Ross Anderson
speaker
73 appearances
2 recordings
2 series
first heard May 2025
last heard 7 Jul
Ross Anderson’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 1 in all, peaking in Jul 2026 with 1.
Appearances
Thank you so much for having me. Happy to be here.
Thanks for a little bit of the context that you're sharing some concerns about whether or not the federal cuts might impact your employment. My first question would really be, what does your emergency fund look like? And we don't necessarily need the numbers here, but I would think about it in terms of how long could you go, whether that's weeks or months, if you didn't have paychecks coming in.
That's really how I think about evaluating emergency funds. So could you share a little bit about where you are in that respect?
A couple of years. Okay. So, so very strong.
Yeah.
Typically what you'll hear advisors say is kind of three to six months, um, as a good, healthy emergency fund. Now, the more sensitive your income is to the environment, I actually think notching that up can be prudent. So people that work in commission jobs, for example, or real estate where they may not have, um,
commissions for a long period of time or they may have a slow season and things like that. So being a little above that is really healthy. But in theory, if you could go multiple years, first of all, congratulations, that's fantastic. That also may be an indication that you're a little too heavy in cash. So we can talk about that as well today. But that's a really, really impressive place to be.
So you should be proud of that, that you were able to save that much and put yourself in a really strong position.
That kind of then leads me back to your original question, which is, does it make sense to reduce your retirement contributions if that's the case? If you're starting from a position of really strong balance sheet, meaning you have that emergency fund in place, then quite frankly, I would almost go the other direction, right?
When we've got times of economic uncertainty, that's normally when markets are going to price down because people are scared. And the stock market is kind of the one place where everything goes on sale and nobody wants it. It's a great place to be putting money, especially when there is fear in the markets. And
I don't know if we're at a bottom or if we've already seen the bottom of kind of this current unrest. But generally, I want to be a buyer when everybody else is concerned. I think of it as how can I put the most money to work possible when everybody else is a little bit nervous.
Yeah, so I'll try and keep it fairly distinct here. But when I think about wanting to retire early, what that generally means is that you're going to need a higher savings rate or a higher contribution rate to get to the finish line faster. And so...
I'm going to use some very broad generalizations here, but typically about 15% for folks, if you're saving a total of 15% towards your retirement, that's normally going to have you on track for what I'll call a traditional age retirement, which might be in that 60 to 65 range. Depends exactly when you get started and what you spend and kind of what your spending mix is.
So there is some nuance to it, but 15% is a really nice benchmark for to say, okay, that's probably going to get you to a normal aged retirement. If you want it to be done earlier than that, then what we probably need to do is ramp up those resources.
If we can get to saving 20% or 25% of your income, and some people in the FIRE movement you'll see end up saving really, really large percentages of their income, And that's because they have that goal to be done sooner, right? So we have to build capital sooner, and we've got less time for that money to compound.
And so if we're thinking that way, then how aggressive you want to be leads down kind of two paths. Number one is we need to think about what that savings rate is. What can we really get to? And it is a balance, as you said, right? We're balancing how do we live today with how ambitious do we want to be towards that savings goal?
And the second thing that I don't think it's talked about as much or enough is where are we saving? So if you wanted to be retired at 50, for example, you don't have full access to your retirement accounts, right? When you're putting money into 401ks or Roth IRAs, right?
And there's nuances and rules to all of this stuff where you may have an exception or two, but you don't have unrestricted access to that money. And if you're trying to take... Whatever you're saving as your nest egg, you're going to go overseas with it, buy a house and start living on your resources.
You want to make sure that it's accessible and that it's not causing you really big tax headaches. And so that would be the other really big focus I would have is make sure that you're still getting your match in your 401k, right? Anything that you can do to get free money, we should do that.
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