I love that 3rd option James. I’m going to do that, I’m 54 with app. $2.1 million saved. I’m going to stop saving so much and start spending now!!! More dinners and maybe that sports car I’ve always wanted. Why wait until I’m 70 to buy that car!!!
Take your deferred money buy an annuity, lifetime income rider. Spend the rest. If you are trying to leave a legacy that's not retirement. Stock market gambling is for the young with time to recover.
Do it! I have around 2.5 and can't even spend it all now. Lost my wife and all our plans. Also have pension. Money is nothing without good health and purpose. Best of luck to you!
We're very similar to you (55 with $2.5 million saved). We decided to scale back the savings a bit , start "quite quitting" a couple jobs (we're both self-employed and have multiple accounts) , bought a Porsche (with some of the profits from a sale of an investment property), and went on a road trip to Sicily. Don't wait to long or get over fixated on saving like a miser. My Brother just died at 58 ... Enjoy yourself (within reasonable limits)
Perfect topic. I'm 3 years in retirement @57, did a good job in the accumulation phase with net worth of $3M+. The problem is I haven't spent any of it despite knowing I have no concerns of running out of money. Some minimalist traits that helped me save are not easily cast aside. I sense I'll be dead and gone with plenty of money left behind, but that was never a goal.
Suggestion; Consider Charity. Homeless, Food Needs, Clothing.... You can do a lot with your wealth. You'd be suprised how many local churches have food pantries and minister to those in need
I had same problem. I couldn't separate from my frugal habits. So i hired a financial planner with a certified retirement specialist designation. I'm not advertising anything. But this guy was good at coming up with a spending distribution plan including increasing my brokerage accound holdings. Now i get 1 check from my dividend/brokerage account, another from my trad ira and then a 3rd from my work pension. Yes the aum is 1%. But I can focus on enjoying my life rather than 6 hours a day overanalyzing how to pay myself, when, and how much. Dream a little and don't look back with regrets!
They've done a great job of saving a nice sum. Planning to work until 70 with a $2.2M today wouldn't work for me. Expenses not too bad but especially their mortgage is a killer until 74 years is concerning. Nobody knows what their health will be tomorrow. Me personally would do whatever is needed to retire before 70. Good analysis and video. Thanks
Thank you. This is the main reason I scaled back on savings the last several years. The money saved decades ago is doing all the heavy work. Thanks again Great scenario.
I couldn't imagine waiting until 70 to retire. There is no way in hell that I could do then what I am doing now at mid 50s - my enjoyment and capabilities to fully engage in my retirement would have been severely limited. Let alone, all the stories that I hear of people on living 2-5 years after they retire because they waited so late. What a shame to have worked for 95% of your life to get down to the wire and only have a handful of years left. Retire now.
Correct, my old man retired this year at 62 collecting social security. Has no debt, and lives a perfectly good life fishing everyday with 100k saved. It's all about lifestyle.
It’s recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving that percentage can ensure that you have enough money to retire comfortably. You can take advantage of compound interest and potentially grow your retirement savings over time.
This is a great video. I retired at 70 and my wife at age 66. We were able to utilize the spousal benefit to supplement her retirement income and an important thing happened by accident. Something we hadn’t anticipated. Her school district participates in the state teacher retirement program AND social security. Many school districts do one or the other but not both. So end result, she gets two retirement benefits. Teachers especially need to consider this. If their school doesn’t fund a retirement fund or pay into social security then they should seriously consider that 403b that you mentioned and fund it at the level their social security or retirement fund should have been. Also, I don’t think you mentioned but when you retire your retirement deductions and social security contributions stop. So your income that was funding that can be much less. Medicare + a supplement (Part G) can be had for a $200/year deductible/max out of pocket. If you sign up for the supplement within 6 months of filing for Medicare they CANNOT rate you (higher premium) or refuse you for pre-existing conditions. Plus you can go to any doctor you choose rather than having to stay within some network that your doctors may not be in. Stay away from Medicare Advantage! There are people who specialize in getting people to sign up for Medicare and supplements and there service is paid for by the insurance companies. Let them help you get enrolled. It’s a one time thing. The problem is Medicare Advantage SEEMS less expensive and includes things like Silver Sneakers and prescription drug coverage but it’s a trap. Later if you decide you want to go with Part G they can turn you down or rate you for pre-existing conditions. “Pay me now or pay me later”. Finally, QCDs (qualified charitable contributions) for charitable recipients. This “supercharges” your standard deduction because the QCD comes out of your retirement fund TAX FREE so your after tax cash flow goes further than if you make those charitable contributions from your monthly cash flow. If you can pay off your mortgage before retiring then it is much easier to live on your retirement cash flow so all of that needs to be taken i to consideration. We didn’t have the benefit of this software or advice and both deferred social security until 70 but we’re in relatively good health and it worked out but in reality I probably could have retired earlier and been ok. Don’t look back!
Good point! I started the initial plan of retiring later, but reconsidered after my recent retirement at 64 yo while I am still healthy. My children are doing well career wise and they recognize my efforts on saving for retirement, so they rather I enjoy spending my time to be happy instead of saving money for inheritance for them. Knowing this has allowed me to retire without guilt. The difficult part is withdrawing and spending the saved income. 😂 I enjoy watching your UA-cam because it reinforces my decision and allows me to learn something I might not have been aware of. Thank you!
Great video. The case studies are great videos from which to learn. I love how James picks different financial scenarios but also focuses on one aspect of the financial plan with each one, ie budget, heathcare, roth conversions, etc. One thing with option 3 is this though: saving less and spending more means inflating lifestyle, which means that in retirement they will likely want to spend more than they thought they would when compared with their current lifestyle.
My wife and I have about $2.7 million in investments with a $600K home. No mortgage not debt or car payments. My wife retired this summer at 57 on I plan to retire next summer at 59. Before we ran the numbers with our financial guys we were much like your couple. We assumed we would work till 60 or 65. After running the retirement scenarios his only question to us was "what are you waiting for" My wife describes not working as "transformative" and now I have the peace of mind to walk out of the working world without stress. Moral of the story. Tell your Finacial person your wish list and work from there.
My recommendation is to ease into retirement, stop working full time move to part time, free up space for travel and things you want to do while you’re in the go go years.
Exactly what I did too. When I was ready to retire at 57, I got an insane offer to remain part-time. Did that for 2 years. Was a great transition. With this couple, the dude is a teacher. Not sure how he could go part-time, unless he went to substitute teacher, though he presumably gets his summers off. His lawyer wife can hopefully dial back. But yeah, the 2-year part-time transition was perfect.
No point be the richest person in the graveyard. Tomorrow is not promised to anyone and enjoying the financial provisions you have made is a priority. The reality is retirement falls into a number of phases, 1)Go Go years where you are more active and may want to travel 2) Slow Go years where you still want to do things but at a slower pace 3) No Go years where even less activity and more staying local and enjoying your time. These phases need to budgeted into retirement spending. No point putting $20K a year in a budget for travel at 85+ when you have neither the energy or desire to do that. Plenty of data available to show how spending changes in retirement. PS. In this example the couple will sleep a lot better without a mortgage, pay it off today. Its not a pet to keep around!
Agree with everything you said with the exception of the Mortgage. Paying off the Mortgage is a math equation. How high is your interest rate vs what is a reasonable return on that money
Why would a teacher want to keep going until age 70? Teaching is exhausting. And at a private school, no less, with terrible pay and no pension. Another option not mentioned is if Tommy retires today, gives up his not wonderful $82K a year salary, and Monica continues to work and carries the health insurance until age 65, when Medicare picks up. Monica could likely renegotiate with her firm when she reaches age 60 to reduce her hours and her salary but have them continue to pay health care. Also, even if they stop contributing the max to their 401K / 403B, it's silly to contribute zero - they are missing out on free money from their employer. They should contribute the match (which is usually around 3%), but nothing more.
@@AbeFroman-zx5hs He has the heart of a teacher. He is deliberate and focused. He gives a thorough breakdown and opens eyes to possibilities beyond what people think they "MUST" do. Did you see something different?
maybe I missed it but I didn't see any discussion of planning for long term care. we all want to stay in our homes as we age but many need assistance either in home or moving to a community. Important to plan for that if possible.
I wonder that too and then I realize I need to keep my brain sharp and occupied and have something nice to do daily. Finding a job you want to do vs having to do
I retired at 46 with over 3 million in retirement, I plan to die with zero in the bank, and I am taking a lot more than any of his scenario show, and I am in no risk of running out of money. All these videos are not aggressive enough in my opinion. You only have one life, you better live it while you can.
I will have 2 pensions and SS at age 68 which is when I plan on retiring. Im 59 now. Not counting any investments I will be bringing in Apx 6500 a month.
I’m 60 and my wife 54 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle in the stock market made it possible for us this early even till now we earn weekly.
Why not retire now or 62? I retired at 59, 9 years ago with inflation adjustment the same amount of money and similar spending. I am doing just fine and travel about 6 months a year.
how much do you have saved that enables you to retire at 59? I am 52 and want to retire at 58. I currently have 1m in Retirement and 800k in Brokerage/cash..
Thank you, James. You do a fabulous job for your clients in helping them to see how to live their best lives, now and in the future. You are so clear and thorough in all of your videos. Thank you!
Another great video James. However, I did notice that their budget for travel is $20K per year which may not be realistic depending on the type of traveling they want to do. Traveling is expensive, particularly international. I would budget double that at least for a couple of nice vacations per year. This illustrates that details are very important, and a retirement plan is only as good as the assumptions that go into it.
I’ve watched dozens of videos about retirement. Yours has had a major impact on the way I’m viewing retirement. I would like a plan like the one you discussed in this video. I need your help
I'm just throwing this out as a variation on option 3 which might make sense only if they have enough in investments in their taxable joint account that can be sold without much if any capital gain, e.g., a money market fund. In that case, they could keep making the total of $42k pre-tax contributions to their respective workplace retirement accounts and, instead, cash out $42k from their taxable joint investment account.
I was following along with the scenario until you got to the Medicare piece. Are you sure that they would each have to pay $800/month? That is about twice what I am estimating I will pay for me and my wife when we start Medicare, and we have twice what your scenario is based on in addition to pensions of over $130,00/year.
The "story" doesn't make sende at all to me?. Most of logical persons would not choose to work till 70 because they want save up to 5 millions. The two make 330k yearly. They can easily spend 50k yearly for vacation and still have a comfortable life retired at 65.
I agree. Pay off your debts and retire. Expenses go down when you retire and if you retire at 70 you only need to have 20 years of spending. At 90 how much are you able to do?
3rd option = Coast FIRE. I think this is the optimal strategy for many people. Work hard and save fast early, then start living to the max at younger years
Explain how Monica's $3.6K/mo. in SS benefits earlier in the video translate to $62,857 year SS income, later in the video. Is there a standard COLA factor?
I get it ...the solution is to get my CFP and start a UA-cam channel showing a spreadsheet and graphic summary of retirement disasters and then selling software for a living ;-)
It's not so much the income you retire with. it's your tax liability and dept that will last through your retiment. We retired dept free on 5 acres downsized to a newly built 1700 sq ft modest home, fully electric. Property tax $1450 annually No sales tax state. No SSI tax State Our 2023 electric liability $1450. Well, septic. No other utilities. Bare bones budget is 18% of our combined SSI pay-out. We have a 1 year income emergency fund for home and vehicle maintenance and repair in regular savings. Instant access. But we do have considerable gold bullion buchased in 2009-2011 as a fall back. Best thing we did. It's more than doubled. No stocks because of 2008, I'm not in control. We still save 20- 25% annually for purchasing more virgen land with marketable timber. "Our hobby," for annual harvest. Or just for generational wealth for our children. There's other investment besides stock. After 2008, I chose a different direction. My wife calls the properties our parks. It works for us. Research and do what works for you. Good luck.
I retired to Mexico. No brainer for me, I spoke Spanish, hale from Arizona ( which borders Mexico), like the food and people, beautiful beaches and mountains for outdoor activities. enjoy the rich cultural and historical vibe, and way cheaper than the USA
I enjoy your videos, although you focus too much on couples. There are a great many singles who need retirement help also. Your software costs $297. I'm currently using New Retirement. I'm sure you're familiar with it. That costs $120. What is the additional value your software provides to justify the much higher cost? Thank you.
@larrybeagle66 For New Retirement you are paying $120 per YEAR. James is only charging a ONE TIME FEE of $297. Plus with James you get a 13 module retirement course. I have been using Right Capital for about 6 years. I have also used New Retirement. I prefer Right Capital to New Retirement.
When SS and Medicare reforms happen most likely in 2030s, projecting a median change of a lifetime reduction in SS benefits of 14% and increased lifetime healthcare costs of about the same 14%. The more your net worth trends above the median, the more these %s will be greater. The effects may not be immediate, but younger workers of today should take note.
We were essentially told the same thing; the difference being we'll be updating and optimizing our home for aging in place rather than big trips in the interim.
Has anyone here enrolled in the course and got access to the financial software? If so, do you have full access or is it a watered down or crippled version? How do you guys like the software overall?
I have considered it but have not yet taken the plunge. I found a free "watered down" version of RightCapital (RC) software from another planner. It does most of what you see presented by RootFinancial (RF), but it is not quite as robust as what is demonstrated here. I understand the version from RF is also not the complete version you see demonstrated in the videos but does offer a substantial amount of planning options for the end user. *** I previously stated here that I had some concerns with the Social Security (SS) calculations in RC. I found my error and now fully agree with the SS values as presented by RC. ***👍
Your health will change at an undisclosed point in time - and then again - and then again. Retire as early as you can. Maybe you only have 3 years to walk to the glacier on the Alaskan Cruise - maybe in 7 years you’ll only be able to walk around the deck - maybe in 13 years you’ll do it from a wheelchair.
I've switched my investment strategy to gold and banks and less mutual funds. I can't see how we can pay off the trillions unless bonds go way way way up. Like 10% or more. I think it's a great time to get rich. With Trump losing 99% probability the US economy will most likely get a green boost. TSla rivn and other green autos should bloom with or without incentives. The used tesla and other evs are a great market to buy a used EV. They're still really decent and will go nearly 300k on a battery pack before needing a replacement, but by then you'll be looking for a new EV then. Gold has gone up 700.00 current 8 yrs. I congratulate Dumpster for that as he is the one who killed our deficit as he doesn't understand anything related to economy only rip offs.
Retire at 70? Wow, they have no idea of what most people can do or can’t do at that age. A new car every 5 years I think is another crazy idea. But hey what ever is your priority in life.
Why do they want to die with millions left in the bank? Is this so their children will inherit millions of dollars? If so, then that is generous but kind of sad in my opinion, all things being subjective and relative. If they aren't doing it to will a fortune to their kids, then it really doesn't make sense to me.
Retirement isn’t like winning a race and flying across a finish line. It is more like a ship entering an unfamiliar harbor and having to course correct and plan well. These videos help those course corrections. 2 years in at age 59. It’s not safe but it’s good!
Because the Stock Market is NOT static. Because there is NOT just one method to invest and withdraw funds. Because we all need a little reminder and course correction as we travel along.
$20,000 per year to travel. That's $1,700 per month. Who's going to budget that much money, every month, just for travel? I can see taking one or two very nice vacations during retirement, but every year? C'mon man...why are you putting scenarios like this out there? This is so far from reality for 90% of your viewers.
Oh my gosh there's so many assumptions here. I think it's more preferable to focus on what their income will be in light of what they have accumulated. From there I think they should be able to figure out what they'll be able to do knowing what they recurring income will be. The IRA distributions Will require lots of taxable issues and that's a concern. But the focus needs to be monthly income and this video just goes right to the expense side making things so damn complicated to figure out. 😢. $2.2 million seems kinda nice
Bad plan anyone with enough money to live on should retire 65 or under. Tomorrow is not guaranteed. I retired at 49 and it was the best choice I ever made.
Anyone? As in EVERYONE?! As in, our jobs are simply a means to an end and serve no other purpose than to pay the bills? (PS I retired at 46 and I'm happy! But I'm NOT "everyone").
That law school dream is really coming to an end huh. A 60-year-old attorney making $215k a year... not exactly what those older Hollywood movies are all about.
There are Real Estate Lawyers who do closings and maybe Wills Then there are scumbag Dicorce attorneys who rape their clients and make Millions.... And of course, everyone in between.
If the title says "I" but the video is about a couple, it feels like a bait-and-switch to me as a single person. It would be better to use "we" in the title.
All my. A million this and a million that. Are we taking about the average American? NO. How about come off the soap box to tell the everyday family to go in to retirement. With the average savings. Not looking to line your pockets with a plan.
Lol!!! WHAT?! If this isn't for you, MOVE ON!! Though, "The Average Family" should he ashamed of themselves if they don't have at least A Million Dollars saved after 40+ years of working! That's only $200/month!! Tell me, how much is your phone bill? Your cable bill? Your cigarette and alcohol bills?! Please stop being so damed Needy and frankly GREEDY! And learn from this and other such videos rather than speaking of "averages!" Average isn't who wins!
I love that 3rd option James. I’m going to do that, I’m 54 with app. $2.1 million saved. I’m going to stop saving so much and start spending now!!! More dinners and maybe that sports car I’ve always wanted. Why wait until I’m 70 to buy that car!!!
I love that 3rd option James. I’m going to do that, I’m 54 with app. $2.1 million saved. I’m going to stop saving so much and start spending now!!! More dinners and maybe that sports car I’ve always wanted. Why wait until I’m 70 to buy that car!!!
Definitely get that car before your body can't get into it anymore!
Take your deferred money buy an annuity, lifetime income rider. Spend the rest. If you are trying to leave a legacy that's not retirement. Stock market gambling is for the young with time to recover.
Get it James! Well done! You’re an American success story.
Do it! I have around 2.5 and can't even spend it all now. Lost my wife and all our plans. Also have pension. Money is nothing without good health and purpose. Best of luck to you!
We're very similar to you (55 with $2.5 million saved).
We decided to scale back the savings a bit , start "quite quitting" a couple jobs (we're both self-employed and have multiple accounts) , bought a Porsche (with some of the profits from a sale of an investment property), and went on a road trip to Sicily.
Don't wait to long or get over fixated on saving like a miser.
My Brother just died at 58 ...
Enjoy yourself (within reasonable limits)
Perfect topic. I'm 3 years in retirement @57, did a good job in the accumulation phase with net worth of $3M+. The problem is I haven't spent any of it despite knowing I have no concerns of running out of money. Some minimalist traits that helped me save are not easily cast aside. I sense I'll be dead and gone with plenty of money left behind, but that was never a goal.
Suggestion;
Consider Charity.
Homeless, Food Needs, Clothing....
You can do a lot with your wealth.
You'd be suprised how many local churches have food pantries and minister to those in need
@@METVWETV haha no
I had same problem. I couldn't separate from my frugal habits. So i hired a financial planner with a certified retirement specialist designation. I'm not advertising anything. But this guy was good at coming up with a spending distribution plan including increasing my brokerage accound holdings. Now i get 1 check from my dividend/brokerage account, another from my trad ira and then a 3rd from my work pension. Yes the aum is 1%. But I can focus on enjoying my life rather than 6 hours a day overanalyzing how to pay myself, when, and how much.
Dream a little and don't look back with regrets!
Your point?
They've done a great job of saving a nice sum. Planning to work until 70 with a $2.2M today wouldn't work for me. Expenses not too bad but especially their mortgage is a killer until 74 years is concerning. Nobody knows what their health will be tomorrow.
Me personally would do whatever is needed to retire before 70.
Good analysis and video. Thanks
Absolutely!! Cash it in and pack your bags
Thank you. This is the main reason I scaled back on savings the last several years. The money saved decades ago is doing all the heavy work. Thanks again Great scenario.
Boy, these videos completely changed my outlook on retirement. So very useful. Thank you.
Yes I work for LAUSD and his videos are very enlightening. Helps educate me tremendously. Thank you James.
I couldn't imagine waiting until 70 to retire. There is no way in hell that I could do then what I am doing now at mid 50s - my enjoyment and capabilities to fully engage in my retirement would have been severely limited. Let alone, all the stories that I hear of people on living 2-5 years after they retire because they waited so late. What a shame to have worked for 95% of your life to get down to the wire and only have a handful of years left. Retire now.
Correct, my old man retired this year at 62 collecting social security. Has no debt, and lives a perfectly good life fishing everyday with 100k saved. It's all about lifestyle.
It’s recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving that percentage can ensure that you have enough money to retire comfortably. You can take advantage of compound interest and potentially grow your retirement savings over time.
Well said hagakuru.
Not everyone hates their life
This is a great video. I retired at 70 and my wife at age 66. We were able to utilize the spousal benefit to supplement her retirement income and an important thing happened by accident. Something we hadn’t anticipated. Her school district participates in the state teacher retirement program AND social security. Many school districts do one or the other but not both. So end result, she gets two retirement benefits. Teachers especially need to consider this. If their school doesn’t fund a retirement fund or pay into social security then they should seriously consider that 403b that you mentioned and fund it at the level their social security or retirement fund should have been.
Also, I don’t think you mentioned but when you retire your retirement deductions and social security contributions stop. So your income that was funding that can be much less. Medicare + a supplement (Part G) can be had for a $200/year deductible/max out of pocket. If you sign up for the supplement within 6 months of filing for Medicare they CANNOT rate you (higher premium) or refuse you for pre-existing conditions. Plus you can go to any doctor you choose rather than having to stay within some network that your doctors may not be in. Stay away from Medicare Advantage! There are people who specialize in getting people to sign up for Medicare and supplements and there service is paid for by the insurance companies. Let them help you get enrolled. It’s a one time thing. The problem is Medicare Advantage SEEMS less expensive and includes things like Silver Sneakers and prescription drug coverage but it’s a trap. Later if you decide you want to go with Part G they can turn you down or rate you for pre-existing conditions. “Pay me now or pay me later”.
Finally, QCDs (qualified charitable contributions) for charitable recipients. This “supercharges” your standard deduction because the QCD comes out of your retirement fund TAX FREE so your after tax cash flow goes further than if you make those charitable contributions from your monthly cash flow.
If you can pay off your mortgage before retiring then it is much easier to live on your retirement cash flow so all of that needs to be taken i to consideration. We didn’t have the benefit of this software or advice and both deferred social security until 70 but we’re in relatively good health and it worked out but in reality I probably could have retired earlier and been ok. Don’t look back!
Good point! I started the initial plan of retiring later, but reconsidered after my recent retirement at 64 yo while I am still healthy. My children are doing well career wise and they recognize my efforts on saving for retirement, so they rather I enjoy spending my time to be happy instead of saving money for inheritance for them. Knowing this has allowed me to retire without guilt. The difficult part is withdrawing and spending the saved income. 😂 I enjoy watching your UA-cam because it reinforces my decision and allows me to learn something I might not have been aware of. Thank you!
Spending can be hard.
@@jameschaves5723
Indeed it can!
Great video. The case studies are great videos from which to learn. I love how James picks different financial scenarios but also focuses on one aspect of the financial plan with each one, ie budget, heathcare, roth conversions, etc. One thing with option 3 is this though: saving less and spending more means inflating lifestyle, which means that in retirement they will likely want to spend more than they thought they would when compared with their current lifestyle.
My wife and I have about $2.7 million in investments with a $600K home. No mortgage not debt or car payments. My wife retired this summer at 57 on I plan to retire next summer at 59.
Before we ran the numbers with our financial guys we were much like your couple. We assumed we would work till 60 or 65.
After running the retirement scenarios his only question to us was "what are you waiting for"
My wife describes not working as "transformative" and now I have the peace of mind to walk out of the working world without stress.
Moral of the story. Tell your Finacial person your wish list and work from there.
Thanks James for another very informative video!
Working till 70 is insane
The audio/voice processing on this video sound really good.
Really nice job on the video. A clear, concise step-by-step walkthrough. Well done!
My recommendation is to ease into retirement, stop working full time move to part time, free up space for travel and things you want to do while you’re in the go go years.
That’s what I did!
Exactly what I did too. When I was ready to retire at 57, I got an insane offer to remain part-time. Did that for 2 years. Was a great transition.
With this couple, the dude is a teacher. Not sure how he could go part-time, unless he went to substitute teacher, though he presumably gets his summers off. His lawyer wife can hopefully dial back.
But yeah, the 2-year part-time transition was perfect.
No point be the richest person in the graveyard. Tomorrow is not promised to anyone and enjoying the financial provisions you have made is a priority.
The reality is retirement falls into a number of phases, 1)Go Go years where you are more active and may want to travel 2) Slow Go years where you still want to do things but at a slower pace 3) No Go years where even less activity and more staying local and enjoying your time. These phases need to budgeted into retirement spending. No point putting $20K a year in a budget for travel at 85+ when you have neither the energy or desire to do that. Plenty of data available to show how spending changes in retirement.
PS. In this example the couple will sleep a lot better without a mortgage, pay it off today. Its not a pet to keep around!
Agree with everything you said with the exception of the Mortgage.
Paying off the Mortgage is a math equation.
How high is your interest rate vs what is a reasonable return on that money
Cannot thank you enough, James. All of your content is so good and so relevant. This one here for Tommy and Monica is your best yet (IMO)!
62 seems like a good number. Doesn't matter if you would draw more SS if your dead or out of steam. 😎
Why would a teacher want to keep going until age 70? Teaching is exhausting. And at a private school, no less, with terrible pay and no pension. Another option not mentioned is if Tommy retires today, gives up his not wonderful $82K a year salary, and Monica continues to work and carries the health insurance until age 65, when Medicare picks up. Monica could likely renegotiate with her firm when she reaches age 60 to reduce her hours and her salary but have them continue to pay health care. Also, even if they stop contributing the max to their 401K / 403B, it's silly to contribute zero - they are missing out on free money from their employer. They should contribute the match (which is usually around 3%), but nothing more.
Excellent as always
Elaborate
@@AbeFroman-zx5hs
He has the heart of a teacher.
He is deliberate and focused.
He gives a thorough breakdown and opens eyes to possibilities beyond what people think they "MUST" do.
Did you see something different?
Well done, great video!
Good stuff. I enjoy your videos a lot.
maybe I missed it but I didn't see any discussion of planning for long term care. we all want to stay in our homes as we age but many need assistance either in home or moving to a community. Important to plan for that if possible.
Why do they have to work until 70 with over two millions in retirement ?
Completely insane to me. But some people love working
I understand if you HAVE to work, but FFS if you got 2.2 million don’t work until just a few years before the average death age!!!
Ill informed.
I wonder that too and then I realize I need to keep my brain sharp and occupied and have something nice to do daily. Finding a job you want to do vs having to do
Fear of change in lifestyle is my guess. But it's probably also not fully understanding what's possible if you retire prior to the age 70.
I retired at 46 with over 3 million in retirement, I plan to die with zero in the bank, and I am taking a lot more than any of his scenario show, and I am in no risk of running out of money. All these videos are not aggressive enough in my opinion. You only have one life, you better live it while you can.
I will have 2 pensions and SS at age 68 which is when I plan on retiring.
Im 59 now.
Not counting any investments I will be bringing in Apx 6500 a month.
How nice for you.
And?
@@METVWETVjealous much?
I’m 60 and my wife 54 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle in the stock market made it possible for us this early even till now we earn weekly.
Tommy ain’t pulling his weight
Buying a new car every 5 years in retirement? But great video!
Yes!
Why not?!
I plan for this. One new car every 5 years. Two people, so I’m keeping the car 10 years.
They probably have two cars and replace both every 10 years, but have to portray it this way in the software.
Why not retire now or 62? I retired at 59, 9 years ago with inflation adjustment the same amount of money and similar spending. I am doing just fine and travel about 6 months a year.
how much do you have saved that enables you to retire at 59? I am 52 and want to retire at 58. I currently have 1m in Retirement and 800k in Brokerage/cash..
@@mattbateh8717
So you have nearly $2Million now and are asking how you can retire with about $4Million in 6 years?
Thank you, James. You do a fabulous job for your clients in helping them to see how to live their best lives, now and in the future. You are so clear and thorough in all of your videos. Thank you!
But did you pay em to manage your money?
Great Video!
Another great video James. However, I did notice that their budget for travel is $20K per year which may not be realistic depending on the type of traveling they want to do. Traveling is expensive, particularly international. I would budget double that at least for a couple of nice vacations per year. This illustrates that details are very important, and a retirement plan is only as good as the assumptions that go into it.
I’ve watched dozens of videos about retirement. Yours has had a major impact on the way I’m viewing retirement. I would like a plan like the one you discussed in this video. I need your help
Go to his site, they will be glad to manage your money for a big fee.
I'm just throwing this out as a variation on option 3 which might make sense only if they have enough in investments in their taxable joint account that can be sold without much if any capital gain, e.g., a money market fund. In that case, they could keep making the total of $42k pre-tax contributions to their respective workplace retirement accounts and, instead, cash out $42k from their taxable joint investment account.
I was following along with the scenario until you got to the Medicare piece. Are you sure that they would each have to pay $800/month? That is about twice what I am estimating I will pay for me and my wife when we start Medicare, and we have twice what your scenario is based on in addition to pensions of over $130,00/year.
Sorry to be off topic, but what kind of T-shirt is that? I like it.
The couple's annual SS benefit seems high in your analysis, over $104k/year. If Mr.'s FRA benefit is $2400 and Mrs.'s is $3600 that doesn't line up.
Beware those who make claims that can easily be debunked.
The monthly benefits are probably what you can get today and he's probably estimating what they'd get 10 years from now.
He’s calculating with an adjustment for inflation increases to the SS benefit.
The "story" doesn't make sende at all to me?. Most of logical persons would not choose to work till 70 because they want save up to 5 millions. The two make 330k yearly. They can easily spend 50k yearly for vacation and still have a comfortable life retired at 65.
After 60 your body goes downhill.
I agree. Pay off your debts and retire. Expenses go down when you retire and if you retire at 70 you only need to have 20 years of spending. At 90 how much are you able to do?
2.2 million on a 4.5% treasury note would give you 99k without touching the principal. $8250 per month.
They look ripe for Roth conversions in 2024 & 2025 and possibly later. Interesting in seeing the RMD effect on taxes 5+ years into retirement.
3rd option = Coast FIRE. I think this is the optimal strategy for many people. Work hard and save fast early, then start living to the max at younger years
Explain how Monica's $3.6K/mo. in SS benefits earlier in the video translate to $62,857 year SS income, later in the video. Is there a standard COLA factor?
I get it ...the solution is to get my CFP and start a UA-cam channel showing a spreadsheet and graphic summary of retirement disasters and then selling software for a living ;-)
It's not so much the income you retire with. it's your tax liability and dept that will last through your retiment.
We retired dept free on 5 acres downsized to a newly built 1700 sq ft modest home, fully electric.
Property tax $1450 annually
No sales tax state.
No SSI tax State
Our 2023 electric liability $1450. Well, septic. No other utilities.
Bare bones budget is 18% of our combined SSI pay-out.
We have a 1 year income emergency fund for home and vehicle maintenance and repair in regular savings. Instant access.
But we do have considerable gold bullion buchased in 2009-2011 as a fall back. Best thing we did. It's more than doubled.
No stocks because of 2008, I'm not in control.
We still save 20- 25% annually for purchasing more virgen land with marketable timber. "Our hobby," for annual harvest. Or just for generational wealth for our children.
There's other investment besides stock. After 2008, I chose a different direction.
My wife calls the properties our parks. It works for us.
Research and do what works for you. Good luck.
I only fly first class or private
We’re all proud of you.
Is that health insurance price accurate? I pay $2k per month for both of us.
What software are you using to do the projections and presentation,
looks like he has a link to it in the description
I retired to Mexico. No brainer for me, I spoke Spanish, hale from Arizona ( which borders Mexico), like the food and people, beautiful beaches and mountains for outdoor activities. enjoy the rich cultural and historical vibe, and way cheaper than the USA
I enjoy your videos, although you focus too much on couples. There are a great many singles who need retirement help also. Your software costs $297. I'm currently using New Retirement. I'm sure you're familiar with it. That costs $120. What is the additional value your software provides to justify the much higher cost? Thank you.
@larrybeagle66 For New Retirement you are paying $120 per YEAR. James is only charging a ONE TIME FEE of $297. Plus with James you get a 13 module retirement course. I have been using Right Capital for about 6 years. I have also used New Retirement. I prefer Right Capital to New Retirement.
@@boba.1801
Thank you....
@@boba.1801 Thank you for the feedback. Can you briefly describe one or two things that Right Capital provides over New Retirement?
Hoping to retire at around 50.
When SS and Medicare reforms happen most likely in 2030s, projecting a median change of a lifetime reduction in SS benefits of 14% and increased lifetime healthcare costs of about the same 14%. The more your net worth trends above the median, the more these %s will be greater. The effects may not be immediate, but younger workers of today should take note.
Is the continued increase of their portfolio likely if they end up in assisted living or a nursing home?
We were essentially told the same thing; the difference being we'll be updating and optimizing our home for aging in place rather than big trips in the interim.
I don’t know an English teacher with a 700k home.
Has anyone here enrolled in the course and got access to the financial software? If so, do you have full access or is it a watered down or crippled version? How do you guys like the software overall?
I have considered it but have not yet taken the plunge. I found a free "watered down" version of RightCapital (RC) software from another planner. It does most of what you see presented by RootFinancial (RF), but it is not quite as robust as what is demonstrated here. I understand the version from RF is also not the complete version you see demonstrated in the videos but does offer a substantial amount of planning options for the end user.
*** I previously stated here that I had some concerns with the Social Security (SS) calculations in RC. I found my error and now fully agree with the SS values as presented by RC. ***👍
They just need to lower their bills.. They make a ton of money
Your health will change at an undisclosed point in time - and then again - and then again.
Retire as early as you can. Maybe you only have 3 years to walk to the glacier on the Alaskan Cruise - maybe in 7 years you’ll only be able to walk around the deck - maybe in 13 years you’ll do it from a wheelchair.
I've switched my investment strategy to gold and banks and less mutual funds. I can't see how we can pay off the trillions unless bonds go way way way up. Like 10% or more. I think it's a great time to get rich. With Trump losing 99% probability the US economy will most likely get a green boost. TSla rivn and other green autos should bloom with or without incentives. The used tesla and other evs are a great market to buy a used EV. They're still really decent and will go nearly 300k on a battery pack before needing a replacement, but by then you'll be looking for a new EV then. Gold has gone up 700.00 current 8 yrs. I congratulate Dumpster for that as he is the one who killed our deficit as he doesn't understand anything related to economy only rip offs.
Retire at 70? Wow, they have no idea of what most people can do or can’t do at that age. A new car every 5 years I think is another crazy idea. But hey what ever is your priority in life.
Why do they want to buy a new car every year and work longer to do so?
If you have to work till you're 70 you already messed up. Just rent a cheap apartment with a pool in a warmer state and call it a day.
Sounds boring
Working till 70, that's sad
No couple is making 100k in social security
Not contributing to a 401k at least to the level of maxing the employer match is just bad advice.
$43,000 in 2036 is going to get you a e-bicycle if current car prices keep going up like they have
Why do they want to die with millions left in the bank? Is this so their children will inherit millions of dollars? If so, then that is generous but kind of sad in my opinion, all things being subjective and relative. If they aren't doing it to will a fortune to their kids, then it really doesn't make sense to me.
A new car every 5 years??
They probably have two cars and replace them every 10 years.
How come so many people who have been retired for years watch these videos?
Retirement isn’t like winning a race and flying across a finish line. It is more like a ship entering an unfamiliar harbor and having to course correct and plan well. These videos help those course corrections. 2 years in at age 59. It’s not safe but it’s good!
Because the Stock Market is NOT static.
Because there is NOT just one method to invest and withdraw funds.
Because we all need a little reminder and course correction as we travel along.
$20,000 per year to travel. That's $1,700 per month. Who's going to budget that much money, every month, just for travel? I can see taking one or two very nice vacations during retirement, but every year? C'mon man...why are you putting scenarios like this out there? This is so far from reality for 90% of your viewers.
Huh?….A 2 week trip to Europe for two is probably $15k alone.
I want to marry a Monica. 😂
Oh my gosh there's so many assumptions here. I think it's more preferable to focus on what their income will be in light of what they have accumulated. From there I think they should be able to figure out what they'll be able to do knowing what they recurring income will be. The IRA distributions Will require lots of taxable issues and that's a concern. But the focus needs to be monthly income and this video just goes right to the expense side making things so damn complicated to figure out. 😢. $2.2 million seems kinda nice
2.2 at 4%/Annually is
$88,000/year BEFORE Taxes!
And that's only "guaranteed" for 30 years!
Not so "nice" anymore, huh?
Bad plan anyone with enough money to live on should retire 65 or under. Tomorrow is not guaranteed. I retired at 49 and it was the best choice I ever made.
Anyone?
As in EVERYONE?!
As in, our jobs are simply a means to an end and serve no other purpose than to pay the bills?
(PS I retired at 46 and I'm happy!
But I'm NOT "everyone").
You missed the obvious choice -- they should retire today.
(I retired at 56 so maybe I'm biased to retire as early as you can.)
That law school dream is really coming to an end huh. A 60-year-old attorney making $215k a year... not exactly what those older Hollywood movies are all about.
There are Real Estate Lawyers who do closings and maybe Wills
Then there are scumbag Dicorce attorneys who rape their clients and make Millions....
And of course, everyone in between.
If the title says "I" but the video is about a couple, it feels like a bait-and-switch to me as a single person. It would be better to use "we" in the title.
Agreed!
omg, out of all the info. this is what he takes away. Get a life
@@teddyruxpin7876
Yes.
This is an Angry Troll.
Not to be confused with a Garden variety Troll.
I. As in the man wears the pants
All my. A million this and a million that. Are we taking about the average American? NO. How about come off the soap box to tell the everyday family to go in to retirement. With the average savings. Not looking to line your pockets with a plan.
Lol!!!
WHAT?!
If this isn't for you,
MOVE ON!!
Though, "The Average Family" should he ashamed of themselves if they don't have at least A Million Dollars saved after 40+ years of working!
That's only $200/month!!
Tell me, how much is your phone bill? Your cable bill? Your cigarette and alcohol bills?!
Please stop being so damed Needy and frankly GREEDY! And learn from this and other such videos rather than speaking of "averages!"
Average isn't who wins!
I love that 3rd option James. I’m going to do that, I’m 54 with app. $2.1 million saved. I’m going to stop saving so much and start spending now!!! More dinners and maybe that sports car I’ve always wanted. Why wait until I’m 70 to buy that car!!!