As a single person (with a good job), working longer has several benefits. I'm turning 58 this year and have a good nest egg, but its nice to get this perspective. Great video.
Yes I did it with 150k at 62. I have a pension of $1800 and 1600 from Social Security. I take 5k a year from my investment. The only difference is that I moved to the Philippines. A lot cheaper than the US. I live very well and comfortable.
I have walked away from the work world. I am short 10,000 short of 150,000. Pension and ss total 3300. Doing just fine. GOT RID OF DEBT. And wasteful spending. I refuse to work til i die. Life is good here!
I quit work at age 53, I had my home, 2 cars ,and $ 100000 in the bank and some investments. I’m 82 and I’ve been retired 27 yrs with no debt. It can be done if you change your lifestyle accordingly to your monthly income.
Disagree for today's generation. You /we didn't have the college debt, out of reach car payments and mortgages Fact in 1970 the income to house price ration was 1-2 (you made 20k your home cost 40k).....today it is 10-20 times ratio. Plus other debt, and Biden economics were everything is 30-50% higher. It's a different world today brother.
In 1970,I was earning $ 5800 and my home costs $13500 I was in supervision at a fortune $500 company . I understand what you’re saying but,our kids were convinced back then you needed that college degree to get ahead. Many kids went into debt to achieve that premise. In reality the trades were where jobs that were needed and those that persuaded them got ahead more rapidly than the others. Today what the kids are learning is woke subjects ,gender equality,climate crisis. The only people getting ahead is the professors who earn $200000 for teaching this garbage. $my Grandaughter is paying $80000 a yr for college, these kids can’t even read,write ,spell , know simple math unless from the phone. Our children have been dumbed down. Today you need a masters degree to succeed,they will be $1000000 in debt! Even at best those jobs are hard to find because of the competition.
@@michaelchristophergutierre7244 So you don't think you'll be debt free by 52? Look, times have changed, yes but you have to take charge of your own life and finances. Invest, get debt free and save for your future. Incomes are higher, do what's necessary to succeed not make excuses!
Retired after 42 yrs as an RN My pension was over 600k and SS 2700 I also had saved 401K and PERS from another job as a nurse. I feel very blessed and can’t really believe it’s real
Don't be mean. Every video can't cover everyone. If you don't like what he's saying it's as simple as finding someone else to watch or find your own information. This is his channel so he can teach what he wants to. I don't mean this in a nasty way but really, if he's talking more to married couples here then single people aren't his target audience but there is someone who's targeting single people. Maybe even check his other videos.
That means you have enough for 17 yrs, if returns are 10%. It’s only 11 yrs if we use 6% like the video says. Is that how you planned it? Some people just live on Social Security though, in a low cost area.
This is a good starting point. One thing you have to account for, in addition to the listed items are the ‘one-time’ expenses, such as HVAC repairs/replacements, car replacement, etc. The biggest factors to try to take care of before retiring are to have a paid off mortgage AND no other debts.
That’s why it’s so vitally important to run a budget for many years before retirement. That will give you a realistic yearly average of actual spending. And if it’s been to long to include things like a new AC or a roof then add that in over say 5 years or whatever when making your plan. We pay for all of our vehicles cash but I still account for that monthly in my projected retirement needs. Of course most people are too lazy to go through the hassle of making a budget.
I do no care if I die without my house paid off... My issue is can I afford the mortgage payment. I cashed out a pension and made a 'trust' fund that is more then my mortgage. It is just like having the mortgage paid off except at the end of 30 years I (or my children) still have the amount of the trust. My mortgage is at 2.66% and I would be a fool to pay it off early. It does not matter if you die with your house paid for or not... it matters how you live before you die.
Isn’t that the truth! I thought my husband and I are doing well to build a financial foundation for retirement but we are nowhere near a million! (He’s retired but I’m eight years younger at 60 so still working). It’s just not necessary.
We purchased a two bedroom condo on the Black Sea for $20k You can get by here on $300 a month if you just stay home. Live comfortably and travel throughout Europe for $1200 a month. No one says you have to stay in the States.
Thank-you for the "real-world" scenario that many of us will likely find ourselves in. I'll likely "only" have double this amount by 62 AND continue working part time to keep living reasonably. I'll have my home paid off in about 8 more years and look forward to being debt-free before 65 and staying that way!
Yes, I am 70, and can live very well on my SS. I sold my home in CA and have it invested with other savings. I'm renting a nice place for only $750/mo. But, money should be invested for future "unknown things" mostly healthcare issues.
@@paulbunyun-xi9by No, you would not have to live in a cardboard box. One could live very well with SS (incl. Medicare) There are millions of people in the world who would give their right arm to have SS w Medicare and $150,000 cash!
@@ThePianoMan1953 oh we are talking about all the people in the world..because in the USA $150K will get you no where! you need at least 1 million in investments, sorry
@@paulbunyun-xi9by Nope. In the US, very few people have anything even close to $1,000,000 and get along just fine. I am wealthy but could live just fine on my SS. But, you have to live within your means, meaning, I would not be living in San Diego (although, I probably could if I had to because I have a talent for "making due" with what I have) If you think people need $1,000,000 to live a happy life, you are misguided.
People need to have a detailed plan and an accurate expenses calculation. I created a spreadsheet which takes all different expense categories into account. I even added things like phones and computers that only need replacing once in a few years. A car replacement down the road, potential house repairs (like new water heater every 10 years ). Etc. it also takes into account if I want to live abroad for a few years. I can change my lifestyle on an annual basis. It’s not ready for prime time release but I’m very happy with what I’ve done. I’m happy with all the variables I can change and see the effect of what age I run out of money ! For a full year I kept track of every dime I spent and which category the money was spent in. My actual spending was within 2% of what I thought it would be at the start of the year. I would definitely recommend everyone keep track of their expenses for at least 1 year. You will have a better insight for planning
Makes me feel a lot better knowing I have way more than $150K saved up and I have over 15 years left before retirement. I'm excluding SS for my calculations, and will treat it as a bonus, if I end up getting some part of it. Thanks for the great breakdown and explanation, Drew. Have a great weekend!
That's sort of how SS was designed as a cushion to your regular retirement savings not the main source of retirement. congrats for being on track to a well funded retirement.
I am divorced at 57. I have learned to live well under my means. Child supports ends in a year and a half. The biggest hurdle I see that you didn't touch on was out of pocket health insurance costs which in my estimate is the single reason I will work until 65
Living well under your means should mean you qualify for medical as it comes out of your property taxes each year. Look at all the people collecting it, that have paid nothing towards it. A Dr made me promise to utilize what we paid in on all these years in taxes. If you qualify, use it. No shame in it, you paid for it.
Almost a year left of child support for you now. When men pay it they learn to live below their means. He left out a possible divorce for the couples example lol
I agree with the other comments I love how you worked in a budget for millions of people that don't have tons of money. The only thing you didn't touch on was health coverage which can run way too much money. I'm waiting till 65 which is in 3 years for Medicare
IMO, Retirement should not be an option unless you are debt free. I just retired (sort of- I still can work in self employment), at age 64. My SS equals my monthly debt (about 1k/mthy), and I have roughly 145k in 5% cd's and high yield savings and own my home. Since I am debt free I only spend accordingly. I still have tangible assets to sell off which can yield another 50k if I'm lucky. For the 1st time in my life, any money I earn can go directly into savings. I'm a single guy with a cat and no family whatsoever. I think I'm in a lucky position but still worry. I guess one can never have enough just to be sure. Good post, Thanks.
@@dijonalexander3666 I will probably be in a similar situation when I retire. I have very few family members left and it's possible I will outlive them. I also can't count on them financially, so I will be 100% on my own in retirement. My parents didn't even raise me and didn't save for retirement, but us "kids" help them financially so they aren't homeless. They hit the lottery so to speak by having children that help them financially even though they didn't raise us. They would have been homeless without our help.
You will die with your house paid for... do you get a star on your tombstone? If you die with money in the bank that is the cost of an adventure you never lived to take.
I can’t believe all of the negative comments. Every financial person knows that everyone’s situation is different, and I think the readers need to adjust starting numbers based on their personal preferences. Income requirements are not the same in Louisiana as New York or LA, and not the same for someone who wants to travel, and someone who wants to sit on their couch and watch TV. These are guidelines, and it is great information. I live in Ohio, and I think I can certainly retire on less than someone in LA., but most financial advisors say $1 million or more. This is more realistic for a lot of people.
Right I'm thinking those "financial advisors" are hoping you croke, so they can skim off the top is what I think. Sorry but that's how I feel about financial advisors. No harm intended towards "financial ekg" it's of my opinion he's being honest and trying to help. Yep budgeting, and situations are different most definitely. Get rid of debt first and foremost, understand needs versus wants, see what you can live on cheaply with some leftover, to add to your kiddy(As I call it)/future and let it grow.
I like your style of explanation and examples!! You did an excellent job making it easy to understand the various situations and not make things overly complicated as so many others tend to do. Keep up the good work!!!
I retired to Jamaica at age 60 on my Army Reserve pension which is $2,600 per month. I have a TSP with much more than 150k that I have not touched yet. I will wait until 67 to take SS.
That’s hopeful ❤I have been thinking about retirement but I’m turning 57 this year and don’t have “enough” saved according to most financial advisor. You gave me hope that I can retire at 62 or earlier 😊
Just get serious and prioritize spending now so you can increase your 401k or IRA savings. It’s amazing how much ground you can make up in just a few years. You don’t need a million. You will be fine!
In 2008 I was laid off, lost half the value of my IRAs, and virtually all the equity in two rental houses I owned. Couldn't see a job on the horizon and I was 58. I had $143,000 in my retirement savings so I did the only thing I could do -- I retired. Oh I had a year of Unemployment benefits (and I did look for work) but that's about it. I had to short sell one house but I took some money out in the HELOC on it. I waited as long as I could for the market to improve but it didn't. It took some juggling and a bit of luck and a lot of careful planning but I made it to 62 when SS kicked in. I live in the other "rental" but when I bought them I did so with the thought I'd live in them one day so I bought really nice home so I live in a really nice home. I paid off my mortgage shortly thereafter. I live on SS and a tiny pension from a former employer and it's plenty; with no mortgage (of course there are other house costs but about $800 per month all in) I have hundreds left over every month. I did have to dip into those IRAs especially in the early days but I have more in them now than I did when I retired and other than RMDs (which I reinvest) I take nothing. I've always been frugal and lived below my means but even so I eat great food, drive an old but very reliable and comfy car and have no worries about money ever.
For a single individual, the biggest issues are not the two you mentioned. Of course you only have one 401k/retirement plan. That's all you paid into. But with respect to Social Security, as a married couple even if only one person paid in, SS pays a spousal benefit. They are basically "stealing" from single individuals to pay more to married couples. I am not talking about survivor's benefits or about couples where they are drawing individually. The biggest difference for single individuals is that it costs so much more to live as a single person than it does to live as a couple (per person). One house, one utility bill (per provider), you can even get away with one car. Your example shows just how much harder it is for the single person. Plus, you started with a couple, two incomes, two retirement plans, two social security checks, starting with $150k total. That is $75k each. The single person saved twice as much, at 150k. For a proper comparison, the couple scenario should have started with $300k.
Yes, it's much more difficult living as a single person with only one income. But there really are no guarantees that getting married will be the better option. I know a woman who was married for decades to a man that was a business owner. She decided around age 50 that she wanted something different. She found a new man who was a high income earner and promptly divorced her husband and raked him through the coals in the divorce. He had to sell his business that had been in his family for generations to give her half of it, he had to sell his house to give her half of the equity and she also got half of his retirement.
thank you for posting this. More reality than people realize. So many people 'retire' with less than this and HAVE to make it last. I know many people that never planned, never saved. Although it's tough, they survive on SS or SSDI alone.
My dad never put away any money into a 401K or anything else. He also had no pension (most people don't have those these days - I"m fortunate to be a school secretary grandfathered in under the original NDPERS plan). My dad worked all the way up until he died at age 80. He loved working and it kept his brain active, though it was hard on his body. I think he had about $800/month in SSI and then whatever he could make as a traveling salesman. I honestly have no idea how he did it, but he always kept enough on hand to pay for his funeral expenses......and that is exactly how it played out in the end. He had very little to go through and had about $1,000 remaining after everything was taken care of. There was no bickering amongst us kids, and we were able to work together to finalize his affairs within about a month. This isn't the route I want to take, but it is one option.
My parents are in their early 80s. I'm seeing the devastating effects as their physical/cognitive health declines. The cost of in-home care or assisted living should be discussed much more by financial planners.
I worked until I was 70 years old, and then collected Social Security, which was twice as much as I would have gotten at age 62. Our expenses are a lot more. People don't realize how much health costs (including dental) can be. We have a supplement Medicare insurance plan (which pays everything), and our premiums are nearing &550 a month total. If we went with a private Advantage insurance plan, our monthly premium would be a lot less, but we could be hit with deductibles, co-pays, co-insurance, etc. Then there's drug, dental, and vision insurance. We drive fairly new cars, mainly to avoid car repairs, but our savings might not be enough to trade in for another new car. I don't know if your calculations account for all this.
Our calculations take into account the historical inflation average but obviously everyone’s situation and timing is different. Thanks for sharing your scenario!
Not sure where you live but most advantage plans do not have deductibles and the drugs are included in the plan and most of those don’t have deductibles…your paying 6k a year and in some places max out of pocket on plans is 3k to 4k…you get dental vision and other things included in advantage plans, I’d revisit them if you haven’t in a long time, I’ve done all types of Medicare plans in multiple states for over 9 years- it never makes sense to stay in a supplement unless someone gets really expensive infusions or something like that and even then the max out of pocket once it’s paid - everything is covered 100% medically,…
I see myself retiring in a lower cost of living country. The cost of living in the US has become unbearable. I am okay working a few more years on something I like and enjoy. This video puts me at ease
Really good writeup that explains the nuts and bolts of how to determine a ball park figure with a set of reasonable assumptions. In reality, 150K is not enough unless you are willing to make some modifications and get lucky. You gently danced around that fact and showed them the way without ramming it down their throats. The reality is things happen that blow the budget out of the water. Health and family issues, black swan events etc. If something happens early everything changes resulting in a death spiral if not addressed. If you are not cash flow positive from the start including saving for contingencies the budget most likely will not work. It is easier to keep working than trying to find something when you are 70 to make the numbers work. You didn’t mention reverse mortgages which are an option of last resort, as well as moving to a cheap location. Loved this. Forty year accountant BTW.
I love the math skills and enthusiasm of financial planners, they do a great job advising on how you can retire on whatever that number may be. However, the greatest assumption being made here, is that these individuals who over 45 years did not manage their money are going to automatically have the discipline to follow a financial plan, when in reality they have never lived on a budget. But the advise is sound, but the discipline required, leaves these plans as wishful thinking. I would like to see a survey of customers 5 years into retirement, and see how they are doing with the plan and were they able to follow a plan. I look forward to any comments.
some turn it around. I never saved and a few years ago I had a moment of clarity. I now have absolutely no debt and my house is paid off as well. I was previously a payday spender. Now I have significant savings and plan to wait until 65 to retire. this video comes at a good time for me.
A lot of people are destroyed through no fault of their own, by divorce. I saved and scrimped and worked like a dog, and it cost me a fortune to divorce the ex who refused to work. So yes some of these low retirement fund people were irresponsible, but some of us just ended up hitching our wagons to the wrong person.
Well I guess you could call us retired (5 years now) hubby has a side hustle job and takes care of me. I am basically disabled (as I almost died three years ago,) the only "help" I get is healthcare and our taxes pay into that, which I qualify for as we live well below the poverty level. We have a decent nest egg on paper, it was a bit more than the video poster mentioned then 2020 hit, which hit the nest egg too, but that goes up and down anyways...ride the waves right. We live well below the poverty level and have been for a lot longer than just the five years, out of necessity at first. Now it's a choice to try to hang onto, and grow what little we do have. It definitely takes discipline to live comfortably without wants or the normal consumerism lie everyone has been fed. That's it in a nutshell wants, versus needs. Our needs far outweigh our wants. What we want, (which is needs), is to live out the rest of our lives, as comfortably as possible without stupidly wasting through what we're trying to build, and have comfort and less worry, the rest of our lives. The current world we live in is far from peaceful though sadly. I also noticed, the less we try to use each year, keeps costing us more, so hopefully the nest egg can carry us on to the other side of this world, whilst still growing to get us by. But so far so good, still trying to figure out better ways, to keep adding to it without giving the greedy big g man too much, if ya get my meaning? So we have to make our own four walls the happy place, in this not so nice world, that seems to be utter chaos constantly. Not sure I answered your question or not, but I hope I did.?
I laughed at your rainbow, unicorns and pixie dust comment. That’s the retirement route I took two years ago at age 57. 🙂 No regrets. I started downsizing years ago and enjoy living with less. Of course money does fly out the door fast without employment income coming in. Hoping not to touch 401k till I’m 62 but may have to figure something out as I go. I like your comment about earning money doing something you love. Figuring out as I go and that works for me. I don’t like to use maps to my next destination. I’d rather wing it and enjoy the journey. I didn’t want to wait till I’m too old to enjoy retirement.
This is timely that I find this video. My employer (of 37 years is offering a severance).. I’ll be 62 next Spring. I’ll have SS and Pension and 401k for income. I only owe a mortgage, which monthly payment is relatively low.. lower than any rent would ever be. . If I decide to work at all it’ll be part-time .. I honestly think I can make it !!
Think? You are sentencing yourself to a small SS check for life. Don't you want to think it through and be sure? How will you feel in 20 years when you realize you made a colossal error?
Yes. I did it with way less. It's all about getting rid of debt first and not adding debt later. Unless you live in a really high cost area, NY, Boston, LA, etc it's easily doable As far as continuing to work, many people don't have the ability to work anymore. Retail is Not an easy job for someone with arthritis or glaucoma. In addition, there is a good amount of age discrimination. The job market is strong in some sectors and regions and weak in others. If you have the option to take ss, even at 70% less, while you are still able during the "go years" you should go for it rather than wait another 5 years or so. Not only is my ss (includes survivors benefit) more than my working income, I save 500 to $900 a month that I use to travel, and just fun money. Thank you for providing information
Enjoyed your video at the moment I have 401k and a small old company pension plan in the uk and maybe social security from both the uk and here in the states too
I will be retiring next month. For my expenses, I've used credit cards for every purchase, except for small things where I use cash, for the past 2 years. I know to the penny how much I spend every year. I also categorized those expenses in a spreadsheet, as much as possible, so I have a good idea of where the money went. I now know going into retirement what I will be spending, and where I can cut if needed.
Bravo bravo bravo! You are way ahead of the game because like you said you know darn well what you will most likely need. You also made a great point that many overlook and that’s what you can cut out if you needed to. 99% of the population knows absolutely nothing about how much they spend month to month.
Good analysis. And one of the benefits of keeping distributions low, is that you might not have any tax liability after subtracting the standard deduction.
Drew, I found an easier way to retire. My wife of almost 25 years passed to be with Jesus Aug. 2020. I retired on supplemental SS and a small pension at 62. I sold everything by April 2022. I had about $150,000 with $2,295 monthly. I moved to the Philippines end of April 2022. Prices here for everyday basic bills are about 60% less than the U. S. Just thought I would share my idea. Thanks and God Bless!!!God is faithful.✝️♥️🙏
@@DL-by8elPhilippines allows entry with a tourist visa of $30 per month up to 36 months. Then you must exit the the country and return and apply for another 3 years. There are ways to get residency as well.
Sorry for your wife passing away. I've recently been looking into taking early retirement and the Philippines is in my top 3 places to live. As a single woman without a huge savings or social security benefit I won't be able to afford the US unless I make lots of money!😂
I can answer this question! No, $150K won't cut it. Especially if you live past 82. My advice would have been to keep working and not take SS until at least full retirement age. For what it's worth (not much)
@Jims-VanLife, there are always individual variables which you should plug into this video retirement scenario. As example, my brother-in-law had some health issues so he took his SS at age 62. It was a smart move. He passed away last year at age 69. Check your family history, both my grandfather's passed at age 59 and 67 and my mom at 75. My Dad did live to his early 80's but had dementia since his middle 70's. In other words he didn't give a damn that he was broke at age 82. He was a vegetable by that age, not a care in the world.
If your health is good- why work until you drop. Trust me people I just lost my wife to cancer at 56. We had plans but remember god always has a plan. Retire as soon as you can and live.
Hmmm... so sorry about your wife and the other poster's brother in law. My dad broke all predictions on his family's genetics concerning longevity. He didn't plan to live long as his dad died at 59. My dad just passed away at 93 and although frugal, didn't make the best long term decisions. I took over my parents' finances in 2018, and got all their debts paid off. My husband and I also built a nice 1600 sqft home for them back in 2003. We (my husband and I) adored my dad, but his poor planning (mostly deciding to carry debt into retirement) took a toll on me. So although he had a "nice life" in his early 60s, my 52 through 57 years were extremely rough. (He fell for a scam in 2018 and lost what he had left.) My mom is still alive at 90 and I'm in the process of applying for Medicaid for her, because I have a 17 year old who needs me too. I'd love for my mom to move in with us, but her dementia is pretty advanced. (And she's just a difficult person by nature.) Over plan, over save, think about your kids and grandkids.
Great video. I would like too see how medical expenses, savings and vehicle replacements etc…. would factor in. These will be needed throughout your retirement. Again great information.
I think the single should look into housing subsidies or maybe even independent senior living places (lower end type). In my neck of the woods independent care is $1700-1900 for a 1 bedroom all in for the non glamorous places. (maybe slightly lower for a studio) Everything is included. weekly housekeeping, 2 meals a day , all utilities including cable and wifi off the building system. So I'd guess they'd just have a cell phone bill and medical/dental insurance costs. the other side would be subsidized senior housing and that's sliding scale so best guess would be in the $800 a month range for that income level plus some or most utilities and food costs . at around $2000 a month income , they might qualify for some food cost assistance in some areas and there are food banks to help stretch their food dollars via charities. Or the single could live in a van down by the river...very low utility costs involved down by the river if you can filter your own water, and draw electricity from the sun some of the time. You see it every day , people on $1200 a month or less in subsidized housing , scrimping away, but they are doing it. So at $2K a month plus a drawn down in a low cost state it's doable., but you would be on some government assistance.
I can just imagine a 80 year old filtering their water out of a river. No doubt that happens all the time. Thanks that's my plan for the future. They make those drinking straws where you can drink out of a creek and maybe not catch diarrhea. That's my plan after I buy my tent to live down by the river
Thank you for making this video. I watched other videos (not yours) but this is the most realistic video. Based on the majority of Americans who retire who have less than $500k in savings for retirement.
I would move to a low property tax state , and use up $150k pay off the house and all other debt and start withdrawing SS at age 65 for about $2000 a month and qualify for Medicaid.
If you're on Medicaid, you lose some of your agency and autonomy. You have to do "what they say." Medicaid is never a good "plan." It's the last resort for the truly destitute.
When it comes to "cutting the cord", that would probably be the last thing that we would do. We are in our 70s, and cable TV (& DVR), with numerous channels, is very important to enhancing our lifestyle at this age. Being older, we stay at home a lot, and cable TV is our main source of entertainment. The Internet is probably our second source of entertainment. Our cable TV, Internet, and phones are a package deal, which costs us a little over $200 a month. That is money well spent for us.
Another option.....go to the right place in Latin America and that $150k turns into virtually $300-500k overnight, and then you'll have a lot more money and a more vibrant and welcoming environment to enjoy in retirement!
Thanks for the video. The biggest reason everyone has some trepidation about retirement funding is uncertainty. As you point out, you can’t control external factors. However, you can, to some extent, control both your income and expenses. One thing to keep in mind is that, if you do take Social Security at age 62, you can’t earn over (currently) $21,240 without having each extra $2 in income decrease you benefit check by $1. So, by delaying the taking of SS, you not only get higher monthly payments for the rest of your life, but you can also continue to make as much as you can to increase the retirement savings. Also, since most people won’t be eligible for Medicare until age 65, good health insurance is expensive and will have to be paid out without income. My plan is to keep working until 65 and waiting until age 67 to claim SS, living solely off of retirement savings for those two years and getting supplemental health insurance (much cheaper once you have Medicare). The trade off, of course, is that I am losing the healthiest three years of the rest of my life for the ability to be better off financially for the rest of my life. Everyone has their own risk tolerance and circumstances, which is why a good financial planner is important. When you do run out of your retirement savings, you will not be in control and will be forced to cut expenses drastically. Proper prior planning can prevent this from happening.
I am at that point right now at 65, but loathe the idea of not getting the maximum amount if I don't wait until 66 and 8 months which is my full retirement age, the 21,240 cap doesn't really bother me because I don't plan on earning more than 1000 a month maybe doing some type of part time work , on the other hand I am just burned out from working in a production facility for 42 years it is hot, loud and smells of chemicals and hate going there any more , and think at some point a person has to put quality of life over some money, another that I consider is if I retire right now at 65 years old I will get 2200 per month but if I wait another year and a half I will get another 200 per month, but I could easily make up that lost 200 per month just working one day every week per month doing something easy and only a few hours , but I would be locked in to that lower SS payment forever and what if I couldn't work as I got older? another thing as I continue to work I am making a lot more money per month than I would on Social security and still able to contribute to my 401K and other savings ,once I get on social security I won't be able to save any more money , I feel better being able to save for emergencies and so on , another thing I consider if I go off my employers healthcare I will have to get medicare which does not have dental or vision coverage and only covers 80% of medical expenses I am not sold on Medicare advantage plans ,so I would have to get more insurance to cover that 20% or basically more of my limed income will have to go toward insurance, another thing I dwell on is how long will I live, maybe I should take the lesser amount and enjoy what time I have, Its a lot to think about
@@bluemouse5039 You’re right, it’s a lot to think about. It sounds like you’ve done your research, so my advice is to make a decision. One thing to think about is that if you die earlier than break even point after waiting to get SS, you might never know you made the wrong choice. However, if you took it early and live until 90, you’ll remember your decision every check after break even , until you die. Good luck!
@skeller61 You are very wise. So far, everyone that I've known that retired early has ended up struggling financially in their later years. Mostly due to them underestimating their life expectancy. It's much better to work as long as you can and save because it's easier to make money when you are in your 50s and 60s and healthy rather than try and scramble to survive and re-enter the workforce when you are in your 70s or 80s. I'm also not going to collect my SS until age 67.
My biggest worry when retiring at 62 is the cost of "health insurance." To me, health insurance is very expensive, and now car/home insurance are rising too.
Car payments are over $500 a month now for reasonable payoff time. Home maintenance will surprise you with appliance replacement, plumbing repairs, etc. Forget world travel for any of these examples, because it is extremely expensive now. We had over $10,000 in dental expense in a single year at age 74. I would not try to retire at 62 with such small savings as $150,000. Too many surprises out there. Thanks for the data, Drew, it was a valuable experience in doing the math, and with any luck, your figures may well work out.
Thanks for this, interesting, I am going to retire end of 2024 at 64, spouse will be 63, pension will be 3000k per month, SS for us both will be 3 k per month. We have about 30 k in a HSA that we never touch. Also have 300 k in savings. (currently in CDs most at 5 percent) no mortgage, no car payments, hopefully this will be enough.
@@yourfinancialekg I hope so, one always wonder's if they did enough. To late now, I think we will be okay. We have been maximizing our HSA, definitely would have done that long time ago, but wasn't offered until just a few years ago. Highly recommend anyone that has the opportunity to do HSA to take full advantage of it.
Money can be replaced but time can never be replaced. One must consider how much time they have to enjoy retirement before they get too sick and eventually pass .
Releasing yourself from the trap of employment in the system does not mean work ends. You can keep busy doing all kinds of things outside the trap of the system and at your own pace free of stress. Stress is a killer. @@ambethk77
I have a Roth IRA that i put my 401k money into after being laid-off. Along with all the money i received from my former companys "profit sharing" plan. I combined & deposited all of that $$ into a Roth IRA. I then got into my new employers 401k and deposit 8% of my bi-weekly check into a seperate account. So i basicslly have a Roth IRA thru one Financial Company & a 401k with a different Financial Company. I just turned 59 and hope to be done at 62.
I’m planning on retiring at 62,I’ve got 300K in savings my monthly expenses are about 2,000, my social security will be around $2,100,i think I’ll be able to retire at 62
Glad to hear someone acknowledge spending changes. Most people's spending goes down as they age. Just the basics at some point in life. Included in reduced spending would be taxes. In the scenario presented none of that income would be subjected to income tax. Also a SPIA from $125 of the $150k would throw off a married couple in excess of $10k per annum (guaranteed 25 years), keeping $25k for an emergency fund. With a paid off house and little consumer debt a couple could live very well on SS and $150k.
I can currently live on 2500 just barely. doesn't account for unexpected expenses. I assume He is assuming the person owns his home and is in a low tax area. social security will be cut by 25% in 8 years. congress has had decades to fix it. I don't have any faith they will do the right thing.
Thank you for this video. As many others have mentioned, this is far closer to situation than most other videos I've seen. I'm single and eligible for retirement at work. I'll have a FERS pension, but started putting money in my TSP late it will not be much more than this. I'll also have SS. If I retire at 62, i expect to work at least part time so that I can supplement my income and continue to travel.
agreed. At 62 there is no coverage that is free, unless you are at poverty level income, and even then the coverage in some areas is horrible. I live in Florida and the deductibles and copays will kill your savings.
I really appreciate your example. The only part I’m struggling with is a gross amount of $50,000 for 2 people. That seems very conservative even if they are frugal.
Finally!!! I am able to understand getting to retirement! Im so happy! I dont need a million dollars Lol! Thank you so much! Your explanation just clicked for me. I finally feel optimistic about getting to retirement. Its totally doable!😊
Thank you so much for this wonderful video. Your explanation is so clear . I'm 62 still working making $100K a year. I'm thinking or retiring at age 63 but after watching your video, it looks like I need to work till age 65. Again, thank you.
Me and my wife have 300k saved .all post tax money. abd will be retiring in 3 years and will wait abd draw ss at age 65 whivh will be only 3100 a minth but no debt is the key
If you are not debt free and you cannot afford health care outside of your employer plan, your earliest retirement date is probably Medicare age of 65 -- even if you have more than $150k. Better than that under the same circumstances is waiting to retire until Social Security Full Retirement Age (66-67).
I retired at 62 and took "Obamacare" until age 65. My only income from 62-65 was Social Security so I qualified for a large subsidy. COBRA was very expensive... that would have delayed my retirement.
@CaptainQueue You are correct. A little known fact is retirement used to be age 65 for everyone in the eyes of the SS administration. People think that their elected officials really love them and only want the best for them and that is why they started to offer early retirement at age 62. If you start collecting SS at 62 you will get 70% of what you would get at full retirement age which is for me (born in 1958) age 66 and 8 months. Between age 66 and 8 months and age 70 the benefit increases by 8% per year so the intrepid worker that waits until age 70 to collect will get almost double the SS benefit than his age 62 comrade. So if I had started collecting age 62 my check would have been about $1800/month, if I wait until age 70 it will be about $3400/month. My spouse is going to wait until age 69 to collect her benefit will be about $3200/month. So just our SS alone will be $6600/month that is just shy of $80,000.00 per year. And that is just SS not our pension and investment savings. The big question is not "do I have enough retirement income to I pay my regular monthly bills?" but rather "do I have enough retirement income to pay my bills, pay for random stuff that happens and also have some fun?"
I was able to retire at 57 but I have a pension and I substantially reduced my expenses (25 percent). Early retirement is possible but you should reduce expenses or increase your income (take a PT job etc) for better security. It would be helpful to see the 4% rule in your video. The rule generally says you can pull out 4% from your investment account indefinitely. This assumes you will earn more investment monies per year than you pull out (6% return per year in video but I assume 7 % return so I can cover a 3% inflation rate). I did this 4% calculation on my investment account and it tells me the maximum amount I can pull out of my account. If I can live on that income (along with SS) then great but if not then I need to reduce expenses, work longer, take a part time job in retirement or move to a cheaper area to live.
@@yourfinancialekg I am disabled, 58 years old and have $50k to my name. My only "income" is $1932/mo SSDI. My budget accounts for every single $. I buy T-bills every month. I will be fine. If I can do it, most people should be able to.
TY. Now, I'm a bit more hopeful. Change the single scenario to I want to work a seasonal job, which I should take home about 20K, expenses, I like the 40K. Delay SS to full retirement age for my birth year.
Here is another way to make that "retire single at 62" scenario really work;-- ya gotta MOVE to and LIVE IN... an area where your dollar goes far. So think rural Kentucky and NOT Southern Florida. Think rural Mississippi and NOT anywhere in California. Areas in America vary greatly in COST OF LIVING. You gotta live where the cost of living is LOW.
My SS will be about $1582 at 62 and my plan is to be debtfree and RV fulltime,my 401k/Roth will combine for $128,000 me and my wife should be ok in retirement.
@@DrSchorThe sale of our home and our RV and truck will both be paid off in 1.5 yrs and our other debts will be paid off in 3yrs and and I’ve calculated our RV total monthly expense $2300.Oh I base our retirement off of my finances I didn’t include her $1700 SS she brings.
It also depends if you have a paid off home as well. I do and have retired at age 61 and have not had to touch any investments. And don't plan to until I have to withdraw from my rrif in canada
Question: 1. what about if one of the people die? You lose their SS. 2. What if one or both become very ill or disabled? Seems like either of these will really derail these plans.
A survivor benefit helps, but for many of us, it still means our budget is cut beyond comfort. It's often family that tries to bridge this gap. However, recent studies shop about one-third of elders are at risk of becoming "elder-orphans" with no one to advocate or help them. Having a network of people who can help you, and who you can help, is even more important than just income when you are older. Develop your tribe if you don't have one!
Most of us do not have a pension or anything other than what we have saved and invested. Most likely will not even get SS that have paid into my entire life. What do we have to look forward to?
I’m 58 and plan on pulling out at 62. My Wife of 18 years is dead. Well after this September is dead to me. We call her “EX”. Haha. She bailed on me of her concern of having enough retirement funds. Of which she couldn’t identify that amount. Since she bout me out of our marital home and we split our real estate assets, I’ll be headed over seas with $240k in pre taxed USD and $220k of post taxed USD. I still have 3 solid years of income of $90k a year and shall. Onto use to be debt free. I’ll buy my home as an expat for $150k and car with cash. So I say to anyone going through what m experiencing, let them go with a smile. Who’s laughing now!!! Bless her heart.
The cost of healthcare is what's not mentioned here. Assuming $8000/yr/person for premiums and $5000 in deductible, $50K/year is no where enough if staying in the US.
Question on SS. If you start withdrawing SS at 62, with the $1800 a month figure, that’s $108k after 5 yrs. Is it worth waiting until your 67 for the extra $600 a month, especially if you 401k continues to grow because you’re not withdrawing $1800 a month between 62-67?
Great question. Every SS decision is based on the individual situation. I would rather delay SS as long as possible but sometimes because of assets that is not possible.
SS benefits are based on the 35 greatest earnings years. Some can replace a low earnings year in the 35, increasing the benefits. Depends upon a person making a decent income post age 62.
By jetting out of the USA to retire in South America, all of the issues with health care and inflation are crushed out. $1,800.00 per month in beach towns in Mexico will get you an insane 1,000 sq. ft. condo 3 minutes walk to the beach. You can live on a lot less than that but it's just an example of how leaving the USA doubles your money.
Dang, I retired at 58, $200k, and a pension that covers most of my necessities yet I still worry about having enough. Been thinking about a roommate or temporary jobs. I'm planning SS at 67 or older but meantime I want to have fun and travel. I'm not sure i have enough.
Great presentation. Has made me see my ability to retire quite a bit differently. I thought i was doomed not having at least $1M saved up already but i guess i might not be. Thank you. "I have 3 kids and no money. Why can't i have no kids and 3 money?" - Homer Simpson
As a single person (with a good job), working longer has several benefits. I'm turning 58 this year and have a good nest egg, but its nice to get this perspective. Great video.
Thanks for sharing!
Yes I did it with 150k at 62. I have a pension of $1800 and 1600 from Social Security. I take 5k a year from my investment. The only difference is that I moved to the Philippines. A lot cheaper than the US. I live very well and comfortable.
👏
The only difference is a MAJOR difference. I'm out to South America at 62. Cheers! Hope all is well in the Philippines.
Nice. I'm looking to move to Philippines when I retire also. Where did u move to in the Philippines?
Did you pick up an 18 year old bride there too?
Only différence makes absolutely all thé différence LOL
I have walked away from the work world. I am short 10,000 short of 150,000. Pension and ss total 3300. Doing just fine. GOT RID OF DEBT. And wasteful spending. I refuse to work til i die. Life is good here!
Awesome job!
Same story here!
I quit work at age 53, I had my home, 2 cars ,and $ 100000 in the bank and some investments. I’m 82 and I’ve been retired 27 yrs with no debt. It can be done if you change your lifestyle accordingly to your monthly income.
Thank you for sharing!
Disagree for today's generation. You /we didn't have the college debt, out of reach car payments and mortgages
Fact in 1970 the income to house price ration was 1-2 (you made 20k your home cost 40k).....today it is 10-20 times ratio. Plus other debt, and Biden economics were everything is 30-50% higher.
It's a different world today brother.
In 1970,I was earning $ 5800 and my home costs $13500 I was in supervision at a fortune $500 company . I understand what you’re saying but,our kids were convinced back then you needed that college degree to get ahead. Many kids went into debt to achieve that premise. In reality the trades were where jobs that were needed and those that persuaded them got ahead more rapidly than the others. Today what the kids are learning is woke subjects ,gender equality,climate crisis. The only people getting ahead is the professors who earn $200000 for teaching this garbage. $my Grandaughter is paying $80000 a yr for college, these kids can’t even read,write ,spell , know simple math unless from the phone. Our children have been dumbed down. Today you need a masters degree to succeed,they will be $1000000 in debt! Even at best those jobs are hard to find because of the competition.
@@michaelchristophergutierre7244
So you don't think you'll be debt free by 52?
Look, times have changed, yes but you have to take charge of your own life and finances.
Invest, get debt free and save for your future.
Incomes are higher, do what's necessary to succeed not make excuses!
and where do you get 10-20xs???
Most people are making 6 figures by their 30s and homes, even in HCOL areas, can be had for 400K or less.
Retired after 42 yrs as an RN My pension was over 600k and SS 2700
I also had saved 401K and PERS from another job as a nurse. I feel very blessed and can’t really believe it’s real
So blessed!
You worked hard and earned it.
We should have all married nurses! 😉
So at what age did you retire?
Finally, a financial advisor dealing with more practical savings and income levels. This is much closer to where my wife and I are. Thank you!
That's why we are here!
@@yourfinancialekgThis video is closer to reality of everyone I know or work with.
@@gregorycarson8513 yeah I love how most start out, can I retire with a million in the bank. DUH!
Good to see a video about managing a smaller retirement balance than those with millions for a change.
I am here for all account sizes, not just the big ones
My thoughts exactly. This was a perfect presentation.
Thank you for not ignoring the 1/3 (or so) of the 50+ population who are single.
Thank you for watching!
Don't be mean. Every video can't cover everyone. If you don't like what he's saying it's as simple as finding someone else to watch or find your own information. This is his channel so he can teach what he wants to. I don't mean this in a nasty way but really, if he's talking more to married couples here then single people aren't his target audience but there is someone who's targeting single people. Maybe even check his other videos.
Mean? 🤔
@@carolwilliams8840mean? He just gave him a compliment. Read. Slower.😂
same here retired, no debt with $148,000.00, only need $1500 a month.
That's great!
That means you have enough for 17 yrs, if returns are 10%.
It’s only 11 yrs if we use 6% like the video says.
Is that how you planned it?
Some people just live on Social Security though, in a low cost area.
@@chaselesser3191 no, I only need to withdraw about $3000 a yr or sell some gold I did not count, about 9 ounces.
Health insurance?
@@chaselesser3191 What about my 2000 a month Social Security
This is a good starting point. One thing you have to account for, in addition to the listed items are the ‘one-time’ expenses, such as HVAC repairs/replacements, car replacement, etc. The biggest factors to try to take care of before retiring are to have a paid off mortgage AND no other debts.
Great comment!
And always have an emergency fund!
That’s why it’s so vitally important to run a budget for many years before retirement. That will give you a realistic yearly average of actual spending. And if it’s been to long to include things like a new AC or a roof then add that in over say 5 years or whatever when making your plan. We pay for all of our vehicles cash but I still account for that monthly in my projected retirement needs.
Of course most people are too lazy to go through the hassle of making a budget.
Or other unexpected repairs 😢 not covered by insurance
I do no care if I die without my house paid off... My issue is can I afford the mortgage payment. I cashed out a pension and made a 'trust' fund that is more then my mortgage. It is just like having the mortgage paid off except at the end of 30 years I (or my children) still have the amount of the trust. My mortgage is at 2.66% and I would be a fool to pay it off early. It does not matter if you die with your house paid for or not... it matters how you live before you die.
Thank you for making a video that 90% of Americans could pptentoally relate to. Im sick of every video directed at people with $1 million in savings.
Your welcome!
Isn’t that the truth! I thought my husband and I are doing well to build a financial foundation for retirement but we are nowhere near a million! (He’s retired but I’m eight years younger at 60 so still working). It’s just not necessary.
We purchased a two bedroom condo on the Black Sea for $20k
You can get by here on $300 a month if you just stay home.
Live comfortably and travel throughout Europe for $1200 a month.
No one says you have to stay in the States.
Thank you for sharing!
What city ?
@ramhaven2322 Burgas. Similar properties can be found in Varna, Sunny Beach , and ours is located just south of Burgass in a town called Sozopol
This is my plan
What about your Healthcare are the medigap plans working? Do you speak their language or just try to get by with English?
Yes you can if your home is paid for!. Have not touched my retirement account since I retired 13 months ago. Just S.S. and retired at 62.
NICE!
@@jamesjenkins3384 same boat. Only SS. All fine.
Thank you so much! Most firms are only interested in helping people with half million or 250k… God Bless you!
We are “the people’s” financial firm! Thank you for watching. GOD bless you too!
Thank-you for the "real-world" scenario that many of us will likely find ourselves in. I'll likely "only" have double this amount by 62 AND continue working part time to keep living reasonably. I'll have my home paid off in about 8 more years and look forward to being debt-free before 65 and staying that way!
Thank you for watching, you are doing awesome!
Absolutely! You can retire on $150,000 of savings, or even less, if your social security checks can cover all your expenses.
Yes, I am 70, and can live very well on my SS. I sold my home in CA and have it invested with other savings. I'm renting a nice place for only $750/mo. But, money should be invested for future "unknown things" mostly healthcare issues.
lol sure..you would have to live in a cardboard box, no health insurance and no other bills , bye bye internet and utube
@@paulbunyun-xi9by No, you would not have to live in a cardboard box. One could live very well with SS (incl. Medicare) There are millions of people in the world who would give their right arm to have SS w Medicare and $150,000 cash!
@@ThePianoMan1953 oh we are talking about all the people in the world..because in the USA $150K will get you no where! you need at least 1 million in investments, sorry
@@paulbunyun-xi9by Nope. In the US, very few people have anything even close to $1,000,000 and get along just fine. I am wealthy but could live just fine on my SS. But, you have to live within your means, meaning, I would not be living in San Diego (although, I probably could if I had to because I have a talent for "making due" with what I have) If you think people need $1,000,000 to live a happy life, you are misguided.
Love that you explain it all at lower amounts most advisors do not and scare many .
Thanks!
People need to have a detailed plan and an accurate expenses calculation.
I created a spreadsheet which takes all different expense categories into account. I even added things like phones and computers that only need replacing once in a few years. A car replacement down the road, potential house repairs (like new water heater every 10 years ). Etc. it also takes into account if I want to live abroad for a few years. I can change my lifestyle on an annual basis. It’s not ready for prime time release but I’m very happy with what I’ve done. I’m happy with all the variables I can change and see the effect of what age I run out of money !
For a full year I kept track of every dime I spent and which category the money was spent in. My actual spending was within 2% of what I thought it would be at the start of the year.
I would definitely recommend everyone keep track of their expenses for at least 1 year. You will have a better insight for planning
Awesome comment!!
Great info!! These numbers are literally close to reality for almost 99 percent of this country. The “I have 2 million can I retire” videos are funny😂
That is why I do them all!
Makes me feel a lot better knowing I have way more than $150K saved up and I have over 15 years left before retirement. I'm excluding SS for my calculations, and will treat it as a bonus, if I end up getting some part of it. Thanks for the great breakdown and explanation, Drew. Have a great weekend!
Thanks for the great comment and watching!
That's sort of how SS was designed as a cushion to your regular retirement savings not the main source of retirement. congrats for being on track to a well funded retirement.
@@markbajek2541 Thanks for watching and commenting!
You can retire with 150000 my wife is 63 and im 62 both working with 450000 so we probably could retire ?
I’d say you’re on the right track!
I am divorced at 57. I have learned to live well under my means. Child supports ends in a year and a half. The biggest hurdle I see that you didn't touch on was out of pocket health insurance costs which in my estimate is the single reason I will work until 65
You are so right! Health insurance is huge. You’re doing an amazing job. Keep up the good work!
Single? Others: 1;more saved. 2: bigger ss check for life.
Living well under your means should mean you qualify for medical as it comes out of your property taxes each year. Look at all the people collecting it, that have paid nothing towards it. A Dr made me promise to utilize what we paid in on all these years in taxes. If you qualify, use it. No shame in it, you paid for it.
Almost a year left of child support for you now. When men pay it they learn to live below their means. He left out a possible divorce for the couples example lol
I agree with the other comments I love how you worked in a budget for millions of people that don't have tons of money. The only thing you didn't touch on was health coverage which can run way too much money. I'm waiting till 65 which is in 3 years for Medicare
IMO, Retirement should not be an option unless you are debt free. I just retired (sort of- I still can work in self employment), at age 64. My SS equals my monthly debt (about 1k/mthy), and I have roughly 145k in 5% cd's and high yield savings and own my home. Since I am debt free I only spend accordingly. I still have tangible assets to sell off which can yield another 50k if I'm lucky. For the 1st time in my life, any money I earn can go directly into savings. I'm a single guy with a cat and no family whatsoever. I think I'm in a lucky position but still worry. I guess one can never have enough just to be sure. Good post, Thanks.
Great contribution!
Where's your family bro?
Everyone has some type of family
@@dijonalexander3666 I will probably be in a similar situation when I retire. I have very few family members left and it's possible I will outlive them. I also can't count on them financially, so I will be 100% on my own in retirement. My parents didn't even raise me and didn't save for retirement, but us "kids" help them financially so they aren't homeless. They hit the lottery so to speak by having children that help them financially even though they didn't raise us. They would have been homeless without our help.
Consider a reverse mortgage even if you don’t pull the funds from it it can help with major home repair expenses
You will die with your house paid for... do you get a star on your tombstone? If you die with money in the bank that is the cost of an adventure you never lived to take.
I can’t believe all of the negative comments. Every financial person knows that everyone’s situation is different, and I think the readers need to adjust starting numbers based on their personal preferences. Income requirements are not the same in Louisiana as New York or LA, and not the same for someone who wants to travel, and someone who wants to sit on their couch and watch TV. These are guidelines, and it is great information. I live in Ohio, and I think I can certainly retire on less than someone in LA., but most financial advisors say $1 million or more. This is more realistic for a lot of people.
You are right Chris! You don’t need 1 million to retire, you need a plan. Thanks for watching!
Right I'm thinking those "financial advisors" are hoping you croke, so they can skim off the top is what I think. Sorry but that's how I feel about financial advisors. No harm intended towards "financial ekg" it's of my opinion he's being honest and trying to help. Yep budgeting, and situations are different most definitely. Get rid of debt first and foremost, understand needs versus wants, see what you can live on cheaply with some leftover, to add to your kiddy(As I call it)/future and let it grow.
Same here retired, no debt with $148,000.00, only need $1500 a month.
Awesome!
I like your style of explanation and examples!! You did an excellent job making it easy to understand the various situations and not make things overly complicated as so many others tend to do. Keep up the good work!!!
Glad you enjoyed it!
I retired to Jamaica at age 60 on my Army Reserve pension which is $2,600 per month. I have a TSP with much more than 150k that I have not touched yet. I will wait until 67 to take SS.
Thank you for your service 🇺🇸!
What does TSP mean?
@@kittendkat5100 Thrift Savings Plan. That is a government retirement savings plan.
@Your Financial EKG™ Thank you. So many acronyms to keep up with the days 😀.
Don't wait get SS at 62 because your quality of life is not better at 67. Your 60 start traveling while you still young
That’s hopeful ❤I have been thinking about retirement but I’m turning 57 this year and don’t have “enough” saved according to most financial advisor. You gave me hope that I can retire at 62 or earlier 😊
You can do it!
Just get serious and prioritize spending now so you can increase your 401k or IRA savings. It’s amazing how much ground you can make up in just a few years. You don’t need a million. You will be fine!
In 2008 I was laid off, lost half the value of my IRAs, and virtually all the equity in two rental houses I owned. Couldn't see a job on the horizon and I was 58. I had $143,000 in my retirement savings so I did the only thing I could do -- I retired. Oh I had a year of Unemployment benefits (and I did look for work) but that's about it. I had to short sell one house but I took some money out in the HELOC on it. I waited as long as I could for the market to improve but it didn't. It took some juggling and a bit of luck and a lot of careful planning but I made it to 62 when SS kicked in. I live in the other "rental" but when I bought them I did so with the thought I'd live in them one day so I bought really nice home so I live in a really nice home. I paid off my mortgage shortly thereafter. I live on SS and a tiny pension from a former employer and it's plenty; with no mortgage (of course there are other house costs but about $800 per month all in) I have hundreds left over every month. I did have to dip into those IRAs especially in the early days but I have more in them now than I did when I retired and other than RMDs (which I reinvest) I take nothing. I've always been frugal and lived below my means but even so I eat great food, drive an old but very reliable and comfy car and have no worries about money ever.
Thank you so much for sharing your story!
Thank you for one of the most encouraging videos concerning retirement that I have seen on UA-cam.
That means more to me than you know!!
that is not saying much. it's youtube.
For a single individual, the biggest issues are not the two you mentioned. Of course you only have one 401k/retirement plan. That's all you paid into. But with respect to Social Security, as a married couple even if only one person paid in, SS pays a spousal benefit. They are basically "stealing" from single individuals to pay more to married couples. I am not talking about survivor's benefits or about couples where they are drawing individually. The biggest difference for single individuals is that it costs so much more to live as a single person than it does to live as a couple (per person). One house, one utility bill (per provider), you can even get away with one car. Your example shows just how much harder it is for the single person. Plus, you started with a couple, two incomes, two retirement plans, two social security checks, starting with $150k total. That is $75k each. The single person saved twice as much, at 150k. For a proper comparison, the couple scenario should have started with $300k.
Yes, it's much more difficult living as a single person with only one income. But there really are no guarantees that getting married will be the better option. I know a woman who was married for decades to a man that was a business owner. She decided around age 50 that she wanted something different. She found a new man who was a high income earner and promptly divorced her husband and raked him through the coals in the divorce. He had to sell his business that had been in his family for generations to give her half of it, he had to sell his house to give her half of the equity and she also got half of his retirement.
thank you for posting this. More reality than people realize. So many people 'retire' with less than this and HAVE to make it last. I know many people that never planned, never saved. Although it's tough, they survive on SS or SSDI alone.
Appreciate you and your comment!
My dad never put away any money into a 401K or anything else. He also had no pension (most people don't have those these days - I"m fortunate to be a school secretary grandfathered in under the original NDPERS plan). My dad worked all the way up until he died at age 80. He loved working and it kept his brain active, though it was hard on his body. I think he had about $800/month in SSI and then whatever he could make as a traveling salesman. I honestly have no idea how he did it, but he always kept enough on hand to pay for his funeral expenses......and that is exactly how it played out in the end. He had very little to go through and had about $1,000 remaining after everything was taken care of. There was no bickering amongst us kids, and we were able to work together to finalize his affairs within about a month. This isn't the route I want to take, but it is one option.
My parents are in their early 80s. I'm seeing the devastating effects as their physical/cognitive health declines. The cost of in-home care or assisted living should be discussed much more by financial planners.
Yes it should!
True.! Healthcare expenses can suddenly explode - ambulance, ER, surgery, hospitalization,etc. Even with Medicare..
Yes 62 is good if you don’t live past 82
Yes, $6,000 to $10,000 a month eats $150,000 in the blink of an eye.
As we get older an retirement is what you want,live life to the fullest and retire early if you can. It can be done if your debt free and
I worked until I was 70 years old, and then collected Social Security, which was twice as much as I would have gotten at age 62. Our expenses are a lot more. People don't realize how much health costs (including dental) can be. We have a supplement Medicare insurance plan (which pays everything), and our premiums are nearing &550 a month total. If we went with a private Advantage insurance plan, our monthly premium would be a lot less, but we could be hit with deductibles, co-pays, co-insurance, etc. Then there's drug, dental, and vision insurance. We drive fairly new cars, mainly to avoid car repairs, but our savings might not be enough to trade in for another new car. I don't know if your calculations account for all this.
Our calculations take into account the historical inflation average but obviously everyone’s situation and timing is different. Thanks for sharing your scenario!
Not sure where you live but most advantage plans do not have deductibles and the drugs are included in the plan and most of those don’t have deductibles…your paying 6k a year and in some places max out of pocket on plans is 3k to 4k…you get dental vision and other things included in advantage plans, I’d revisit them if you haven’t in a long time, I’ve done all types of Medicare plans in multiple states for over 9 years- it never makes sense to stay in a supplement unless someone gets really expensive infusions or something like that and even then the max out of pocket once it’s paid - everything is covered 100% medically,…
I see myself retiring in a lower cost of living country. The cost of living in the US has become unbearable. I am okay working a few more years on something I like and enjoy. This video puts me at ease
Glad this helped!
Really good writeup that explains the nuts and bolts of how to determine a ball park figure with a set of reasonable assumptions. In reality, 150K is not enough unless you are willing to make some modifications and get lucky. You gently danced around that fact and showed them the way without ramming it down their throats. The reality is things happen that blow the budget out of the water. Health and family issues, black swan events etc. If something happens early everything changes resulting in a death spiral if not addressed.
If you are not cash flow positive from the start including saving for contingencies the budget most likely will not work. It is easier to keep working than trying to find something when you are 70 to make the numbers work. You didn’t mention reverse mortgages which are an option of last resort, as well as moving to a cheap location. Loved this. Forty year accountant BTW.
Thank you so much for the awesome comment and contribution!
I love the math skills and enthusiasm of financial planners, they do a great job advising on how you can retire on whatever that number may be. However, the greatest assumption being made here, is that these individuals who over 45 years did not manage their money are going to automatically have the discipline to follow a financial plan, when in reality they have never lived on a budget.
But the advise is sound, but the discipline required, leaves these plans as wishful thinking. I would like to see a survey of customers 5 years into retirement, and see how they are doing with the plan and were they able to follow a plan. I look forward to any comments.
some turn it around. I never saved and a few years ago I had a moment of clarity. I now have absolutely no debt and my house is paid off as well. I was previously a payday spender. Now I have significant savings and plan to wait until 65 to retire. this video comes at a good time for me.
A lot of people are destroyed through no fault of their own, by divorce. I saved and scrimped and worked like a dog, and it cost me a fortune to divorce the ex who refused to work. So yes some of these low retirement fund people were irresponsible, but some of us just ended up hitching our wagons to the wrong person.
@@catherinewilke5583 a woman bitching about divorce? Hysterical! My ex took 75% of me and was unemployed. The irony is panful.
Well I guess you could call us retired (5 years now) hubby has a side hustle job and takes care of me. I am basically disabled (as I almost died three years ago,) the only "help" I get is healthcare and our taxes pay into that, which I qualify for as we live well below the poverty level. We have a decent nest egg on paper, it was a bit more than the video poster mentioned then 2020 hit, which hit the nest egg too, but that goes up and down anyways...ride the waves right. We live well below the poverty level and have been for a lot longer than just the five years, out of necessity at first. Now it's a choice to try to hang onto, and grow what little we do have. It definitely takes discipline to live comfortably without wants or the normal consumerism lie everyone has been fed. That's it in a nutshell wants, versus needs. Our needs far outweigh our wants. What we want, (which is needs), is to live out the rest of our lives, as comfortably as possible without stupidly wasting through what we're trying to build, and have comfort and less worry, the rest of our lives. The current world we live in is far from peaceful though sadly. I also noticed, the less we try to use each year, keeps costing us more, so hopefully the nest egg can carry us on to the other side of this world, whilst still growing to get us by. But so far so good, still trying to figure out better ways, to keep adding to it without giving the greedy big g man too much, if ya get my meaning? So we have to make our own four walls the happy place, in this not so nice world, that seems to be utter chaos constantly. Not sure I answered your question or not, but I hope I did.?
Really insightful for anyone working on their retirement plan. The breakdown for married and single scenarios is super helpful.
Thank you!
I laughed at your rainbow, unicorns and pixie dust comment. That’s the retirement route I took two years ago at age 57. 🙂 No regrets. I started downsizing years ago and enjoy living with less. Of course money does fly out the door fast without employment income coming in. Hoping not to touch 401k till I’m 62 but may have to figure something out as I go. I like your comment about earning money doing something you love. Figuring out as I go and that works for me. I don’t like to use maps to my next destination. I’d rather wing it and enjoy the journey. I didn’t want to wait till I’m too old to enjoy retirement.
You be you! Thanks for watching and commenting 😀
Yes, if you move to Mexico. Absolute folly to try to retire at 62 in the USA with 150,000 dollars, whose value is trending towards zero.
Absolutely correct! Wherever I go in South America, it will NOT be an American expat community shindig. Tired of my own kind.
And in Mexico you can work part time for the local drug cartel!
I did it. It’s absolutely possible
@@kellanhills1972 🤣
This is timely that I find this video. My employer (of 37 years is offering a severance).. I’ll be 62 next Spring. I’ll have SS and Pension and 401k for income. I only owe a mortgage, which monthly payment is relatively low.. lower than any rent would ever be. . If I decide to work at all it’ll be part-time .. I honestly think I can make it !!
I'm glad it was helpful!
Think? You are sentencing yourself to a small SS check for life. Don't you want to think it through and be sure? How will you feel in 20 years when you realize you made a colossal error?
Pay off your mortgage before you retire or you will regret it.
@@virginashaffer172 done !! Thank you.
Update:: I did leave the employer. I’m completely debt free.
Yes. I did it with way less. It's all about getting rid of debt first and not adding debt later. Unless you live in a really high cost area, NY, Boston, LA, etc it's easily doable
As far as continuing to work, many people don't have the ability to work anymore. Retail is Not an easy job for someone with arthritis or glaucoma. In addition, there is a good amount of age discrimination. The job market is strong in some sectors and regions and weak in others. If you have the option to take ss, even at 70% less, while you are still able during the "go years" you should go for it rather than wait another 5 years or so. Not only is my ss (includes survivors benefit) more than my working income, I save 500 to $900 a month that I use to travel, and just fun money. Thank you for providing information
Great contribution to the video, thank you!
Yup....get rid of the debt...number one priority.
@@kevinyoung5575 Truth!
This was awesome! I'm 48 and single. I only have $90k saved for retirement. But this video makes me feel hopeful. Thanks so much ❤
Appreciate you and your comment!
Enjoyed your video at the moment I have 401k and a small old company pension plan in the uk and maybe social security from both the uk and here in the states too
@@markhosbrough9180 Thank you for watching!
That's 90k more than most people have at your age!
@@martinrbookermb thanks for encouraging others!
I will be retiring next month. For my expenses, I've used credit cards for every purchase, except for small things where I use cash, for the past 2 years. I know to the penny how much I spend every year. I also categorized those expenses in a spreadsheet, as much as possible, so I have a good idea of where the money went. I now know going into retirement what I will be spending, and where I can cut if needed.
👏
Congrats on the upcoming retirement
Bravo bravo bravo! You are way ahead of the game because like you said you know darn well what you will most likely need. You also made a great point that many overlook and that’s what you can cut out if you needed to. 99% of the population knows absolutely nothing about how much they spend month to month.
Good analysis. And one of the benefits of keeping distributions low, is that you might not have any tax liability after subtracting the standard deduction.
Great comment!
Drew, I found an easier way to retire. My wife of almost 25 years passed to be with Jesus Aug. 2020. I retired on supplemental SS and a small pension at 62. I sold everything by April 2022. I had about $150,000 with $2,295 monthly. I moved to the Philippines end of April 2022. Prices here for everyday basic bills are about 60% less than the U. S. Just thought I would share my idea. Thanks and God Bless!!!God is faithful.✝️♥️🙏
Thank you for sharing David. I am sorry for your loss but your determination is evident. GOD is faithful! Thank you for watching!
So did you buy a property and how do you stay without a visa?
@@DL-by8elPhilippines allows entry with a tourist visa of $30 per month up to 36 months. Then you must exit the the country and return and apply for another 3 years. There are ways to get residency as well.
Sorry for your wife passing away.
I've recently been looking into taking early retirement and the Philippines is in my top 3 places to live. As a single woman without a huge savings or social security benefit I won't be able to afford the US unless I make lots of money!😂
@@belle42 wish you could let it us know how it goes with your retirement.
I can answer this question! No, $150K won't cut it. Especially if you live past 82. My advice would have been to keep working and not take SS until at least full retirement age. For what it's worth (not much)
@Jims-VanLife, there are always individual variables which you should plug into this video retirement scenario. As example, my brother-in-law had some health issues so he took his SS at age 62. It was a smart move. He passed away last year at age 69. Check your family history, both my grandfather's passed at age 59 and 67 and my mom at 75. My Dad did live to his early 80's but had dementia since his middle 70's. In other words he didn't give a damn that he was broke at age 82. He was a vegetable by that age, not a care in the world.
If your health is good- why work until you drop. Trust me people I just lost my wife to cancer at 56. We had plans but remember god always has a plan. Retire as soon as you can and live.
Hmmm... so sorry about your wife and the other poster's brother in law.
My dad broke all predictions on his family's genetics concerning longevity. He didn't plan to live long as his dad died at 59.
My dad just passed away at 93 and although frugal, didn't make the best long term decisions. I took over my parents' finances in 2018, and got all their debts paid off. My husband and I also built a nice 1600 sqft home for them back in 2003. We (my husband and I) adored my dad, but his poor planning (mostly deciding to carry debt into retirement) took a toll on me. So although he had a "nice life" in his early 60s, my 52 through 57 years were extremely rough. (He fell for a scam in 2018 and lost what he had left.)
My mom is still alive at 90 and I'm in the process of applying for Medicaid for her, because I have a 17 year old who needs me too.
I'd love for my mom to move in with us, but her dementia is pretty advanced. (And she's just a difficult person by nature.)
Over plan, over save, think about your kids and grandkids.
Great video. I would like too see how medical expenses, savings and vehicle replacements etc…. would factor in. These will be needed throughout your retirement. Again great information.
Thank you for watching and suggestions!
agree this guy is not realistic..he must want something
I think the single should look into housing subsidies or maybe even independent senior living places (lower end type). In my neck of the woods independent care is $1700-1900 for a 1 bedroom all in for the non glamorous places. (maybe slightly lower for a studio) Everything is included. weekly housekeeping, 2 meals a day , all utilities including cable and wifi off the building system. So I'd guess they'd just have a cell phone bill and medical/dental insurance costs. the other side would be subsidized senior housing and that's sliding scale so best guess would be in the $800 a month range for that income level plus some or most utilities and food costs . at around $2000 a month income , they might qualify for some food cost assistance in some areas and there are food banks to help stretch their food dollars via charities. Or the single could live in a van down by the river...very low utility costs involved down by the river if you can filter your own water, and draw electricity from the sun some of the time. You see it every day , people on $1200 a month or less in subsidized housing , scrimping away, but they are doing it. So at $2K a month plus a drawn down in a low cost state it's doable., but you would be on some government assistance.
Great suggestions!
I can just imagine a 80 year old filtering their water out of a river. No doubt that happens all the time. Thanks that's my plan for the future. They make those drinking straws where you can drink out of a creek and maybe not catch diarrhea. That's my plan after I buy my tent to live down by the river
The wait list for senior housing is long
@@bka8851😂
Its not my desire to plan to live in desperation
As straight forward as it gets! You got my attention, my thumbs up and my subscription.
Thanks for watching and subscribing!
Thank you for making this video. I watched other videos (not yours) but this is the most realistic video. Based on the majority of Americans who retire who have less than $500k in savings for retirement.
Thank you for watching!
I would move to a low property tax state , and use up $150k pay off the house and all other debt and start withdrawing SS at age 65 for about $2000 a month and qualify for Medicaid.
That could be a possibility!
Property taxes are not a huge burden people make it out to be.
@@vandydandy2697 it depends on where you live!
If you're on Medicaid, you lose some of your agency and autonomy. You have to do "what they say." Medicaid is never a good "plan." It's the last resort for the truly destitute.
You could retire whenever you want it just depends on how much money you want to have as income
Bingo!
When it comes to "cutting the cord", that would probably be the last thing that we would do. We are in our 70s, and cable TV (& DVR), with numerous channels, is very important to enhancing our lifestyle at this age. Being older, we stay at home a lot, and cable TV is our main source of entertainment. The Internet is probably our second source of entertainment. Our cable TV, Internet, and phones are a package deal, which costs us a little over $200 a month. That is money well spent for us.
Thanks for commenting and contributing to the conversation!
You could spend a lot less than $200 for a mint phone plan for $15. Internet for $70 and maybe $30 for a few streaming services.
Another option.....go to the right place in Latin America and that $150k turns into virtually $300-500k overnight, and then you'll have a lot more money and a more vibrant and welcoming environment to enjoy in retirement!
Thank you for your comment. Keep in mind everybody's financial situation is different.
@@yourfinancialekg That's very true so I changed my comment to be more positive. Heh... Thanks!
@@all4fitz Latin America sounds fun too! Thanks for the contribution!
Moving to a 3rd world country in retirement. Brilliant life plan.
@@8corymix8 Haha. Maybe you haven't traveled or done much research.
Thanks for the video. The biggest reason everyone has some trepidation about retirement funding is uncertainty. As you point out, you can’t control external factors. However, you can, to some extent, control both your income and expenses.
One thing to keep in mind is that, if you do take Social Security at age 62, you can’t earn over (currently) $21,240 without having each extra $2 in income decrease you benefit check by $1. So, by delaying the taking of SS, you not only get higher monthly payments for the rest of your life, but you can also continue to make as much as you can to increase the retirement savings. Also, since most people won’t be eligible for Medicare until age 65, good health insurance is expensive and will have to be paid out without income.
My plan is to keep working until 65 and waiting until age 67 to claim SS, living solely off of retirement savings for those two years and getting supplemental health insurance (much cheaper once you have Medicare). The trade off, of course, is that I am losing the healthiest three years of the rest of my life for the ability to be better off financially for the rest of my life.
Everyone has their own risk tolerance and circumstances, which is why a good financial planner is important. When you do run out of your retirement savings, you will not be in control and will be forced to cut expenses drastically. Proper prior planning can prevent this from happening.
Great contribution!
I am at that point right now at 65, but loathe the idea of not getting the maximum amount if I don't wait until 66 and 8 months which is my full retirement age, the 21,240 cap doesn't really bother me because I don't plan on earning more than 1000 a month maybe doing some type of part time work , on the other hand I am just burned out from working in a production facility for 42 years it is hot, loud and smells of chemicals and hate going there any more , and think at some point a person has to put quality of life over some money, another that I consider is if I retire right now at 65 years old I will get 2200 per month but if I wait another year and a half I will get another 200 per month, but I could easily make up that lost 200 per month just working one day every week per month doing something easy and only a few hours , but I would be locked in to that lower SS payment forever and what if I couldn't work as I got older? another thing as I continue to work I am making a lot more money per month than I would on Social security and still able to contribute to my 401K and other savings ,once I get on social security I won't be able to save any more money , I feel better being able to save for emergencies and so on , another thing I consider if I go off my employers healthcare I will have to get medicare which does not have dental or vision coverage and only covers 80% of medical expenses I am not sold on Medicare advantage plans ,so I would have to get more insurance to cover that 20% or basically more of my limed income will have to go toward insurance, another thing I dwell on is how long will I live, maybe I should take the lesser amount and enjoy what time I have, Its a lot to think about
@@bluemouse5039 You’re right, it’s a lot to think about. It sounds like you’ve done your research, so my advice is to make a decision. One thing to think about is that if you die earlier than break even point after waiting to get SS, you might never know you made the wrong choice. However, if you took it early and live until 90, you’ll remember your decision every check after break even , until you die. Good luck!
@skeller61 You are very wise. So far, everyone that I've known that retired early has ended up struggling financially in their later years. Mostly due to them underestimating their life expectancy. It's much better to work as long as you can and save because it's easier to make money when you are in your 50s and 60s and healthy rather than try and scramble to survive and re-enter the workforce when you are in your 70s or 80s. I'm also not going to collect my SS until age 67.
My biggest worry when retiring at 62 is the cost of "health insurance." To me, health insurance is very expensive, and now car/home insurance are rising too.
No doubt!
Awesome breakdown Drew! Just turned 59 out here in California with 22 yrs in with the Federal Government.
Car payments are over $500 a month now for reasonable payoff time. Home maintenance will surprise you with appliance replacement, plumbing repairs, etc. Forget world travel for any of these examples, because it is extremely expensive now. We had over $10,000 in dental expense in a single year at age 74. I would not try to retire at 62 with such small savings as $150,000. Too many surprises out there. Thanks for the data, Drew, it was a valuable experience in doing the math, and with any luck, your figures may well work out.
Thanks for watching and the comment!
It always comes down to your expenses.
Yes it does!
and debt
Thanks for this, interesting, I am going to retire end of 2024 at 64, spouse will be 63, pension will be 3000k per month, SS for us both will be 3 k per month. We have about 30 k in a HSA that we never touch. Also have 300 k in savings. (currently in CDs most at 5 percent) no mortgage, no car payments, hopefully this will be enough.
Sounds great!
@@yourfinancialekg I hope so, one always wonder's if they did enough. To late now, I think we will be okay. We have been maximizing our HSA, definitely would have done that long time ago, but wasn't offered until just a few years ago. Highly recommend anyone that has the opportunity to do HSA to take full advantage of it.
Money can be replaced but time can never be replaced. One must consider how much time they have to enjoy retirement before they get too sick and eventually pass .
Great comment!
People tend to live longer if they continue to work.
Releasing yourself from the trap of employment in the system does not mean work ends. You can keep busy doing all kinds of things outside the trap of the system and at your own pace free of stress. Stress is a killer. @@ambethk77
I was searching for a couples video. Pretty crazy that a married couple can make it with 150k in this scenario. Good stuff!
Thanks for watching!
I have a Roth IRA that i put my 401k money into after being laid-off. Along with all the money i received from my former companys "profit sharing" plan. I combined & deposited all of that $$ into a Roth IRA.
I then got into my new employers 401k and deposit 8% of my bi-weekly check into a seperate account.
So i basicslly have a Roth IRA thru one Financial Company & a 401k with a different Financial Company.
I just turned 59 and hope to be done at 62.
Awesome Daniel!
Yes you can if you’ve spent your life spending and saving wisely.
Exactly!
Love this striated talk instead of fear talk! Subscribed!
Thank you!
Woooo, amazing analysis, eye opening examples to follow. Great work Drew
Much appreciated!
The key is: Pre & post retirement downsize & downsize. And then downsize more. It works.
Yes!
I’m planning on retiring at 62,I’ve got 300K in savings my monthly expenses are about 2,000, my social security will be around $2,100,i think I’ll be able to retire at 62
Great!
I'm not seeing an $1800 avg SS payment at 62 at any of the online examples. My own SS estimate after taxes is $1250.
Man saying that $3000 a month of expenses was wayyyy to high of an estimate for me.. Mine is maybe like $1700 am month for a single person.
That’s great!
Glad to hear someone acknowledge spending changes. Most people's spending goes down as they age. Just the basics at some point in life.
Included in reduced spending would be taxes. In the scenario presented none of that income would be subjected to income tax. Also a SPIA from $125 of the $150k would throw off a married couple in excess of $10k per annum (guaranteed 25 years), keeping $25k for an emergency fund. With a paid off house and little consumer debt a couple could live very well on SS and $150k.
Thanks for watching!
I can currently live on 2500 just barely. doesn't account for unexpected expenses. I assume He is assuming the person owns his home and is in a low tax area. social security will be cut by 25% in 8 years. congress has had decades to fix it. I don't have any faith they will do the right thing.
Thanks for sharing!
Thank you for this video. As many others have mentioned, this is far closer to situation than most other videos I've seen. I'm single and eligible for retirement at work. I'll have a FERS pension, but started putting money in my TSP late it will not be much more than this. I'll also have SS. If I retire at 62, i expect to work at least part time so that I can supplement my income and continue to travel.
Awesome! Thanks for watching!
Very good video. I do think you need to consider health care costs more.
Good consideration! Thanks for watching
agreed. At 62 there is no coverage that is free, unless you are at poverty level income, and even then the coverage in some areas is horrible. I live in Florida and the deductibles and copays will kill your savings.
I really appreciate your example. The only part I’m struggling with is a gross amount of $50,000 for 2 people.
That seems very conservative even if they are frugal.
Thanks for watching!! Everyone's number is different.
Finally!!! I am able to understand getting to retirement! Im so happy! I dont need a million dollars Lol! Thank you so much! Your explanation just clicked for me. I finally feel optimistic about getting to retirement. Its totally doable!😊
You can do it!!
Very useful, thanks! Didn't even realize you were local until you mentioned the Rays 😊
You bet!
Excellent video. I might not need as much to retire as I thought I did. Good stuff.
Glad you enjoyed it
Might? Guessing is a bad habit.
Thank you so much for this wonderful video. Your explanation is so clear . I'm 62 still working making $100K a year. I'm thinking or retiring at age 63 but after watching your video, it looks like I need to work till age 65. Again, thank you.
Glad it was helpful!
Me and my wife have 300k saved .all post tax money. abd will be retiring in 3 years and will wait abd draw ss at age 65 whivh will be only 3100 a minth but no debt is the key
That’s awesome, no debt is key!
adb?
Will be in touch for sure
Looking forward to it!
If you are not debt free and you cannot afford health care outside of your employer plan, your earliest retirement date is probably Medicare age of 65 -- even if you have more than $150k. Better than that under the same circumstances is waiting to retire until Social Security Full Retirement Age (66-67).
True statement
I retired at 62 and took "Obamacare" until age 65. My only income from 62-65 was Social Security so I qualified for a large subsidy.
COBRA was very expensive... that would have delayed my retirement.
@CaptainQueue You are correct. A little known fact is retirement used to be age 65 for everyone in the eyes of the SS administration. People think that their elected officials really love them and only want the best for them and that is why they started to offer early retirement at age 62. If you start collecting SS at 62 you will get 70% of what you would get at full retirement age which is for me (born in 1958) age 66 and 8 months.
Between age 66 and 8 months and age 70 the benefit increases by 8% per year so the intrepid worker that waits until age 70 to collect will get almost double the SS benefit than his age 62 comrade. So if I had started collecting age 62 my check would have been about $1800/month, if I wait until age 70 it will be about $3400/month. My spouse is going to wait until age 69 to collect her benefit will be about $3200/month. So just our SS alone will be $6600/month that is just shy of $80,000.00 per year. And that is just SS not our pension and investment savings.
The big question is not "do I have enough retirement income to I pay my regular monthly bills?" but rather "do I have enough retirement income to pay my bills, pay for random stuff that happens and also have some fun?"
Thanks, I feel a lot better about retiring early now.
Nice breakdown of info!
Glad it was helpful!
50 thousand in expenses wrong! We are retired and my yearly expenses are about 20grand
Thank you for your comment. Keep in mind everybody's financial situation is different.
I was able to retire at 57 but I have a pension and I substantially reduced my expenses (25 percent). Early retirement is possible but you should reduce expenses or increase your income (take a PT job etc) for better security.
It would be helpful to see the 4% rule in your video. The rule generally says you can pull out 4% from your investment account indefinitely. This assumes you will earn more investment monies per year than you pull out (6% return per year in video but I assume 7 % return so I can cover a 3% inflation rate). I did this 4% calculation on my investment account and it tells me the maximum amount I can pull out of my account. If I can live on that income (along with SS) then great but if not then I need to reduce expenses, work longer, take a part time job in retirement or move to a cheaper area to live.
Thanks Jeff! I did a video on the 4% rule recently: ua-cam.com/video/UEErZHQJz-Y/v-deo.html
Wow. That blew my mind. I just might have a chance! Thank you.
You can do it!
@@yourfinancialekg I am disabled, 58 years old and have $50k to my name. My only "income" is $1932/mo SSDI. My budget accounts for every single $. I buy T-bills every month. I will be fine. If I can do it, most people should be able to.
Great calculations. Thanks for your hardworking for us.
Thanks and welcome
TY. Now, I'm a bit more hopeful. Change the single scenario to I want to work a seasonal job, which I should take home about 20K, expenses, I like the 40K. Delay SS to full retirement age for my birth year.
Glad this video helped!
Great presentation
Thank you!
Here is another way to make that "retire single at 62" scenario really work;-- ya gotta MOVE to and LIVE IN... an area where your dollar goes far. So think rural Kentucky and NOT Southern Florida. Think rural Mississippi and NOT anywhere in California. Areas in America vary greatly in COST OF LIVING. You gotta live where the cost of living is LOW.
I am from Kentucky, Go Cats!
My SS will be about $1582 at 62 and my plan is to be debtfree and RV fulltime,my 401k/Roth will combine for $128,000 me and my wife should be ok in retirement.
Awesome!
Not Awesome! You are guessing, not planning.
@@DrSchorThe sale of our home and our RV and truck will both be paid off in 1.5 yrs and our other debts will be paid off in 3yrs and and I’ve calculated our RV total monthly expense $2300.Oh I base our retirement off of my finances I didn’t include her $1700 SS she brings.
One half of us have NOTHING saved for retirement. That's scary.
Very scary
It also depends if you have a paid off home as well. I do and have retired at age 61 and have not had to touch any investments. And don't plan to until I have to withdraw from my rrif in canada
Until the age of 71. Also baby boomers may inherit money as well!
Thanks for sharing!
Question: 1. what about if one of the people die? You lose their SS. 2. What if one or both become very ill or disabled? Seems like either of these will really derail these plans.
No doubt this would derail. Never is a scenario perfect and especially when you have a razor thin margin like this.
You may get a survivor benefit from SS if married for over 10 years. If your spouse had a larger benefit than your own then that might help.
A survivor benefit helps, but for many of us, it still means our budget is cut beyond comfort. It's often family that tries to bridge this gap. However, recent studies shop about one-third of elders are at risk of becoming "elder-orphans" with no one to advocate or help them. Having a network of people who can help you, and who you can help, is even more important than just income when you are older. Develop your tribe if you don't have one!
Most of us do not have a pension or anything other than what we have saved and invested. Most likely will not even get SS that have paid into my entire life.
What do we have to look forward to?
That is why we plan now!
I’m 58 and plan on pulling out at 62. My Wife of 18 years is dead. Well after this September is dead to me. We call her “EX”. Haha. She bailed on me of her concern of having enough retirement funds. Of which she couldn’t identify that amount. Since she bout me out of our marital home and we split our real estate assets, I’ll be headed over seas with $240k in pre taxed USD and $220k of post taxed USD. I still have 3 solid years of income of $90k a year and shall. Onto use to be debt free. I’ll buy my home as an expat for $150k and car with cash. So I say to anyone going through what m experiencing, let them go with a smile. Who’s laughing now!!! Bless her heart.
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The cost of healthcare is what's not mentioned here.
Assuming $8000/yr/person for premiums and $5000 in deductible, $50K/year is no where enough if staying in the US.
Healthcare is a huge factor
Question on SS. If you start withdrawing SS at 62, with the $1800 a month figure, that’s $108k after 5 yrs. Is it worth waiting until your 67 for the extra $600 a month, especially if you 401k continues to grow because you’re not withdrawing $1800 a month between 62-67?
Great question. Every SS decision is based on the individual situation. I would rather delay SS as long as possible but sometimes because of assets that is not possible.
That is why I want to Split the difference and take SS at 65 along w Medicare, they will take it out of Soc Sec check to Keep it Simple!
SS benefits are based on the 35 greatest earnings years. Some can replace a low earnings year in the 35, increasing the benefits. Depends upon a person making a decent income post age 62.
@@josephjuno9555 Don't forget to keep your eye on additional retirement medical costs that medicare doesn't cover like most dental , vision etc.
By jetting out of the USA to retire in South America, all of the issues with health care and inflation are crushed out. $1,800.00 per month in beach towns in Mexico will get you an insane 1,000 sq. ft. condo 3 minutes walk to the beach. You can live on a lot less than that but it's just an example of how leaving the USA doubles your money.
Dang, I retired at 58, $200k, and a pension that covers most of my necessities yet I still worry about having enough. Been thinking about a roommate or temporary jobs. I'm planning SS at 67 or older but meantime I want to have fun and travel. I'm not sure i have enough.
Sounds like you need an EKG!
Great presentation. Has made me see my ability to retire quite a bit differently. I thought i was doomed not having at least $1M saved up already but i guess i might not be. Thank you. "I have 3 kids and no money. Why can't i have no kids and 3 money?" - Homer Simpson
Thank you for watching!
Homer was crazy from the jump!!!