Cody Garrett and Sean Mullaney: ‘For Most Americans, You’re Going to Pay Less Tax in Retirement’

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**Christine Benz** (0:28)
Hi, Long View listeners. It's Christine Benz. We took a brief break from creating new episodes so that everyone on our team could enjoy the July 4th holiday. For this week, we're rerunning one of our favorite episodes from the past year.
Our conversation with financial planners and tax encyclopedias, Cody Garrett and Sean Mullaney.
We hope that you enjoy the conversation, and we'll be back with a new episode next week.

**SPEAKER_3** (0:51)
Please stay tuned for important disclosure information at the conclusion of this episode.

**Christine Benz** (0:57)
Hi, and welcome to The Long View. I'm Christine Benz, Director of Personal Finance and Retirement Planning for Morningstar.

**Amy Arnott** (1:03)
I'm Amy Arnott, Portfolio Strategist for Morningstar.

**Christine Benz** (1:07)
Our guests on the podcast today are Cody Garrett and Sean Mullaney. They're both advice-only financial planners, and they're the co-authors of a new book called Tax Planning To and Through Early Retirement. Cody is a certified financial planner and the founder of Measure Twice Money, where he helps DIY investors make informed decisions aligned with their values. He also leads Measure Twice Money, which is an educational community for financial planners. Sean Mullaney is a certified public accountant and head of Mullaney Financial & Tax. He also writes the blog fitaxguide.com, which is focused on the intersection between financial independence and taxes.
Cody and Sean, welcome to The Long View.

**Cody Garrett** (1:51)
Thanks for having us. Thank you. So glad to be invited back.

**Christine Benz** (1:54)
Well, we're excited to have you here and to talk about your book, which is called Tax Planning To and Through Early Retirement. So the book is focused on tax planning and early retirement. And I'm wondering if you can talk about how you define that.
There are people who retire very young, like in their 40s, but there are also people who retire a little bit young, like in their early 60s. So who are you pitching the book toward?

**Cody Garrett** (2:19)
Yeah, that's right, Christine.
So early retirement, for the sake of this book, we have to decide what are we defining as early retirement. We define that as anytime before Medicare eligibility, which is typically the month of your 65th birthday. So we actually found a study out there that was kind of surprising that around 70 percent of Americans report retiring before them, both voluntarily and involuntarily. So I would say with that said, the book also does cover strategies and tactics through all phases of retirement through the end of life. But we'll just say for this purpose today, that early retirement is pre-65.

**Amy Arnott** (2:52)
Yeah. I think if I remember correctly, I think the average retirement age is around 62 So even people who aren't necessarily planning to retire early might end up doing so either because of a layoff or health issue or family obligations, things like that.
So we often hear kind of the caricature of an early retiree, is that he or she is a high earning, heavy saving person, extremely frugal. Do most of the early retirees that you've worked with fit that profile?

**Sean Mullaney** (3:31)
I would say most of the early retirees I work with are generally high earning and generally are high saving and investing. Now they have been helped by equity markets over the past decade and a half, which have been very good in terms of returns.
The one thing I don't typically see is extreme frugality, really to any degree. Now to be fair, most of the folks I work with have some identification with the financial independence movement. Now it might just be from time to time I listen to one of those podcasts. It might be as simple as that. So I don't see extreme spending in terms of the folks I generally work with, but I also certainly do not see extreme frugality.

**Christine Benz** (4:17)
So, Sean, that was you speaking there. I wanted to follow up on that. And we do want to discuss tax planning first and foremost, which is the focus of your book. But I wanted to ask about withdrawal rates for these younger retirees. Can you talk about how you counsel people as they're thinking about how much they can reasonably spend from their portfolios? I sometimes hear in the FIRE community sort of this adherence to 4%, 4%.