In this episode: spending down to zero, the ratcheting rule, the guardrails approach, high fee 401k’s, and mini-retirements.

This week we are diving back into the listener mailbag with Rachael Camp to address the pressing questions our community has! Whether it’s curiosity towards the concept of dying with zero, determining whether it is a good time to take a mini-retirement, or working with high-fee 401k’s, Brad and Rachael tackle it all! Listen along as YOU the community dictate the conversation with your hot button FI questions!

Rachael Camp:

Website: www.rachaelcampwealth.com Twitter: @camp_wealth Timestamps: 0:55 – Introduction 1:38 – Spending Down to Zero 10:15 – The Ratcheting Rule and The Guard Rails Approach 20:38 – Flexible Spending Strategy 27:01 – Does Everything Need to be Optimized? 31:15 – High Fee 401k’s 41:48 – Mini Retirement Considerations 49:54 – Roth IRA Contributions and Faze Out Limits 55:57 – Conclusion Resources Mentioned In Today’s Episode: “Die With Zero: Getting All You Can from Your Money and Your Life” by Bill Perkins “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts” by Annie Duke The Ratcheting Safe Withdrawal Rate – A More Dominant Version Of The 4% Rule? The guardrails approach is a flexible retirement withdrawal strategy: Here’s how it works Early Retirement Now The Problem with the 4% Rule (and Why You Could Retire Even Sooner) The Roth IRA Conversion Ladder | A Case Study | ChooseFI Ep 17R Roth IRA Conversion Ladder Case Study | ChooseFI Ep 163R Retire Often Mini-Retirements to Accelerate Your Path to FI | Jillian Johnsrud | ChooseFI Ep 451 Subscribe to The FI Weekly! More Helpful Links and FI Resources: Top 10 Recommended Travel Rewards Credit Cards Empower: Free Dashboard to Track Your Finances CIT Bank Platinum Savings Account M1 Finance: Commission-Free Investing, 1-click rebalancing CashFreely: Maximize Your Cash Back Rewards Travel Freely: Track all your rewards cards and points Emergency Binder: For Your Family’s Essential Info (code ‘CHOOSEFI’ for 20% off) Student Loan Planner: Custom Consult (with $100 Discount) Get a cheaper phone plan with Mint Mobile…(read more)

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In the latest edition of the 485 | Mailbag, financial expert Rachael Camp tackles three burning questions from readers about spending down to zero, dealing with high fee 401ks, and taking mini retirements.

The first question comes from a reader who finds themselves in the unique position of having to spend down all their savings in order to qualify for government assistance programs. They are concerned about how to manage this process effectively without running out of funds too quickly. Rachael advises them to create a detailed budget and prioritize essential expenses while also finding ways to increase their income, whether through part-time work or selling unused belongings.

Next, a reader writes in with concerns about the high fees in their employer-sponsored 401k plan. Rachael emphasizes the importance of understanding the impact of fees on long-term investment returns and suggests looking into other retirement savings options such as IRAs or self-directed accounts with lower fees. She also recommends speaking with HR or a financial advisor to see if there are any alternative investment options available within the 401k plan.

Lastly, a reader asks about the concept of taking mini retirements throughout their career rather than waiting until traditional retirement age. Rachael explains the benefits of taking sabbaticals or extended breaks from work to recharge and pursue personal interests, but also cautions against the financial risks of not having a steady income during these periods. She suggests building a solid financial plan and savings buffer before embarking on mini retirements to ensure a smooth transition back into the workforce.

In conclusion, Rachael Camp provides valuable insights and practical advice for readers facing various financial challenges. Whether it’s managing a limited budget, navigating high fee investment accounts, or considering alternative retirement options, her expertise and guidance shine through in this edition of the 485 | Mailbag. Stay tuned for more expert advice and solutions in the next installment!