4% from investments plus SSI for both of us will be sufficient for what we spend every month. Any excess gains will pad the healthcare fund. Just because you can afford it, doesn't mean you need it.
I keep saying 4% is nonsense. When market is performing well you can go to 7-8% drawdowns but if it suffers sequence of returns you may need to drop down to 3-4%. Be flexible and alert of decisions made in retirement
I was expecting to laugh at the silliness of this video because of the title. But I was pleasantly surprised. I have several different buckets. Bucket 1. 2 paid for houses, value, about $1 million, cost $625k. 401k. Value, $650k, investment, $25k. Roth IRA, $300k, investment, $100k. Stock $2.8 million, this will shock you, my cost as I have been selling as LIFO. All I have left is old stock, about $25k. We also get $5500 in SS and pension. We have averaged about 14% over 35 years of saving.
Why would having 80% of your pre-retirement savings all those years later be bad? If you’re spending what you want to spend who cares how much is left. why do you spend money just for the sake of spending it. If there’s something you need you buy it. If you don’t need it then don’t spend it just for the sake of spending
Many retirees are not spending what they want - for fear of running out of money. If people spend what they want and have money left over then everybody wins. Thanks for watching!
Lots of folks also work too many years out of fear, retire, and don't have many healthy years left to do the things they might enjoy like travel, hike, volunteer, start a part-time business they always wanted to, etc. Being smart is great, but when you live in fear, you limit your options in life.
my wealth for retirements consists of 1. paid-off home (= covers my shelter) 2. govt. pension benefits (= covers my subsistence) 3. savings. (= to spend on experiences and toys.) A withdrawal rate only applies to my savings which is a minor part of my wealth. I can deplete my 200k GIC (CD) savings in linear fashion over 25 years which is 4% per year or $670 per month. it doesn't seem like a huge deal to worry about. I get universal health care here in Canada I will find out about long term care costs here. I think there is no wealth test here.
Great points @kevinwelsh. I feel like way too many people in the US forget about Social Security benefits or the fact the some people still do have pensions that will provide income in retirement. If you ask me, the 4% rule seems like a fear mongering tool that AUM financial advisors love. They sure do enjoy taking 1% of your money. Guess what? Sure does benefit them to scare you into working longer so you can pump more and more money into accounts they manage for you. Dying a multi-millionaire is not a great goal for many.
Does "80% of their pre-retirement savings" account for inflation? If inflation averages 3% for 20 years you will lose about 45% of your purchasing power. If you have 80% of 55% that means you only have 45% of your original purchasing power. 45% remaing does not seems excessively high given you might live another 15 years and could have high health/care costs in those final years.
Great comment and I'm not entirely share. But here's the thing about inflation in retirement as it pertains to my clients. Over the last 3 years - not a single one of my clients in the distribution phase asked for more money from their accounts. I think people adjust. Thanks for watching and for the comment.
4% sounds like you’re just living off the interest in CDs and preserving the principal. If in stocks, sounds conservative not sure why you would only achieve your goal 80% of the time. Seems like you would be closer to 100% and growing your capital. Most likely
Thank you for watching! I talk about the 4% will because this is what a lot of other advisor speak about in a concept at the public knows pretty well but I agree with you
Yeah, 4% is conservative, but my parents wanted to spend more and went bankrupt in their late 60's thanks to overspending. It wasn't pretty and made them miserable being forced to follow the court-ordered spending constraints.
Sorry to hear about that. Sounds like it made you fearful. You are not giving any real numbers about their scenario. Maybe they didn't start retirement with enough money. Maybe their WD rate was very high, like 10% each year?
I dont think the 80% stat is that terrible. Mostly because the half of Americans dont gave a lot saved for retirement. So someone with the median amount cant really spend that much without worrying about a catastrophic event like a health issue wiping them out. A person with 2 million can spend more and still be fine but less than 10% of Americans have that. For myself, I plan to follow the die with zero strategy but I understand why people are hesitant to spend
The two of us have no mortgage ($500k value) $46k in combined SS, $65K in cash and $700K in IRA’s. I’m 68 and she is 64, both healthy. No kids to leave an estate. I believe we are in good shape.
Never understood this 4 percent rule Absolutely madness I'm gonna draw 15 percent and get 10 percent growth so I'll withdraw 15 percent Then it will grow 10 Etc
@@theretirementguyYT nothing is constant If it goes to minis 5 or 5 within a few years it will average back out As you said in video Your not spending all your pension pot in the first week If someone retires at 60 with 500k pension and it drops 20 percent that year ,they still withdraw 25k to live on And within a few years ,history repeated your pot will be back up into the green
4% from investments plus SSI for both of us will be sufficient for what we spend every month. Any excess gains will pad the healthcare fund. Just because you can afford it, doesn't mean you need it.
Indeed. great point! Thanks for watching.
I keep saying 4% is nonsense. When market is performing well you can go to 7-8% drawdowns but if it suffers sequence of returns you may need to drop down to 3-4%. Be flexible and alert of decisions made in retirement
I agree. Thanks for the comment porscheCarreras!
Yes u said it,key word (FLEXIBLE),its that simple!
I was expecting to laugh at the silliness of this video because of the title. But I was pleasantly surprised. I have several different buckets. Bucket 1. 2 paid for houses, value, about $1 million, cost $625k. 401k. Value, $650k, investment, $25k. Roth IRA, $300k, investment, $100k. Stock $2.8 million, this will shock you, my cost as I have been selling as LIFO. All I have left is old stock, about $25k. We also get $5500 in SS and pension. We have averaged about 14% over 35 years of saving.
Sounds like you have it all figured out! Congrats and thanks for watching!
Simple fact,large reserve fund,lets u weather down markets in retirement,it is that simple!
You are a nice young man. Don't let anyone dim your sparkle.
Can't tell if you are joking but thx for watching!
Why would having 80% of your pre-retirement savings all those years later be bad? If you’re spending what you want to spend who cares how much is left. why do you spend money just for the sake of spending it. If there’s something you need you buy it. If you don’t need it then don’t spend it just for the sake of spending
Many retirees are not spending what they want - for fear of running out of money. If people spend what they want and have money left over then everybody wins. Thanks for watching!
Lots of folks also work too many years out of fear, retire, and don't have many healthy years left to do the things they might enjoy like travel, hike, volunteer, start a part-time business they always wanted to, etc. Being smart is great, but when you live in fear, you limit your options in life.
Moving from a lifetime of saving to even moderate spending is extremely difficult.
No question about it. Thanks for watching!
my wealth for retirements consists of 1. paid-off home (= covers my shelter) 2. govt. pension benefits (= covers my subsistence) 3. savings. (= to spend on experiences and toys.)
A withdrawal rate only applies to my savings which is a minor part of my wealth.
I can deplete my 200k GIC (CD) savings in linear fashion over 25 years which is 4% per year or $670 per month.
it doesn't seem like a huge deal to worry about.
I get universal health care here in Canada
I will find out about long term care costs here. I think there is no wealth test here.
Sounds like a plan. THX for watching!
Great points @kevinwelsh. I feel like way too many people in the US forget about Social Security benefits or the fact the some people still do have pensions that will provide income in retirement. If you ask me, the 4% rule seems like a fear mongering tool that AUM financial advisors love. They sure do enjoy taking 1% of your money. Guess what? Sure does benefit them to scare you into working longer so you can pump more and more money into accounts they manage for you. Dying a multi-millionaire is not a great goal for many.
People with govt pensions don't count.
Awesome video! I really like the topic - so much I felt compelled to reply to some of the comments (sorry about that, hope it's not annoying).
Thanks for watching!
Does "80% of their pre-retirement savings" account for inflation? If inflation averages 3% for 20 years you will lose about 45% of your purchasing power. If you have 80% of 55% that means you only have 45% of your original purchasing power. 45% remaing does not seems excessively high given you might live another 15 years and could have high health/care costs in those final years.
Great comment and I'm not entirely share. But here's the thing about inflation in retirement as it pertains to my clients. Over the last 3 years - not a single one of my clients in the distribution phase asked for more money from their accounts. I think people adjust. Thanks for watching and for the comment.
This was very helpful, I hope a lot more people can see your video. Thank you.
Thanks for watching!
4% sounds like you’re just living off the interest in CDs and preserving the principal. If in stocks, sounds conservative not sure why you would only achieve your goal 80% of the time. Seems like you would be closer to 100% and growing your capital. Most likely
Thank you for watching! I talk about the 4% will because this is what a lot of other advisor speak about in a concept at the public knows pretty well but I agree with you
Yeah, 4% is conservative, but my parents wanted to spend more and went bankrupt in their late 60's thanks to overspending. It wasn't pretty and made them miserable being forced to follow the court-ordered spending constraints.
That's sad. Sorry to hear that.
Sorry to hear about that. Sounds like it made you fearful. You are not giving any real numbers about their scenario. Maybe they didn't start retirement with enough money. Maybe their WD rate was very high, like 10% each year?
It's easy if you plan properly.. Fortunately Social Security covers my costs. Withdraw from retirement is for fun activities.
That's great, Jeff. Social Security does a lot for people.
Thank you for great information.
Glad it was helpful!
This video earned you a subscriber.
LOL, thx. It's hard to get those!
I dont think the 80% stat is that terrible. Mostly because the half of Americans dont gave a lot saved for retirement. So someone with the median amount cant really spend that much without worrying about a catastrophic event like a health issue wiping them out. A person with 2 million can spend more and still be fine but less than 10% of Americans have that. For myself, I plan to follow the die with zero strategy but I understand why people are hesitant to spend
Great points and thanks for watching. "How to die with zero dollars by spending your last dollar" is probably a great video idea!
The two of us have no mortgage ($500k value) $46k in combined SS, $65K in cash and $700K in IRA’s. I’m 68 and she is 64, both healthy. No kids to leave an estate. I believe we are in good shape.
Congrats on your success and congrats on the younger woman :)
@@theretirementguyYTlol my wife is 5 years younger! I am so lucky 😂
Never understood this 4 percent rule
Absolutely madness
I'm gonna draw 15 percent and get 10 percent growth so I'll withdraw 15 percent
Then it will grow 10
Etc
Let me know where to get the consistent 10% growth 😜
@@theretirementguyYT nothing is constant
If it goes to minis 5 or 5 within a few years it will average back out
As you said in video
Your not spending all your pension pot in the first week
If someone retires at 60 with 500k pension and it drops 20 percent that year ,they still withdraw 25k to live on
And within a few years ,history repeated your pot will be back up into the green
I'm leaving ALL my pension in s and p 500 and global all world ETFs until I die
🤣🤣 should never Laugh at the stupid- but watching videos will hell educate you. I think