Wow, this video is incredibly helpful! Kevin's breakdown of Jim and Pam's retirement plan is so clear and easy to follow. I love how he uses software to model different scenarios, especially considering market downturns. The tips on tax planning and Roth conversions are gold! Definitely sharing this with my parents as they plan their retirement. Thanks, Kevin!
Absolutely! The detailed analysis and practical examples are super helpful. The way he explains tax strategies and stress tests different market scenarios is impressive. This is a must-watch for anyone planning their retirement!
That's awesome to hear! Having a professional walk you through the numbers can make a huge difference. According to a study by Vanguard, working with a financial advisor can potentially add about 3% in net returns to your portfolio annually. Plus, they can help with tax strategies and planning for market volatility, just like Kevin showed in the video. Definitely worth the investment!
Thank you for mentioning the emotional selling. The whole "THIS is the end of times" while ignoring all the other "end of times" scenarios is only exasberated by social media. The people who follow a more disciplined "ignore the noise" approach tend to have better retirements. That's what I always try to do. I wasn't always good at it but I built that skill over time.
I love these scenarios, Kevin. Thanks for taking the time to put them together. I was wondering if you could do a similar “how much can they spend” with a combined total of $3M at age 57. This would be between IRA’s, 401ks, and some taxable brokerage.
Please clarify the following statement on your website: "We do not offer hourly work, but we do offer a very limited number of one-time retirement plans beginning at $5,00.00. We are unable to offer a free assessment to people not interested in a long term engagement." I can't decipher whether $5,00.00 is $500 or $5,000.
Variable spending is both a good plan and a necessary plan. We are retired 2 and 4 years. Our income needs are literally different in almost every year through the first 10, and only later are expected to be more consistent. We also have determined our necessary spending versus our desired discretionary spending that our portfolio should support, and the difference is about 40%. Having a 40% cushion pretty much eliminates all major risk other than health and death! (Which are of course the more significant and unpredictable risks in retirement)
Dynamic spending is the only strategy that makes any sense, in my opinion. You can't just ignore market conditions and expect to have a successful retirement, unless you have oversaved by a sizable margin.
This is by the best video about retirement, with such useful guidance on tax liabilities , spending plans and financial market scenarios. I’m planning to retire in two years and want to make plans for it. I really like to use your retirement planning tool - how can I get started?
It would be fun to play around with this software just to do a look see. $1k a month seems low for international travel. We're budget travelers living in Europe. In general I calculate 300 Euro a day for expenses. We just got back from Iceland and did Antartica last year and they were significantly more than that.
I have a 150K annual retirement income. But 100K is royalty based, and it fluctuates a lot. 30K is from a 401K and it fluctuates a lot. The last 20K is social security. Even though my expenses are 100K, I feel I have to have a wide cushion because of my income variance. I am a bit paranoid about spending.
You can look at my plan: 1) We are going to live in our pay off beautiful house until I die. 2) Only after my wife will sell our house and buy something smaller, closer to the kids. 3) NEVER a reverse mortgage!!!
Planners I’ve heard said It is the last thing you should do. Some people consider their house equity as covering long-term care, which he did not include in this plan at all. That’s just one example of using house equity that is not a reverse mortgage.
@@teresawood6830reverse mortgages are a misunderstood tool. We have one, the balance is two hundred dollars! We are using it strictly as a credit line growing at 7.5% per year. It will only be used for true late life emergencies. It should be worth about $1 million by our mid 80’s. Cost us $10k to set up at age 62. NO RISK, other than the initial $10k outlay.
This is really helpful to plug in all those scenarios. Love that you can enter in your legacy goal. How did this plan factor in potential long term care needs?
@gracealleman4102 Financial Planning software is not available to consumers. It is expensive to design and proprietary. Consumers would want it for free, mess things up, and blame the software creator. You don’t ask to fly the plane when you go on a trip do you? Do you analyze your own X-rays? Why not? Because you don’t know what you are doing. Same with finance. 99% of the people watching these videos don’t have any education in these important matters. Financial Planning Designation took me 18 months of study and a 6 hour exam. It required knowledge of a great many subjects but most importantly required knowledge of those fields where I had to defer to other professionals. But go ahead, design your own retirement plan.
Great content. I wish you and every other financial planner would disclose your fees on these videos. This is a subtle sales pitch. Let's be honest. Your website does not dislose your fees either.
Thanks, Jim! I now feel more confident about my retirement plan. I am 62 and plan to retire in 3 months. Between me and my husband, we currently have about $3.5M in our 401ks (excluding IRAs and ROTH) and no debts (our house and cars are all paid off). Our withdrawal rate from 401k would be 2% annually (since we will have about $100k-120k portfolio income annually from our taxable brokerage accounts). We plan to travel around the world during the first 10 years of our retirement, then settle down in the States thereafter... Our budget for retirement spending is about $12k (can increase if needed) monthly pre-tax (we live in TX)... Given the spending scenarios, hopefully we can afford the retirement we've envisioned?
@@ok2tmtsg why would you say hopefully you can envision the retirement you planned? If your brokerage account alone funds your plan, your qualified accounts are just $3.5 million dollars emergency fund. You’re not seriously concerned, are you?
Great video Are you a certain type of Financial Adviser? My current FA has never presented this type of analysis Do you provide this level of detail to all your clients? I am 63 Wife is 66 NW $2.6 Liquid $1.6 - 401k / IRA
Not crazy. One unexpected, long term illness could completely change the picture for them. In the US, bankruptcy is always right around the corner when it comes to healthcare. It's why many people are leaving the country altogether
A somewhat serious question. What do you do when your spending capacity is so much higher than we could or would spend. Just let the portfolio continue to grow?
So it looks like they break even with roth conversions at 84 when there is probably a 75 pct chance one or both are dead. I have been debating on doing roth conversions and this has settled it for me. I'm not doing them because I don't care to leave my kids millions and dont think market returns will be as good as the last 30 years that I've been investing
Through software like this, you can plug in your plan, and then compare it to a plan that includes some conversions and see if it makes an improvement. They aren’t for everyone.
Probably I'm new to this topic, but when you said "income", the numbers on those pretty graphs, and the money they theoretically can spend ($10-11k/month), do you mean after-tax or pre-tax?
I’d love to know where you can buy a car for $25K. Given that as of today the average new car price is ~$46K and I can’t see that decreasing in the future.
Kinda a Goldilocks story here. ex CEO buying used car on the cheap, old company generously paying for health care, living in a state (PA) that doesn't tax retirement or SS.
@@93rc69 I took from it that with software like this, you can plug in your own information and do what if scenarios and tweak it for your own personal situation. Agreed this particular couple did not have any worry for long-term care either, but just plug it in and evaluate the outcome.
@@Patrick-iq1do You are correct that financial advisors that take a percentage of your assets annually to manage your money aren't interested in clients with smaller portfolios. But fee-only advisors are happy to meet with anyone. But that doesn't mean that "these videos" are just ads. There are TENS of MILLIONS of people that are on pace to have $2 million plus in assets at retirement, and many are interested to learn as much a about their options as possible.
@@YIWOTYAnd I am one of them. But I also know that a bunch of CFPs/CPAs/MBAs aren't spending all this time and money producing videos for the pennies that UA-cam pays, and certainly not just to be nice guys. - I'm glad that you are fee-only, I'm used to AUM, but you are a business needing to make a profit. That is just reality.
@@Patrick-iq1do At 42K subs, he's not that far from being able to make six figures a year from UA-cam, assuming his viewers watch his videos all the way through. Those looking for this kind of content (40 years old or older) are much more likely to do so compared to the younger viewer with a short attention span.
I’m curious, if Jim and Pam had $4 million instead of $2 million could you roughly estimate that they could safely spend approx $22,000 a month in retirement? If $6 million then $33,000 a month?
I thought that at first, too. Then I remembered that they'd be trading in their 7 year old car to make up the difference, so $25k is pretty reasonable .
Why do CFP's always use such lofty retirement #'s when in reality they are talking about 1-2% of retirees max. And NONE of those people are on YT seeking financial advice.
Actually we are on YT looking for financial advice! My wife and I only have our 401k’s which luckily have done very well and have $2M between the two. We have decent jobs, but by no means “rich” jobs and live a modest lifestyle. It’s very possible for regular people to have this amount and need/want advice to do our own retirement planning.
Suppose you started investing in your early 20s and got returns that averaged out to 7% per year. Suppose you started investing 500$ per month and increased your investment rate by 5% per year . At the end of a 40 year career your portfolio is worth 2.4 million dollars. One person with a decent career trajectory can do that. Add a spouse who brings in an income and it gets easier (even just a part time earning spouse)
It’s actually ten times that many. But it all comes down to spending. I know a retired couple that have that much after raising four kids. Neither had college degrees and she only worked part time after they started having kids. But they saved, rather than spent. Paid cash for cars, no lavish vacations. But that was their choice. Other people choose to go to the Caribbean or Mexico every year, get Starbucks every day, finance new cars every couple years, get a new iPhone every other year, etc. That all adds up. Who enjoyed their lives more up until retirement? That’s up for debate. But the savers will certainly sleep easier when they decide to quit working.
As others have told you, your numbers are way off. It's probably 10% of retirees that are in this range and as noted, we love these videos. We have the time, the knowledge, the brainpower and the motivation to take advantage of approaches that make sense to us, after we think critically about what we want.
This is much better than the standard 4% stuff you hear about. The key is the dynamic approach to spending. That seems to be very practical tactic.
Wow, this video is incredibly helpful! Kevin's breakdown of Jim and Pam's retirement plan is so clear and easy to follow. I love how he uses software to model different scenarios, especially considering market downturns. The tips on tax planning and Roth conversions are gold! Definitely sharing this with my parents as they plan their retirement. Thanks, Kevin!
Absolutely! The detailed analysis and practical examples are super helpful. The way he explains tax strategies and stress tests different market scenarios is impressive. This is a must-watch for anyone planning their retirement!
That's awesome to hear! Having a professional walk you through the numbers can make a huge difference. According to a study by Vanguard, working with a financial advisor can potentially add about 3% in net returns to your portfolio annually. Plus, they can help with tax strategies and planning for market volatility, just like Kevin showed in the video. Definitely worth the investment!
2:15 I love that Kevin couldn’t help but smirk while introducing Jim and Pam. IYKYK 😂 I like the dynamic income approach.
Thank you for mentioning the emotional selling. The whole "THIS is the end of times" while ignoring all the other "end of times" scenarios is only exasberated by social media. The people who follow a more disciplined "ignore the noise" approach tend to have better retirements. That's what I always try to do. I wasn't always good at it but I built that skill over time.
I love these scenarios, Kevin. Thanks for taking the time to put them together. I was wondering if you could do a similar “how much can they spend” with a combined total of $3M at age 57. This would be between IRA’s, 401ks, and some taxable brokerage.
I would have loved to see this without the legacy goal! Great video
Please clarify the following statement on your website: "We do not offer hourly work, but we do offer a very limited number of one-time retirement plans beginning at $5,00.00. We are unable to offer a free assessment to people not interested in a long term engagement." I can't decipher whether $5,00.00 is $500 or $5,000.
Variable spending is both a good plan and a necessary plan.
We are retired 2 and 4 years. Our income needs are literally different in almost every year through the first 10, and only later are expected to be more consistent. We also have determined our necessary spending versus our desired discretionary spending that our portfolio should support, and the difference is about 40%. Having a 40% cushion pretty much eliminates all major risk other than health and death! (Which are of course the more significant and unpredictable risks in retirement)
Dynamic spending is the only strategy that makes any sense, in my opinion. You can't just ignore market conditions and expect to have a successful retirement, unless you have oversaved by a sizable margin.
This is by the best video about retirement, with such useful guidance on tax liabilities , spending plans and financial market scenarios. I’m planning to retire in two years and want to make plans for it. I really like to use your retirement planning tool - how can I get started?
This tool is only available to financial advisors. I’d look into New Retirement.
@@foundryfinancial I use New Retirement and it is very similar. We love it and are about 4 years from retirement.
@@shannonm5307 Thank you for the suggestion - trying it out and it works well.
Great informational video. Appreciate your insight.
not sure how many years you planned for their retirement - 20 or 30?
love the analysis
Takes them to their early 90s. So slightly over 30 years.
Let’s address the elephant in the room!! With that size of assets what would they be paying you? Or any CFP?
What about a young widow whose spoused died at 52? I have not seen any models discussing this scenario.
Yup, I'm living this scenario in real time.
@@ivanvarykino8202 how you doing it?
Can we keep adding to a Roth Ira once retired? With income not coming from work but from pension, social and or 401k and or taxable accounts
No, none of those are considered "earned income", which is what you need to contribute to an IRA.
Thanks for the presentation!
It would be fun to play around with this software just to do a look see. $1k a month seems low for international travel. We're budget travelers living in Europe. In general I calculate 300 Euro a day for expenses. We just got back from Iceland and did Antartica last year and they were significantly more than that.
Wow this is great. Thank you!
I have a 150K annual retirement income. But 100K is royalty based, and it fluctuates a lot. 30K is from a 401K and it fluctuates a lot. The last 20K is social security. Even though my expenses are 100K, I feel I have to have a wide cushion because of my income variance. I am a bit paranoid about spending.
Very interesting video. Are reverse mortgages ever a good idea in your opinion?
You can look at my plan: 1) We are going to live in our pay off beautiful house until I die. 2) Only after my wife will sell our house and buy something smaller, closer to the kids. 3) NEVER a reverse mortgage!!!
Planners I’ve heard said It is the last thing you should do. Some people consider their house equity as covering long-term care, which he did not include in this plan at all. That’s just one example of using house equity that is not a reverse mortgage.
@@liverpool3469glad you can predict who will die when, that makes all this much easier.
@@teresawood6830reverse mortgages are a misunderstood tool. We have one, the balance is two hundred dollars! We are using it strictly as a credit line growing at 7.5% per year. It will only be used for true late life emergencies. It should be worth about $1 million by our mid 80’s. Cost us $10k to set up at age 62. NO RISK, other than the initial $10k outlay.
This is really helpful to plug in all those scenarios. Love that you can enter in your legacy goal. How did this plan factor in potential long term care needs?
Didn’t really get factored in outside spending level.
Why would you not mention the name of the software demonstrated?
Because it’s only available to advisors. It’s called IncomeLab
It's software developed for advisors called Income Lab.
Money.
@gracealleman4102 Financial Planning software is not available to consumers. It is expensive to design and proprietary. Consumers would want it for free, mess things up, and blame the software creator. You don’t ask to fly the plane when you go on a trip do you? Do you analyze your own X-rays? Why not? Because you don’t know what you are doing. Same with finance. 99% of the people watching these videos don’t have any education in these important matters. Financial Planning Designation took me 18 months of study and a 6 hour exam. It required knowledge of a great many subjects but most importantly required knowledge of those fields where I had to defer to other professionals. But go ahead, design your own retirement plan.
Great content. I wish you and every other financial planner would disclose your fees on these videos. This is a subtle sales pitch. Let's be honest. Your website does not dislose your fees either.
Thanks, Jim! I now feel more confident about my retirement plan. I am 62 and plan to retire in 3 months. Between me and my husband, we currently have about $3.5M in our 401ks (excluding IRAs and ROTH) and no debts (our house and cars are all paid off). Our withdrawal rate from 401k would be 2% annually (since we will have about $100k-120k portfolio income annually from our taxable brokerage accounts). We plan to travel around the world during the first 10 years of our retirement, then settle down in the States thereafter... Our budget for retirement spending is about $12k (can increase if needed) monthly pre-tax (we live in TX)... Given the spending scenarios, hopefully we can afford the retirement we've envisioned?
You could make 30k per month wheeling a stock like AAPL. Look it up.
@@ok2tmtsg why would you say hopefully you can envision the retirement you planned? If your brokerage account alone funds your plan, your qualified accounts are just $3.5 million dollars emergency fund. You’re not seriously concerned, are you?
It would have been helpful to see their investments
Great video
Are you a certain type of Financial Adviser?
My current FA has never presented this type of analysis
Do you provide this level of detail to all your clients?
I am 63 Wife is 66
NW $2.6
Liquid $1.6 - 401k / IRA
This is really great software. Definitely will be looking into this.
You might try a publicly available software called New Retirement.
@@erickarnell Thanks, I already have that. Always looking for more "tools"
@@ndiandy He told another commentary that this software is only available to planners / advisors.
This sounds crazy, they die with a million dollars in the bank and a million dollar house. People worry too much about leaving millions to their kids.
AMEN!!
I plan on spending every penny and when/if I need assisted living I’ll let the government pick up the tab…
Not crazy. One unexpected, long term illness could completely change the picture for them. In the US, bankruptcy is always right around the corner when it comes to healthcare. It's why many people are leaving the country altogether
@@DWilliam1that type of assisted living where you are indigent will suck?
@@FIRED13 Not really. I’ve seen people paying $12K a month next someone who is on the governments dime.
A somewhat serious question. What do you do when your spending capacity is so much higher than we could or would spend. Just let the portfolio continue to grow?
Or spend more. But yeah, most people just shift the money towards charity or legacy goals.
Strategic gifting. Be generous.
@@junecampbell771 Agreed. I plan to set up a DAR sometime soon.
Given that amount of net worth, I don’t think they need much financial advice.
What is the planning software? Is it only for advisors?
It is. But it’s called Income Lab.
@@foundryfinancial thank you. I use New Retirement, which is awesome, but I really liked the features in Income Lab.
Here is the problems, uncertainty and the cost of this plan not disclosed. Also, time value of money for conversions is ignored.
So it looks like they break even with roth conversions at 84 when there is probably a 75 pct chance one or both are dead. I have been debating on doing roth conversions and this has settled it for me. I'm not doing them because I don't care to leave my kids millions and dont think market returns will be as good as the last 30 years that I've been investing
Through software like this, you can plug in your plan, and then compare it to a plan that includes some conversions and see if it makes an improvement. They aren’t for everyone.
How much would they earn on the tax money if they paid what they owe not doing s roth conversion ??
That would be a great comparison. He did show the Roth conversion break even is at 2048. 24 years from now.
Probably I'm new to this topic, but when you said "income", the numbers on those pretty graphs, and the money they theoretically can spend ($10-11k/month), do you mean after-tax or pre-tax?
PB&J!
I’d love to know where you can buy a car for $25K. Given that as of today the average new car price is ~$46K and I can’t see that decreasing in the future.
It assumes they’re trading in or selling their car.
This gives me hope that I will have a decent retirement :)
What kind of new car can you buy for 25k ?
It always assumes they’re trading in their former car. I forgot to mention that.
Used, but NEW to you.
Kinda a Goldilocks story here. ex CEO buying used car on the cheap, old company generously paying for health care, living in a state (PA) that doesn't tax retirement or SS.
@@93rc69 I took from it that with software like this, you can plug in your own information and do what if scenarios and tweak it for your own personal situation. Agreed this particular couple did not have any worry for long-term care either, but just plug it in and evaluate the outcome.
You had me until the break-even at age 86 or so. That is not a good result in my book.
was this a reference to The Office?
What was your first clue?
Yes. He’s veered away from a Modern Family couple.
How about some models with ordinary people that don’t have a million dollars. Like 500-750k. Please
You have to retire overseas. That’s a different video.
These videos are ads. If you don't have $1M+, you aren't worth their time as a client.
@@Patrick-iq1do You are correct that financial advisors that take a percentage of your assets annually to manage your money aren't interested in clients with smaller portfolios. But fee-only advisors are happy to meet with anyone.
But that doesn't mean that "these videos" are just ads. There are TENS of MILLIONS of people that are on pace to have $2 million plus in assets at retirement, and many are interested to learn as much a about their options as possible.
@@YIWOTYAnd I am one of them. But I also know that a bunch of CFPs/CPAs/MBAs aren't spending all this time and money producing videos for the pennies that UA-cam pays, and certainly not just to be nice guys. - I'm glad that you are fee-only, I'm used to AUM, but you are a business needing to make a profit. That is just reality.
@@Patrick-iq1do At 42K subs, he's not that far from being able to make six figures a year from UA-cam, assuming his viewers watch his videos all the way through. Those looking for this kind of content (40 years old or older) are much more likely to do so compared to the younger viewer with a short attention span.
Reality amounts for us poor please! Try if your grand total of all is 100k only!°
Part time work.
This educational video is to attract customers. You are not a target customer.
I’m curious, if Jim and Pam had $4 million instead of $2 million could you roughly estimate that they could safely spend approx $22,000 a month in retirement? If $6 million then $33,000 a month?
No, not necessarily, because other variables like SS and legacy amounts are included.
So then it would probably be a higher spending amount? Sorry, I’m just trying to understand the big picture logic here.
2 million, I'm gone.
.
..
25k for a new car… was this video made a decade or two ago?
Presumably they trade in the previous car and 30k is still a solid new car.
show me a new car for 25K that you want to own
I thought that at first, too. Then I remembered that they'd be trading in their 7 year old car to make up the difference, so $25k is pretty reasonable .
Google
2024 Corolla LE sedan: Starts at around $21,900 and includes navigation and a Wi-Fi hot spot
Why do CFP's always use such lofty retirement #'s when in reality they are talking about 1-2% of retirees max. And NONE of those people are on YT seeking financial advice.
Actually we are on YT looking for financial advice! My wife and I only have our 401k’s which luckily have done very well and have $2M between the two. We have decent jobs, but by no means “rich” jobs and live a modest lifestyle. It’s very possible for regular people to have this amount and need/want advice to do our own retirement planning.
@@jnewby74 Hire a professional.
Suppose you started investing in your early 20s and got returns that averaged out to 7% per year.
Suppose you started investing 500$ per month and increased your investment rate by 5% per year .
At the end of a 40 year career your portfolio is worth 2.4 million dollars.
One person with a decent career trajectory can do that. Add a spouse who brings in an income and it gets easier (even just a part time earning spouse)
It’s actually ten times that many. But it all comes down to spending. I know a retired couple that have that much after raising four kids. Neither had college degrees and she only worked part time after they started having kids. But they saved, rather than spent. Paid cash for cars, no lavish vacations.
But that was their choice. Other people choose to go to the Caribbean or Mexico every year, get Starbucks every day, finance new cars every couple years, get a new iPhone every other year, etc. That all adds up.
Who enjoyed their lives more up until retirement? That’s up for debate. But the savers will certainly sleep easier when they decide to quit working.
As others have told you, your numbers are way off. It's probably 10% of retirees that are in this range and as noted, we love these videos. We have the time, the knowledge, the brainpower and the motivation to take advantage of approaches that make sense to us, after we think critically about what we want.