The New Retirement Model and the Goldilocks Goal | The Modest Millions Show

“Retirement” is such a dated term. It conjures images of senior citizens who have worked their whole life, only to retire with nothing to do. What if, instead, people gained financial independence so they could have the option to put their life skills to work and supplement their retirement income, allowing them to “retire” much earlier in life?


  • Traditional retirement model
  • New retirement model
  • The concept of “having enough”
  • Introducing the Goldilocks Goal
  • The 4% Rule
  • Why you should (still) check out Betterment
  • Defining financial independence and financial freedom


What is retirement? No really, how do you define it? There are two very different schools of thought when it comes to retirement.

Let’s picture a traditional retirement scenario:

  • You work hard until you hit 65, 70 or 75, or whenever social security kicks in, if it does at all. You’ve got your nest egg that you so carefully incubated all these years ready. And, you followed all the traditional advice and saved up enough to live on 80% of your full-time income in retirement.
  • You hang up the toolbelt, enjoy your retirement party in the break room, and ride off into the sunset.
  • Then what?

In this scenario, you’ve saved enough to never need to work another day in your life. That’s tremendously commendable, but I, along with a rapidly growing minority, find that traditional retirement model not only boring, but also very inefficient.

Let me explain.

Over the course of your life, you’ll acquire a number of marketable skills. They could be related to your profession, hobbies and passion areas, and some skills you just learned out of necessity over the years, like how to fix a dryer or build a deck.

Why not leverage those skills in a way that allows you to earn income? It’ll allow you to not only keep yourself busy in retirement doing something that interests you, but it creates a supplemental income stream at the same time. Otherwise, it might be an awful long retirement without purpose. That’s not to say that everything needs to be about earning income. There are plenty of opportunities to have purpose when you no longer need to work that don’t involve generating income, like volunteering for a cause that matters to you.

The point I’m trying to make is that if we rethink what it means to retire and start shifting our thinking, we might be able to reach that “retirement” threshold even earlier that we would have thought before.

The traditional retirement model is sunsetting, especially as baby boomers get ready to start retiring, and certainly as Gen Xers and Millennials get older. and start to seek new ways to earn some supplemental income in “retirement,” which means they may not need as much saved up in their retirement account, allowing them to reach that level of financial independence earlier.

That’s the first shift in redefining retirement: supplemental income

The second shift is figuring out how much you truly, actually, need to retire. And to answer that question, you need to figure out what kind of retirement you want. Not what an advisor or the internet tells you what type of retirement you should have. Take some ownership of your future and make the decision that’s best for you.

Most traditional retirement advice projects what your income will be at retirement based on an assumption that you will want or need more than you make today. Retirement calculators throughout the internet all use different assumptions, but they’re usually basing it off having a nest egg somewhere around 80% of your income at retirement. This will get you an extremely comfortable retirement with enough money to build upon the lifestyle you worked for your whole career, but it’s going to need to be a pretty big nest.

For example, if you make $70,000 today, and you have another 30 years before you want to retire, it stands to reason that you might be making more than what you’re making today. So, that 80% replacement income is based on something like $100,000 or $120,000, rather than 80% of what you’re making today. For the sake of simplicity for this episode, let’s set inflation aside; we’ll cover that in a future episode.

Or, on the opposite end of the spectrum, you might desire a minimalistic retirement, one that allows you to truly take a step away from the rat race and enjoy life. You won’t get the big take out, travel or big toy budget, but the required nest egg is much more attainable.

Alternatively, if you’re in a good place in life right now, you could look at your current lifestyle and figure out how big of a nest egg would be required to live on the same income but without the debt. Perhaps you don’t need to be rich in retirement, perhaps you want to freeze where you’re life is now, except without the burdens of money. This approach allows you to still enjoy a comfortable retirement, while also allowing you to retire earlier due to the smaller nest egg required.

I’m going to call this the Goldilocks Nest Egg, and it’s an approach that’s gaining a lot of steam in today’s society. This concept of “having enough” is one that people are connecting with because they’re valuing their time and financial independence more than they are valuing the growth of material possessions or needing to have a larger nest egg.

Why save for a five-star resort vacation when a four-star resort will give you everything you want in a vacation, but will let you go on vacation sooner and/or more often.

But, the great thing is that your retirement should be about the retirement that YOU want. Don’t let the internet, an advisor or me for that matter try to tell you one type of retirement is better for you. Think about the retirement that you and want and start designing THAT retirement.

Once you figure out what kind of retirement is right for you, you need to find your number. This is the magic number that you need to have squirreled away before you can retire. Again, going with the Goldilocks analogy of finding the retirement that’s JUUUUUUUST RIGHT for you. I call this the Goldilocks Goal.

There are lots of retirement calculators online, but they all use different variables and assumptions, so you’ll be told you need a nest egg anywhere between $2-12MM. How are you supposed to plan for that? Instead, a well-regarded rule of thumb, especially in the DIY personal finance community is to set your Goldilocks Goal to be 25-30x your annual desired income (think about this now like 25-30x annual expenses in retirement). That way you’ll be able to safely withdraw 4% every year without risking depleting your nest egg. There will be a future episode on the 4% Rule, because there is a lot to cover, but for now, 25-30x annual expenses is a good rule of thumb.


We’ve talked about Betterment before, but I’m all-in on these guys, so I want to talk about them again. If you haven’t looked into Betterment, you need to. Especially if you’re just getting going with investing, Betterment is a great option that gets you access to high-performing investments without needing to meet any really high amount minimums that since advisors require. If you haven’t checked them out, do it. You can get a free account by clicking here.


“Retirement” is such a dated term. It conjures those images that we talked about at the top of the episode. It implies that someone has squirreled away enough to walk away from their job and never work another day in their life.

That’s great, and all, but I propose it’s an erroneous description of tomorrow’s “retirees.”

Instead, there are two terms I like that better describe this new “work-because-you-want-to” mentality.

Let’s start with “financial independence.” Being financially independent means that work is optional, and frees up the option to generate supplemental income without the burden of your work being tied to covering your necessities. Then supplemental income becomes your play money. If you want to stop working, you can without worrying about the financial ramifications. You can work if you want to, but it’s by no means required.

One step up from that is “financial freedom.” Being financially free means that you have enough assets to sufficiently cover both necessities and discretionary spending. Then, if you want to work, you’re doing so not necessary to spend that money, that income is going to build your wealth.

So I opt to follow a new retirement template, one that allows me to chart my own path, not toward retirement, but toward financial independence, where we can enjoy our current lifestyle and be super excited about “having enough.” Because for us, we place a premium not on the amount of possessions or size of lifestyle we can acquire, but on gaining early independence from money that allows us to call our own shots and design the lifestyle that is JUUUUST right, for us.


That’ll do it for this week’s episode. We really covered a lot, and I think it sets a good framework as we dive deeper into the topics of personal finance. For a recap of the strategies, tools and links that we talked about today, check out the show notes and visit

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Join me for the next episode, we’ll talk about The 4% Rule. Bring your calculators!

Until then, remember to keep squirreling away now to earn millions later!


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