How Much Do You Need To Retire | What The Experts Say
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- Опубліковано 6 вер 2024
- When it comes to retirement, most of us tend to have the same questions:
How much do I need to save each month?
What is the total amount I need to save?
How much can I take out once I retire?
Well I like to defer to the experts when it comes to answering these types of questions. The thing is though, the answer you get really depends on who you ask. For this video I look into what 5 different financial experts in the personal finance space say when it comes to the matter of retirement and answer the age old question: How much do I need to retire?
We will look at retirement advice from:
Dave Ramsey
Suze Orman
Mr. Money Mustache
David Bach (Author: Automatic Millionaire)
Robert Kiyosaki
Now each of these experts are VERY well known in their fields. And they each have their own unique view and perspective when it comes to personal finance. They have different styles of saving, investing and yes, approaching retirement.
Sure there are some over-lapping in some areas, but in some areas each of these experts have vastly different perspectives?
So who is right? Well the answer to that depends on you. It really matters who's advice really resonates more with you and you lifestyle. Each of these experts may be right at different times.
It's important to remember that personal finance is just that...personal. There is no one size-fits-all approach. What matters is what works for you. And keep in mind that these financial experts are still human. And no one is 100% right all the time. You don't have to agree with what anyone says 100%. Listen to what they have to say, then make your own decision on what is best for you.
It's your retirement. Are you a member of the FIRE community, if so your approach to retirement is going to be vastly different than someone else on a traditional retirement trajectory. Do you what to save enough for you to live simply in retirement? Or do you plan on saving more than enough in order to pass along an inheritance to your heirs? Again, those are going to be different approaches.
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Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
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It is amazing what today’s Americans need to be “happy.” Myself included. In the early 1990’s my grandparents would just sit in lawn chairs under a tree on a summer day, each holding a glass bottle of Pepsi. They were just so happy. It was their big vacation, sitting under those trees, each little breeze a gift. When my grandfather got a nice raise greasing construction equipment in Springfield, IL in the 1930’s my grandmother said, “We went bowling and had an ice cream cone every night. We thought we were rich.” I’ll never forget her saying that. Whenever a friend of mine asks how I’m doing I say, “Oh man, it’s all bowling and ice cream cones!”
Oh my goodness! I love these stories! Thanks you so much for sharing!! 🙏this is quite possibly one of the cutest things I have ever heard
@@ErinTalksMoney Thanks! I love telling them. My grandfather went from pushing a wheel barrel full of bricks down a ramp to bricklayers working in a basement to running around with a grease gun lubing construction equipment. It was something crazy like 33 cents at hour to $1.10 or something like that. Can you imagine? Whatever it was, it was a total game changer for them.
Indeed! My retirement plan? Sit on the porch and yell at the kids to stay off my lawn! Sounds like heaven to me! Seriously, each person and where they live drive "How much" you need to retire. I will get a small pension, remember those? But that combined with SS, will be more than I need to live. House paid for, cars paid for, just Property Tax, Insurance, food and Electric. Hopefully no catastrophic health issues at least for a while. Wanna retire at 65, 4 1/2 years to go.
Have you seen how much it costs to go bowling lately? I remember what a bargain it was to go bowling in the 80s and 90s. Those days are gone.
@@norwegianblue2017 So are most bowling alleys!
My goal has been 3million for a long time- cautiously optimistic I’ll reach it, but that’s still 20 years away and a lot can happen by then. For now, I’m on track, I currently have 6x my wages saved and I’m a young gen-Xer.
One thing that helped was being auto enrolled into a 401k in my 20s. I didn’t even know I had that money until I quit.
Also I have a good registered fiduciary who’s been investing majority of my capital and the returns are decent. Ever heard of ferrochrome securities? If you have good for you and if you haven't you're defo missing out
Now I just need to get my husband on board!
Get out of debt, STAY out of debt, learn to cook and the learn the difference between wants and needs and you'll be fine!!
"learn to cook" b-о-о-о-ring!!!
I tell this to my wife and it’s like talking to a wall
@@donkaster9738 Well Don, if you can afford to eat out every day and night or are the king of microwave food more power to you! LOL
@@gregorycarson3889 She must have a much better plan, you might ask her BEFORE you retire! LOL
@@donkaster9738 how???? Look I cook mad dishes tf you talking about????
Good point from Suzie about having an emergency fund to draw from in retirement during bear markets. Filed in brain for future reference.
Dave Ramsey is great for get-out-of-debt advise. His thoughts on investing however are very dubious.
I took his advice and I went from $2K in retirement to $50K with 15% of my income. Idk if it will work but it’s better than nothing lol
@@diannebee But you can actually learn and know this stuff instead of hoping Dave's advice is good. Why blindly follow advice when the answers are out there. Google is your friend when you don't know something
Retired with a 7 figure portfolio and Receiving about $53k in dividends. I have been in the Stock market about 20 years. Am I worried? Am I selling? Absolutely not. I have purchased growth stocks too a little at a time over the past few weeks. I am going to sit back and observe how this all plays out, adding more at a time. my investment strategy actually calms me down. Eye on the prize, stay the course!
Dividend investing is great, just be patient. I went from making enough passively to pay for my netflix and hulu to now making enough to cover half of my mortgage. Not commenting this to brag, just to give hope to anyone who is discouraged by tiny gains in the beginning.
what route did you take? how can one invest more efficiently? help. sounds like you got something going for you. I am new at investing and really want in.
Recently I got into the financial niche, and I’ve taken a deep dive into investing, particularly dividend growth investment as it interests me. hoping to get to your level someday.
Love it when i see my fellow individuals excelling. I'm also on my way to the millionaire's club from investing in stocks. It's exciting watching your wealth grow. Good luck to us both.
Good for you. I'm not retired yet, but am sticking with my long-term buy and hold strategy. Will be in 7 figure territory by the time I hang up my boots.
I am a Personal (read Life) Coach and I have recommended your Channel to many of my clients since I found you in the middle of last year. I am always impressed by your discussions and I love the fact that you do such extensive research instead of just sharing opinions. Your humility combined with your transparency and your commitment to studying the topics is very much appreciated. I have studied personal finance and investing for over 40 years and I still learn something from each of your broadcasts.
saving with out investing, will be very difficult to maintain the same lifestyle in retirement that you did in your working years which you may find challenging .The best way to build wealth is to stay invested, but I know that can be challenging as well too, this is why I recommend *Romero* *pieto* an expert in this field.
Nice video Erin.
His trade execution quality and profiting is well structured with great financial features.
Love his trading system , he ensure safe investment and better risk management.
When it comes to consistent profiting I only know of one man called Romero pieto ever since I started investing with him he has indeed been a great blessing to me and my family.
Who is Romero pieto ?
My only retirement advice is plan for early retirement. Too many long established companies are now working very hard to eliminate older workers who are nearing retirement. I got caught when I was 58 and the company I worked for which was a long-standing company making good money outsourced everyone in my area. And I was four years short of my planned departure.
That's terrible, I'm so sorry.
I was able to retire early after employing the service of an investment analyst. He advised crypto investments and flipping of NFTs. I took advantage of the opportunity and I was able to pay off mortgage, debt and live on 15k a month
@@marissavanderlinden2714 Stop the scam! You probably have someone to put us in touch with too.
@@marissavanderlinden2714 If you have a mortgage and debt, then I don't believe you are existing on $15K
There is definitely a target on your back at 50+. Has been for a long time. The only saving grace right now is the tight labor market but as with everything, this too shall not last unfortunately.
Living within your budget is a skill. If you don't have it no amount of money will ever be enough. People who have successfully been poor at some point in their life usually have the skill and can survive on what they have. Folks who have no idea what is a necessity and what is not will suffer.
FYI, other sources of cash flow are capital gains, dividends, small business ownership, landlording, pensions. These can be combined to meet your cash flow goal, without needing to save $1M+, or even $500K. Plus this strategy adds diversity to your income stream.
You are correct. I will have two pensions, our social security (God willing), paid off house in addition to our million dollar+ investments. We should be okay.
Great comment. Diversifying cashflow is the way to go. I think small business ownership and landlording are great options to pursue over time that give you more power over increasing your income if you want to.
You are absolutely right! Plus (in worst case scenario) there is a reverse mortgage.
Suze Orman was my first too, watched her every Saturday also. She’s the best!
people then money then things.
I enjoyed this video partly because you did a good job summarizing the different approaches these well known financial advisors have for retirement. But, I think that your emphasis on the fact that every individual should tailor their approach to retirement based on their individual circumstances and goals was the best part of your video.
My spouse and I recently retired at age 50. We could have retired earlier but we wanted to own our home and to take international and domestic vacations at least six weeks per year. We also knew that eating out was a necessary expense to excel in our careers. We wouldn’t have been able to accomplish our career goals by the time we were 30 or 40 years old, especially since we didn’t start our careers until age 24 and 25, respectively.
Anyone nearing retirement age will tell you the years slip by, and building a sizable nest egg becomes more difficult if you don’t start early. You'll also probably acquire other expenses you may not have yet, such as a mortgage and a family.
You may not earn a lot of money as you begin your career, but there’s one thing you have more of than richer, older folks: time. With time on your side, saving for retirement becomes a much more pleasant-and exciting-prospect.
You’re probably still paying off your student loans, but even a small amount saved for retirement can make a huge difference in your future. Reason you should work with the right team.
@@stephenwalters2605 Very true. which team are you working with ? would you mind sharing
look out for Tamara Diane Hagan.
@@stephenwalters2605 Found her website. thanks
I'm with Ramsey as far as getting out of debt and staying out of debt. The only issue I have is rushing to pay off the house. My interest rate is 2.25%. We invest the extra $700 we were going to use to pay off the house early.
That sounds like a fantastic plan! 👏👏👏
Agree…he seems not to factor the opportunity cost of not investing. I ran the numbers to see what the difference would have been…it was a difference of about $50k. That’s a lot to leave on the table.
@@jmminmn I came up with about the same amount of money. If we invest $700 for ten years we will be able to pay off the house and buy a $40k new to us car.
Why pay off your house early? Let the fed/government destroy your debt for you.
@@jdek88 , I paid off our house in 2011 and I can invest what I was paying on the mortgage
I agree with Dave Ramsey on being debt free. But agree with Suze on the withdrawl rate of 4% and having a bridge account of 2 to 3 years so the market can recover when you can't safely withdraw 4%. Health insurance is a big concern and a big expense that has a major factor on when to retire.
4% is not Suzie that is the Trinity study
Debt free is great advice for many people, and terrible advice for me. I use the debt on my house to have saved and invested a lot more a lot earlier than I would if putting that money towards not having a loan. The time-value of money invested early has built my portfolio. Adding huge payments starting a few years ago (if my house was paid off early) would never catch up to where I am, not remotely close either. The house debt I did not pay off early allowed me to invest max 401k contributions early in my career, leading to a much higher total invested than had I put all that 401k investment into paying off my mortgage quickly.
But... I think most people are going to save investable money poorly. Until they can fix that, they wont benefit from carry a low interest rate home loan. Where within 5 years of starting my career I had bumped up my 401k contributions until I was at the max. Also, I refinanced my house (no disbursement, straight refi only) a few times over the years as interest rates lowered. I have a 30-yr 2.625% loan currently, and can still benefit from itemized deductions, so save another 22-24% off that via taxes (approx 2.07% effective rate). I only have one year out of 25 that my investments in 401k went up less than that from gains alone (not new money incoming), and that was 2008.
Debt free is reasonable advice for people who wont save the money, but would have cost me many years of my life having to work to catchup to where I am now.
I am a fan of the bucket approach. 1 year checking account. 1-2 years in short term Treasuries Bills. The rest invested in low cost index funds. I personally like VOO, VTV, VYM, VBR, BND - 20% each.
@@marshallhosel1247 Nice, I like your mix. I am also investing with Vanguard & Fidelity, mostly all low cost index funds I am maxing all retirement funds, with 1 year emergency fund. I have a few more years until retirement. Are you currently retired?
Very interesting content. I plan to retire by 55 with $3million in savings and a few passive income sources, I'm currently 40 and although I started investing this year I have high hopes for the future. Hopefully the market doesn't undergo another crazy crash.
there will aways be market crashes, you just have to stay prepared for it.
@@theonlydonyon6798 Having an investment coach actually does make a difference, investing becomes pretty much simple and less complicated, and it really ups your profit too. I made about $250,000 within 6months I hired an investment coach.
Be very cautious about basing your retirement on a lump sum especially if you're thinking 10-20 years from now. You should focus on creating passive or semi-passive income streams. Otherwise, you're forced to include your estimated year of death into your equation.
At David ramseys 8% withdrawal rate, assuming inflation is 3.5% average, 30 year retirement, your portfolio would fail to last in more than half the cases based on the historical s&p returns.
In my opinion, it will be highly delusional to hold unto your money thinking there will be an apocalyptical market crash. That will never happen. If I listened to stories like that, I would not have made the enormous $800k in profits that I made from just the last quarter. Analysts will talk, stocks will rise and fall but the market will always remain a cash den for people who know where to look. my one cents though
@@carolinesarin9452 I invest across the top markets but not by myself anyway. I follow the trades of Josephine Guevara Laporte. She is a popular broker you might have heard of. I can correctly say she's worth her salt as a financial adviser as her diversification skills are top notch. I say because I see that in her results as my portfolio grows by average of 10 to 15% on a monthly basis
@Vlastimir Beršnak exactly. I've been copying her trades for close to two years now. Started with a capital of $150k. My portfolio value has since skyrocketed beyond my wildest imaginations. Plus it's relatively much easier to set up and connect my accounts than creating a financial plan and drafting investment strategies myself
@@carolinesarin9452 you can just look her up and contact her from her website. She's not hard to find
@Vlastimir Beršnak She charges me 10% on the profits she makes which is fair enough to me considering her consistency.
Everyone one following this thread. Beware. Snake oil. !!!’ Same as the call this number scams. One thing is true. Save to invest !!! Just. Not with this group
Wow. Dave forgot that in the decade from 2000 to 2010 S&P 500 had average annualized negative return of almost 1% for the decade if we include dividends. Great video. Thanks Erin.
Dave misses a lot of things
None of these people can really tell you how much you need because that's personal. There are other factors. Do you have other income like a pension or from rental property. Are you debt free and living a modest lifestyle that works for you. Most of them though do have a reasonable approach in terms of saving around 10% and withdrawing something like a 4% of your portfolio.
Some people never live long enough to retire. Others live long enough but, suffer from failing health. Some live long and suffer long from poverty. Life can change on a dime as the saying goes. You may be able to retire from your job but, you cannot retire from life and it's complexities. Each person lives from day to day on this planet and is challenged to do the best they can one day at a time. The past has already happened. The present is a gift and the future is unknown. Ramsey"s 12% mutual fund return is unrealistic especially given fund management fees. Rich man skills to take those risks are not built into people. FIRE 's can be extinguished. The best laid plans do not guaranty success. Thanks for the comparisons.
Personally I find Robert Kiyosaki very abrasive and difficult to listen to, but I loved your distillation of his financial approach. I would gladly listen to your distillation of anything he has to say. I found your explanation of his approach clear and reasonable, while I find his attempt to explain his approach disorderly and insult laden. Thanks for the great content.
Thanks for listening! 🙏😊
If you pull 8% a year you are definitely going run out of money. I think 3-4% withdrawal rate.
Not definitely but closer to 50/50 chance. All depends on what the market does and of course what you do. But definitely too risky
Listening to the *Experts* is great advice but some of the most overlooked experts are the people who are actually retired and have been for a while. Don't hesitate to have discussions with those retired people who have similar lifestyles and economic situations to yourself and what you hope to have in retirement. They can give you lots of good advise based on experience, both of things to do and things not to do. Observing people who are successfully retired can take away lot of retirement anxiety.
So true!
advice
$625,000 divided by $50k per year, only gives you 12.5 years of retirement. am I missing something?
Great content Erin ❤️I'm retired with almost 10million dollar networth, a house and fleet of cars all in my name. I've loved the FIRE movement alot but the FI part is the most important of it all, gaining financial independence is greater than retiring early... I'm so happy I made wise decisions about my finances which got me to this stage, I did it! You can do it too!! Good luck
Great one! You must be an inspiration to most women out there.. I'm planning on retirring by next year
DANG GIRL!! 👏👏👏 A HUGE congrats to all that you have accomplished!! I love seeing strong women. What a great example you set for others, especially women.
@@sarahpatterson390 Good luck 💖
@@ErinTalksMoney thank you!! I'm a huge fan tho... I know you are also an inspiration to most women too, I couldn't have achieved all these if I hadn't started investin g earlier and making plans for my retirement.. God bless you ❤️
I have great respect for women majorly because I was raised by one and they have played huge roles in my life.
I celebrate all women reading this and I want you to know that your gender cannot limit you from achieving whatever you desire.
There are other withdrawals besides 4% to live on.
Financial Planner Fees: 0.5% to 1.5% of your portfolio that is paid monthly, quarterly, or annually.
Taxes State & Federal are taken out monthly in my case.
So actually you are withdrawing a larger amount to live, to manage and the taxes...
Cool summary. Advisors rarely explain that everyone is different, and it's important to understand that. Both of your 4% Rule explanations did not include the "automatic increase for inflation" part of Bengen's original rule. I think this is great advice. And, I've never understood how Ramsey thinks 12% gains are a reasonable expectation for retirement. That's reckless.
Great point!
4% rule is only 4% of beginning portfolio balance, then you adjust that amount for inflation, then you continue to adjust each year thereafter. I.e, It is NOT 4% if your portfolio balance each year. If you took any fixed percent of your portfolio “each year,” you’d never run out of money. Problem is, your spending would fluctuate with your returns.
Ramsey's likes to play the game where he conflated "millionaire" with "independently wealthy." And, he seems to fixate on showing his listeners a path to becoming a "millionaire," and thus a status that will make them comfortable beyond their dreams (I haven't sen him state this, mind you, but he sure seems willing to let people believe this). Without his liberal return promises, one million gets harder to see mathematically for most people. But, more importantly, if he were to tell people that the aspirational goal of being a "millionaire," meant budgeting yourself to 40k or less per year, the whole facade would crumble away.
@@stewartkaplan3100 don’t forget, once you take SS the 4% rule can drop down a bit, that is if you put SS off a bit
This is depressing to me. I know I'm above the average as far as my retirement fund goes, but nowhere near where these guys say I need to be in order to retire. I may as well forget about ever retiring. Your last statement was the only glimmer of hope. Thanks for that.
Middle class Americans. Make it a priority to max out your traditional 401k @ $19,500 & a personal Roth IRA @ $6,000. You need both to be diversified for pre/post tax accounts. If you do that for the standard 25-30 year career you will retire with dignity.
👏👏👏
“Diversified” should NOT mean random, that does no good.
I’d actually plan how much money you can withdraw from pre-tax to fill the lower brackets in retirement.
Likely maxing 401k will result in too much in pre-tax which can mean higher taxes, RMDs etc.
Most people need nowhere near that much money nor they can afford it. A married middle class family making $100,000 should not save almost $40,000 in 401k plans and another 12,000 in IRAs. That's ridiculous
@@johngill2853 Why not?
@@snterp because you have to live today and save for retirement. Saving 52% of your income for retirement is an undue hardship on most people
You can still catch Suzi occasionally on PBS specials. I have found, has changed a lot of what she has recommended over the years.
I noticed her stuff has gotten better. She was terrible at first
Great video. The first book I read on investing and personal finance was Rich Dad, Poor Dad. I don't agree with everything Kiyosaki says, but there is definitely great value in his advice. What's worked for me is a combination of his approach about building assets that can pay for things and Orman's approach spending less than you earn and investing the difference. Add in Ramsey's views on debt and it's been a winner. Adding these approaches together means that in my 40's I've got no real financial worries and there is a pretty good chance I'll be able to retire well before 60 or at least have the option to slow down in my 50's. That was my goal and it's how things have mostly worked out so far.
Sounds like you have done a great job with your finances!
I agree with her response and am there myself but what about healthcare? That's my struggle as I wait for Medicare.
@@garyxyz4400 I don't live in the US, so health care is a different situation for me.
@@adam872 I also watch videos about retiring in Philippines but our family is here. Thanks for your response.
Agree. It's a combination of these ideas. Keeping low to no debt. Spending less to build the savings to invest and then investing into various assets to create a cash flow like a small business, rental properties, or dividend growing stocks and even growth stocks.
I made pretty good money most of my working life. As an expat helicopter pilot working overseas low 6 figures was the norm. I read books about how to retire rich and had solid plans in place. Then, I spent 7 years working in the bush of west Africa operating in-out of mud hut villages. The people had nothing by American standards but they were happy. They literally had no idea where their next meal was coming from. They believed the meal would come when necessary but had no idea from where or exatly when.
When you put that into perspective it makes all our problems in the US pale by comparison. I now look at money in excess of what's needed (key word is needed) as something bringing more problems into one's life.
I like looking at different scenarios and never planning on the best case scenario coming true. As I write this comment, the market is amid another dive and I’m not afraid of that right now while I work, but experiencing a 15%, 20% or greater dive when I retire does frighten me. My parents went through that as they retired in 2000, however, they hold more now than they did upon first retiring. I think they had effective management and also made very conservative choices while still living comfortably and simply. I think we may travel a bit more, but I know my wife and I will likely be equally comfortable living simply. I just need to not make any poor decisions that can cost us down the road. Only recently have I heard of the idea of having 1, 2, or 3 years of savings in cash upon retirement and I definitely think that’s a winning play in my book. The great option with that is if I at any point determine that is a mistake, I can always invest that somewhere. Good luck and many blessings to everyone.
I mixed and matched. I paid myself first starting at an early age. I kept my debt low only going into debt for a modest house and modest cars. No credit card debt. I lived below my means and enjoyed that life. I kept a 6 month emergency fund. However, I didn’t have children and was lucky enough to not have any financial setbacks in my life and I was never unemployed. Two other factors allowed me to retire at 55 years old - a professional engineering career with a generous pension (plus Social Security now) and I moved to Thailand, a low cost of living country.
Sorry Erin, but most of these "experts" didn't make their wealth following their own advice, they have built their wealth telling other people how to follow their advice. The value of their advice would be the result of an unbiased assessment of those who followed it vs outcome, to date I'm not aware of any such assessment. We followed Dave Ramsey for several years, and he inspired us to address our debt and we cleaned it up which set us a successful path to a comfortable retirement, but by no means did we follow his program implicitly. Ultimately you're on your own, research advice, take the good parts and put your plan together.
Exactly. Personal finance is personal. All of these advisors give general advice. It is not tailored toward any one person. I even say in the video that you show take whatever bits of advice you feel apply to you and your lifestyle and forget the rest. What matters is that you are on a path that works for you.
Have you read Your Money or Your Life by Joe Dominguez and Vicki Robin? They reached their goal through frugality and investing in income-producing vehicles like Treasury bonds. Joe died young, but he never took a speaker or consultant fee. Vicki still never takes a speaker fee or runs a paid class.
The ironic thing about Dave Ramsey is that, while he's such a big advocate of taking on 2 or even 3 jobs to pay off your debt, he declared bankruptcy!!! I will agree, I've gotten very aggressive with paying off my debt and I'm down to 1 credit card, and he's absolutely right that carrying debt is stupid. He just didn't follow his own advice!
It's really such a personal thing, some folks want plenty of security and don't mind slaving to get there with a huge nest egg, others see it as giving up quality of life and time to save more than you'll likely need. I think Kiyosaki's take is great IF you don't mind the hassle of managing the risk those investments entail. If you'd rather not, then do the safe but sure thing instead, live beneath your means, diversify your investments (real estate, index funds), and you'll get there when you get there. Balance isn't just about work/life, it's also about risk tolerance/peace of mind... Enjoy life in YOUR style, don't mind what the other guy's doing. BTW, you are a breath of fresh air in this financial advice game, down to earth, clear as day, AND well informed. Keep it up!
It always comes down to cash flow (which is needed to pay expenses). Savings, investments, etc, generate cash flow. So that's usually the focus. However the focus should really be on cash flow. And it can come from a variety of sources other than your retirement account.
Very true, and well said 👏👏
Ramsey getting 12% on your savings... GOOD LUCK!!! I’ve been pretty aggressive the last 10 years and my 15 year average is more like 8%. I’m shooting for 5%.
In the future you may be right.
But for anybody there was 100% S&P 500 over the last 10 years they got over 13% (unfortunately I didn't get that because I'm more diversified)
I retired at 62 with 50K in the bank. Been very happy the whole time. We still put money in savings every month. The secret is being debt free when you retire not how much you have in the bank. Social security, 2 pensions are more than we need and we still travel around the country to see kids and grand kids. Don't get hung up on "must have" cash. You only live once and my advice is retire ASAP.
Congrats!! 👏👏👏
Unfortunately not everyone has a pension.
@@snatchinitback4635 Yeah, I would never rely on SS alone.
Um no, in your case the "secret" is your pensions (which are probably worth millions when you consider that those of us who don't have them would need to pay millions to an insurance company for an annuity). Congratulations on your retirement, but don't encourage people who have minimal savings (and no pension) to retire early.
Snatchin IT Back and lnvestment too
I retired last last year at 70 and feel feel some of them best advice came from Geoffrey Schmidt of the Holy Schmidt channel. He advocates concentrating on the cost of retirement lifestyle you want first and suggests three different style budgets, bare bones, comfortable and luxury. Then add up your fixed social security and pension/annuity income to see what additional income (including 401k/IRA)you might need for the lifestyle you want. As he stated, you will be surprised how much less you need to have based on lifestyle choices. Seems obvious but the most important thing you can do is have enough to pay for essentials and hopefully have enough excess income to move up to a higher budget lifestyle as you choose
Well done! I almost left early, when you mentioned the first "expert" suggesting one can expect a 12% return. I stayed once I realized you knew that was very aggressive. It's just about an impossible return long term. I believe a healthy mix of the other's advice is best. Kiyosaki is mostly correct, except he omits that one does need to initially save to get started in accumulating assets. You need to own that first home, and then save up to buy a second so you can then rent out your first. You can attempt to incur debt to do this, but one harsh downturn and you can get into big trouble quickly. Cheers.
Thanks for sticking around!
I've been long term investor in rental real estate not too concerned about market fluctuations just caring about rents /,expenses. The pandemic crushed cash flow and I want more liquidity. Huge step after 37 years of re investing. Not sure about transition
We retired in 2019 debt free and our retirement fund investments have increased since then. From age 62 to 65 we saved over $25,000 per year in health insurance premiums by limiting our income to qualify for Obamacare.
it all depends on how much debt you have and how much you need to live on, do you have a pension? How much Social security will you get?
absolutely 💯 percent!! 🙌
Retired with a zero bank account. On SSI now. Living in Hawaii. But I do own 3 properties outright.
Don’t forget, TAXES!!!
When you calculate your overall savings!
Taxes are so important!!
The time to think about taxes is before you make the investment. Tax planning starts at the beginning of your investing timeline.
Suzie Orman was the first investment "person" i ever listened to. Love her style. i have listened to just about every person in that trade at this point. I think you are better than all of them
FYI.
Hey Paul! I grew up watching her all the time! I loved her show! Thanks for watching, and that you so much for the kind words! 😊
Great job on this video. Each financial expert you listed has a different take on things and there are some kernels of truth to all of them. As you said, you have to be able to discern what fits you the most and will make you the most successful for your goals. That goal needs to be clearly understood and not just some general idea that “I’d like to retire rich.” If someone said that too me I would have a lot more questions. What does rich mean to you? What does retirement mean to you? When are you expecting to retire? Etc.
You are so, so right. It's called personal finance for a reason! You have to make it personal to you!!
At 34 I own 10 rental properties and I still work all my properties are paid off. I work a cushy government job that lets me travel 60% of the time. Even once I retire from this job I'll work another much easier job but still working.
Nice!! That sounds like you are setting yourself up nicely! Congrats on the already 10 rental properties at 34, that's incredible!!
YES ! Must have cash to get over the downturns in the markets. While our aggressive and growth funds have avg 12 and 14% over the past 20 years, they do have a down year or 2 here and there. That's why we are sitting on 4+ years of living expenses in cash with another 3+ in non retirement mutual funds. when we pull the plug on working early, we can cruise through to 59.5 when we can tap IRAs and 401Ks if we want. Plan is to show 25 to 30 K in MAGI so we can qualify for ACA stipends and health insurance will be 0 to 150 a month. That 25 to 30 K will help replenish our cash thus slowing the burn rate and enabling us to do more over the longer haul. Some years we will pull more when large gains are realized and just deal with the health premium costs. Once SS and Medicare kick in, it will be icing on the cake.
Bob, oh my goodness, I LOVE THIS!!! Congrats on all the hard work, the savings and the great planning. 👏👏👏 I am so, so happy when I hear stories like this. You are the best 🥇 I hope you are telling everyone you know how you handle money and inspire them!!
Bob,.....outstanding post,.....and you described my retirement plan exactly. Recently retired at 59 1/2. Also,...my T.Rowe Price investment calculator(among others)say I have a 100% likelihood of never running out of money. Great minds certainly think alike.
@@Tonymanero1960 That's awesome ! How are you loving it so far? Any big plans?
I take a little from every expert. I do believe that most experts also over complicate retirement. And not enough talk about SS and passive income…dividends and capital gains. I never plan on touching my principle. My house paid off before I retire, SS and investment income. That’s my plan.
That sounds like a pretty darn good plan to me!
Hi. Ever since the covid break out I’ve been forced to find additional sources of income as I barely have time to continue trading and watching my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks.
Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job as a chef swallows up most of my time. I work with a fiduciary, Leviclemans. I could leave you a means to get across to him if you need help.
@@alexpavarde8698 Oh please I’d love that. Thanks!
@@Ferocious923 I’ll leave you his mail so you can get across to him.
Leviclemans@gmalcom
Thanks dear. Already had a conversation with him and he indeed proved to be well-versed, and licensed too! Thanks again.
My financial advisor was able to build a portfolio which helped pay off my mortgage, cleared my debt and gave me 15k monthly income through crypto investments and flipping of NFTs. Retirement came early with no regrets, I always recommend him without reservation.
Accruing savings is like losing weight, one category being more (or less) than the other will move the needle. The small amounts add up to BIG amounts if you don’t pay attention.
The number one factor is your lifestyle, if you don't spend much you don't need much
So true!
It seems that the financial experts think that most people will travel the world in retirement.
My goal is to do a bit of both save and generating revenue in retirement. I want to do what I love on my own schedule. I want my mind to continue to be active.
I like that approach!! 👏
You're right DR is way too aggressive on expected returns. The Trinity study came out with a max of 4% withdrawal rate. Personally (because I retired at 52) I work on a max of 3% and last year I pulled out 0.69% due to the fact I still have two rentals, but I also have a pension so this 0.69% may end up at zero%. Oh yeah my savings rate was bigger than 50% during my career.
Nice! You sound like you are very well prepared for retirement! 👏👏👏 My goal is to retire sometime around the age of 50
@@ErinTalksMoney Good for you. Depending on the market and your savings rate you might be able to beat that. I started saving by paying my mortgage down at age 36. After 6 years and 3 months that was paid off. Another 10 years and I was FI.. So that brought me to 52. I wish I had started when I was 20..:)
Hi Erin, I am retired, and I put aside 60% percent of the money I receive. Even after retirement.
That's awesome!!! Congrats 👏
My financial advisor was able to build a portfolio which helped pay off my mortgage, cleared my debt and gave me 15k monthly income through crypto investments and flipping of NFTs. Retirement came early with no regrets, I always recommend him without reservation.
I’m a no debt person. My entire life. I’ve never understood why anybody would pay all the extra interest.
Because people want stuff now,it becomes addictive to them.
Spending and spending on credit can become addictive
Suze is spot on with her recommendations. Take her advice but study the philosophy of Mr. Money Mustache on simplifying your life and you’ll be golden.
Robert Kiyosaki is interesting. A "guru" who has declared bankruptcy, made money by selling his Rich Dad Poor dad go Amway, continues to make money by selling dreams, shaming people for working a job and contributing while most of his contributions are minimal if not negative to society as a whole even though he profits greatly
I'm less than a month away from 30 and my independent work life has just started, I've worked since I was 22 (very old compared to many other people) but I was working for my dad (a very secure position), without any financial literacy, so my parents were paying for my career after I went through some studying problems caused by me, and later the late consequences of those bad desitions, I was also paying as much as I could of my university with the work I had because of the guilt I was feeling, so I was saving almost nothing, and just now I'm paying for my things and making strong financial desitions, and now I have a way better paying job, and thankfully I have no student loan, but definitely my life is just starting hahaha.
Loved the video and some very good advice that I'm going to apply.
I love that you are taking control of your financial life! That’s incredible! 👏👏👏
Thank you for this objective and critical view. Far too many videos or people go all in on one style or one person's *broad* advice and neglect the shortcomings of the structure. Every one of these advisors has merit and like you said, "None of them are 100% right and you have to look at it in terms of your own lifestyle".
I look forward to the next video.
Thanks so much for your kind words!! I think the best style is the one that works best for you 😊
So very true. Starting sooner than later is the key.
We all get a lot of land and a choice work or education at 18 yrs old , plant on that lot along the way to later yrs , when the day comes to harvest we all eat what we planted . Susie Orman was awesome !
Great breakdown on the differences between the money guru's strategies!
Thanks!
All of the methods for retirement are very simplistic. Required retirement savings depends greatly on your income sources for retirement. For example if you have a good pension, that and social security will generally provide you with enough money for retirement and you don't actually need any savings, particularly if you have zero debt when you retire. All of the advice you presented assumed that the only retirement income source would be savings. That is nuts.
My advice for having a comfortable retirement is pretty simple. Pay off all debt. That will allow you to live a very comfortable life on a relatively small income. In my case my pension and social security provide more income than I spend. That said, as I age I am decreasing my expenditures. for example, I sold one of my yachts in 2022 (not for money reasons, but because I don't have the energy for two yachts any more).
Thank You for a concise, eloquent and well delivered outlook on different approaches on retirement. I really enjoyed this young lady and her explanation as I age toward my own retirement
Thank you 🙏 for watch and your kind words!!
Questioning this 15 - 20% savings toward retirement. First of all FICA has me forcibly adding 6.2% towards my retirement which is matched by 6.2% from my employer for a total of 12.4% of my income. Then my pension (IPERS) has me forcibly investing 6.29% which is matched by 9.44% from my employer for a total of 15.73% of my income. By this point there has been 28.13% of my income put towards retirement without ever voluntarily investing a dime. Now above that I am putting in a traditional IRA another $7k/year as I am over 50. This brings my total up to about 36.13%. Another 10 - 14% goes to 501C3 giving which I feel gives back in other ways. As I have just sold a small rental house, I cannot make use of the traditional IRA this year. My CPA said to check if my employer offered a 403b, and it turns out they offer the 457b (a better sibling to the 403b). I have maxed out my contribution of pre-tax dollars into the 457b and will live off of the house sale for the next year or so. This should allow me to place another $43k / year into savings for a while (although I may slow down after this year to better affect my AGI in subsequent years). Now I'm sure the 457b puts me over what these people are suggesting, but without it how do you feel that FICA and my pension work towards meeting their target numbers?
As my wife has me by about 5 years, I am looking to retire at 65 which would make her around 70. With around $220,000 invested so far and no loan or credit card debts, does it seem like we are on the right path?
An old guy once said "earn as much as you can, save as much as you can, give as much as you can."
I like that!
I believe in the FIRE Movement. I've already hit my FIRE number, but decided to mix in some of Kiyosaki's beliefs on building wealth. In this case, I want to acquire more wealth building assets so I started buying more real estate. It's unfortunate that lenders tend to like W2s more when it comes to approving loans. I'm giving myself another 2-3 years to buy more real estate before leaving my W2 job for good.
This was such a cool video. I really enjoyed the comparisons! 12% annual return and 8% withdrawal though? Really, Dave?! I’m with you, Erin-10% annual return and 4% withdrawal rate. I would be way too scared to withdraw more!
Thanks so much!! 🙏 Taking out 8% would scare me 😳 so much!!
Nice video, Erin.
Two questions RE: David Bach's bit.
1.) Is it 10x salary? or is it 10x expenses? Is that really his position 10x salary?
2.) You also stated it's 10x "starting salary" As in, 30 years ago starting salary? that doesn't seem right.
David Bach concept fits mine, should relate to everyone . This was a Great video, well done
Thanks so much!!
Good stuff Erin! Beware of celebrity experts. Ramsey really isn’t a retirement planner. Suze advocates bucket system which is wise.
Great video Erin!! So...if I could somehow make $10Mil in my 20's, I would make Suze Orman sooo proud! lol
Haha!! Same here!!
Ppl many not earn that much in a lifetime
I'm 53 and will be retiring in 6 years. I'm single, have no kids, and I'm not married. And I don't plan on getting married or having kids. I'll probably have between 6 and 700 thousand in my tsp and a decent pension. And I'll be able to take my health benefits into retirement with me. I plan on living off of my pension and my tsp for the first five years and holding off on my Social Security until I reach 65. I'll work on converting a lot of that traditional tsp to Roth before I take my social security. I'm keeping my tsp in the C and the S fund. I can afford the risk of a market downturn because of my guaranteed pension and social security. It's a simple plan.
Erin, really insightful conversation. It's so fun filtering through all the financial Guru's and refining what works for you. There isn't a one-size-fits-all approach, and tailoring your retirement strategy really is important! Great job! 👍
Thank you!! 🙏
I wish some of these experts, or even one, would focus on the other aspect of money management spending and passive income. I'm not an extreme couponer but, gain $200/month with cash reward credit cards and platelet donations. For the record, I did donations for decades at Red Cross without incentive but in FL Oneblood pays about $65 a month.
Really enjoyed the video, especially how you brought together the advice of the experts, and then boiled each one down and commented. Keep up the good work!
Thanks so much! I really found it interesting that there is such different perspectives.
instead of retire early, why not find something you enjoy working at. that's what I did. retired very comfortably at 67
Clark Howard🤔
Hmmm, .08 puts me just $120K away. But I have 3 years to go so on track for more. I think it is better to overestimate and have too much than to underestimate and worry.
My mom and I loved watching The Suze Orman Show growing up that we once called in on whether we could afford a trip to Europe that we wanted to do and we were so excited when she approved us 😂
I'm so jealous you called in!! And I'm so happy you were approved!! Did you enjoy your trip?!?!?
Can I afford it, was always my favorite segment. I also loved her giving the grade for over all finances. I was always thinking, what could I do to get an A?!?!
If you have no debt in retirement, I don't see what all the money is needed for? Because we started saving early, we should have around 4 mil in 25 years. My mom retired at 62 w/ SS. She only had 20k and lost half of that in 2008/9, but she does ok. House is paid for, but she got a car loan. If you retire with your house/cars paid for, it seems like a couple thousand a month would be fine. While I want to retire comfortably, I don't want to work longer than I have to.
Good discussion Erin, yes what is reasonable withdraw rate? Mine is 5%, which is proving too low, and my balance is growing nicely, so far 10 years into retirement...my heirs will be happy haha!
Even the authors of the Trinity Study, which put the 4% Rule in the world came out last year and said that people could bump up to a 5% withdrawal rate! I think reasonable depends on how much you have saved up and how long you plan on being retired. I recommend talking with a good CFP and asking for their opinion on your personal situation.
Also remember the stock market has done phenomenally well the past ten years! 😂
@@ErinTalksMoney To add on to this, the author of the trinity study conducted the study under a worst case scenario situation, so 4% should be okay for even if the market doesn’t do well.
Suze Orman is correct that people ought to think about 5 or 6
Josh from heritage wealth planning 🤔
Josh puts these “experts” to shame. He covers everything you need to think about and how exactly do act. Very detailed, his thinking is viable and realistic for 95% of the population.
Josh and Clark Howard are 👏👏👏 😊
Yes! With Pablo and Finney too🤑
Everyone needs to figure out what will work for them. I'm constantly running numbers for retirement. Dividing your retirement income by 25 years is the same as 4%. $1,250,000/25=$50,000 per year with no interest. Add interest and you should not run out of money.
I seem to lean on Dave Ramsey‘s principles. It’s been proven to work for me.
The answer is pretty simple.
All numbers are just made up for a reference point.
Use your current budget as a reference point -- monthly utilities, food, gas, cable, etc. Isolate out the basic necessities and make the assumption that those won't change in retirement. Let's make the assumption it's $800/month (Probably low) - $9600 a year. Then you need to add in your household cost- you definitely need to have your home paid off, but then assume X for insurance and x for property taxes. Let's say that's $6000 a year. You're up to $15,600. Then add in your "discretionary" spend; shopping, dining out, etc -- and don't go cheap on this . . . . . your behavior today will likely carry into retirement. So let's assume $1500/month - $18,000 a year. What won't be carried into retirement are all your contributions to your 401Ks and IRAs, etc.
So if you total all that up, you're at $33,600 a year (this is likely low, again, just an example to illustrate the point). To determine what investments you'll need to make to maintain that standard of income, you'll need to first know how much Social Security you'll get, followed by any potential pensions (military, etc). Let's assume that your combined post-retirement income from SS and pensions is $20,000 a year, meaning that you'll need $13,600 to maintain your standard of living. You'll need about $300,000 in investments averaging 5% return/income (an average over 30 years), netting $15,000 per year.
This is a simple example, but the average person can do the math to figure these things out and then use a "professional" to true the assumptions up. A big thing I didn't mention is healthcare, so you'll have to make more assumptions. But I hope you get the point.
Great video, Erin. I am going to put David Bach's book on my reading list and share the video with my sister.
He's got a few, I think his best is the Automatic Millionaire. 😊 Thanks 🙏 for the kind words and sharing!!!!!
@@ErinTalksMoney I was going to start with that, but I found "Smart Women Finish Rich" as a kindle library loan and needed something to read on my flight in a couple of days.
Do you know if Suze Orman changed her recommended SWR recently? I read her book "The Ultimate Retirement Guide for 50+: Winning Strategies to Make Your Money Last a Lifetime" (copyright 2020, but went to press in late 2019 just after SECURE Act was passed), and she was recommending a 3% withdrawal rate along with two - three years cash and an emergency fund. She also was encouraging people to work until age 70 in some capacity and not take Social Security until then. I get being conservative with planning and certainly don't want to run out of money, but I value having time/freedom in my 50s and 60s too.
I'm a big fan of David Bach's books, Smart Women Finish Rich is my favourite so far. Plus I'm in canada and I love that there's canadian editions for all of his books.
The only difference between kiyosaki and the others is what you are doing with the savings. Kiyosaki IS saving like the others. He just doesn’t “ save “ it in cash and saving accounts where the others are to a degree doing so. His lesson is after the others who he agrees with actually. They are all doing the same thing EXCEPT. Savers who leave their money in depreciating assets like cars and cash think the cash is better when modern monetary practises make cash a depreciating asset. So he is really saying “ save “ by “ spending “ on assets that grow ! It’s not that no one is right , it is that there is no right …. One must learn what money is always because it is a changing thing. And there is no fixed approach to that. Good video
Just have 8 x your gross at retirement age. If you don't have a defined pension, make it 10 x your gross. Withdrawal of 4% per year should plus social security should get you where you need to be.. These figures are only if you have no debt. House, car, etc must be completely paid..
Thanks for sharing!! I am with you, I don't like the idea of debt in retirement!
@Comrade What do you consider retirement age? I don't have a pension and have 12 x my gross income, but I am only 57, eight years away from receiving medicare.
Think carefully if you decide to retire prior to medicare age.. If you have modest expenses and at least 1 million in the market, it should last till you pass away..However, there are many unknowns in the future.. If you ever have to be put in a nursing home, your million won't last long..
@@comrade916 I am researching long term healthcare. Hate to work so hard only to give it away to nursing homes towards the end. My mother is in an assisted living ,but because of her long term healthcare policy she only pays 20%.
@@jimhandler1129 At your age, a long term health policy will be costly..In particular, since one never fully knows if you will end up in one. I'm planning on retiring outside the U.S.. Many modern assisted living establishments with a private room charge under $1500.00 per month.. That's including all nursing services, meals, the works.. Now, I hope I don't end up in one, but again, the distant future is unknown.
I bought sweat equity,run down houses in rural areas.Fixed them up,sold them.Real estate is where its at.Now i do what i want,still working,own business,it can be done.Good debt is a good thing.If it was'nt for the backing of a credit union,i could'nt have made the headway.
I appreciate this video. Seeing all the approaches side-by-side was valuable.
Thanks!! I'm thinking of doing another video of expert opinions - just a different topic, and a different set of experts! Let me know if you'd be interested!
@@ErinTalksMoney I'd be interested. But your offer was directed to Chris.
@@DaveM-FFB the offer is good for all! 😂
Retirement expectations are so much different now than even a few generations ago.
Our grandfathers were content to work in their woodshop, maybe go fishing once or twice a week. Our grandmothers would quilt and work in the garden. They might volunteer at church or in the community.
Today, we want to travel the world, own an RV, maybe a boat. Expectations are totally different.
Next time hopefully you will include the Money Guy. They give sound advice and explanations.
I absolutely LOVE the Money Guy!!!! 😊 I have been listening to their podcast for years!! I always say, they are like the first people in finance that I practically agree 100% with!
I love the Money Guy! I only found them recently and have been diving deep into their videos 👌
What I find interesting with almost all 'experts' is none of them factor in a pension if you have one, nearly all focus on how much return you MIGHT get on how much you have saved.
Yep. I figured in my pension and my savings number is much smaller. A pension alone can be $500,000 or more then add savings and IRA to that number and you'll have a tidy total of $750,000 or more for retirement.
@@randyscrafts8575 My wife has a school teacher pension.....40k/yr. She retired at age 60 eight years ago. She will likely live well into her 80's, so say 25 years @40k/yr= 1 million bucks.....as guaranteed as any financial anything can be. Her Social Securtiy, another 1/2 million over that time period.
My retirement is social security only, but between of it, we have about twice the income we actually live on. Excess goes into gold/silver. Have nothing in the makets.
@@edsmith4414 Life is good. Enjoy your retirement.
I took Dave Ramsay advice got me a mutual fund.. it’s does 11.83 on my money
It does 11.83
No that is what it returned over the time period you're looking at. That is not what it will return every year. Stock mutual funds don't come with guarantees
I agree wuthe Suzi Orman. 2-3 years of kiving exspenses is a safyy net especialy if there is a recession during retirement.