Average Retirement Savings by Age 60. Are You Ready to Retire?
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- Опубліковано 3 лис 2023
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ABOUT ME
I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission - pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money - so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!
📅 THE BASICS OF RETIREMENT PLANNING
Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.
Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.
Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.
Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund - especially if you have an employer retirement plan that matches any portion of your contributions.
Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.
Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.
❣ SPONSORED No, this video was not sponsored.
⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome
Did any of the numbers surprise you?
I don't believe they did. So many people fail to plan appropriately from their early 20s on. Without a pension, the average retiree will need some sort of retirement savings balance and be debt free to live comfortably in retirement with SS benefits. Life happens and emergencies come up...especially health. I wish our primary and secondary education institutions would do more to prepare individuals for the life's journey of personal financial planning.
Do you know how these average/median numbers account for people with multiple 401k accounts? I have 3 different 401k accounts at 2 different providers. So my "Median account balance" would only be about $15k, my average account balance would be $30k, but my Total 401k Savings is actually $90k.
Are these statistics corrected for that? I'm sure I'm not the only one with multiple accounts across different platforms. My situation looks bleak if you look at any one of them, but combined I'm doing just fine.
@@joedessenberger2048The best thing that could happen to public education would be to get rid of the present system that is costing more per capita than anywhere else in the world while always at the bottom of industrialized countries. Most property taxes in most localities go primarily to fund the outrageous salaries and pensions of do nothing teachers, worthless coaches and deadbeat administrators. if this money were left in the pockets of the producers it would lift all boats. Is there some reason you could not instruct little Suzy and Joey about their finances?
@@nathanrice7352typically when you see these numbers from Vanguard or Fidelity - it’s the average on their platform. The numbers hold up across custodians so they’re accurate, but only take into account what’s at their custodian. So not exact. The Federal Reserve number is more inclusive.
@@foundryfinancial Thanks for the response! So it's a "By account" number, not a "By individual" number? IE, The Median 401k Balance is $xxx, NOT the Median Person has a 401k balance of $xxx?
I retired 7 1/2 years ago. My wife retired two years later also at age 62. To date we have not touched a dime of our retirement savings. We are having zero issues living on nothing more than our Social Security. What's our secret? Simple, we retired debt free. Just remember it matters more how much you own than it does how much you have. It's a simple plan. Take care of your debt before you retired and eliminate money worries after you retire.
@@phoenix3.057 although I never took home ec, I read Kiplingers and money magazines and signed up for tax deferred investing with my employer
If you and your wife are living just on socialist insecurity, even with everything paid off, you are living in a pretty austere situation.
@@phoenix3.057 Those are things you learn in the real work world not in the public indoctrination center.
Totally different when you’re single
@@phoenix3.057I'm in my fifties, I don't remember finance being taught in home economics. It was baking/cooking and sewing.
I learned finances by helping my best friend's father with computer data entry when he was putting together his bankruptcy accounting. That terrified me to the point to where I said that will never be me.
Because of that indirect lesson, I started saving pretty much on day one of my adult career after leaving the military at 25 years-old.
Arrived to the USA at 16, penniless, no English, no relatives. Now 60, married with kids, Institutional investor. Retiring in a few weeks.
Best of luck! Guess you have all your objectives met. Cheers.
I always hear my cohorts in their late 50s say things like "We finally paid off (insert "BMW", "MERCEDES", Junior's student loans from XYZ private college"), so now we are going to start saving for retirement." These are the same people who laughed at my old Landcruiser that was paid off and outlasted their series of five MB's that took a dump at 80,000 miles!
I have an MB that is the hundreds of thousands of miles and looks and drives great. That's why I bought it. I bought because my quietly rich friend had a 20 year old MB that was still going strong. . Obviously I paid cash, but please don't knock the car.
Yep. It’s basic math, like mean and median.
Same here. Car payments and insurance really eat into that income.
LOL, great point you make. I retired at 55 (almost 2 years ago now) and still drive my '96 FZJ80 I bought used in 2001. I split the driving now 75/25 with a paid off Tesla Model 3 to save on gas and mainly use the LC for excursions (mostly secluded/remote beach driving her in Hawaii)... best of both worlds imo
Us too people looked down their noses at us. We’re now 63 and 52 millionaires
This is very encouraging for me. I am 61 1/2, single, no kids, and ZERO debt, currently with $960,000 in retirement savings.
Depending on your spending, you sound in great shape.
Thanks, my monthly expenses in retirement should be just under $4000.@@foundryfinancial
one more year to this may..little behide you just under $890.000 but going to go maybe 2yrs if i get these young guys to work on time.
Go live , no kids you die tomorrow and at 61 those odds are high ….. go live before you regret it
@@markwick7898Haha...the odds are high at 61 I will die tomorrow?? That's funny!
Thanks for this information video. I feel much better about where I am in my retirement planning journey🙏🏾🙏🏾♥️
Excellent idea to provide the more accurate median numbers. Thank you!
Thanks!
Excellent informative video, thank you! Your presentation style is clear and makes it easy to digest the info.
Thank you!
I really Enjoy Kevin’s videos. Seems like a good guy and the info is presented clearly.
Thanks, Daniel!
Thanks for covering the AVG vs Median - it's important to understand what you're really looking at.
The x in 8x is spoken as "times." Great video! Many very helpful perspectives, such as explaining the median and average, the incorrect assumptions about retirement needs, and the non-linearity of retirement spending (and more!). Another great point was that it's ridiculous to compare 401(k) values by themselves. Many people don't have 401(k)s. I didn't have a job that allowed me to have a 401(k) until I was 35, but I had saved tons before then. I had an IRA and then a Roth IRA before then, and have continued contributing to the Roth IRA at the maximum annual rate after I got the 401(k). Also, because I maxed out Roth IRA contributions, I also had plenty in non-retirement accounts, which are almost NEVER mentioned or considered in the studies and articles.
So much of success is determined by actual retirement age and the ability to be flexible in your spending each year. Spend less in bad years and bolster savings in really good years.
I just found your channel. You’re really good and explaining things. Thank you.
Thank you!
Another metric that could be informative would be to calculate the quartiles and identify the middle 50%. This excludes the top 25% and the bottom 25% from calculations.
Great video thank you!
Great video. You nailed it!
But I hear you. Great info. Thank you Sir.
Very informative
8x is an absurd overestimate of how much you need relative to your income.
Informative video. You are a terrific speaker. Clear, concise and comprehensive.
Thanks so much. Very kind of you. I’m still trying to figure out this UA-cam thing, but I really enjoy it.
Very sound advice. But you should also look into downsizing: fewer cars, smaller house, moving to a state that taxes less, reverse mortage, etc. I sold my 3rd vehicle, A truck, and reduced my insurance, moved to a state that is not only lower cost, but won't tax my retirement income or my retirement fund or my social security. Effectively, I saved enough that my buying power actually went up over my working salary.
Do worry what others have. Worry about what you need. Start saving early, small amounts and often.
Missing "not" there
This video was great. I've been scrimping and saving for 30 years, and every time I see an article stating "you must have 2 million, or else you'll live in a cardboard box," it seems hopeless. It seems that it's not so hopeless
Those one size fit all articles do a disservice to the readers.
Brian - A much easier formula is figuring out how much extra income you will have after all necessities are paid for. I personally could somewhat comfortable on $2K per month after all necessities are paid for. For me, $3K per month or more, after expenses is more than enough.
You should have a monthly budget and know how much you spend. That will help you establish a minimum requirement. Add in for unusual events like home repairs, car repairs, etc. Measure that against the assets you will have in retirement.
When I had a similar conversation with my financial advisor, her advice was for me to quit watching those videos. Some of the best advice I have received! I thought I was doomed. Now, I am 10 months away from being able to retire. You can do it! Find a good financial advisor and meet with them if you haven't already done so.
Good way of looking at after retirement
Turning 60 this year and your info made me feel a whole lot better, I think I will be okay for the 62 or 63 year retirement age, paws crossed....................................
I’d like to see inspirational videos of those that turned their retirement situation round later in life. Bravo to them!
Great video! The one thing in most retirement discussions is around 401K and IRA's, and the values at a given age. Many people are real estate investors and have a portfolio that provide numerous tax advantages, cash flow, appreciation, amortization, plus a total equity position. It would be great to see a video on this type of investment approach as we have done. Thanks again! Mark
Do all of the above, I did- Rentals, 401K, ROTH, Pension and SS. Most people are good at focusing on one thing, but you're better off to do it all.
Great info...thanks for sharing. I was surprised to not see higher median. I just 50 and happy to see I am doing ok based on numbers shared.
Thanks!
I’d be retiring/working much less in 5 years and curious to know best how people split their pay, how much of it goes into savings, spendings or investments? I earn around $150k per year, but nothing significant to show for it yet.
you should consider financial planning, never can tell what the future holds
SCAMMERS 😂😂😂😂
max out your 401 at 30k, no sense giving all this tax to the government.
lots of people spaen every thing they make....you seem to be one....sorry...
@@notmycupoteaI agree. The amount of taxes you DON'T have to pay due to contributions outweighs NOT putting in the maximum.
Thank you for the great Video. Your numbers go a long way towards explaning what the experts say people need verses what people actually have when they retire.
Thanks! I’m glad it was helpful.
I'm thankful we both have a pension and lived within our means . Life is good.
Glad I’m way ahead of that at 41 but it was with a lot sweat, risk and hard work
How much? It all depends on where you live, life style and debt. We live in the Mid West and have a very basic budget which does not exceed our SS. We have a median savings which we have never used the past 10 years in retirement. If we were on the East or West Coast. We would probably be broke by now.
I retired in 2012. In 2012 my monthly expenses (rent, food, utilities, insurance) was $1600 a month and now that exact same lifestyle, no debt, same apartment, same paid off truck, same monthly bills (rent, food, utilities, insurance) cost $3000 a month. $1600 a month rising 6% a year for 11 years = $3027, so average real inflation for last 11 years was 6%. Everybody planning for retirement needs to plan on 6% annual expense increases just to stay even. Retirement savings need to keep growing in retirement or could end up homeless.
Thanks for that real life example Mike!
“Retirement savings needs to keep growing in retirement.” You realize this means that one NEVER uses ANY of their retirement savings to pay for things in retirement, don’t you? Is that what you mean?
@@Observe555 No, but you need to live on less and keep reinvesting because income needs to grow. I will give you my example: I am earning 5% on $2 million invested in Money Market, CDs, Bonds, Dividend Stocks, Preferred Funds, so that is $100K a year income, $50K plus Social Security to live on and $50k to reinvest because expenses keep rising and medical expenses grow exponentially as we age.
That’s a very healthy amount to income you have, congratulations. Back to my comment though. The only way for “Retirement income to grow in retirement” is for the rate of return to increase. If you start drawing down your $2 million, the rate of return would have to increase even more to “increase retirement income.”
By the way, did you retire before FRA and if so, at what age did you start collecting SSI? If before FRA, do you have any regrets for doing that? I’m 63 and I just started collecting, but I’m bothered by the income limitation imposed on me. I’m talking about the return $1 of SSI received for every $2 earned above the $22,320 (for 2024) rule.
I learned my lesson back in 2008 when I got laid off from what was largely my one and only source of income. As I looked for another full time job I began taking on side-gig work. When I did get another job I kept those side gigs. Then I started a home business. Fast forward to the present and I have about a half dozen income streams. No debt. I've began dividend investing in 2021 and am looking to expand that with some inheritance money. once the estate clears probate in 2024. I passed $1 million in net worth shortly after turning 60. I am aiming to double that by 67 and then retire. At that point any Social Security I get will just be frosting on the cake.
Congratulations! That’s excellent progress.
I ain’t got much in the saving thing for retiring but I got pension and things like that on it? What should I have on that?
Hi Kevin! I have a question. I will be turning 60 next August. I have been a widow since 2017 and my late husband was collecting Social Security starting at age 62. Recently I visited my local Social Security office to ask questions about Social Security Surviving spouse benefits. I know the annual working income limit for 2024 is $22,320 and it is $1,860 monthly. I know that it is $1 taken out for every $2 over that limit. I told him I earned close to $50,000 this year of 2023. When I do the Math I will get a little bit each month. Not much though. I was told not to apply because my income is too high. He suggested that I start working part time and in the future I can apply for benefits with a lower income.. Nowhere on the SSA website did I read that there is an absolute maximum income limit before you should not bother to even apply for benefits. He wouldn't do any calculations to see if I am eligible for anything. Was I given the correct information? Thanks.
I am 60 and I am done being an employee at the end of 2023. I guess I am one of those who help skew the average.
Skew it, baby! 💰💰
These numbers are terrifying! Clearly there is an enormous population that has virtually no chance of a successful retirement. Obviously there’s SSI, but still very low numbers.
Part of the factor should be if you own your home or not.
Everyone says that but if you look at your mortgage bill, and you live in high tax areas like New England, most of that bill is taxes. My actual mortgage is $1,100 a month but with taxes, insurance and a HOA fee, I pay $2,400. My pension and SS is going to be $5,000 a month NET and I can take another $1000 or so from my 401K. Still not certain it will be enough
@@danimal6070 why it’s important not to live in a condo and any community that has an HOA fee that forces you a monthly payment as well as special assessments that could be in the thousands of dollars whenever they choose. my paid off house in Southern California is worth about 750 K now taxes are 2600 homeowners insurance is less than 1000 that’s all I’m forced into paying for a 4 be 2 ba house near the ocean for a year.
Most of my coworkers are not retiring until they reach 70 plus. I am one of the younger ones at age 54 and I get stuck with all of the physical jobs.
My wife and I make over $200k/yr and don't spend that much. We don't like to buy junk to fill up the house, and we don't spend that much on food either. We have no debt and can live comfortably at around $60K/yr, which is the same amount of social security for both of us when we retire in a few years. We have a decent net worth, but the recommended net worth for retirement needs to be revised.
Thank goodness I’m in a good position as a single person! I’ve lived as a minimalist for over 10ys. Never going out if it cost money. I only do things for free, take my own snack & drinks. I’m able to save $1400 a month making under $53k living in CA. Being debt free except for my $1250 mortgage & having a renter has made a huge difference. I vacation every year using my cc points. I use my cc all month for basic living expenses & pay it off monthly. Everyday choices have made a difference. My child is grown & gone so I’m only feeding me using OMAD by choice for health reasons. I use up everything I have before replacing it. Gotta have a plan every payday what’s a need vs a want. This mindset has changed my financial life. 😬
All you need now is a life
That's actually a great way to do it congratulations! I need to be more like that.
@@johnb3959 I have a great life. I'm very active. 😁😅😂
ROTFLMAO ! So true........... Indeed people think money is everything in life@@johnb3959
So you haven't really lived much. Congrats
Enjoy life bud.. go out to dinner. Take a vacation.. buy yourself something nice. Live a little.. life is short
I retired at my minimum retirement age (plus 3 months) last year (56 and 6 months). My health was poor due to Long COVID.
Luckily I started putting in the maximum amount into my Thrift Savings Plan (government IRA). I have over $1 Million.
I watch these videos to gauge reality versus theory. I agree with Kevin. I know I will probably never run out of money. By the way, I did not pay off my mortgage.
I think best is semi retirement. We need to work until we die. Working is love for mind and body. If we can find a job that can give us income and at the same time not too demanding... 😊
100%… I carved out a side career as an artist and I can hopefully do that into old age!! Never have to fully retire!!!
There's no better feeling than seeing both my parents retired, thanks to my advisor (James Fletcher) for guiding my dad on the steps to take to retire early, the stock market is the perfect place to raise your retire funds with less work
Hell no, I’ll volunteer but never work.
What’s sad is you could be doing better than these numbers and you’re still going to be a retirement failure.
Depends on the job you have.
I started working part time at age 50 and hope to fully retire at age 60.
Did the estimated 5x and 8x in this video consider inflation ?
Many years ago in my 20s I started saving in a 401k and also some various funds with investment companies. I was always told 10x your income (or a few people told me $1M was the goal) to live comfortable in retirement.
Starting early in your 20s or early 30s makes a huge difference to funding your retirement.
Save early and often, live within your means and have some money/finance education and you will do well.
Im 58 and have about 325k total combined savings and 401k...i dont think i will even get to 500k...and theres no way i can work past age 62 in my current job
How does that number feel to you? If you are able to hit 500k, do you think you can live well into your 80s with social security and your savings?
I have no interest in living past a certain age, so planning & saving for my designated retirement years before my chosen expiration date occurs was pretty easy.
i'm betting on the next pandemic will target the boomers who got "all the vax". the boomers are bankrupting all the millenials and gen Z, and once boomers aren't controlling all the votes and voting for 85 year old white men... the millenials can rule the world!
I am terrified of Retirement in my 50s now, you just made me think better.
8 times the income “saved” is a good gauge so long as future SS and any Pension income is converted into “saved” dollars.
A person making 100k doesn’t have 800k in 401k and IRA’s combined.
However, let’s factor in future social security income. 3k per month. Just multiply by 12 to annualize. 36k per year. Use a 15 factor. That’s 540k “saved”. SS is inflation adjusted too.
Now. Do some have 300k saved in 401k and IRA and Roth and regular savings account. Yeah… it’s more realistic now.
It’s true most don’t spend as much when retired.
The challenge of course is when to take SS. Does one have enough saved to retire early.
Typically those numbers assume just investments. But I see your point.
@@foundryfinancial but it shouldn’t. Right? Why do so many channels and financial institutions leave out probably the biggest portion of retirement. Social security.
Median and averages of 401k balances are driven down because of pensions and social security. There are retired government workers who don’t have anything “saved” other than they collect a 200k pension check every year. They can continue to live pay check to pay check.
Some save away in 401k for early retirement but most cannot touch until 59.5 or utilize the 55 year old rule. Retiring at 55 with no health coverage other than ACA and then lasting until FRA of 67 now for many requires one to have more savings.
Bottom line. Social security and pensions need to be factored in. Most all Americans would have one or the other or both.
@@f430ferrari5 while your # are in general correct for married couples who both worked full time during their lives you have to also consider the position this puts single people @ given their costs are based on the spending habits that dual income couple created. Theirs is much more restrictive as a ‘single’ with a budget.
Excellent information! Thank you! I lost my job .... I am an older women and looks like no wants to hire me because of my age. It's sad. I have been very conservative and financial responsible all my life. Despite being unemployed I sleep well at night as I have no debt.
Also divorce derails ones saving ability as well.
Well presented. Seems like studies are neglecting home equity?
They are.
Helpful, thanks. Sadly, our government's $35 trillion debt + money printing leading to inflation will make even millions in a retirement account insufficient. Zimbabwe and Germany had trillionaires during hyperinflation, but it meant nothing, because the paper money was worthless.
My first retirement is in 14 days!
When does your second retirement happen?
In 10 years because I had my kids later. I really retired at 65.
@@MrMojoRisin4371lol she had an answer
@@randyiffland7531 i cant believe it lol!
It helps if you are a couple meeting this number per person! And have additional pension besides SS! 👍😬
Thank God I have a pension and receiving both my pension and Social Security benefits.
Average is a funny thing for large groups (and usually not very useful). Median is a much better measurement. Where can we find the numbers? Also, a standard deviation curve would be quite useful to understand the distribution if it skews higher or lower.
Here in Australia some retirement funds imply you need a million to retire comfortably. It's not the case but it puts fear into people to contribute more which the retirement funds like as it generates more income from fees. You also have the case where retirees fear they don't have enough but actually have and decide to live frugally and die with large sums in their superannuation. How much is enough is not always easy to predict.
True
Have you heard of a 4% rule? It's a good place to start
I'm well aware of it. I am retired and I work on the simple rule of live within your means, Sometimes easier said than done given cost of living here.
@@filofilo8127 are the fees higher there? Can you guys own the s&p 500 at a reasonable cost?
As a single person who lives within my means, this video was a relief. I'm not too far behind.
I’m so glad!
This video is so spot on. For years I scrimped and saved, thought I needed 25 times my yearly spending in stocks before I could retire. But my job was killing me, so I retired at age 55 with 20 times my yearly spending. That was 7 years ago, now 62 and my 3 portfolios have grown so well, even with the market drop in Jan 2020 I have more than I'll ever need. 7 years ago I was planning on taking social security at 62. Now I guess I'll wait until I'm 67.
Thanks for sharing this. I hope to retire at 55 or before as well one day
Before I watch this I will state, comparison is the thief of joy. Figure out what your expenses might be in retirement, then solve the problem of funding that amount.
One of the things that is almost never discussed in videos like this is the "B" word - BUDGET. One of the reasons so few Americans have enough saved for retirement, at any age, is because they have never followed a budget, and won't in retirement. It's the main thing missing from the financial picture, and the single biggest thing anyone could do to secure their future. It doesn't matter how much you make, and it never has...it matters how much you spend, and what you spend it on! I am personally very well-acquainted with a couple who makes over $200K/yr, but is debt-free and lives on less than $50K/yr. Do they need to have 8X their income in retirement, or do they need to have $50K/yr in income, since that's that they live on? This isn't what a "financial advisor" wants you to think about. They want you to save more money, because their earnings are based on "assets under management"...so they're ALWAYS going to tell you to save more! They don't really care what you live on, they basically just want you saving more and more, so they make more off your money.
I do think there’s some truth into what you’re saying. Some advisors are just trying to increase their AUM.
@@foundryfinancial DR - BS6 - EDM - It all starts with a Budget.
One size doesn't fit all for retirement. One person can drive a 20 year old Toyota Corolla and can feel very comfortable. Another person might feel like her 7 year old Mercedes is starting to look old. I can live moderately comfortable on $2K per month because I have no debt. Problem is...I just don't know if I want to. I enjoy not having a budget. I'm a 3.5 on a 10 scale of being a spender. However, when I do go out to dinner or do something, I don't like to think about the price. If I want the overpriced appetizers, then I get them. In other words, I like the freedom to get what I want.
The real issue is living a more fulfilled life. For some, it might be working and saving more. For others, it might be cutting expenditure and quitting work now. In my opinion, if you hate your job, budget well and quit asap. If you like your job, perhaps work a little extra, save and have a little more to spend when you retire.
@@cdsersd2d- You know the appetizers are over-priced. This means you understand what you're spending and what you're getting. That puts you ahead of 90% of American consumers. If you're living, well, on less than you make, and investing the rest for retirement, that's great. Living without a budget, when you know how to do it, is a bit immature, though. Adults do the responsible thing. Children stomp their foot and do what they want.
@@jasonbroom7147 - This is just my opinion on what worked for me: Balance is the key. When you're young and have little, it's better living well below your means and invest. When you're older, the game changes. You have less years to live and hopefully, if you invested, you now have zero debt and zero mortgage. You can't take it with you, so I believe people should enjoy life.
Regarding budgeting...with the exception of a couple of years, I really never kept a budget. However, I kept close tabs on my monthly savings and investments and let my asset balances dictate my spending. I worked great for me. In fact, it still governs how I live my life. If I see my balances going negative, I will adjust my spending accordingly to stop the bleeding.
Regarding "doing what you want"... I am not against that as long as you are meeting your financial goals. For people like myself, I don't spend much. My luxuries are relatively cheap and do not have a significant impact on my bottom line. For others, their luxuries are buying a new car, going on fancy trips, or buying expensive home improvements. I have nothing against either...except my ONE RULE. Are you meeting your financial goals? If so, you're probably ok assuming your financial goals are enough. If not, you're probably better off to stop the bleeding and stop spending, except for necessities. In my situation, living how I want doesn't tank my assets, so I will continue to do so. But again...this is what has worked for me.
There are many reasons for my early retirement at 55 but you make some great points. My fear however is that people who didn't do great at saving, will most likely not do great at curbing their spending in the first few years of retirement. In my case, my wife still works (remote now) but will retire end of this year after 'testing the retirement waters' with me having no income the last 1.5 years. These are not exact numbers but say she makes $50k/year and we budgeted $90K per year (net), so far in 1.5 years, we've transferred only $20K over from our savings during this entire time period after traveling to Argentina, Portugal and Spain over a 6 month period. We also moved to Hawaii (7 months now) so we are NOT in a low cost state, just the opposite. People need to be disciplined in keeping to their budget, whatever that is or they run the risk of having to go back to work if they haven't saved enough with a good buffer.
I’m 67, very little savings. Social Security will be my main stream of income. I will probably have to work until I die.
Of course their is waaaaaaaaaay toooo many variables like at what age to retire, life expectancy, when to take SS, …. A yearly personal plan is the only “plan”. People that made less then $50k (they don’t have a buffer for life happening) need more of their income then people that made over $150k (they can control how much they can save after meeting their base living costs)
I had initially planned to retire at 62, work part-time, and save money, but the impact of high prices on various goods and services has significantly disrupted my retirement plan. I'm worried about whether those who experienced the 2008 financial crisis had it easier than I currently am. The volatility of the stock market is a concern as my income has decreased, and I fear that I won't be able to contribute as much as before, potentially jeopardizing my retirement savings.
You'll be fine just turn off Fox News
I personally don’t care about what others have to be honest…..just what I have and especially what I need. Though I guess I help screw the average data since we have 50X our expenses at age 46. We live such a basic simple minimalistic life we look the poorest on the block….so nice to be stress free about money!
Congrats!
If you can work part time and wait until 70 to take SS you'll get a lot more plus not have to draw so much out of savings. It's what I did, and fortunately my part time income was more than enough to pay the bills. But also, do what you can to get your health sorted out so you can live well past 70 without a basket of health issues.
Even you’re saying get your health sorted out so you can live well past 70. What does that mean? Collect from 70 to 80 and then die having only collected for ten years.
I am waiting until I am 70 to take SS. I have eight years to go, God willing, and last night I was in my online SS account, and I will make $3,750.00 monthly, this does not include my pension. And I love my engineering career, so I see no reason to quit.
@@veltonmeade1057 hoping you get a few good years to enjoy retirement. The fact that the government urges later payments is all I need to know to collect earlier.
You make such a good point. I will be 65 this year and I'm in excellent health. My husband is 5 years younger and he, too, is in good health. Genetics plays a role but we are plant based, exercise daily. You have a lot of control over your health but many just let themselves go and then blame the chronic illness on bad luck. Quality of life matters!
@@Bonnie-yu3kj Same here - Plant based 11 years +. Also exercise/walk daily. Aging is inevitable but some of my peers look like hell and creep around like they're much older. No amount of money replaces good heath.
It’s only need to 15 second for Google and find why keep watching this 😅
So my question is what would be my best option im 55 was disabled for 8.5 years 2 years of that in a wheel chair finally got cleared to return to work literally spent every dime i had to get medicine and be able to live guess I wasn’t one of the fortunate ones who was able to get a disability check even had a lawyer. I’ve been back to work for 7 months the company doesn’t match 401k and i can only probably afford 3% of savings at the time. I’m playing ketchup with everything what would be my best option.
My accountant disagrees but I keep wondering if I should increase my W2 income (I'm self employed and also get a K1) to increase my future SS payment. My salary is about 1/3 of my total income.
I thought the same but was told after a certain amount it isn’t making a difference the way they calculate it. You will just be paying more taxes for nothing.
Only use median - never mean due to standard deviation issues with mean.
Hard part is when you own the Company
No. Having been retired since Sept 2023 I can say your 25% less than you were spending is true for me.
A very pleasant surprise.
Health is the focus. Bad health will kill your retirement fun and use your money in the least fun way.
You need a $1.2 million cash flow from all sources to retire modestly to about age 86. This includes actual savings, pensions, all investments, estimated inheritances, side gigs, part time work etc.
I forgot SS
????. People make it to 90 on 4500-5000k per month sitting on 500k including SS. There are no absolutes here. Depends on how you spend. WTF does 1.2m cash flow mean? Americans aren’t saving. A lot of people make it to the finish line on SS alone….🫤
That 537k retirement savings includes home equity.
Do those retirement savings include retirement plans run by the government or the state? I bet that lots have such plans but they are not in the numbers. Nonetheless, you should put a value on this as well.
I went with the numbers as reported.
I'm 50 and retired just over a year ago. I don't live in the USA and have over a million. Loving life!
The best way to see how you compare would be to remove the top 5% and average the rest. I would like to know that number.
You made a good point finally. The increase in spending once retired probably goes up initially... But that decreases as you slow up or finish things you really wanted to do... Then goes back up with health/medical issues probably... Living situation,/house maintenance, etc.
Everyone is worried about what someone else has, don’t worry about the average and worry about yourself.
Being debt free and own a place to live before retirement should be the focus.
All about expenses in retirement.
I would think that many retirees would prefer that their income was not 50-75% off their working income. I would imagine that drop is more attributed to a lack of means. You have so much more time to spend money in retirement.
That’s the thing with data, it often reveals a counterintuitive truth.
Some people commenting here are confusing savings with inheritance.
Retiring from my job at the latest when I hit 58 and spouse is 62. Hopefully will have the 500k in 457 and Roth’s plus a $50.000 pension. Spouse will collect SS at 62 and I have no issue getting a part time job to get out of the house. Wishing everyone the best in their retirement journey.
If you are debt free when you retire, you shouldn't have to get a part-time job with that retirement account and pension and SS.
My wife and I retired debt free multi millionaires and have not yet needed to touch our savings. I was thinking of buying a new truck but, the $70,000 price tag has me thinking my 20 year old Toyota Tacoma which runs fine, looks better everyday. Maybe We’ll go live in Italy for a few months instead.
Are these numbers per person or per household?
What retirement age did he base the SS monthly payout off? 2500 seems low for a 100k avg over top 35 yrs worked
It’s not an exact number, but it’s close. www.ssa.gov/OACT/quickcalc/
It’s right for age 62.
Did the Federal Reserve study include real estate? I know a lot of people with more in real estate than traditional financial assets.
No, not real estate.
Low to Zero debt - No mortgage debt - low car expense - Simple lifestyle - hobby or self employment - low stress - no to little personal responsibilities - a pet or a lover 😊❤️
It should be measured by net worth, since some choose to invest in physical assets, rather than the roller coaster stock markets, and put a emphasis more on 'owned assets. While putting 25% of my income in a 401K I focused on paying off 2 rental homes for a combined value of $1.1 M, at the same time generating 100% cash flow minus expenses. These 2 investments outperform my 40 years of investing in the stock markets. And are not counted in these "wealth assessments".
Hard to beat real estate unless you bought the right stock at the right time and held on!
Only comment from me are the salaries quoted are probably double those normally quoted in the UK.
Oh interesting. So you’re saying salaries in the UK are lower? Do you have something similar to a 401k for retirement besides the pension system?
Hi, yes, a quick check on some professional salaries show the US is higher on average than the UK. Of course, I'm not too familiar with the cost of living in parts of the US and the fact you pay additional medical insurance costs (which we pay through a compulsory deduction as part of what we call National Insurance). In terms of pension; we have the state pension which kicks in at age 67 (currently, but always under review); then we have two other pension options - defined benefit and defined contributions. The defined benefit is basically when you receive a percentage of your final salary when you retire (both you and your employer contribute but it was a very small percentage of your salary - at least in my case) - it was very common in government institutions like the police, fire service and health service and some very large organisations. This is being phased out over recent years due to the high cost commitment. More common now is the Defined Contribution pension where you sacrifice a percentage of your salary and your employer matches that contribution - say 4% each (all tax free at this point). It's compulsory for employers to enrol employees into one of these pensions and the employee has to specifically opt out if they want to.@@foundryfinancial
Better to over-estimate and have the best chance of retirement success rather than under-estimate and then perhaps not save as much as you should, compromising your retirement.
This video also ignores inflation. If I'm retiring at 60 today then my expenses could more than double before I kick the bucket. Likewise, if I'm 40, and 20 years from retirement, then by 60 I'll likely need twice the nest egg that the guy retiring today will need.
Did not ignore inflation. Both social security and the rate of withdrawal are inflation adjusted numbers.
@@foundryfinancial Yes and neither are anywhere close to the actual rate of depreciation. Government figures are a joke.
My perspective is not to worry about inflation. Think about investments like equities and real estate that will grow with inflation. But diversify appropriately and expect/hope the winners balance out the losers. I'm not saying 50% more to eat out doesn't shock the H outa me, but if your portfolio grew $100K Y2Y, and you're debt free, you take it in stride.
Now, Add the military retirement, 50% of basic pay for 20 yrs of service, add 2.5% for every additional year. If you joined the federal service after, then add FERS retirement. And if you have any kind of VA disability, add that to the equation too. When you reached 62.5, then you can also add the Social Security. Add all those with the TSP or 401K.
Next time when you see a 65 year old military retiree inside McDonald simply relaxing and drinking coffee, you know that he is collecting at least 4 or 5 times more than you do. You need to have at least $4M in your portfolio to match that.
Join the service!!
For me, the "assumptions" are incorrect because it assumes that you are spending what you make. But if you make 100k while working, but your living expenses are 25k, you don't need 8X your income. If you are debt free, you are just socking away money or blowing it.
Like every one of these, it assumes a single person. I have been married 20 years, and only I have any retirement savings. The wife was a stay-at-home mom and had nothing, not even social security.
I am always left scratching my head about what we will need. If it's just me providing the bread am looking at 10x my final income. (5x for me and 5x for the Mrs?) As I am now in my mid-50s, I don't see that happening.
Non of the videos i see show about pention retirement?
If you are planning for retirement Here are some key pointers. Firstly, kick-start your savings early to benefit from compounding. The longer your money has to grow, the better. Secondly, make the most of retirement accounts like 401(k)s and IRAs, especially if your employer offers a matching contribution - it's essentially free money. Thirdly, diversify your investments across different assets to mitigate risk. Think stocks, bonds, and real estate.