How to Afford a $10k/Month Lifestyle in Retirement!
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- Опубліковано 13 гру 2023
- Ever imagined a life of comfort in your golden years, spending $10,000 a month after taxes? Well, buckle up as we debunk popular myths and instead introduce you to the 'guardrails approach' to retirement planning, emphasizing the need for a sustainable plan tailored to your individual needs. Toss aside those rigid figures and start focusing on variables such as social security, pensions, and desired spending to provide a personalized roadmap to your retirement.
Dive deeper as we navigate the complexities of early retirement, from the rule of 55 right down to the tax implications. Ponder about the 'house rich, cash poor' scenario and recognize the importance of a well-rounded portfolio. Health insurance is another key player that demands your attention. Let's not allow the process to overwhelm you, rather push you to seize control of your financial future. So, are you ready to transform your golden years into a treasure trove? Let's dig in!
Ari Taublieb, CFP®, MBA is the Vice President of Root Financial Partners (Fiduciary).
Interested in a custom strategy to retire early? →
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eBook: The Complete Guide To An Early Retirement (FREE)→
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eBook: The Complete Guide To Health Insurance (FREE)→
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Early Retirement Expense Calculator (FREE) → rootfinancialpartners.com/cas...
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Thank God for UA-cam. My parents did not have the benefit of learning this information
Thank you Darrell. I am also a binge-UA-camr (of mainly history content)! It’s the best.
He didn’t ask about $6000. He asked about $10000. He may not be old enough to get SS.
You’re right! Just trying to give helpful examples in case $6k would be helpful for all of you. SS for example purposes only to help illustrate. You’re correct / I made assumptions!
Also $4000 a month is extremely rare most people get around $2000
@@LuisRCruzwhere do you live??
@@earlyretirementari I am retiring at 32 and also our SS is much less generous than in the US, and honestly with this in mind, the video is useless. Too many assumptions.
I will be lucky to get 300 dollars per month in SS at the age of 80 when I retire. Social security schemes are collapsing all around the world. So in 50 years when I am eligible SS will have to be very low or non existent.
We have been blessed by living in one of the lowest-cost-of-living areas in the U.S. The dollars stretch. 😀Thank you, Ari!🎯
Woo!
Where do you live? West Coast is expensive 😳
Hi, do you have a retirement calculator on your website that I can use? Thanks
Hi Ari. Continue to give good informations for the seniors.😂 Good job!!! 👏👏👏
HA
I'm 55, and I plan to continue to work full time until age 60. My portfolio is at our goal of 2.5M not including our house and our annual net living expenses is 80k or about 7k per month. Also at age 60 I may cut my hours to part time to bridge over to 65 and Medicare. I have a pension from work which will be about 1k per month at 65. I work in critical care as a nurse so a lot depends on how I am doing as I age. At age 70 I'll take SS estimated to be about 3k per month. My wife is my same age so she will likely take spousal SS at age 70 also and get about 1.5k per month or half my amount.
Thank you very much for sharing and your assistance to keep us all healthy.
Sounds like you are in good shape and probably working too long based on your needs but good on ya for planning and saving so well - we're 57 planning on soft retiring at 60 (were builders) but we are still about $1mm shy of my goal based on our spending which is in the $140/yr range - good job!
Don’t forget sequence of return
Hi, I didn’t follow the assumption about getting $4000 month in social security. If this is an early retirement scenario then one would most likely be retiring before they would claim social security.
Astute observation - if retiring early, you typically must fund all of your spending from your portfolio… until you reach what is an ideal for your situation, age to start Social Security.
I know people who have spent $10,000 or more per month for years. When they retired they were broke. With two incomes, they thought they were rich, always had big parties, moved into a bigger house, always with a new car or truck. Acted like they owned a big money tree. It funny watching them live retired life with their engine running on idle.
Great point, do not spend if you’re not in a position to do so long-term.
Ari I just texted you. I'm now interesting in using your services to get us on track to early retirement. Thanks for this great & informative video. :)
Text received and just sent you a message back! You’re very welcome.
Annuities (MYGAs + SPIAs) can help bridge the gap of early retirement to SS. Gives u a principal protection income floor to protect against sequence of return risk at the beginning, and then a keep a chunk of your money in a lifetime income stream annuity . Portion of $ stays in market for growth/inflation hedge
What do all of you think about annuities?
@@earlyretirementari Im warming up to the idea for using them for a bridge like Lefty suggested
One clarification I would appreciate is what do you mean by early? You said it's before the traditional age of 65, but are you talking 35, 45, 55? I assume you're speaking loosely and could actually mean any age, but it would be helpful to hear the approximate age you're meaning so I know how your strategies apply to me. Thanks for the video.
I generally view early as pre-65 (50-65). Anywhere in that range, but it just totally depends on your overall plan!
I fired my advisor because i thought his picture of 100k per year with my 2 mill in trad ira, roth ira, brokerage and another $250 cash , a $30k annual pension, and delayed Soc Sec of $3,000 sounded too good to be true. I subscribed to a respected planning tool that did not agree with his outcome. And he couldn't explain what his input variables were.
Having a real plan you can trust is critical to being able to spend confidently in retirement. And despite having just turned 60 with the above income sources, no debt and paid cars, I still don't have that feeling. Now Ari, I don't know what or who to believe 🤔😬😄
The truth is there are lots of bad advisors out there. Sorry to say. Software alone doesn’t give anyone that feeling. In my opinion the key is the right advisor. Biased, obviously.
Actually, apologies for popping the balloon, and you do not share all your assumptions, but if we make some reasonable assumptions, your original advisor might have actually been correct. And his failing perhaps was not skillfully explaining how, and helping you to feel comfortable.
Assumptions: (over-simplified a bit since does not factor inflation, SS COLA, etc…)
$2 million retirement accounts portfolio
$250K(?) cash
$30K current annual income from pension
$36K Social Security annual income, “delayed”… until age 70?
$100K annual spending
So age 60 thru age 70 needs from the portfolio: $110K per year (assuming $10K taxes) minus $30K pension = $80K per year.
$80K withdrawn from a $2 million portfolio is a 4% withdrawal rate for the first ten years. Most experienced, skillful advisors a comfortable with higher than 4% withdrawal rates early in retirement as long as there is future income coming to fill in the income gap later.
Then at age 70 your $36K annual Social Security (actually will be much higher due to SS COLA adjustments, but so will inflation) kicks in, reducing your annual portfolio withdrawal needs to $44K per year. That’s a bit more than a 2% withdrawal rate.
Of course this is simplified, assuming your $2 mil portfolio out grows inflation - it certainly should if properly invested.
Bottom line: most folks would feel pretty comfortable with that level of safety margin - your extremely low withdrawal rate. In fact, RMD’s at age 75 of likely $80K+ (will be painful - you only need $44K) will make you hope a large portion of your portfolio is in Roth’s, not traditional IRAs or 401Ks.
10% taxes? You have to make less than 22K to pay that and only because taxes are low currently. If you invest wisely you probably go over that threshold in capital gains and dividends, not to mention the $4000 a month in soc sec that you assume is also taxed. $4K a month in SS is also way overblown.
I have clients receiving more than $4k, and clients receiving closer to $2k. It completely depends on many factors. Hopefully the example was helpful so you can determine how to determine for your situation!
A lot of people work to their 70s because they do NOT know what else to do.
If you are reitring early you can't get your social security, and most people are never going to get $4000 a month from social security, the average is like $1500 a month
Loved the insights shared in this podcast! Retirement planning doesn't have to be rocket science, right? It's all about finding the right balance and staying ahead of the game. Speaking of which, ever thought about diversifying with crypto? My Digital Money is making crypto investing easy-peasy, even for us non-finance folks. So why not give it a shot and watch your retirement funds grow? Here's to securing that bag, the crypto way!
What do you think of the 'retirement spending smile'?
I was impatient. You talked about it at minute 5. Lol
@@jonstoehr175 HA!
Pajamas ?
🤘🏻
1.5X on UA-cam. 😀 Thanks.
As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
I think the safest strategy is to diversify investments. Like spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation.
Angela Lynn Schilling is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Thank you for the lead. I searched her up, and I have sent her a message. I hope she gets back to me soon.
$10,000 a month.....that's crazy. I make $310K and at best I'm spending $6k a month.
You probably don’t make $310k a year and spend $6k a month. Just my guess.
Dude! Live a little.
Then you live in a low cost area of the country - we make close to 400 and spend SPEND 12000 a month and dont do much - insurance costs are crazy high - health, cars, home, life, etc etc - throw in a $2500 mortgage and eating out once or twice a week and guess what - 12k a month
Good for you - you’re planning to retire in 9 years, right?
Assuming you have no retirement funds, with that spending rate, after taxes, you should be able to put away $200K/year. $72K annual spending needs something like a $1.8 mil portfolio with no pension or social security. $1.8 mill divided by $200K = 9 years, not even factoring in investment growth over those 9 years.
I’m making the same and I’m paycheck to paycheck. Yes, I’m spending 12k a month.