Jake Murphy, FSCP - Financial Planner

A $2 million retirement portfolio can get into trouble fast if you’re forced to sell from it after a 40% market drop.

Especially when you still need $70,000 from that portfolio to live that year.

This is why I like having a War Chest in place before retirement.

A simple rule of thumb is to keep around five years of planned withdrawals in cash, bonds, and other more stable investments.

If you need $70,000 per year:

$70,000 × 5 = $350,000

That gives you a pool to draw from when the market gets ugly instead of immediately selling the investments that just got crushed.

Think about someone retiring in 2007.

They had no control over what happened in 2008 and 2009.

But they could have controlled where their retirement paycheck came from while the market recovered.

Without that buffer, a temporary 30%, 40%, or 50% decline can become permanent when you’re forced to sell to fund your lifestyle.

With it, you have several years to let the rest of the portfolio breathe.

If retirement is only a few years away, I care just as much about where your next five years of income are coming from as I do about your long-term return.

A healthcare couple in their mid-40s - “We’d love a small place near the beach someday.”

That only came out after I asked them to picture their ideal life three to five years from now.

Before that, their goals sounded like most people’s:

Pay off debt.
Save for retirement.
Take care of the kids.

All important.

"What else?"

Then she mentioned working part time through telehealth from a place near the beach.

He added that it needed to be close to a golf course.

“Now we’re talking.”

From there, the rest opened up:

Redo the house.
Buy cars with cash.
Build a stronger emergency cushion.
Help the kids avoid student loans.

The accounts told me where they were.

The beach house told me where they wanted to go.

In their mid 60s, projected to receive $100,000/yr in income before their investments.
She still thought they might be in trouble.

This was a couple approaching retirement with pensions, an annuity, and two projected Social Security benefits.

Together, those income sources added up to $98,700 before taxes.

That was $6,500-$6,700 per month available before withdrawing anything from their retirement accounts.

Her husband immediately started teasing her because he had been saying they were in better shape than she believed.

She laughed and explained that she works in research. Everything needs to be checked and double-checked.

He reminded her that he works with money.

Then he admitted that her need to verify everything was one of the things he loved most about her.

She had started saving later than she wanted, so she had carried the assumption that they were behind.

Once the income was laid out in one place, the entire tone of the conversation changed.

The worry turned into laughter.

A Porsche Panamera GTS, two investment properties, an 800+ credit score and a $1 million net worth by 2026.

That was success to me at 23.

I had just entered the industry and wrote all four into my first business plan.

Here's what actually happened:

I bought one investment property in 2024.
My credit score hasn't reached 800.
I still drive my paid-off 2019 Hyundai Elantra.
And I am nowhere near the net-worth number I wrote down.

I used to read that plan and feel behind.
Now it mostly makes me laugh.

My goals today:

Throw an unforgettable wedding.
Take a honeymoon to Costa Rica.
Have our first child.
Buy the home we raise our kids in.

Tell me those don't matter more than any car or credit score.

Earn $20,000 a year part time and Investopedia’s estimated New Jersey retirement target drops by more than $200,000.

From $1.02 million to $818,000.

Picture someone who leaves full-time work at 60 but earns $400 a week working two mornings at a local business.

That income covers part of their regular spending without requiring another demanding career or a full-time schedule.

It also reduces how much they need to withdraw from investments during the first 10 years of retirement.

That could create the breathing room to scale back years before they are ready to stop working completely.

A lot of people don't want to quit forever.

They want more control over their time and the freedom to work on their terms.

A retirement number matters.

Knowing when your income becomes optional matters more.

Austin Reaves says his financial advisor told him to spend more money.

Kyle Kuzma says professional athletes don't have an income problem. They have a lifestyle creep problem.

At first, those sound like completely opposite ideas.

I don't think they are.

A few months ago, I sat down with a locums PA making just over $300,000. He wasn't trying to figure out how to earn more. He wanted to build enough passive income to spend more time with his wife and 3 year old.

Every recommendation had to answer the same question:
How does this help him spend more time with his family?

A few weeks later, I met with another client making a great income who couldn't understand why there never seemed to be anything left over at the end of the month. Same income, but completely different decisions.

That's why I think both NBA players are right.

Some people need a plan that gives them confidence to enjoy the money they've worked so hard to earn.

Others need a plan that keeps lifestyle creep from quietly eating away at future choices.

Reaves and Kuzma are talking about different people.

A good financial plan knows which one you're closer to.

A 60 and 65 y/o couple making $190,000 thought one of them would have to work another five years before they could retire together.

They didn't.

When we mapped out their retirement income, Social Security claiming options, taxes, and long-term cash flow, they realized they could both retire at the same time instead.

Five more years together in retirement.

That was the outcome they actually cared about.

A few days later, I met with a travel PA earning about $305,000.

He wanted to know how much of each paycheck he could actually keep after taxes, contract gaps, investing, and everything else.

By the end of our first strategy session, every paycheck already had a destination before it hit his account, there was a tax plan in place before his next contract started, and he had a roadmap toward building enough passive income to spend more time with his family.

Then there was a 63-year-old who had recently retired with about $2 million saved.

His plan was straightforward: live off cash, delay Social Security, and keep taxes as low as possible.

Once we projected the plan over the rest of his lifetime instead of focusing on this year's tax return, we found an opportunity that was projected to reduce lifetime taxes by nearly $200,000 while increasing what could eventually pass to his family by almost $800,000.

Five more years together in retirement.

That's the conversation I haven't stopped thinking about this week.

Friday afternoon, I had every intention of staying home and doing absolutely nothing.

Then one of my clients texted me.

He had two floor tickets to Shane Gillis that he couldn't use because he was working and asked if my fiancée and I wanted them.

Needless to say, our Friday night plans changed pretty quickly. The show was awesome. The fact that he thought of us was the coolest part though.

We met through LinkedIn a couple months ago. Since then, we've spent a few hours working through how to make the most of a 30% pay raise and whether to put extra towards student loans or investing.

It's easy to think financial planning is just spreadsheets, tax projections, and investment accounts.

Those things matter.

But then every once in a while, you get a random text asking if you wa

A physician household making nearly $900,000 asked Reddit whether his wife could stop working to spend more time with their four young kids.

That wasn't the part that caught my attention. The question was. Five years earlier, I'm guessing the conversation probably sounded more like:

"Can we afford daycare?"

"Can we afford this house?"

"How fast can we pay off our student loans?"

Now it's:

"Is one income enough?"

"What would life actually look like if one of us stayed home?"

I've had versions of this conversation with enough high-income clinicians to notice a pattern. Early in a career, the goal is usually to earn more. Later, the conversation shifts.

In this case, the decision wasn't just about walking away from a $150,000 income.

It was also walking away from employer health insurance.

A career she genuinely enjoyed.

Years of training.

Future earning potential.

All for something you can't put in a spreadsheet:

More time with four kids under six.

Those decisions usually have very little to do with whether someone can afford them.

They have everything to do with what they're unwilling to trade anymore.

Making $230,000.

Driving a truck with an $1,100 payment.

Putting 3% toward retirement.

I see some version of that more often than you'd think.

Then I saw the average new car payment is now over $750 a month.

That's become normal. I've learned that "normal" is one of the most expensive words in personal finance.

Nobody wakes up planning to spend $1,100 a month on a vehicle.

It happens one decision at a time.

$80 more for the bigger trim. Another $90 for the package you really wanted. 12 more months on the loan to keep the payment manageable.

That extra $525 a month has the potential to become roughly $310,000 over the next 20 years.

Normal has a way of quietly moving the goalposts.