I used to think I would retire at age 60, but now that I am 55, I've come to the realization that I just don't have it in me and am now planning on retiring at 57. I suspect that, knowing that I already have enough to retire, my mind is already subconsciously going into retirement mode. I just don't have the drive to keep going and it is getting worse over time. I just received my annual bonus/RSUs on Friday and even though it was an objectively large sum (six figures), I just kind of shrugged. I realize that I am extremely blessed and lucky to be making good money, but after a certain point, it's all just numbers. I know I can't be the only one feeling this way; there must be a term for this pre-retirement apathy.
It is definitely hard. I started to cut back (dropped to 32 hours per week with a cut in pay) and that helped. I still went one year longer to get the final promised retention bonus. It's a hard decision.
A year and a half ago I had a “near retirement experience” when I was downsized. Used 4 months of my severance to reflect, enjoy life and think about what’s next. I cannot emphasize what that time off did for me and opened my eyes to what could be. The plan is 57.5 which is less than two years away. I don’t want to wish away that time, so I’m focusing on mentoring while finishing out my career.
I’m right there with you. My wife and I make decent money. She and I have worked sooo many long days and weeks over our lifetime. It’s nice to make good money, but I’m pretty much getting tired of having to answer to people that constantly want me to grow my business. I’m 51 and would love to hang it up in 8 years or less.
James, I am a big fan Sir. But I have to state anytime anyone remotely accepts SS will pay out only 75% of benefits, less that 100%, it drives me nuts. Give the politicians NO QUARTER on this one. We all paid into SS, it is NOT an entitlement like welfare, it is an "annuity insurance/Govt Pension product of sorts" we all pre-paid & we all earned. If US can send hundreds of Billions of our treasure to Ukraine, Israel, other allies, any country, ours included, with a natural disaster, fund wars in Afghanistan & Iraq, print trillions for covid, yeah they can swing Tens of Billions to pay their bills they "owe" to their citizens. Sorry for the tangent but we ALL need to draw a line as Congress is slowly messaging cuts, cannot happen. Best Regards Rich
Social Security is an entitlement and nobody has "paid into" it. You paid for your parents and grandparents checks, but the generation facing retirement in the next decade didn't have enough kids to cover their checks, so those checks are going to be smaller. Ultimately Social Security is an evil program created by stupid people and needs to be scrapped.
It's more likely government will reduce future benefits for younger workers, raise the retirement eligibility age or take other measures rather than pay out less benefits for current SS recipients. Politicians know they would lose support (votes) from seniors, as well as younger voters who would end up having to support their elders, if they tried to cut existing benefits.
By definition social security is an entitlement - the current social security law entitles certain people to benefits. You paid the FICA taxes to support people who were receiving benefits, no different than any other income redistribution scheme. If people in approximately 10 years don't pay more in taxes than currently expected, there won't be enough money to pay the full benefits to people entitled to receive them at that time. Entitlements must be cut or taxes increased or both. That is the reality.
I'm a 63yo who retired early. Even though I'm financially comfortable with consistent income from Social Security, pension benefits and earnings from my small business, I believe retirees should never stop saving. There is a discipline that happens when you live a frugal, debt-free lifestyle that is important to continue even as you age. The last thing you want to do is max out your budget. You never know what can happen to your investments. I will continue to save 20% of my income as a cushion in case it all goes awry.
Absolutely! Your commitment to maintaining a frugal and debt-free lifestyle even in retirement is truly commendable. Continuing to save as a retiree not only provides a financial cushion but also promotes a sense of security and peace of mind. Given your disciplined approach to saving, how do you decide on the best places to allocate your savings to ensure they remain safe yet yield good returns? Your strategy could be incredibly beneficial for others in similar situations!
My expenses in retirement should go down by at least 25 percent...Leaving the U.S. for good. Ive calculated a fine life on about 2500 dollars per month...Plan to retire in about 1 year.. 58 years old.. Medical insurance paid by employer till death.
That's an impressive plan! Leaving the U.S. for a more affordable life abroad is a strategy many retirees are considering. Your employer-provided medical insurance is a significant advantage as well. Given your detailed planning, what factors influenced your choice of destination for retirement? Your experience and insights could be incredibly valuable for others considering a similar move!
When to stop saving and start spending? Well, that depends! Can you tell me how long I am going to live? Can you tell me if I am going to stay healthy, or require nursing care? Can you tell me if I am going to need to hire part time or full time assistance with housework, lawn care, and what home maintenance or repairs that may need to be done? Can you tell me whether or not I will need to move into assisted living or nursing facilities, and if so, how many months or years that will be required? It's a lot more complicated than, "Ooo! I'm 65 now, so it's party time! Stop worrying about the future and live it up!" I might live until I'm 75, or I might live until I'm 95! Big difference! We know what prices were like thirty years ago! Can you imagine what they will be like in another thirty? Expenses don't always go down as you grow older! A nursing home can cost over $100,000.00 a year, and that's in today's dollars!
Changes at work can turn your dream job into a nightmare. Thinking that you'll always enjoy work is a gamble. Getting to financial independence early is your insurance policy if things ger sour at work. Otherwise, you'll be stuck and wished you'd planned differently.
Absolutely, financial independence is a powerful safety net in an unpredictable job market. Your point about being prepared for unexpected changes resonates deeply. Have you considered any specific strategies to accelerate your journey to financial independence? It's always interesting to hear different approaches and ideas!
Agree. But remember one can always find another job. Getting to financial independence early just because you may have a prick as a manager someday, is stupidity in itself. One's journey towards financial independence is very specific to tolerance in taking risk. Gambler will never aspire to be financially independent regardless of his working environment.
one big thing missing in this modeling is that there is no consideration of RMD. At age 73, their portfolio grows to about 6 millions. Let's say about 4 millions are in the pre-tax account, now taking this money out will have big tax problem. this nice porforlio will need a big tax strategy to keep the money growing ...
It's recommended to save at least 15% 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 at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
This couple needs to get rid of liability (extra vac homes etc.) and focus on assets (i.e. paying off debt). Keeping up with Johnes is the biggest mental hurdle we need to overcome in our lifetime to be financially independent.
James, I like your video. dont agree with some of the assumptions after 30 years in the business, but I know some if this is what you were taught and the limits of the software. nice video.
95% of people need to contribute to their 401k/retirement account until the day they retire. I understand there is a point when growth outweighs contributions. But, when you retire, most will think long and hard about spending a thousand or two, and that may be what you're contributing each month. Having more than you need is less of a problem than not having enough. You'll always find something to do with the money.
spot on! It's crucial to maintain contributions to your 401k/retirement account to ensure a comfortable retirement. The peace of mind that comes with having more than enough far outweighs the stress of not having enough. How do you manage to stay motivated to keep contributing, even when it might feel challenging at times?
I just want to ask for more realistic examples. It’s always a “couple” who owns a rental property or some other assets. What about the rest of us? Single, divorced and just barely trying to hold on? Even if we’ve worked hard, have a 401k, and SS how can we afford rental property? And yes it was the government’s decision to move from pensions to 401ks and now discussion of SS cuts, and continuous taxes. It’s all a game to play by robbing Peter to pay Paul. I think we need to be realistic here.
The problem that must be considered is lifestyle escalation (lifestyle creep accelerated). Will post-retirement require a substantial cut if they today replace saving with spending?
We can’t really do much to change it. I’m in the UK and we get hardly anything. We have the NHS in the uk so we are hardly anything when we finish work. £234 once a year. I’m over 60 and that’s it. Regarding hardly much money
Is the joint investment account a taxable or Roth IRA account? With their income level, one should create individual Roth IRA accounts using the Roth backdoor method if their income is above the Roth IRA threshold.
Agree , but to have gone into a field or a career and not enjoy it was just a lack of forward thinking on that individual. It is also just a mindset change in many cases where many jobs can be enjoyed with the proper perspective
My financial advisor told me I can’t retire because my son can’t find a company that will pay him what he thinks he’s worth. So he chooses to not work. So my advisor said my retirement plan at 70 years old next year is out of the question until my son gets his dream job. He said it’s my obligation to take care of my kids before I selfishly think of retiring same as it was for paying all of his college. Even though he’s 33 good thing I asked before I just did it.
I think you have done your job with your son. You don't have to feel responsible for him. I would just tell him I'm retiring in "6 mos" or whenever and let him know he will be on his own. He is old enough to find his own way.
Fire your financial advisor and tell your son he has 6 months to find a job and a place to live. Retire at 70. You’ve fulfilled your parental obligations a long time ago.
Might be time to sell the house and move, with no forwarding address. It might be worth just giving him the house as you leave, "it your responsibility now, good luck."
I used to think I would retire at age 60, but now that I am 55, I've come to the realization that I just don't have it in me and am now planning on retiring at 57. I suspect that, knowing that I already have enough to retire, my mind is already subconsciously going into retirement mode. I just don't have the drive to keep going and it is getting worse over time. I just received my annual bonus/RSUs on Friday and even though it was an objectively large sum (six figures), I just kind of shrugged. I realize that I am extremely blessed and lucky to be making good money, but after a certain point, it's all just numbers. I know I can't be the only one feeling this way; there must be a term for this pre-retirement apathy.
It is definitely hard. I started to cut back (dropped to 32 hours per week with a cut in pay) and that helped. I still went one year longer to get the final promised retention bonus. It's a hard decision.
I am in the same boat. 56...can't stand the corporate grind anymore.
A year and a half ago I had a “near retirement experience” when I was downsized. Used 4 months of my severance to reflect, enjoy life and think about what’s next. I cannot emphasize what that time off did for me and opened my eyes to what could be. The plan is 57.5 which is less than two years away. I don’t want to wish away that time, so I’m focusing on mentoring while finishing out my career.
I’m right there with you. My wife and I make decent money. She and I have worked sooo many long days and weeks over our lifetime. It’s nice to make good money, but I’m pretty much getting tired of having to answer to people that constantly want me to grow my business. I’m 51 and would love to hang it up in 8 years or less.
What are you retiring TO? Read the book Halftime by Bob Buford. Good clarifier.
Purchased your software. Can’t wait to confirm our plan will work. Ready to spend a little more in our early retirement.
how much is the software?
James, I am a big fan Sir. But I have to state anytime anyone remotely accepts SS will pay out only 75% of benefits, less that 100%, it drives me nuts. Give the politicians NO QUARTER on this one. We all paid into SS, it is NOT an entitlement like welfare, it is an "annuity insurance/Govt Pension product of sorts" we all pre-paid & we all earned. If US can send hundreds of Billions of our treasure to Ukraine, Israel, other allies, any country, ours included, with a natural disaster, fund wars in Afghanistan & Iraq, print trillions for covid, yeah they can swing Tens of Billions to pay their bills they "owe" to their citizens. Sorry for the tangent but we ALL need to draw a line as Congress is slowly messaging cuts, cannot happen. Best Regards Rich
Social Security is an entitlement and nobody has "paid into" it. You paid for your parents and grandparents checks, but the generation facing retirement in the next decade didn't have enough kids to cover their checks, so those checks are going to be smaller. Ultimately Social Security is an evil program created by stupid people and needs to be scrapped.
“Congress” is not messaging cuts. MAGA is messaging cuts.
Unfortunately the government cut benefits in 1985.
It's more likely government will reduce future benefits for younger workers, raise the retirement eligibility age or take other measures rather than pay out less benefits for current SS recipients. Politicians know they would lose support (votes) from seniors, as well as younger voters who would end up having to support their elders, if they tried to cut existing benefits.
By definition social security is an entitlement - the current social security law entitles certain people to benefits. You paid the FICA taxes to support people who were receiving benefits, no different than any other income redistribution scheme. If people in approximately 10 years don't pay more in taxes than currently expected, there won't be enough money to pay the full benefits to people entitled to receive them at that time. Entitlements must be cut or taxes increased or both. That is the reality.
I'm a 63yo who retired early. Even though I'm financially comfortable with consistent income from Social Security, pension benefits and earnings from my small business, I believe retirees should never stop saving. There is a discipline that happens when you live a frugal, debt-free lifestyle that is important to continue even as you age. The last thing you want to do is max out your budget. You never know what can happen to your investments. I will continue to save 20% of my income as a cushion in case it all goes awry.
Absolutely! Your commitment to maintaining a frugal and debt-free lifestyle even in retirement is truly commendable. Continuing to save as a retiree not only provides a financial cushion but also promotes a sense of security and peace of mind.
Given your disciplined approach to saving, how do you decide on the best places to allocate your savings to ensure they remain safe yet yield good returns? Your strategy could be incredibly beneficial for others in similar situations!
Well, some people stop saving. Many retirees continue to save, because they have been so successful that they have more income than they need.
My expenses in retirement should go down by at least 25 percent...Leaving the U.S. for good. Ive calculated a fine life on about 2500 dollars per month...Plan to retire in about 1 year.. 58 years old.. Medical insurance paid by employer till death.
That's an impressive plan! Leaving the U.S. for a more affordable life abroad is a strategy many retirees are considering. Your employer-provided medical insurance is a significant advantage as well.
Given your detailed planning, what factors influenced your choice of destination for retirement? Your experience and insights could be incredibly valuable for others considering a similar move!
I’m 53 and just started to cut back on my 401K. More money now is definitely more important than more money then!!!
When to stop saving and start spending? Well, that depends! Can you tell me how long I am going to live? Can you tell me if I am going to stay healthy, or require nursing care? Can you tell me if I am going to need to hire part time or full time assistance with housework, lawn care, and what home maintenance or repairs that may need to be done? Can you tell me whether or not I will need to move into assisted living or nursing facilities, and if so, how many months or years that will be required? It's a lot more complicated than, "Ooo! I'm 65 now, so it's party time! Stop worrying about the future and live it up!" I might live until I'm 75, or I might live until I'm 95! Big difference! We know what prices were like thirty years ago! Can you imagine what they will be like in another thirty? Expenses don't always go down as you grow older! A nursing home can cost over $100,000.00 a year, and that's in today's dollars!
Changes at work can turn your dream job into a nightmare. Thinking that you'll always enjoy work is a gamble. Getting to financial independence early is your insurance policy if things ger sour at work. Otherwise, you'll be stuck and wished you'd planned differently.
Absolutely, financial independence is a powerful safety net in an unpredictable job market. Your point about being prepared for unexpected changes resonates deeply.
Have you considered any specific strategies to accelerate your journey to financial independence? It's always interesting to hear different approaches and ideas!
Agree. But remember one can always find another job. Getting to financial independence early just because you may have a prick as a manager someday, is stupidity in itself. One's journey towards financial independence is very specific to tolerance in taking risk. Gambler will never aspire to be financially independent regardless of his working environment.
one big thing missing in this modeling is that there is no consideration of RMD. At age 73, their portfolio grows to about 6 millions. Let's say about 4 millions are in the pre-tax account, now taking this money out will have big tax problem. this nice porforlio will need a big tax strategy to keep the money growing ...
Very timely and useful advice regarding early burnout and work intensity, compared to work longevity, thank you…
Thanks James for another very informative video!
This was a very helpful video. A lot to think about in terms of living our best life.
It's recommended to save at least 15% 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 at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
This couple needs to get rid of liability (extra vac homes etc.) and focus on assets (i.e. paying off debt). Keeping up with Johnes is the biggest mental hurdle we need to overcome in our lifetime to be financially independent.
Why can we not spend in retirement, and allow our investments to continue to grow. Why is it save or spend?
James, I like your video. dont agree with some of the assumptions after 30 years in the business, but I know some if this is what you were taught and the limits of the software. nice video.
Such perfect advise. I wish I was Brad!
95% of people need to contribute to their 401k/retirement account until the day they retire. I understand there is a point when growth outweighs contributions. But, when you retire, most will think long and hard about spending a thousand or two, and that may be what you're contributing each month. Having more than you need is less of a problem than not having enough. You'll always find something to do with the money.
spot on! It's crucial to maintain contributions to your 401k/retirement account to ensure a comfortable retirement. The peace of mind that comes with having more than enough far outweighs the stress of not having enough. How do you manage to stay motivated to keep contributing, even when it might feel challenging at times?
Most. But not all. For some of us, asset allocation is a real question. Even if most people just need to concentrate on saving more assets.
I just want to ask for more realistic examples. It’s always a “couple” who owns a rental property or some other assets. What about the rest of us? Single, divorced and just barely trying to hold on? Even if we’ve worked hard, have a 401k, and SS how can we afford rental property? And yes it was the government’s decision to move from pensions to 401ks and now discussion of SS cuts, and continuous taxes. It’s all a game to play by robbing Peter to pay Paul. I think we need to be realistic here.
How do you figure long term care expenses in this scenario?
Great content! Thanks. How dramatically would your thinking and strategy change if they had 2 or 3 kids?
Are the kids minors?
The problem that must be considered is lifestyle escalation (lifestyle creep accelerated). Will post-retirement require a substantial cut if they today replace saving with spending?
Very helpful to me
We can’t really do much to change it. I’m in the UK and we get hardly anything. We have the NHS in the uk so we are hardly anything when we finish work. £234 once a year. I’m over 60 and that’s it. Regarding hardly much money
Socialism
Does the Financial Planning Academy do Roth Conversion? Is it going to be a fluid program for the next 20-30 years?
Is the joint investment account a taxable or Roth IRA account? With their income level, one should create individual Roth IRA accounts using the Roth backdoor method if their income is above the Roth IRA threshold.
Does the planning software have an expiration date, or it is good to use forever?
Rush
I just don't see how one spend 8-10 hours working and commuting enables one to enjoy life, especially when one is over 50 years old.
Agree , but to have gone into a field or a career and not enjoy it was just a lack of forward thinking on that individual. It is also just a mindset change in many cases where many jobs can be enjoyed with the proper perspective
Is the Root software available to public? if so pl, let me know the cost . Thanks
Yes it comes with purchase of retirement planning academy here: retirement-planning-academy.mykajabi.com/rpa
What is the name of the software you use?
Joint savings of $71k made me puke a little. Hope that's at least in a mmkt mutual fund earning over 3%. Banks don't pay squat.
Most people don’t want to be a millionaire, they want to spend a million dollars.
The average net worth is not anywhere near $3.5 million at age 52.
Eliminate the cap on earnings that are subject to Social Security payroll taxes. That would help keep Social Security solvent for years
First!
My financial advisor told me I can’t retire because my son can’t find a company that will pay him what he thinks he’s worth. So he chooses to not work. So my advisor said my retirement plan at 70 years old next year is out of the question until my son gets his dream job. He said it’s my obligation to take care of my kids before I selfishly think of retiring same as it was for paying all of his college. Even though he’s 33 good thing I asked before I just did it.
Put your mask on before helping others
I think you have done your job with your son. You don't have to feel responsible for him. I would just tell him I'm retiring in "6 mos" or whenever and let him know he will be on his own. He is old enough to find his own way.
Fire your financial advisor and tell your son he has 6 months to find a job and a place to live. Retire at 70. You’ve fulfilled your parental obligations a long time ago.
Your son needs to get off his behind and get a job. He is too old to have you supporting him.
Might be time to sell the house and move, with no forwarding address. It might be worth just giving him the house as you leave, "it your responsibility now, good luck."