getting back to taxes. What kind of conversations did you have with yourself, or debate did you have regarding your retirement accounts and converting to Roth? Not advocating one direction or the other, but getting back to understanding taxes in the future. Did you find, with your goals of trying to get out early, the willingness to pay a higher tax rate, to do a Roth conversion, for example, or something along those lines?

KT (25:23):

Right.

Kevin Gaines (25:24):

But, how did that impact or fit in your overall plan?

KT (25:28):

Yeah.

Kevin Gaines (25:28):

And, did it?

KT (25:29):

Yeah, I actually have not done that yet. So, there are a couple of things. As we talked about, everybody’s situation is different. So, one of the things that’s unique about my situation, I mentioned my husband’s 12 years older than I am. So, we’re fortunate in that he’s able to take social security now. So, we’ve got some inflow of cash there. I also, as part of my learning and research, I got to know a couple of the bloggers that I was following and had some back and forth, I would say at the halfway point. So maybe five, six years in, I’m talking to them about here’s where I’m headed, here’s how I’ve got things allocated. And being the age I am at, I come from a more traditional 401k, just your basic traditional 401k to traditional IRA. And she pointed out to me this gap that I would have because all my money, like I couldn’t get to it. So, actually what I did was shift some of my money away from going into the 401k to cash.

Stephanie McCullough (26:36):

Or investments outside the plan?

KT (26:38):

Investments outside the plan. Yeah.

Stephanie McCullough (26:40):

Yeah.

Kevin Gaines (26:41):

That’s important. And we’ll probably highlight, again, in our little recap that we like to do after these is, you had a good understanding of your cash flow and the timing of that, meaning you’re going to be tapped to some of this stuff before 59½ or whatever.

KT (26:57):

Yeah.

Kevin Gaines (26:57):

So, it’s like, the rule of thumb of put as much money as you can in your 401k, or IRA or whatever, didn’t apply because your situation is a particular situation.

KT (27:08):

Yeah.

Kevin Gaines (27:09):

So, I really don’t have a question here, but I just want to applaud you for having that awareness to just not follow what everybody else is talking about.

KT (27:20):

I wish I could take credit for that, but it was truly this blogger who I walked through my investments with and she’s like, “Well, but wait, you’re going to need that, you’re going to need cash and you don’t have any cash right now.” Because my whole life, I had been shoveling money into a traditional retirement account and-

Stephanie McCullough (27:41):

That’s what we’ve been told to do forever.

KT (27:43):

Yeah, it is. And also, the sort of PS to that is I was privileged in that my income didn’t allow me to do a lot with Roth at the time. I could have done Roth through the form, but anyway. But that was a whole other set of learnings that I didn’t have at the time. But so, I stopped, I diverted money and I built up a big cash cushion, which now supports me for the short-term. But also, you hear people talk about the buckets of money. And you’re replenishing the cash bucket, so you can take from that. But having enough in the cash bucket, so that if the market drops, you’re not dependent on taking money out of the market, you have that cash to lean on for the short-term.

Stephanie McCullough (28:29):

Yep. Yeah. Very important.

KT (28:32):

Lots of planning and thinking, and…

Stephanie McCullough (28:36):

It’s complicated. It’s a complicated financial world they’ve made us live in, whoever they are.

KT (28:40):

Yeah.

Kevin Gaines (28:41):

It’s always “they.”

Stephanie McCullough (28:42):

I know.

KT (28:43):

It’s not as complicated as it gets made out to be. And I don’t remember what episode it was, but one of your guests talked about the money stories that we keep in our head about how complicated it is.

Kevin Gaines (28:57):

Mm-hmm.

Stephanie McCullough (28:57):

Yes.

KT (28:57):

And, it causes all this anxiety. And if you just start taking action, whether it’s tracking your spending or looking at your net worth every month, it’s just these little baby steps.

Stephanie McCullough (29:08):

Yeah.

KT (29:09):

It’s taking that action that alleviates that anxiety.

Stephanie McCullough (29:14):

I totally agree with that. So often, I’ll sit down with clients who are terrified to look at this stuff, but once we actually dig in, they just feel so relieved like “that wasn’t so bad.” Or “I had more than I thought,” or whatever it is that it kind of builds up as this giant, scary thing, until you start tackling it.

KT (29:32):

Mm-hmm. Exactly.

Kevin Gaines (29:34):

The fear of the unknown is a lot bigger than the known for a lot of people.

KT (29:40):

Yeah.

Kevin Gaines (29:40):

Myself included.

KT (29:42):

Yeah.

Stephanie McCullough (29:43):

All right. I have a big question for you, KT. What do you like to splurge and spend money on?

KT (29:48):

Okay. It’s funny you should ask me that, because so my most recent favorite money book is I Will Teach You to Be Rich, by Ramit Sethi.

Stephanie McCullough (29:58):

Yeah.

KT (30:00):

And the reason I like it so much, a lot of what he talks about in that book I’m past. Right?

Stephanie McCullough (30:07):

Yeah.

KT (30:08):

However, he does a great job about talking about money dials and you can’t just keep being frugal for frugal sake, which probably is my natural inclination. So, I’m working on teaching myself to torque up those money dials and the things that are important to me. So, I would say one of them is I love to cook. I love to cook and bake, which means I like to buy good ingredients, I like to buy expensive cookware. That’s an area. And travel, which obviously we’ve sort of been restrained a bit, shall I say, with the pandemic.

Stephanie McCullough (30:45):

Just a bit.

KT (30:48):

Just a bit. And now, I’ve also got a sick family member. So, I’m home for the foreseeable future, but travel. I have a bucket list a mile long.

Stephanie McCullough (30:58):

Excellent.

Kevin Gaines (30:59):

Yeah. I do have one or two listeners that we have that will personally berate me, if I don’t ask. What type of bike you got?

KT (31:09):

Do you know motorcycles at all?

Kevin Gaines (31:11):

Yes.

KT (31:12):

Okay. So, I have a Harley Davidson V-Rod, which is-

Kevin Gaines (31:16):

Nice.

KT (31:16):

… essentially a power cruiser. It’s fast like a sports bike, but you sit like a cruiser. And, I’ve ridden that bike, gosh, like a hundred thousand miles.

Stephanie McCullough (31:26):

Whoo.

KT (31:27):

I’m on my second one, I should say. But I’ve bought the same bike twice.

Kevin Gaines (31:31):

Nice. And when the opportunity does present itself, where is your first trip going to be, like big road trip?

KT (31:38):

Big road trip, so we’ve done most of the Western states. So really, we’ve got to hit all the East. So out to the East Coast. We want to go up and down the Mississippi River, out to maybe fall in New England, that kind of thing.

Kevin Gaines (31:54):

Nice.

KT (31:55):

It’s a lot of fun. We enjoy it.

Stephanie McCullough (31:57):

That’s awesome. Well, thank you so much for being with us, KT. Do you have any last words of wisdom?

KT (32:02):

Gosh, no. I think I’ve given you all the wisdom I have. But you know what? I do have a couple of favorite books. So, I’ll send you an email with those books because they really helped me a lot along this journey.

Stephanie McCullough (32:18):

That’s great. We will definitely link to those in the show notes, and make sure we call out the other resources that you mentioned along the way, so people can find them too.

Kevin Gaines (32:26):

Especially those blog sites, for people that are interested in going down this road. And you did say, not all these resources are the best, so-

KT (32:35):

Yeah.

Kevin Gaines (32:35):

… since you’ve done some of the hard work of trial and error, I think more than a couple of people would appreciate riding your coattails, so to speak.

KT (32:44):

There you go. Well, I’ll be happy to pass them along.

Kevin Gaines (32:46):

Great.

Stephanie McCullough (32:46):

That’s awesome. Well, congratulations on your retirement and we certainly wish you the best.

KT (32:50):

Thank you so much. It’s been nice chatting with you.

Kevin Gaines (32:52):

Thank you.

Stephanie McCullough (32:57):

Well, that was so much fun. I loved talking to KT and hearing the real reality of what she went through financially, both before and after she decided that she wanted to retire, quote, unquote, early.

Kevin Gaines (33:10):

There’s a lot to take away from this interview. This wasn’t one of our longest ones, but I think there was a lot of good stuff in there. Most important was she said, “Our podcast was great.” But beyond that, I want to say I had two big takeaways from this and neither really apply to the reason we brought her on, talking about early retirement. The first one was the point she made about personal finance, your situation, my situation, everybody’s situation is different. Maybe not dramatically different, but there’s these little things that are going to make your situation and what you want to do and need to do to make that happen, it’s going to be a little bit different than your neighbor’s.

Kevin Gaines (33:55):

And don’t get hung up on what everybody says, “I’ve got to do this, I’ve got to do that.” Everybody says, “You’ve got to save as much money in your 401k as you can.” In KT’s situation, that wasn’t true. She had a particular situation. And, the other big thing that is probably going to be easy to overlook, the time she spent educating her children on money.

Stephanie McCullough (34:19):

Right.

Kevin Gaines (34:19):

We don’t teach this stuff in school very often or very well, the only place you’re going to learn it is either trial and error, which as we can all attest to, can be painful and expensive, or your parents. To her credit, she took the time and as she said, “Her kids have a solid awareness of money at this point.” Not going to say they’re not going to make stupid decisions, but they’re going to probably be in a better position to recover and, or recognize at least, when they make these bad decisions. And hopefully, less bad decisions than a few of us have made in our lives.

Stephanie McCullough (34:55):

Yeah. I think that openness and transparency really goes a long way, especially to just demystifying it. Like, “Hey, mom talked to us about money openly,” so-

Kevin Gaines (35:04):

Right.

Stephanie McCullough (35:04):

… it’s not some scary, big secret thing we have to keep bottled up inside.

Kevin Gaines (35:10):

What did you take from this episode, Stephanie?

Stephanie McCullough (35:10):

One of my favorite things was her point about being thoughtful about all the dollars she spent and where they went, and really thinking about it before spending and that, along with tracking her net worth, that’s what got her to where she is. Just that practice, that routine of making sure before dollars go out, she’s thought about it. And it doesn’t mean, she’d said she didn’t live on rice and beans. She didn’t scrimp completely, but she was thoughtful about where her dollars were going. I really think that’s the inescapable key to financial stability, to financial freedom at any point.

Stephanie McCullough (35:47):

And then, her other point that I was just talking to clients with about this morning, they’re maxing out their retirement plans, that’s great. And you need cash, and you need investments that are outside of the retirement plan, because what if you need something before that magical age of 59½. Retirement plans, they give you a tax break and tax breaks always come with a quid pro quo. They have those restrictions around when you’re allowed to take them out. Nobody says you can’t have investments outside of an IRA, you can have an investment account and yes, you’re going to pay taxes on it as it grows year-by-year. And in exchange for that, you can spend them whenever you want on whatever you want, including if you feel like retiring at 54 and riding your motorcycle all around the country.

Kevin Gaines (36:30):

Not a bad way to go, just saying.

Stephanie McCullough (36:34):

So, we’re going to link to those excellent resources that KT mentioned in the show notes. We’re so glad you joined us for this episode. We’ll talk to you next time. It’s goodbye from me.

Kevin Gaines (36:45):

And, it’s goodbye from her.

Stephanie McCullough (36:49):

Be sure to subscribe to the show and please share it with your friends. Show notes and more information available at takebackretirement.com. Huge thanks for the original music by the one and only, Raymond Loewy through New Math in New York. See you next time.

Disclaimer (37:03):

Investment advice offered through private advisor group, LLC, a registered investment advisor. Private advisor group, American Financial Management Group, and Sofia Financial are separate entities. The opinions voiced in this material, are for general information only and are not intended to provide specific advice, or recommendations for any individual security. To determine which investments may be appropriate for you, consult your financial advisor, prior to investing. This information is not intended to be substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.