Fear And The Just One More Year Syndrome


“If you could stop working, why haven’t you?”

“If you’re financially independent, then why are you going to work this week?”

Image of Monopoly Millionaire character with empty pockets | MilitaryFinancialIndependence.com

Millionaires, but…

Those quotes were posted on ESIMoney’s Millionaire Money Mentors forum. I spend an hour or two there almost every day, because I enjoy the questions and the creative-writing process!

(That link is not a sales pitch and there’s no affiliate revenue. I’ve written this post to help you worry less and feel happier about the 4% Safe Withdrawal Rate, which I’ll clarify below with a classic-rock reference. The links in this post are for the search engines– and in case you want to dive deeper after enjoying the rest of these thoughts.)

I’ve written on that forum for over two years because, well: millionaire mentors. I’m learning a lot for my next book. (Better yet: paid Internet forums do not have trolls, spammers, or haters.) This is the best peer tutoring I’ve experienced in over 25 years.

The forum does not have any secret trading codes for the stock markets, and the real-estate entrepreneurs did not get rich quick. However we have many discussions about safe withdrawal rates and the potential pitfalls of our financial independence lifestyles.



Yeah, you read that right:  just like everyone else, millionaires are concerned whether we’ll have enough money for the rest of our lives. The Just One More Year syndrome is more pernicious among this wealthy group than my years of experience on Reddit, or MrMoneyMustache, or Bogleheads, or even the Early-Retirement forum.

Some of the Millionaire Money Mentors have been happily financially independent for years, yet they’re not ready to stop working. They fall into two groups.

The first group loves what they do, and this is a very good thing. When you’re financially independent and your work is still challenging & fulfilling, then keep working! Do what you love for as long as you can. I hope we all find our avocations.

The second group of millionaires wants to use their FI to work less and live more. As much as they’d like to do that, they’re skeptical that their assets are sustainable. Before they quit their jobs, they want more safety margin.

I empathize with both groups. It takes months to change a mindset from scarcity to abundance, and we’re all reluctant to live a lifestyle that will Die With Zero.

I have over 20 years of experience with financial independence, yet spending money in retirement was harder than I expected. The skills which enable humans to earn, save, and grow our wealth (before FI) have little relevance to living a financially sustainable life without a paycheck (after FI).

Financial independence means that we might be able to afford the (higher) prices of (more) things, but we still have to perceive the value of every purchase. Does it improve our lives? Does it make us happier?

Millionaires can do math. Most of the forum understands probability & statistics. I thought that every member would embrace the strengths of the 4% Safe Withdrawal Rate while accepting its minimal risks. At age 62 I’m old enough to remember when Bill Bengen published his 1994 SAFEMAX research and started the perpetual debate on the 4% SWR. These days I expected that after three decades of analysis, a bunch of millionaires would agree that it’s become conventional wisdom.

That seems so logical, doesn’t it?

Gosh was I wrong.

At first I was shocked by the number of forum members who feel compelled to work for more years to build more wealth which– by their own math– they do not need. “C’mon, folks, I joined this group to learn the millionaire secrets of how to live with too much money! Whaddya mean, you don’t think you have enough?!?”

Our phrase “safety margin” isn’t fretting about our yacht’s lifeboats or the fuel ranges of our jets. We don’t have yachts or jets. (We’re not even contemplating carbon-fiber longboards.) It turns out that people in the Two-Comma Club are still stressing about mortgages, affordable health insurance, kids’ college tuition, long-term care, and the travel budget.

Image of Kazuma stand-up paddleboard at White Plains Beach Oahu | MilitaryFinancialIndependence.com

Well, I did buy a (used) carbon-fiber SUP.

The math & logic behind the 4% SWR isn’t enough reassurance, either. When you’re a millionaire, you’re still vulnerable to the emotions of behavioral financial psychology. You might be awesome at math & logic but you’re still human. Even if you’re way past the tripwire of financial independence, you still have to sleep comfortably at night after quitting paid employment.

Yes, these are millionaire #FirstWorldProblems. You wish you had them too, right?

(If you’re just starting your path to financial independence, please keep reading.  Do not despair while you’re paying off debt or feeling the pressure to sign up for that military retention bonus.  These millionaire examples are only highlighting the surprising fact that more money does not free you from worry. We can still help you reach financial independence on your terms.)


What’s wrong with working for more money?!?

Money is the easier part. As we approach FI, we have more critical resources to worry about sustaining.

Recently one of the forum’s more prolific posters, Millionaire73, explained his perspective:

… something I have been thinking about recently and might be relevant for the ‘One more year folks’ who have the means to retire but are worried about running out of money [is] how much thought they are giving to ‘running out of health.’
We always talk about SWR but never about SHR (Safe Health Rate)…
You may want to ask yourself why you have that fear around money but not around health as for all too many they are trading money not only for time but for health as they don’t have the time or energy to take care of their physical or mental health and ‘will get to it later.’
I have to think that less stress, more sleep, more time to exercise, and self-care increases the odds of staying healthier for longer. Are you only worried about the money odds?
For each person, there are the opportunity costs of making money at the expense of time and portions of life/experiences (worth way more than money) that you can never get back if you miss as well.

Then he wrote:

Three years ago I was planning on working for another 5-10 years so my perspective has done a complete 180 and I’m sure glad it did.

That’s the issue, coming straight out of the book “Your Money Or Your Life”:  trading life energy (that you might not have) for more money (that you won’t need).

It’s fascinating to learn about the fallacies and biases of behavioral finance, but we hardly ever discuss the fallacies and biases of our life energy. What’s the safety margin on our health? Maybe we feel personally invulnerable and darn near immortal, but the universe has a few surprises waiting for us. We can all figure out how much money we have– but none of us know how much time we have left.

Worrying about money might be the wrong approach. Maybe we should worry about our quality of life.


Feelings and choices, not just math & logic

I’ve spent decades explaining financial freedom with math & logic, but I’ve learned that our human emotions are more important. I’m finally beginning to understand how to explain FI with more attention to how we’ll feel, and not just more pontificating on exponential compounding.

The deeper I dive into the math & logic of personal finance, the more I appreciate that the emotions of behavioral financial psychology are far more difficult to handle. The size of your spreadsheet only matters if you feel confident about it. If you (and your family) aren’t happy with reaching the 4% SWR’s tripwire of FI, then the math & logic is irrelevant.

I should stop relying on math & logic to assuage our fears about the 4% SWR.

Financial independence gives us the freedom to make more choices. It’s our chance to completely redesign our lives.  We should feel happy about that freedom of choice!

Unfortunately there’s a paradox in all of those choices, and we’re overwhelmed like hyper-sugared toddlers in a candy store.

What do we do with too many choices? We want everything. We flounder with indecision. We procrastinate. Instead of thoughtfully and rationally identifying what we really want, we try to discard most of the other choices so that we can pick something from whatever’s left.

Then our self-confidence withers and we second-guess the choices we’ve already made. We start all over again and end up running around in circles.

Every parent has seen this toddler story before, and we all know what eventually happens. First, there’s an epic meltdown… and then someone else makes the choices for them.

“Golly, maybe it’s easier to stop tasting all the candy. We’ll circle back to these decisions in… oh, Just One More Year!”

As we grow older, eventually most of us learn to make our own choices. (Some of us take longer than others to learn that.) However the longer we flail around in the candy store of life, the more likely it becomes that someone else is going to make our choices for us.

Let’s make that fear work for you. If you’re worried about Just One More Year syndrome and hesitant to make the choices for a better life, then I’m going to help you worry constructively.


“What, me worry?”

Image of Leonard Nimoy's Doctor Spock character looking skeptical because worrying is highly illogical.

Worry? Highly illogical.

So you’re too worried about the 4% Safe Withdrawal Rate to feel that you can stop working, and you’re going to try Just One More Year?

Maybe you should worry that you’ve defaulted to spending more time at work instead of choosing to:

  • sleep well almost every night
  • eat a leisurely healthy breakfast (and lunch, and dinner), and not snack on the run
  • exercise regularly
  • spend more time with loved ones
  • enjoy nature during long walks with friends, family, podcasts, or your own thoughts
  • travel the world at your own pace instead of in between work
  • explore new interests as deeply as you want.

If you’re committing yourself to Just One More Year (with only two weeks of vacation), maybe you should worry how you’ll feel about missing the opportunities to:

  • reconnect with your spouse and family
  • focus on parenting after bringing home your next baby
  • volunteer more at your kids’ school
  • cheer on your kids at their school & sports events
  • travel with family for months at any time of year instead of two weeks in summer
  • experiment with long-term slow travel and expatriate living
  • drop everything to help family or friends with a crisis
  • be there for your loved ones.

“Just One More Year”: is your life on hold, or are you holding back your life?

You should worry that instead of making choices for a better quality of life, the side effects of the stress could be working you to death. JOMY syndrome also means that you might be raising your stress levels with:

  • business attire, workplace clothing, and occupational safety gear
  • repetitive stress injuries and other service-related conditions
  • rush-hour commutes
  • corporate travel (in coach, not in business class!)
  • meetings you don’t want to have with people you don’t want to deal with
  • deadlines
  • reorganizations
  • watching out for your team
  • new bosses
  • “mandatory” events of training, team building, and socializing
  • frequent interruptions all workday
  • assessing every life opportunity within the constraint of the work calendar
  • checking e-mail every evening
  • a 24/7 corporate culture, including nights & weekends
  • having to lay off some of your team… or even
  • being laid off.

Considering that list, maybe you should worry about your health. Meanwhile there are literally thousands of posts on personal-finance forums describing how FI people are enjoying their freedom while getting into the best shape of their lives.

While you’re contemplating those Safe Health Rate issues, here’s two more thought experiments.

First, worry about how you’d feel if you were working under the self-inflicted duress of JOMY syndrome when:

  • you’re overweight, your blood pressure is higher, you have stress headaches from chronic fatigue, and your doctor’s writing prescriptions
  • you’re hospitalized with a health crisis
  • a loved one has a severe disease or injury needing prolonged care & therapy
  • a family elder needs your help with their home, their activities of daily living, or even dementia.

Is it better to have to untangle yourself from work to take care of these situations, or would you rather already be living your freedom in financial independence?

And finally, think about Taking Stock of your life if:

  • your co-workers are dying on the job from strokes or heart attacks, or
  • even worse: you realize (before it’s too late) that you’re at risk of dying on the job from a work-related stroke or heart attack.

If you die at work then you don’t have to worry about your feelings– you’re dead. But before that happens, maybe you should worry about how your family, friends, & neighbors will feel. When you’re in the military, you already know how it feels.

That’s a lot of life events to worry about.

Are you still worried about your money and the 4% Safe Withdrawal Rate?

Or would you be less concerned if you had a better Safe Health Rate and the life energy to help you worry about more important issues?


“You Never Know Your Last Day”

Here’s a quote from another Millionaire Money Mentor:

It has struck me lately that we never know the last day we’ll do anything.
For example, I have two friends who looked like they were going to play pickleball for years to come, but have recently had injuries/situations come up.
Now it looks like their last day ever playing pickleball is behind them, not ahead of them.
Things still could turn for them, but I’m even thinking of this issue for myself…I may not be able to do _____. In fact I probably won’t be able to do lots of (fill in the blanks) in 1 year, 5 years, 10 years, etc. So I don’t want to put those off saying, ‘I can do them in the future.’ Maybe I can, maybe I can’t. One simple event could make it the last time I do X, Y, and Z.
Anyway, trying not to be a downer today, but also want to be realistic. So get out there and do what you want NOW – so your last day of doing X is not behind you…as it appears to be for my friends.


The Classic-Rock Reference

Welp, that got awfully dark.

I think you can figure out this post’s Call To Action, so now I’ll try for a more upbeat conclusion.

Let’s reach back to those paragraphs about making life choices for your Safe Health Rate.

The world’s greatest drummer in progressive rock, Neil Peart, wrote the world’s best lyric about Free Will in his chorus:

“If you choose not to decide, you still have made a choice!”

Go ahead, click through that link and enjoy the music while you read those lyrics.  We’re here to help you feel better, and that anthem has helped me get through four decades of life.

Now worry constructively: and make good life choices.  The 4% Safe Withdrawal Rate will take care of your money, and you can take care of your life.

In a future blog post I’ll share more ways to get comfortable with the 4% SWR.

(This post was written in memory of Jim Nelson– BigMoneyJim–  who reached financial independence on a high savings rate and became a digital nomad for two years before unexpectedly passing away. Even as his health deteriorated, Jim was happy that he’d had the flexibility to explore his new life.)


Related articles:
Tim Urban’s “The Tail End”
Four Thousand Weeks
After financial independence: Rich, Broke, or Dead?

Posted in Financial Independence, Military Life & Family, Money Management & Personal Finance | Leave a comment

20 Years Of Financial Independence & Military Retirement 

After 20 years of military retirement, life is better than ever!  We’ve made the shift from accumulating assets (and our former insecure attitude of scarcity) to philanthropy & gifting (from a mindset of abundance).  

Spoiler:  the 4% Safe Withdrawal Rate works.

Thanks to the reader who provided the inspiration for this post:

“I would be interested in hearing more about your FI lifestyle and wisdom you have gained after being financially independent for 20+ years.”

No, you’re not going to read clichés about “20 Lessons From 20 Years.”  This post answers over 20 questions from the audience and from the members of the Millionaire Money Mentors forum.

I’m not going to call out the millionaire questions, but here’s a hint:  millionaires asked far more questions about lifestyle, relationships, and regrets than about the money.

Image of Doug Nordman surfing Haleiwa Ali’i Beach Park | MilitaryFinancialIndependence.com

“So far so good!”

This is one of my longer posts, at over 6300 words.  (I’m not going to break it into a series.)  Feel free to skim.  I’ve highlighted the questions and bulleted them in bold text, along with portions of the answers.

But first, a recap.

My spouse and I reached our threshold of financial independence in late 1999 after 17 years of saving & investing.  (Back then the Internet bull market had peaked and everyone was financially independent… for 15 minutes.)  Back then we were also ignorant about FI (let alone the 4% SWR) and I stayed on active duty until I retired on 1 June 2002.

Even worse, by October 2002 (at what we know today was the depth of the Internet Recession), we were full of uncertainty and a little more fear.  

We were in our early 40s.  Our net worth had dropped from its lofty 1999 heights, but we were still FI by spending all of my military pension plus another 4% of our investments.  The good news was that my pension had an inflation-fighting cost-of-living adjustment and we had cheap healthcare.  The bad news was that the markets continued to drop, and our 4% SWR looked like it’d actually be 8% by 2003.

Other uncertainties back then:

  • My spouse was in the Navy Reserves (no pay, only drill points) but she didn’t know whether she’d earn her own pension (at age 60).    
  • Our rental property had negative cashflow for over eight years of the Hawaii 1990s real estate recession.  It was heavily mortgaged and worth less than we’d paid for it in 1989.
  • Our new home (bought in 2000) was a neglected, filthy money pit— and also mortgaged.  We had years of sweat-equity DIY home improvement ahead of us.
  • Our actively-managed mutual funds had expense ratios of 0.8%-1.4%, and the active management was *not* beating the markets.

Mathematically & logically, the 4% Safe Withdrawal Rate was too new to be trusted.  Bill Bengen had written about his SAFEMAX study in 1994, and research professors had published their Trinity Study in 1998, but everyone was focused on the failure modes.  

From the emotions of behavioral financial psychology, we got a lot of pushback about retirement.  We were “too young”, we’d be “bored & unfulfilled”, we’d “lose our contact network”, our “skills would go stale”, and “we’d never be able to get another job.”  Ha!

The pushback was so forceful (and annoying) that I claimed I’d “take a few months off to spend time with family & friends.”  In reality I was burned out to crispy critterness.  

We decided that “I could always get a real job after retiring from the military”, but first I wanted to try out the financial independence tactics we’d read about in “Your Money Or Your Life” and “The Millionaire Next Door.”  

The good news:  our daughter was nearly 10 years old and our family had just learned to surf!

Cut to the bottom line, Nords.

Today we’re not worrying about the failure rates of the 4% SWR.  We’ve won the game.

My spouse started her Reserve pension a few months ago.  

Today our core expenses are less than half of our gross income.

We’re solidly in the 22% income-tax bracket (before itemizing our philanthropy deductions).  We saw this tax issue coming:  we spent 16 years converting our traditional TSPs & IRAs to Roth IRAs (in lower income-tax brackets) in case our income went higher in our later years.  Now it’s happened.

Image of sunrise at White Plains Beach Oahu | MilitaryFinancialIndependence.com

Sunrises are better than ever.

Our pensions are indexed to inflation (the same CPI used by Social Security and the VA) and our expenses are rising slower than the CPI.  Our pensions also mean that we can invest our other assets in a total stock market index fund.  Over the long term (>10 years) our investments are growing faster than inflation.  Despite three recessions during the last two decades, our net worth has grown a lot faster than inflation.

After many painful money-losing years with our rental property, we’ve finally achieved good cash flow.  (By Oahu standards, that’s a capitalization rate of 3%.)  We’re still trying to figure out whether to keep landlording, or to sell it, or to give it to our daughter and her spouse.

I can start my Social Security deposits in just a few months when I turn 62 years old.  (That happened a lot faster than I expected!)  Our analysis (with the Open Social Security calculator) suggests that we both wait until age 70, because we already know that taking SS sooner will boost our Medicare premiums (IRMAA).

We won’t buy yachts or private planes, although we could certainly spend the rest of our lives on cruises or in first-class seats.  However we don’t care about cruises anymore, and we’d rather fly military Space A.  

We’ve reached “enough” and we’ve gone on to “more than enough.”

Our mindset has made the difficult shift from scarcity to abundance.  

There’s nothing more that we want to own… not even another longboard.  We’ll keep traveling (while we still can!) and we’ll ramp up our philanthropy & gifting.

Let’s go to the questions.

  • “What was your net worth when you started? How did your asset allocation evolve over time, if at all?”

Instead of a 20-year-old number, this chart indexes our financial independence (starting at 100) and shows the growth over the years.

Our asset allocation was 100% equities when we started our military careers.  When we retired, we set aside two years’ expenses in cash to help shield us from the worst failure mode of the 4% SWR against sequence of returns risk.  For the next decade our asset allocation stayed >90% equities with up to 8% cash.

After 10 years we checked our numbers again.  Our net worth had grown faster than inflation and our spending had barely grown with inflation.  Our latest withdrawal rate had dropped below 4%, which meant that our investments would last much longer than 30 years.

Let me repeat that:  after only 10 years of FI we already knew that we’d have enough for the rest of our lives.

During the next two years we spent down the cash stash.  Today we’re back to >95% equities, with only enough cash on hand to pay the monthly bills.  

  • “What were your assumptions when you started? Did they play out the way you thought?”

We hesitantly assumed that the 4% SWR would work.  (If it didn’t, we’d have to cut spending or get part-time jobs.)  More importantly, we were hyper-aware of the failure modes and we expected to see problems coming from years away.

The 4% SWR worked out, as we now know that it does more than 95% of the time.  More importantly, our aggressive asset allocation has grown our investments faster than inflation while my military pension has kept up with inflation.

  • “Many of us just starting the FI journey have angst over the sequence of returns risk. Details on alleviating the SORR fears would certainly be welcome!”

Back in the 1990s we read that most bear markets and recessions are shorter than two years.  It might take longer for our investment balances to recover their previous high values, but they’d still be able to sustain the 4% SWR.

We decided to keep two years’ expenses in cash to ride out the adverse effects on our equities.  Each year when the markets were up, we’d sell some of our equity shares to replenish the cash stash.  If the markets were down, we’d continue spending the second year of the cash stash.

We started with our cash in a money-market account, but after a few years we decided to chase yield with 3-year CDs.  

At the time CD rates were much higher than money markets, and 3-year CDs only had a six-month early-redemption penalty.  We were willing to take that redemption risk during down markets in order to have a little more interest during up markets.

This two-bucket strategy (for the first decade) allowed us to invest more aggressively in equities.  My military pension was already the equivalent of the income from I bonds or TIPS, and we did not need to include bonds in our asset allocation.  Yes, our investments were very volatile, but my pension had zero volatility— and that helped us sleep more comfortably at night.

Our tactic worked well during the 2000-2002 recession.  It worked exceptionally well (both financially and emotionally) during the Great Recession.  We used up our cash stash in 2010 and had to start selling shares of our equities, but we had enough unrealized capital gains to avoid selling at a loss.  In 2012 we replenished the cash stash for the last time, and after that we spent it down for good.

During the 2020 pandemic recession we simply sold shares (capital gains) to pay our expenses.  The lockdown lifestyle was unfortunately very cheap.

  • “Having retired early in the midst of a “lost decade” in the stock market, what specific advice would you give early retirees to plan for emerging through similar market conditions successfully?”

Pick an asset allocation that lets you sleep comfortably at night, and stick with it.  Stay the course and rebalance when your tripwires are triggered.  Don’t even think about trying to time the markets.

Keep tracking your spending.  Don’t deprive yourself— keep spending your plan— but know where the money is going in case the markets expose you to sequence of returns risk.

After our first decade of FI (and despite that lost decade), our net worth had grown faster than inflation.  Our actual withdrawal rate in 2012 had dropped below 4%.  By the end of the second decade of FI our core spending was hovering around 2%.  Even Big ERN (Dr. Doom) of EarlyRetirementNow agrees that a 3% withdrawal rate is sustainable for at least 50 years.  

Note that the “lost decade” of 2000-10 shared a benefit with the lost decade of the 1970s:  dividends.  Between 2003-17 we invested a quarter of our equity portfolio in a dividend fund (the iShares Select Dividend ETF, DVY) that grew its dividends faster than inflation.  I wouldn’t invest in it today— its expense ratio is relatively high compared to other dividend funds— but it maintained most of its payout even during the Great Recession.

  • “How have you fostered the importance of financial independence to your children? Any plans on how to impart similar lessons and inspiration to your grandchildren?”

Kids watch what you do and absorb your values.  Our daughter knew in kindergarten that financial literacy (and financial independence) are important to us.  As she grew up we kept sharing teachable moments in an age-appropriate manner.  

Today that might look smart, but we started as chronically-fatigued parents of an always-on toddler.  We talked about money with her simply to keep her brain occupied on our tasks so that we could all get through the day.

Image of Doug Nordman with toddler granddaughter Arya at the San Diego Zoo | MilitaryFinancialIndependence.com

On deck: #GranddaughterFI

She started managing her money as a preschooler by handling the coins of her small allowance and learning to make spending choices.  As she grew older we added financial incentives:  she could earn more with jobs around the house to save faster for big spending goals.  If she saved money by using coupons or making a home lunch instead of buying school lunch, we’d share the savings with her.  We scaled up as she got older, and she got more comfortable at managing ever-larger sums of money over longer periods of time.

Today she and her spouse are on the cusp of their own financial independence, and they did it a lot faster than her parents.  Our family tactics were so successful— and we got so many more questions on the details— that we shared our tactics in our book.

  • “What impact has your financial independence had on your family relationships?  Not just immediate, but siblings & cousins?”

Summary:  “Money makes you more of what you already are.”  

My father reached FI in his early 50s.  One day in 1993 when I groused about my transition out of the military, he pointed out that if we’d saved & invested then we might not have to find jobs after the military.  His observation sparked our interest in FI and grew it into a bonfire.  

My brother carved his own path to LeanFI.  He sold his business but he continues to do the things he enjoys for some side-hustle income.

My parents-in-law have been less supportive.  I think my father-in-law has worried for the last two decades that my chronic unemployment is going to leave his only daughter penniless.  And her daughter.  And her daughter too.  I don’t know how he feels today:  my last conversation with him was nearly 15 years ago.

My brother-in-law is a retired tax CPA, and his spouse retired from programming at a utility company.  They reached their FI years ago, but he has no reason to stop doing accounting.  He was going into a friend’s tax office one day a week, but he’s retired from the 100-hour weeks during tax season.

My cousins and their adult children are a mixed crowd.  Some are working because they want to while others might still have to.  We stay in touch but I only discuss money with a couple of them.

My cousin Ross and his spouse are both military vets who keenly appreciate FI.  

They’ve reached their threshold on the 4% Safe Withdrawal Rate but they’re still working for their challenge & fulfillment.  (She graduated from medical school straight into the pandemic.)  He might ease up on his hours someday, but remote work keeps him happy with his work/life balance.  His kids are about the same age as our granddaughter, so we have plenty to discuss.

In general, I’ve learned (the hard way) not to bring up our finances with family unless someone asks the question or wants my help.

Looking back… 

  • “What would you tell your younger self about any worries you had about retiring early?”

First, I stayed on active duty for longer than necessary.  Instead of gutting it out to 20 I should have gone to the Reserves or Guard at about 12 years.  Our money would have worked out about the same— FI in 2002 or 2003– and I would have had a much higher quality of life with better work/life balance.  

I never made the time to learn about alternatives to an active-duty pension.  I was ignorant, overworked, chronically fatigued, and overwhelmed.  I stayed on active duty out of fear, and I paid the price in chronic stress.

Now I’m paying it forward so that people can learn from my mistakes.

Second, we made a ton of classic investing errors in the 1980s and 1990s.  No new lessons were learned from these incidents, and today I’d simply invest in passively-managed index funds with low expense ratios.  Fortunately, a high savings rate makes up for a lot of investing ignorance.

  • “What advice would you give a 20 year old today about preparing for early retirement (which may differ from what you actually did)? What are the things to consider, watch out for, and plan for that no one tells you about?”

Well, first I’d suggest that alcohol is overrated.  By age 20 I’d already been drinking for seven years, and I majored in it at college.  (I minored in chemistry.)  Back then it never even occurred to me that beer & wine were wasted spending, and I’m amazed that I survived my alcohol-inspired dumb ideas.

Second, the FIRE acronym has aged badly.  In the 1980s-90s it was popular to claim that we hated our jobs and wanted to FIRE as early as possible.  Today I’d advise reaching FI with a combination of a high savings rate and a sustainable quality of life.  Cut out the waste in your life, and spend where you find value.  You’ll know where the value happens because you’ll be willing to work the extra years to pay for it.

Finally, if you hate your job then start networking for a better job.  (If you’re on military active duty, then learn about the Reserves and National Guard!)  

You don’t need to be miserable in a high-paying job just to reach FI faster.  Even if a more fulfilling and lower-stress job pays less, you’ll be happier on your slightly-slower FI journey.

  • “Obviously your experience comes with having a military pension and healthcare for life. From what you’ve seen/lived/dealt with in the past 20 years, what should someone who doesn’t have those things plan for?”
  • “Military retirees are in an enviable position that I would guess the majority of civilians can not attain. Finding and paying for health insurance and generating a secure and predictable recurring income stream are two key areas most FI candidates have had to deal with in one way or another.  What would you recommend?”

My first part of the answer:  don’t join the military to get rich.  Join to learn skills, to be a part of something bigger than yourself, and to achieve more than you ever thought possible.  

Second, don’t stay in the military for the pension.  Whether you’re a veteran or a total civilian you can create your own pension and income streams with an annuity, or dividend index funds, or investment real estate.

Finally, don’t even stay in the military for the cheap healthcare.  Admittedly it greatly simplifies the math of calculating your financial independence, but it won’t necessarily improve your quality of life.  You can pay your own way through a combination of a health-insurance broker, the ACA exchanges, a high-deductible policy, medical tourism, and eventually… Medicare.

You don’t have to take it from me:  ask any military vet who’s receiving disability compensation (and their family).  We’d all prefer to pay more for our health insurance if we didn’t have to pay the price for combat.

  • “I would like to know how would your 41 year old self envisioned your life would be at age 61 and how does the reality of today compare to that?  What would you tell your 41-year-old self about any regrets you’ve had during early retirement?”

Here’s the short version.

  • Age 41:  Cautiously optimistic but concerned & uncertain.  Age 61 was even farther away than age 41 seemed to be when I started my career at age 21.
  • Age 51:  This seems easier than it should be.  (Or like the notorious attitude of the Navy’s Surface Warfare Officers:  “This has *got* to be harder!”)  Life is good.  I wish I’d been a little more relaxed about our spending when we started our FI.
  • Age 61:  We have more than we need!  Let’s ramp up the philanthropy and the legacy.  

The long version:

Financially, humans suck at estimating the growth of exponential compounding.  When we’re saving and investing, it looks linear for many years.  As FI approaches, the slope of the compounding curve is starting to rise— especially if your earned income is rising at the same time— but it’s still hard to see the acceleration.

When you reach FI with assets of 25x your annual spending, the exponential growth is kicking in and turning the corner to go parabolic.  Even if you’re spending like a 4% SWR robot, you’re still highly likely to have more money than you need for the rest of your life.

Also:  wear your hearing protection and your sunscreen.  Writing that makes me feel like I’m channeling my parents, and now I understand.

  • “What did you get wrong about planning for early retirement? What did you get mostly right?”

We made a lot of mistakes with our assets, but a high savings rate also saved our asse(t)s.

I graduated from college in 1982 and got serious about saving & investing $50/month.  I boosted the savings with every annual pay raise and longevity raise, and whenever I could find a cheap rental apartment.  That math was pretty straightforward, and a few years (plus two promotions) later it turned into a 40% savings rate 

Hawaii real estate values have zoomed up during the pandemic (not that we’re ready to sell just yet), and it’s more than offset the volatility of our total stock market index fund.  Today our net worth is three times as much as we’d need to support the 4% Safe Withdrawal Rate.  

  • “How have you progressed through the stages of shifting from scarcity to abundance, or from frugality to feeling more comfortable with spending?”

It took us years to shift from the scarcity mindset to abundance.  (This seems to be typical of people who’ve been FI for at least 20 years.) In our case it was a series of small steps before our epiphany.  Here’s a bunch of examples, each an individual event with a cumulative effect.

Image of Doug Nordman at White Plains Beach cabin sipping coffee while checking the dawn patrol surf forecast. | MilitaryFinancialIndependence.com

“Life is really good.”

We first felt it a few years after retirement when Hawaii’s real estate market recovered and our next set of tenants paid a (much higher) market rent.  That income stream was especially reassuring during the Great Recession.

We enjoyed it again in 2011 with a long-planned home renovation.  Our daughter was away at college and we gutted our familyroom.  The five-figure rehab edged into six figures as we encountered old termite damage, new hurricane codes, and a few thousand dollars of the expensive“Might as well…” change orders.  After months of living in a construction zone it was wonderful to move back into the new room.  Over a decade later I still look around it and smile.

In 2011 my father’s Alzheimer’s finally meant that he could no longer live independently.  I’m very glad that I had the mental bandwidth (and the time, and the assets) to help care for him.  It made both of us happy, and it made me appreciate the abundance mindset which gave me the freedom to spend the time to take care of him.  Dad spent over six years in a care facility before passing away.  Today I’m keenly aware of my family history of dementia and the importance of disability planning, and I’m determined to do the best I can to have my lifestyle compensate for my genome.  

Our abundance really kicked in around 2015 when we started a slow-travel itinerary through Spain.  We visited our daughter in Rota, where she was serving on her destroyer and where my spouse had been stationed in the 1980s.  We noticed the parallels every day between the years at our first duty stations and then returning over 30 years later— only this time with unlimited liberty and more money.

Later in 2015 I dealt with appendicitis, where it was less than 24 hours from “Ouch!” to the operation.  The biopsy was “carcinoid”, which is right up there with colon polyps for an exciting few decades of cancer monitoring.  As you might imagine, I appreciate the abundance of a healthier diet with all the exercise I can handle.

The good news on the morning after the surgery: our daughter got engaged!  In 2022 they celebrated their sixth anniversary.

In early 2020 they started their family with Arya, who’s the daughter that we’ve warned our daughter about.  Today Arya’s a full-throttle toddler with a very busy brain and a rapidly expanding vocabulary.  Last month we finished a three-week grandparenting visit that left us exhausted (in a good way) and we’re eagerly anticipating their (someday) return to Oahu.

In 2020 I also turned age 59.5 and could tap my Roth IRA penalty-free whenever I wanted.  It turned out that we have more than enough money in our taxable account, and from now on we can withdraw from either our Roth IRAs or our taxable account to optimize our taxable income.

The last 20 years have seen three different double-digit recessions, each nasty in its own speed and duration.  Despite the uncertainty, our investments not only thrived with the 4% SWR but grew far faster than inflation.

Our abundance mindset helped us ramp up our gifting goals by giving our daughter her share of the profits from her college fund.  (She was a good steward of it during her high-school and college years, and she also scored a Navy ROTC scholarship.)  We’ve continued that gifting with grandparent contributions to our granddaughter’s 529.  We have no idea what college will cost in 2038 (if Arya even goes to college) but she’s well on her way.

We’ve also ramped up our philanthropy.  I’ve donated my writing & speaking revenue to military charities since 2011, and we plan to give away the rest of our taxable account during the next few years.  We have more than enough from our pensions, our rental income, our Roth IRAs, and (someday) Social Security.

  • “How has your identity shifted over the past 20 years?” 

All military vets experience this change when they put away their uniforms.  You don’t have to give up your identity but you certainly have to evolve.

I’ll always be a submariner, but I’m also a spouse and a parent.  Those never go away.  I’ve also added “grandparent” and “surfer!”  

Keep adding new aspects to your identity.  Forget about who you were, push out of your comfort zone (when it makes sense), and experiment with who you want to be.  This month my spouse and I are trying our very first housesit (an eight-week gig in Santa Barbara).  We’re constantly discussing the lifestyle and our preferences.  I’m not sure it’ll be a new part of our lives, but we’ll value the experience.

  • “I’d enjoy learning about some of the things you realized were awesome about the retirement life you never would have expected before you retired.”

Before retirement, everyone worries about what they’ll do all day.  A few months after retirement, everyone wonders why they worried about it.  

The real danger is leaping into a new lifestyle and trying everything at once before you’ve had time to recover from your working life.  I never would have expected that I’d have to deliberately give my calendar a blank space every other day for recovery, relaxation, and reflection.

The most awesome part is getting to redesign your life whenever it makes sense.  I wish the book “Designing Your Life” had come out 25 years ago!

  • “Additionally, what were some of the mistakes you made when determining whether or not you were ready to retire? Did you underestimate or overestimate anything?”

The Navy gave me almost four years’ advance notice that I’d retire at 20 years.  (I had failed to select for promotion.)  That was about three years more notice than I needed.

My biggest mistake was figuring out when I should have left active duty.  I completely missed how much it would have improved our quality of life, and I was clueless at how the value of a Reserve pension keeps up with inflation until you start receiving the deposits at age 60.  

Today I advise military families to take their career one obligation at a time.  Stay on active duty as long as it’s challenging & fulfilling, but when the fun stops then it’s time to go to the Reserves or Guard and consider a civilian career.  

Saving and investing for financial independence gives you the resilience to make these career decisions out of strength and confidence, not fear.

  • “How did you win the battle against ‘one more yearism’?”

We used the 4% Safe Withdrawal Rate as our tripwire for “enough” (assets of at least 25x our annual spending), and we knew that we’d be able to avoid its failures! 

Just One More Year syndrome is based on the scarcity mindset of running out of money.  We are humans, not coldly logical Star Trek Vulcans.  Even when the 4% SWR and retirement calculators project a success rate of over 90%, people worry about the chance (of less than 10%) that they’ll be poor.

The 4% SWR simulations never included Social Security, Medicare, variable spending, or the possibility of earning another dollar during financial independence.  Financial independence gives us the flexibility to use all of those tactics.  Retirement calculators can help nail down exactly how much you’ll need for your lifespan or when to change your spending.  

  • “How did you and your significant other decide on spending money in retirement to make sure you didn’t run out of money?”

By the time I retired, my spouse and I had been budgeting for over 20 years.  We made a new budget every year, and we did the same analysis for the 15 years of retirement.

Our projections turned out to be more conservative than necessary.  After we retired we experimented with doing more of our own home maintenance, cooking more meals, and being more active.  We deliberately budgeted more for travel yet we were still within the 4% SWR!   

We also renegotiated our adult allowances.  Each of us was free to spend our personal allowance on anything, with no questions or judgement.  We could spend it all on the first day of the month or save it for a bigger expense.  The budget category was simply “allowance” with no other documentation required.

Image of Kazuma stand-up paddleboard at White Plains Beach Oahu | MilitaryFinancialIndependence.com

There goes my allowance…

Of course if one of us made a mistake around the house, the other one was allowed to say “That’s coming out of your allowance!”

We stopped budgeting about five years ago.  Today we discuss big expenses (over $1000) but we’ve dialed in our lifestyle and we’re rarely surprised.

  • “I have just one question: Why was it worth it?  Was it fun, rewarding, all you thought it would be?”

One answer:  freedom!

… And looking ahead:

  • “How have you aged during this process? How did it impact life and family events? I think these add the richness to story we crave and help us contextualize your decisions in a way that makes this a story of your journey. In the end, that’s a life — the greatest story we can tell.”

Physically:  Retiring from active duty helped me drop my resting pulse rate by 10 beats per minute, my blood pressure by 25 points, and my weight by 20 pounds of excess fat.  

Almost every year since I’ve retired, I’ve been in the best shape of my life.  

Since roughly 2020, I’ve struggled to hold on to those gains.  My top concerns are tinnitus, impending hearing aids, knee damage, and a family history of dementia.  

If I had told my younger self to take care of my hearing and my joints, my younger me would have smirked and insisted that I was already doing that.  Yet the hearing protection wasn’t enough, and excessive stretching can loosen ligaments too much.  I certainly wasn’t willing to cut back on the beer, despite the evidence linking excessive alcohol consumption to declining cognition.

I wish I’d started martial arts younger than my 40s.  (My daughter showed me the way with her friends who train taekwondo.)  It taught me about kinesthetics, flexibility, and the incremental gains of regular training.  I’d already learned how to get up off the mat after being knocked down.  

As much as I wish I’d grown up surfing, the lifestyle would have impeded my ability to make the gritty choices that got me into college and the submarine force.  I don’t know that life would have been worse, but it certainly would have been different.  

If I’d been surfing in my 20s then I would have struggled to show up for work.  It’s probably for the best that I never learned until I retired.

Image of Doug Nordman doing a Cheater Five on a longboard at White Plains Beach Oahu | MilitaryPersonalFinance.com

Physical therapy. And emotional.

Mentally:  I’m much happier!  I’ve overcome my hypercritical self-talk and made peace with most of my life mistakes.  I’m more challenged & fulfilled by tackling projects at my own pace.  I’ve adopted a much longer-term perspective and I’m comfortable about facing whatever the rest of my life brings.

I’ve also learned that the older I get, the less I know.  Life was certainly a lot easier when I was in my 20s and knew everything.

Emotionally:  My family agrees that I’m much easier to get along with and more fun to be around.  These days I’m rarely hijacked by my amygdala.  I can only imagine how much more I would have accomplished in my 20s with the serenity that I’m gaining in my 60s.  

I might be biased, but I think the most important impact on my family is that I’ll be less of a burden.  My spouse and I have done extensive disability and estate planning (because now we can afford to do it the way we want) so that she and our daughter won’t have to care for me the way that I had to care for my father.  

This makes me feel a lot better, too— I may be a nice spouse and a great parent, but it’s all about making sure that I take care of myself and my watchstation so that I can give a good turnover to my relief.

  • “How do you see your identity changing over the next 20 years?”

In the short term, I’m ready to shed the “landlord” identity.  My spouse and I have discussed this for over five years, and she’s already taken over 95% of the tasks.  (I’m still on call for yardwork, plumbing, and sewage.)  We’ll eventually outsource the rest, either to our daughter & son-in-law (thanks, guys!) or to contractors.  I’m willing to hang around for a couple more years to help with that turnover.

In the longer term (and more importantly), I’m going to level up from “military guide” to “living your financial independence.”  This post is one example of writing more about life after FI than about achieving FI, and for a bigger audience.  In addition to updating my first book, I have at least two more books in me.  I’ll be writing about something until I can no longer create a coherent sentence.  

We already have more money than we need for our lifestyle so we’re spending more on philanthropy and gifting.  We want to reduce our net worth until we need our cash flow for long-term care.  Frankly, we might not need it for long-term care if cardiac or cancer issues hit first.

Demographically, I probably have less than 20 years of slow travel left.  I doubt we’ll have Star Trek transporters by then, so I’m going to have to count on virtual reality.  

I’m still surfing as much as I can handle, currently 2-3 times per week.  I’ve finally started catching waves on a stand-up paddleboard (in addition to my longboards), and that’s an outstanding core workout.  When I coordinate surfing with yardwork and walking, that’s enough exercise to stabilize my joint muscles and preserve my mobility (despite my arthritic knees and hands).  Judging from the surfing crowd at White Plains Beach, I’ll keep paddling something out onto the ocean as long as I can.  I’m talking about people like Rabbit Kekai, Doc Ball, and Woody Browne.

My spouse and I have a few more long-term goals:

  • Be retired longer than we were in uniform.  (We both joined the Navy through the U.S. Naval Academy, and she stayed in the Reserves until she had 25 good years.  That means hanging on to the year 2026 for me and 2038 for her.)
  • Collect more pension deposits than paychecks.  (Bonus:  adjust the numbers for inflation.)
  • Join the roster on our alma mater’s ten oldest alumni.
  • Join the Navy’s listing of centenarian sailors.
  • I want to write at least one more 20-year update, too!


I started gathering the questions for this post in November 2021.  At the time I expected to publish on 1 June 2022.  I usually format a blog post on Oahu, at home in my familyroom desk on my usual chair with my high-end desktop PC.

When I finally finished formatting this post and put it on the editorial calendar, we were in the second week of our two-month housesitting gig in Santa Barbara.  I wrote the majority of the post on my 11-inch iPad Pro sitting at the diningroom table with a view of the town all the way out to the Channel Islands.  

If I couldn’t see the next six months coming for this post, then I can’t wait to see what the next two decades bring for my second 20-year update!

What other questions do you have? 

Posted in Financial Independence, Military Life & Family, Military Retirement, Money Management & Personal Finance, What Do You DO All Day?!? | Leave a comment

Under New Management: Again!


(This post was originally written in late 2021, and it’s updated for March 2022.)


Three Creeks Media bought The-Military-Guide website.

You can read the text of the press release at the end of this post.

Here’s more information behind the sale.

For the last few years, The-Military-Guide blog has been owned & operated by my friend Ryan Guina. We’ve known each other for over a decade, and he’s also run The Military Wallet for over 15 years. He understands how to curate a military personal-finance site.

Ryan Guina (left) and Doug Nordman (right) at a USAA conference in 2016. | TheMilitaryGuide.WordPress.com

Six years ago at a USAA conference.

We have a great working relationship:

  • I contributed content to The-Military-Guide for free (and marketed books), while
  • He kept all of the money that the site earns.

That neatly answered all the questions about who does what and how to share the revenue.

“Keeping all of the money” means that he plowed a large percentage of the revenue right back into the site. He spent months cleaning up the infrastructure and improving its hosting bandwidth, which has led to more readers (and book sales) as well as higher rankings in the search engines. The site is on a great trajectory, and it’s one of the Internet’s most authoritative collections of military personal finance information.


So he sold it.

I have no idea how much money changed hands, but we’ve discussed the concept a few times. It must be a truly life-changing sum. I doubt he’s buying yachts or personal jets, but he could certainly boost his financial independence lifestyle to cruises and first-class air travel.

It’s Ryan’s story to tell, although I’ll point out that he’s continuing his Air National Guard career because he finds it challenging and fulfilling.  I doubt that he’ll start commuting to drill weekends in a limousine, let alone in a NetJets charter, but I’ll keep him apprised of the options…

Long-time readers of The Military Guide remember that I sold it to Curtez Riggs in 2013. Back then I’d run the blog for three years, and I realized that I’d rather write posts (and books) than muck around with themes and control panels. Curtez’s “price” for The Military Guide was a very large donation to Wounded Warrior Project, and he ran it for five years. Today he’s a military retiree and an entrepreneur on fire, and he was happy to sell the site to free up his time for more projects with other military vets.

During those years, I’ve donated all of my writing & speaking revenue to military charities like Fisher House Foundation and WWP. It’s over $30K (so far!), and I plan to continue this for the rest of my life.  Three Creeks Media has made a very generous pair of donations to those charities as well.


What’s going to change around here?

Not much for now.  Three Creeks Media has a widely-respected and highly-ranked cash-spewing machine on their hands, and they’re not going to screw that up. They have way more media & journalism experience than me, and I’m not going to hover over their shoulders offering helpful suggestions. You all know that I have way more than enough money for the rest of my life, and I’m happier writing for the site as an experienced volunteer… with links to my books.

During the next few month we’ll figure out where I fit in, but they’ve already indicated that they don’t want to mess with our working relationship. Ryan and I are still running the sites with WordPress permissions as “editors” instead of “admins”, and that only means I won’t see the site’s statistics or… um… be able to glitch the control panel. I’m still running the blog’s comments and the “Contact Me” page finish reorganizing the sites and streamlining the content.

Ryan completed a site audit, and we’ve removed a few posts that have aged badly. (Mainly drawdown news from 2014 and questions about opting in to the Blended Retirement System.) He and TCM have consolidated most of the content from The-Military-Guide on to TheMilitaryWallet’s high-speed dedicated server, which will greatly improve its SEO and search rankings. Hundreds of my posts (with my byline) will live in perpetuity on the first page of results!

Another 250 posts from The-Military-Guide have been moved to this old free WordPress.com site.  They’re mostly lifestyle and personal posts about our family finances, and I’ll keep them there for linking in conversations around the Internet.  I’m happy to share personal finance advice with you, and I’ll be as transparent as I can about what we’re doing.

I’m diggin’ this 12-year-old Twenty Ten blog theme but we’ll update some of the other slugs and headers. You may have noticed that it’s been retitled to “Military Financial Independence”, because you should pursue FI regardless of when you plan to retire. You might not be interested in a military retirement, and the phrase “early retirement” has aged badly too. Financial independence gives you both of those choices.

I’ll take a look at upgrades like spending $50/year to remove WordPress’s ads, and another $50/year for better hosting. (I can certainly afford it!) I think most of this site’s traffic will come from search, but I’m happy to improve the reader experience for you regular visitors who prefer it to an RSS feed.

My social media won’t change. TCM and I are still running the Facebook page for The Military Guide.

I’m still operating The Military Guide’s Twitter, Pinterest, and Instagram accounts. (Well, yeah, sure, 99.5% of that is Twitter.) I’ll continue answering dozens of questions on military Facebook groups like ChooseFI US Military and Personal Finance For U.S. Military Service Members and Families. I’m still posting on Linkedin and I’m still answering every question (so far!) through NordsNords at Gmail.

More importantly, I’ll keep writing blog posts about military personal finance. I may update a few of the posts on TheMilitaryWallet (that’s up to Ryan and TCM) and I’ll add more posts here when I have something to say.

I’m also working on my third book, and I’ll test-drive its topics here. I’m not teasing anyone— you know that I’ll give away most of the book’s content right here on the site, and eventually I’ll publish it in the usual editions for public libraries. If you buy your own copy, it’ll generate even more revenue for military charities.

That’s the future. Right now, though, what I’m doing all day is spending quality time with family and our toddler granddaughter.  That’s the real benefit (and legacy) of financial independence.

Oh, and I’ll be at MilMoneyCon in Cary NC on 21-23 April, as well as FinCon22 in Orlando on 7-10 September.  Who’s with me?



For Immediate Release: August 18, 2021

Contact: contact@threecreeksmedia.com

Three Creeks Media purchases The Military Wallet to help educate Veterans and take control of their financial futures.

Three Creeks Media, LLC purchased two of the most well-known military brands to continue building them into the most valuable and user-friendly online personal finance and benefits resources for current service members, Veterans, and their families.

“We purchased The Military Wallet and The Military Guide to build on their strong standing reputation by producing original content and the most up-to-date information available in the constantly-changing military benefits and personal finance world,” said Brittany Crocker, the sites’ managing editor.

“As a Veteran, I’ve experienced first-hand how hard navigating the financial landscape can be,” said Crocker. “My goal is for these sites to give tools to young service members so they can take control of their financial future immediately.”

Launched in 2020, Three Creeks Media, LLC educates consumers about mortgages, real estate, and personal finance through news, commentary, and related content. Kathleen ‘KK’ Howley, an award-winning journalist, serves as Three Creeks Media’s editor-in-chief.

The Military Wallet is a personal finance and benefits website for military members, Veterans, and their families. The goal of The Military Wallet is to help the military community better manage money and understand the programs and benefits available. Air Force Veteran Ryan Guina started the website in 2010 and has been featured in CNN, Money, Forbes, US News & World Report, and more.

Mr. Guina will continue to play an active role in The Military Wallet to help continue the mission of educating military members, Veterans, and their families.

“We are looking forward to building on the years of hard work already done on these sites to serve our fellow Veterans,” said Crocker. “This is an exciting opportunity for everyone involved and marks a new chapter in transparency, accessibility, and understanding for our millions of Veterans and their families.”

About Three Creeks Media, LLC Three Creeks Media is committed to educating consumers about mortgages, real estate, and personal finance. The company provides independent news, expert commentary, and content solutions to publishers in various verticals. Award-winning journalist Kathleen “KK” Howley oversees editorial operations for Three Creeks. Howley spent 15 years covering housing and mortgage markets for Bloomberg, where she won the Gerald Loeb Award for Distinguished Business and Financial Journalism for coverage of the financial crisis.



Military Financial Independence on Amazon:

The Military Guide cover
  • Reach your own financial independence
  • Retire on your terms
  • Success stories and personal checklists
  • Royalties donated to military charities

Use this link to order from Amazon.com!


Raising Your Money-Savvy Family on Amazon:

The Military Guide cover
  • Reach your own financial independence
  • Teach your kids how to manage their money
  • Specific tactics from my adult daughter
  • Checklists and spreadsheets for your family

Use this link to order from Amazon.com!

Posted in Financial Independence, Money Management & Personal Finance | Leave a comment

One Year Later: Financial Independence Follow Up

[This post is brought to you by my cousin Ross! If you’re interested in contributing at The-Military-Guide.com, please see our posting guidelines.]

[For those who haven’t read this series before, here are the links to Ross’s first post about bumbling into financial independence and his second post.]

Dear reader,

Don’t be mad, but I bought that expensive TV.

The one I told you about last time, the very contemplation of which helped me realize I have a spending problem. I bought it. Sad face emoji.

Image of a large curving wall of hundreds of TV screens against a black background. | The-Military-Guide.com

Well, maybe just one TV.

But before you judge me, permit me just a few moments to explain how I justified the purchase. You see, I actually followed through and did the right thing. I called the manufacturer and arranged for a technician to repair the television under warranty. He came out and performed the repair, but also left me with a word of warning. You see, he’d performed this same repair for countless models of the same television, and it almost never fixed the issue. Sure enough after he left, and we went back to consuming gobs of media, the darn thing still kept going on the fritz.

I can’t be sure, but it actually felt like the problem became worse after the repair. Wonder of wonders, contrary to my previously profligate proclivities, I did the right thing again and called the manufacturer to request a refund. They promptly processed it and they didn’t even want the old television shipped back to them. Apparently the cost of boxing, shipping, repairing, and re-marketing it as a refurbished model was more than they expected to make in return.

This, of course, left me with a dilemma. I was newly on the active FIRE train, after all, and I was spending a lot of mental energy doing so. I was in the midst of attempting to repair my own long standing tendency to spend every dollar that came into the bank account. But… as a couple, my wife and I are your typical Netflix-addicted Millennials. We also have a young toddler who’s in love with all the Disney classics, old and new. And we’re still in the midst of a global pandemic, so we don’t exactly have the luxury of spending a lot of quality time outside the home. Lemme tell you, a two year old who doesn’t have the opportunity to spend much energy outside the house can make a BIG distraction inside the house.

I was in the midst of reworking our budget, including allocating money to savings and investments, and plucking down $2000 for a television certainly didn’t feel like the most rational economic decision at the time. But I ran the numbers anyway. Not the financial numbers – as fellow passengers on the FIRE train I don’t blame you for going there first. No, I ran the numbers on time. Time using the television, and time it had already cost me to coordinate the repair of the original television, and time it would require to re-research low to mid range televisions compared to the research I’d already done.

On usage, well, it’s hard to overestimate how much time our household spends with the television on. I’m not necessarily talking about active time watching it, you understand, but as background noise with the news on as my bleary-eyed wife and I wake up and prepare for our days working as young professionals. Time spent plunking our toddler down with his 118th showing of Moana so we can have just a moment of reprieve peace in the house. Time spent winding down together after a pair of tough days as we binge the latest Netflix release. Or just a chance to turn our brains off over baking shows or bad reality competitions after my wife has a really rough day of treating COVID patients. I’d wager that television is on for 6-8 hours a day, at least 300 days a year. Run the numbers, and even that super expensive TV set drops down to $1/hour of use. That’s not bad compared to alternative entertainment options.

On time, well, I’d already sunk at least four hours into what I term “frustration time” by arranging for the television to be repaired. I won’t technically count the additional hours of frustration time I spent consumed with anger that the repair hadn’t fixed our increasingly fritzy set. (I wasn’t pouting, I swear! I was understandably upset.) At a guess, I’d spent two to four hours of high-intensity “concentration time” prior to the unsuccessful repair researching the best television to replace our old set. And that combined frustration and concentration time is extremely precious to me. It’s time spent not being a quality father, or husband, or worker.

To put this in context, as you can if you re-read the posts I wrote last year, I realized at a young age that it would behoove me to out-earn my tendency to spend. Last year I was in the midst of trying to both maintain my status as a high income earner, and also to finally rein in that spending so I could actually hop on the FIRE train. And at the end of the day, frankly? The frustration time and concentration time costs of reworking that original TV replacement decision were too consequential compared to the usage time we’d get out of the new television. Put another way, if you’re a high income earner who hasn’t yet managed to stop hemorrhaging money each month, the most important task you have is to keep the gravy train running until you’ve fixed your budget. (Oh, but those golden handcuffs are lovely aren’t they?)

Frustration time and concentration time are limited resources, full stop. And I prefer to invest those precious hours at my high-intensity corporate job. Each additional hour spent on them outside of the workplace takes an emotional toll, and saps my willpower as I strive to be the best dang worker on my team. I made the calculated decision to cut off additional contemplation, and just run with the previous decision. We bought the TV.

Was it worth it? Well, I stayed employed until my daughter was born five months later. Shortly after, I was admittedly swept up in a wave of departmental layoffs at my old job, but I’d maintained enough wits about me to see the writing on the wall. (And if I’d invested a lot more frustration time and concentration time on tasks not related to work, who knows?) After a one month sabbatical, I joined a new company where I enjoy my work even more, and got a >25% raise in the process. We’ve watched the heck out of that new television for the past year. Our son has moved on from Moana to Coco and now to Encanto. I invested some time growing my home repair skills, rather than paying a contractor instead, and personally mounted that big new TV set on the wall – win! And ultimately, I’m in a happier, better place than I was the year prior, despite the need to close that $2k hole in our budget.

All that said, did buying that monstrosity throw us off our FIRE journey? I’ll answer that in the next entry.

About the author:

A Florida native, Ross enlisted in the Army after high school. He served as an infantryman in the 75th Ranger Regiment for three years prior to his acceptance to West Point. He deployed three times to Afghanistan and Iraq during the first years of the War – Ross likes to brag that he’d invaded two countries by the time he was twenty-one! After graduating from the Academy, he spent five additional years as an infantry officer with the First Cavalry Division, including another deployment to Iraq. During his final months in the Army, Ross considered a career in medicine as either a doctor or nurse before deciding he was best suited for work in “Corporate America.”

After transitioning from the military, Ross spent an additional year as a proud Army spouse supporting his wife, Camilla, at her terminal assignment with the 10th Special Forces Group at Ft. Carson. He worked as a telecommunications sales engineer during this time. When Camilla was accepted to the Premedical Post-Bacc program at Goucher College he happily followed her to Baltimore, where he worked as a project manager for a residential construction company. After Camilla graduated from Goucher, Ross decided to attend the University of Virginia’s Darden Graduate School of Business, where he graduated with his MBA in 2016. Post-graduation Ross first worked as a consultant with Bain & Co., then in direct mail marketing as a Senior Business Manager at Capital One. Since 2019 Ross was happily employed as an internal consultant at Fannie Mae, where he continued to polish his financial services pedigree.  Just a few months ago he started his next job at ScienceLogic.

Ross is passionate about giving back to the veteran community. He and his wife co-founded Vet2MD, a non-profit organization that exists solely to increase awareness about the medical profession as a career option for transitioning veterans. He has been a volunteer with Team Rubicon since 2013, and is an active member of the DC chapter of Operation Code. Ross also enjoys serving as an informal transition coach to veterans, helping them talk through their background and passions to understand their best fit in the civilian world. After holding a string of jobs that weren’t great fits and finally stumbling into one that is, he’s well positioned to talk to most industries and roles! You’re welcome to connect with Ross on LinkedIn.

Related articles:

Reader story: “How I Bumbled Into Financial Independence”
Reader story: “How I Bumbled Into Financial Independence” (part 2)

Posted in Financial Independence | Leave a comment

Did DFAS And The TSP Let You Contribute Too Much?

Check your 2021 TSP contributions now!

I’ve heard from three different servicemembers that the Defense Finance and Accounting Service and the Thrift Savings Plan have failed to stop their TSP contributions after reaching the elective deferral limit ($19,500 in 2021).

Image of the seal of the Defense Finance and Accounting Service, the agency that forwards your TSP contributions to the Thrift Savings Plan. | The-Military-Guide.com

“Should be fixed by October.” Right.

This problem is caused by a glitch in a January software change for catch-up contributions.
Before 2021, military servicemembers who turned 50 years old during the year had to start a separate contribution for the TSP’s catch-up contribution limit.  (In 2021, that’s an extra $6500.) This was upgraded six months ago by a new “spillover method” for catch-up contributions.

It seems like a great idea:

Participants will no longer make separate catch-up elections in their electronic payroll systems either. Employing agencies/ services will submit catch-up contributions on the same payroll records used to submit the equivalent record for regular contributions. Those contributions will continue until catch-up eligible participants reach the combined elective deferral and catch-up limits for the year.
The TSP system will determine if the participant is eligible to make additional contributions toward the catch-up limit based on the participant’s date of birth.
If the participant is eligible to make catch-up contributions, anything beyond the elective deferral limit will automatically start counting toward the catch-up contribution limit. These additional contributions will “spill over” until the participant meets the catch-up limit for those age 50 or older.

Unfortunately the software bug is popping up with servicemembers in the legacy High Three retirement plan who front-load their contributions. A few of these aggressive savers reached their elective deferral limit ($19.5K in 2021) with June’s contribution, and normally (before 2021) DFAS and the TSP would have stopped their TSP contributions for the rest of the year.

Our first alert about the software problem came in from a long-time reader on 24 June:

“Today, on my LES, I discovered that DFAS overpaid my TSP. I’m in the Legacy retirement system and June is usually when I max my TSP contribution of $19,500. In the past five years, once it hit the max, it halted further contributions. For some reason, it is no longer halting contributions past the limit. My LES is showing my YTD contribution to my Roth TSP as $23K.
I called DFAS and they stated an update was made to continue the contributions to the catch up limit of $26k, which should only apply to those 50 years of age, or older. They stated this is how it is now and that I have to do a CMS case to retrieve the over-contribution (this apparently takes two months). DFAS is working to fix it by October. In the meantime, I just have to eat the temporary reduction in pay and work a CMS case to retrieve the excess contributions.”

After speaking with DFAS, the reader’s finance office put out an announcement:

“Please tell members to stop their TSP deduction once they hit the $19,500 cap (if not catch-up eligible) to prevent it from continuing. If members exceeded the $19,500 limit, they should receive the extra TSP funds back in 1-2 months.
Due to a programming change in the TSP catch-up program, there are no longer separate caps of $19,500 for normal TSP and $6500 for TSP catch-up. As a result, the TSP limit has been changed to $26,000 erroneously.
If the member is age 50 or older, the contributions will continue to “spillover” until $26,000 and be applied as TSP catch-up. For members who are not 50 or turning 50 in this calendar year, the deduction will continue. When TSP receives the money, they will see if the member is entitled to catch-up. If not, the TSP will send a report to DFAS. DFAS will review and research the report and make appropriate TSP adjustments as needed and refund the spillover.
A permanent fix from TSP and DFAS should be implemented at the end of October.”

Another friend (younger than 50) reported:  “I can confirm that once I learned about this I checked my account and so far I’ve contributed over $23,000 this year.”

More unhappy news came from a servicemember in the Facebook group “Personal Finance For U.S. Military Service Members and Families.”  Here’s their report (edited for acronym clarity):

“My spouse is deployed to a combat zone on an aircraft carrier. Admin has messed up their pay for three straight pay periods. Combat Zone Tax-Exempt pay has been screwed up since March. My spouse’s May Leave and Earnings Statement had a $565.06 paycheck which was what we wanted and we put it all into the traditional TSP. In a combat zone with CZTE pay this should have gone in tax free and we were up to $28,664.76 on the May LES. But this pay period the June LES refunded his TSP contributions and he’s now back at $26,000.00. We were so careful and only took the Roth TSP contribution to $18,968.46 before he hit the combat zone. What happens to his tax-exempt TSP contributions if they fix his CZTE pay once they are out of the combat zone?”

(If you can’t see the Facebook post at that link, please read the note at the end of this post to apply to join the group.)

The only “good” news comes from a Coast Guard servicemember“I can report that Coast Guard contributions correctly stopped at $19,500.”

If you’re in one of the other services, please check your TSP contributions! If you’ve exceeded $19,500 in 2021 (and you’re not age 50 this year or in a combat zone) then open a complaint in your finance office’s Case Management System. This is the same advice that DFAS or the TSP would offer if you actually managed to reach them on the phone.

If your TSP contributions have exceeded the EDL due to this programming glitch, please leave a comment to let us know how your finance office is handling it.

Here’s what a DFAS spokesperson shared with Kate Horrell and Military.com:

Officials with DFAS said they are tracking those who inadvertently contribute beyond the limit and “will return the excess TSP contributions back to those members,” a spokesperson said in an email to Military.com.
A DFAS spokesperson confirmed that the system upgrades are slated for this fall.

We have not yet seen an announcement from DFAS or the TSP, but when we do we’ll link it here and on social media.


(Note: If you’re in the Blended Retirement System, you should not front-load your TSP contributions. You want to contribute at least 5% from your base pay to your TSP account in every month of the year in order to maximize your DoD BRS matching contributions.)

(Note: Use this link to request your membership in the Facebook group “Personal Finance For U.S. Military Service Members and Families.”  You’ll have to answer the screening questions to show a moderator that you’re a member of the U.S. military or their spouse.)




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Related articles:
Maximizing Your Thrift Savings Plan Contributions In A Combat Zone
Contribution Limits of the Thrift Savings Plan + 401(k) + IRA = ?!?
Kate Horrell on Military.com:  A Computer Programming Error May Contribute Too Much To Your TSP This Year


Posted in Investing & TSP, Military Retirement | 9 Comments