Jason thinks they could retire at 40. In her application to be on the show, Laura wrote that she wasn’t convinced. In fact, both spouses told him they don’t feel safe about it.
“The way you feel about money is not connected to the amount in your bank account,” Sethi said. He warned against going through life with “one way to feel unsafe after another for the next 50 years.”
His solution wasn’t for the couple to aim for a bigger net worth or nest egg. Instead, he offered a simple fix using two small exercises for the couple.
What the math says
Sethi had the couple’s finances run by Facet, an SEC-registered investment advisor that sponsored the episode. It built three retirement scenarios, assuming the following: income and expenses grow 3% a year, Jason’s pension starts at 65, Social Security starts at 67 and healthcare costs $1,200 per person per month until 65 — when Medicare coverage can begin. Before 59, the couple would live on rental income and taxable investments.
All three scenarios worked. When Sethi shared the news, Laura teared up and called the feeling a relief.
The earliest scenario of the three has the couple retiring at 45, moving into one of their rental units and trimming spending by $3,500 a month. Laura said she’s fine with stopping work at 45. Jason said he’d aim for 42. Neither wants to work longer than needed for a bigger cushion.
The $100 challenge fix
Sethi runs an exercise in his Rich Life program for people who struggle to spend. Participants get roughly 48 hours to spend $100 on something they love. It has to be for themselves (not a spouse, kid or their dog).
The point of the exercise is to notice the thoughts that come up when you treat yourself, such as worry of retirement derailment, and then see that the purchase didn’t change your life trajectory after all.
Sethi assigned this challenge to Laura, who said she’d check whether a $78 jean jacket she passed on earlier this year was still there. She skipped it because it had been an expensive year, but Jason thought she just didn’t like it. Sethi even suggested Jason offer to take her back to the store.
The ‘worry-free’ number she hasn’t set
As for the other small exercise, Sethi also urged Laura to pick a “worry-free number” dollar threshold in terms of spending. Anything below it, there’s no need to worry about it or hesitate. He said his own household uses one.
