Retirement Answer Man
Roger Whitney, CFP®, CIMA®, RMA, CPWA®
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Think Smart, Retire Smarter: Second Order Thinking
Welcome to the second week of our series on improving decision-making skills with mental models to help you rock retirement! This week, we delve into the concept of second order thinking, also known as the law of unintended consequences. Learn how to think beyond immediate outcomes and explore the long-term impacts of your decisions, whether it's buying a new car or helping your child with a down payment. We'll also share insightful stories from RRC retirees who have navigated the transition to retirement, offering wisdom on what they were excited about, what they worried about, and how their perspectives have changed. Plus, we answer your questions and discuss practical applications of second order thinking in retirement planning. Join us for an episode packed with valuable insights and tips to enhance your retirement journey! PRACTICAL PLANNING SEGMENT (00:00) This week's show focuses on improving decision making skills ahead of retirement (01:15) Revisiting inversion thinking with listener feedback (03:18) Shoutout to RRC Member Kevin (5:00) Starting our second mental model: Second order thinking or the law of unintended consequence (9:00) Reflecting on giving money productively to children using second order thinking (12:58) Second order consequence thinking can help you tease out downstream consequences of retirement planning (13:40) Building a retirement plan of record thinking in second order consequence thinking. RRC RETIREE INTERVIEWS (15:20) Talking to our own Kevin Sebesta about retirement (18:09) What is a fun bucket? (23:00) Talking with two-year retiree, Bob, about what his concerns were before retirement and what he was most looking forward to. (27:54) Bob talks about making indulgent purchases in retirement. (30:46) Asking Bob what advice he would have given his younger self. (33:01) Talking to five-year retiree, Becky, about her concerns prior to retirement. (36:06) When you retired, would you say you were overfunded or very constrained? (38:00) How were you comfortable with the unknown going into retirement? (39:30) How important is it to have friends who are on a similar journey? (44:57) Talking to four-year retiree, Jack, about his concerns two years prior to retirement. (48:35) Jack talks about volunteering at food pantries and food banks. (50:46) How do you avoid getting bored in retirement? (52:04) What would you have done differently when it comes to transitioning to retirement? (53:15) Talking with five-year retiree, Chip, about transitioning from professional to retiree. (55:55) A year or two before retirement, what were your biggest concerns? (56:50) “Getting laid off was probably the best thing that ever happened to me.” (59:17) It's been a journey after retirement figuring out how to manage your time (01:03:10) Looking back, is there anything you would’ve done differently? LISTENER QUESTIONS (01:05:14) Mikey asks about withdrawing social security before seventy. (01:09:23) Mike and Bonnie ask about using debt for tax management purposes (01:16:21) Dirk asks about principle protected, structured ETFs (01:17:25) What is principal protection structured ETF? (01:23:59) Tim asks about investing based on newsletters. SMART SPRINT (01:28:59) Use second order thinking to help you make low-stakes decisions REFERENCES Rock Retirement Clubhttps://rockretirementclub.com Six Shot Saturdayhttps://sixshotsaturday.com Roger Whitneyhttps://rogerwhitney.com Catching Up to FI Podcasthttps://catchinguptofi.com Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219
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