Book Report: How to Retire the Cheapskate Way

How to Retire the Cheapskate Way: The Ultimate Cheapskates’ Guide to Retirement.

Jeff Yeager has an interesting approach to preparing for retirement- he, like few brave others, purports that reducing spending is more powerful than the generic brokerage house and financial planner/pundit advice to save a $1-$2M retirement nest egg.

Jeff should know, he managed to retire at age 47 from his moderate-salary job running the books for a non-profit in DC. He is ‘selfishly employed’ (more on this) as an author/authority on frugality and maintains a personal network of hundreds of ‘miser advisers’.

Retiring the Cheapskate way is divided in to several parts:

Prioritize Spending

Determine Needs vs. Wants

Savings – Bob Johnson’s Hierarchy of Moolah Management

Reduce your dependency on money/salary.
Stay Healthy.
Protect assets as you accumulate them.

Calculating what you really need to save for retirement

Track Expenses, live beneath your means.

Social Security

It will be there for all of us, but either at a reduced payout or delayed eligibility age versus today’s system.

Medical Expenses (Stand By!)

Health Care costs for the retired/unemployed- Holy Shnikes! Jeff’s family of 2 spent $16,000 in yearly Health Care expenses (premiums and coinsurance) when no longer covered by an employer’s plan.

Feds, be thankful for FEHB.
Retired from Active Duty- be especially thankful for Tricare.
Reserves/NG- be thankful you can always purchase Tricare Reserve Select for $1200/month if you or a dependent have a pre-existing condition. This places a known ‘ceiling’ of $14,000/year on your ‘Gray Area’ retired health care costs.

Selfish Employment

Turning a hobby or pursuit in to ‘selfish employment’ in retirement will keep you busy and stretch out your nest egg. He lists over 50 examples of ‘selfish employment’ jobs.

Key takeaways:

Debt is a deal breaker

Jeff maintaints that as long as you have any personal debt- including a mortgage- you are not positioned to retire the Cheapskate Way.

Jeff”s “Big Binder Theorem”.

Financial ‘Advisors’ will prepare for you a thick binder with multiple tabs, printouts, graphs, pie charts, and Monte Carlo simulations, but they all say mostly the same thing- Investing $1-$2M with me (and subsidizing my Financial Advisor practice) is the only way to prepare for your retirement. I’m not in full agreement with this, as some advisors are well-connected with skilled accountants and tax lawyers who can provide targeted advice to people with unique situations.

Inflation? What Inflation?

Federal (BLS) data confirm that spending DROPs with age in retirement. This is contrary to the boilerplate FP advice that you will spend 80% of your pre-retirement salary every year, blah-blah-blah, adjusted for inflation.

Kill Bill, Volume 1

Retire a monthly bill, and retire that much sooner.

Kill your cable/phone/cell bill and put that $$ in directly in to retirement savings every month.

Kill Bill, Volume 2

Jeff’s rule for grocery shopping is to limit your purchases to items that cost $1/pound or less.

He then provides a detailed grocery list of items that can be found for $1/pound.
When in Retirement, you can use your available time to save $$.

While nothing above by itself is earth-shattering, Jeff puts together the material in a personal and conversational tone by relating both personal experience and the experiences of some of his ‘miser advisors’. Plus, Jeff lists some very specific methods to find a ‘selfish employment’ gig in retirement and save big bucks on groceries.

In true cheapskate fashion, Jeff advises you to borrow his book from a library- But I’m going to go ahead and recommend you spend the 10 bucks!

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