Hey, guys. Mike Frontera here, back with another Retirement Theory video.
So let's be honest. Do you love your job? Do you wake up in the morning excited for the prospect of another working day? Or are you just putting in your time, waiting for retirement so that you can finally enjoy your life?
Maybe that job that once challenged you and excited you just doesn’t anymore. The long hours, constant pressure, and stress. You’ve been doing what everyone has been telling you to do—you work hard, you save, invest your money. Then you start to wonder, is it that crazy to think about retiring early?
If that’s been on your mind, you’re not alone. I’ve seen it more times than I can count: people with strong savings stuck in a job they really don’t enjoy because they’re afraid they can’t afford to retire. But what I’ve seen more often than not is people don’t end up spending all that money they worked so hard to save, and a lot of them could have stepped away much earlier—if they had only had a little more clarity on how much is enough.
So it’s a clarity issue, but it’s also a mindset issue. People want to be 100% sure that they’ve saved enough money before pulling the trigger and retiring. All the worry and focus is on making sure they don’t ever run out of money. And yes, it is a big problem to run out of money in retirement—but there’s hardly ever even a thought given to running out of a much more important resource: your time. More specifically, your time while you still have a high quality of life.
So how do we reconcile these two things? How do you get clarity around how much stuff costs in retirement, and how can you shift your mindset to put a proper value on your time and your health?
Let’s try to answer that. But first, if you like this video, do me a favor—hit that like button. And if you want to see more videos like this, be sure to hit that subscribe button too.
Okay, let’s start with the practical side—the part where we’re actually putting numbers to this. First, let’s take a closer look at what you’re planning to spend in retirement. We can group your expenses into two broad categories: non-negotiables and nice-to-haves.
Non-negotiables are the basics—your mortgage, utility bills, food, insurance, basic transportation. These are things you simply have to cover. And yes, you should have a high degree of reliability around these expenses.
But it’s that second category—the more discretionary expenses—that people actually tend to oversave for. These might be things like extended travel, luxury upgrades, large gifts to family, second homes, or general lifestyle perks. Don’t get me wrong—those things are awesome. But what does it actually cost to pay for them? And not just in dollar terms, but in time?
Because here’s the trade you’re making: you’re giving up your healthiest and most vibrant years to be able to afford more stuff in retirement. But if you took a moment to step back, would you actually trade that time for a slightly nicer car, more international trips, or some extra shopping on Amazon?
I encourage people to try this exercise: quantify your remaining healthy and active time. No guarantees—just a ballpark. Say you’re 60 years old and estimate you have 20 good years left. If you choose to work two more years, that’s 10% of your remaining high-quality years. That’s 730 mornings of waking up without an alarm clock. Enjoying your coffee slowly instead of sitting in traffic and answering emails. Over 100 weekends you could spend with grandchildren, traveling, or doing what gives you peace.
Two years of freedom during the best years of your life. Is that trade worth it? For some people it is. For others, it isn’t. But most people never even ask the question. They focus so much on never running out of money that they end up overspending their time.
But when you actually run the numbers, you may discover that even partially funding those discretionary expenses—maybe traveling less, buying used instead of new—can allow you to retire a year or two earlier and gain that time back while you can still enjoy it. Because once your health starts to decline, there’s no amount of money that can bring that time back.
So when you’re planning for retirement, it’s not enough to ask, “Will I have enough money?” You also have to ask, “What’s it worth to have more time?”
Let’s walk through a quick example with our pals Jerry and Ginny and see how they answer that question for themselves.
Jerry and Ginny are planning to retire at 65. We start with a Monte Carlo simulation. This combines their portfolio, income, and expenses to determine the probability of success—essentially, how many scenarios end with them still having money. In their case, it’s 91%, which means they’re in really good shape.
One of my favorite tools is the cash flow overview. It shows their expenses (in red) and income (in green) over time. Ginny is making $40,000 and Jerry is making $300,000 for the next six years. They’re saving into their 401(k)s and 403(b), planning to maintain their current lifestyle in retirement.
Looking deeper, there’s a drop in expenses at age 65 because their mortgage is paid off around 2029. Their must-haves—living expenses of $4,000/month, insurance premiums, upkeep—continue with inflation. Their discretionary expenses include dining out ($800/month), gifts, car replacements, Medicare costs, and a $40,000/year “fun” spending budget, which they want to keep going until age 85.
Once they stop working, their taxes drop significantly—from about $146,000 to $1,400—because they’re spending from taxable accounts with favorable capital gains treatment.
Over time, their portfolio grows from $2.3M to nearly $3.5M by age 65. Even after retirement, growth keeps them afloat until about age 80. But here’s the twist: they’re burned out and want to retire at 62 instead.
If they retire early without changing anything else, they run out of money faster. Plus, they need $22,000/year for health insurance until Medicare. Their Monte Carlo probability drops to 32%. Not sustainable.
So we consider part-time work. Earning $24,000/year for seven years makes a big difference. Downsizing their home from $850K to $500K adds equity and cuts costs by $4,000/year. These changes bump their success rate up to 79%.
Next, they cut back on car purchases (from $50K to $36K), reduce discretionary spending by $10K, and revisit priorities—cutting gifts from $7,500 to $6,000, or only trimming $5,000 from discretionary spending. This brings them to an 88% probability—higher than if they had worked until 65.
In the end, by shifting spending, adjusting expectations, and aligning with their values, Jerry and Ginny created a retirement plan that gives them more time, not just more money.
Because remember: your years are not unlimited, and they’re not guaranteed. So when you think about retirement, don’t just ask if you have enough money. Ask yourself if you want more money—or more time.
Planning for retirement isn’t just about bank balances. It’s about clarity on what truly matters. Seeing the real cost of things—not just in dollars, but in time. Weighing your spending against what it takes to earn it.
So, do you have questions for me? Let me know. Once again, thanks for joining me. We’ll see you next time.