046 | Our Next Life | The Reveal | Are you Ready for Early Retirement?

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In today’s podcast we have a wide-ranging conversation with Ms. ONL from Our Next Life on her decision to stop being anonymous on the blog to what their journey looked like to FI plus what they expect life to be like after FI and much more.

1500 days
In Today’s Podcast we cover:

  • A financial independence discussion with Ms. ONL from Our Next Life
  • The big reveal: Their names are Tanja and Mark
  • What does it feel like for them to come out behind the veil of anonymity?
  • Why have they been so strict about remaining anonymous?
  • They both were previously in political consulting
  • They live in North Lake Tahoe in California and lived previously in Los Angeles
  • Health care has been a focus on their blog and they both actually worked on health care policy with their jobs
  • Tanja has been able to stockpile over 1.3 million United miles plus Marriott and Chase points
  • How does their budget in FI compare with the prior 12 months?
  • How do they view the concept of early retirement?
  • How they can pursue the aspects of their jobs that they still enjoy
  • How is early retirement different than working for yourself?
  • One of the best parts of early retirement is that you can try so many different things
  • Their friends and family are extremely supportive of their early retirement plans
  • Finding their ‘why’ behind early retirement
  • A discussion of how silly the notion of being “bored” in early retirement truly is
  • The Endless Winter: Following the snow to ski for an entire winter
  • How they try to save money on their heating costs
  • How difficult the transition could be from working to not working and to mentally prepare yourself in advance for life after retirement
  • How to mentally prepare yourself for future situations with “disaster drills”
  • The value of finding progress in difficult things in life
  • The questions you need to consider when pondering early retirement: 1) How will you support yourself or your family without a job?
  • They do not plan to tap their tax deferred items before 59.5
  • How they projected the amount they need to reach Financial Independence
  • Question 2) What is your backup plan for dealing with financial emergencies?
  • The value of insurance and especially umbrella insurance
  • Question 3) How will you get healthcare?
  • How your income impacts your health care subsidies and the consideration of FI strategies
  • Question 4) How will you keep your body and mind healthy?
  • What will a day look like for them in retirement?
  • The importance of community in maintaining a healthy balanced life
  • The Hot Seat Questions

Links from the show:

9 thoughts on “046 | Our Next Life | The Reveal | Are you Ready for Early Retirement?

  1. I’m really interested in learning more about why they wouldn’t have relocated a few miles East to NV (Carson City, Minden/Gardenerville). I’m looking at Eastern Tahoe as a potential retirement destination in terms of geographic arbitrage. No state income tax. Very reasonable property taxes. I grew up in CA and vacationed in Tahoe twice a year and always wanted to retire there. It’s a beautiful place.

    The only redeeming part of the CA is tax code is Prop 13 which locks in prop tax rates even if property values increase.

    I’d love to hear what I’m missing in my analysis on CA Tahoe vs NV Tahoe. The podcast hinted that it was about healthcare but was vague on details.

    I was also surprised to learn that they weren’t doing Roth Conversion Ladders in retirement. Ignoring ACA implications, it’s literally free money. Convert 12.7k (standard deduction) + 4.05k*2=20.8k tax-free income per year. I understand it’s trickier with ACA subsidies, which reminds me of this GCC post: http://gocurrycracker.com/obamacare-optimization-vs-tax-minimization/. I don’t really have the mental stamina to go through GCC’s article again, but he is a smart guy and concluded that Roth Conversions were optimal despite ACA implications.

    • Hi FP — Post coming next week on the CA specifics, so I won’t go into all of that here. On the local specifics, none of the places you mentioned are IN the mountains, and that was a non-negotiable must for us. We didn’t want to have to drive to hike or bike or whatever else. Also, the property values on the eastern side of the lake are inflated rather ridiculously because there’s more demand to be on the no-income tax side. Income tax is barely relevant for lower income early retirees, and I think it’s short-sighted to look ONLY at property taxes and income taxes, and not look at the whole picture of home price, health care costs, etc. But more on this on the blog next week!

      • Thanks for the response. I’m eager to learn more in upcoming posts. Agreed on not wanting to drive to hike/bike. I’m eager to learn more about the specifics of where you are and why you chose this.

        State income tax + property tax = $20k/year for me currently. Needless to say, NV/WA/CO look appealing to me relative to my current situation. CA had never even crossed my mind despite having grown up here, but again I look forward to insights here.

  2. Just a slight correction that might be important for some folks doing tax planning for Obamacare subsidies: it’s based not on AGI as stated in this episode, but MAGI, which is slightly different. Here’s the deal on MAGI: http://www.investopedia.com/terms/m/magi.asp

    One thing about it that’s different from what was said in the podcast is that you don’t deduct IRA contributions to get MAGI (or, you add them back in to AGI, however you’re calculating it). Just wanted to point that out because for a married couple, a $11,000 difference in MAGI could me the difference between a small subsidy and no subsidy (or a small subsidy and a bigger subsidy). Especially if that person is weighing whether they should contribute to a 401(k) (deducted for MAGI calculation) vs. IRA (not deducted for MAGI calcs). For fun with subsidy calculations: https://www.healthinsurance.org/obamacare/subsidy-calculator/

    Sorry if this sounds nitpicky! Just doing a lot of tax and Obamacare subsidy planning for my own family right now before the year’s end, so it stuck out to me. Otherwise, this was a brilliant episode and I’m looking forward to Tanja’s return to the show!

    • You are totally right and I wished I could go back and correct this after we recorded the episode! (Brad and Jonathan can attest that it was EARLY when we spoke on my end, and I was just waking up.) 😉 Will definitely get the details right when we talk health care again.

  3. I started following ONL right after listening to the Mad Fientist episode and I’m quickly becoming a groupie!! I really enjoyed this show, Tanja and learned a lot. And kudos to Brad and Jonathan for your excellent interviewing skills– you guys asked exactly what I was thinking. Tanja, you are making me want to chart out my matrix of draw down now (instead of just relying on the idea of 4% rule) and I was relieved to hear you support the umbrella policy. I also have USAA and love the idea of them going to bat for me. I’ve often wondered if folks like MMM would say that insurance is stupid so thanks for validating that for me. I also live in a (Colorado) ski town and work at home and most of the winter, I’m up in my office with fingerless gloves, hat and wool socks… so I feel a little less crazy about that too. I look forward to keeping up with your new adventures and want you to know how grateful I am to have learned so much from all three of you this past year. Only 4 more years to go for me!

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