As a soon-to-be retiree, keeping my 401k on track after a bumpy 2023 is a high goal. I've read about investors generating up to $250k ROI in this present economy, any suggestions for increasing my ROI before retirement would be greatly appreciated.
there are strategies that could be put in place for solid gains regardless of economy or market condition, but such executions are usually carried out by seasoned investment advisors
True, a lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to keep my business growing, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $355k to approx.$800k as of today.
Katherine Nance Dietz is the licensed advisor I use. Just google the name and you’d find necessary details. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
If GAP is $5,000 a month, that is $60,000 for a whole year. After a standard deduction, only about $30,000 withdrawal from retirement accounts will be taxed. That is about 5% effective tax rate, not 20%. Likewise, Tom doesn’t need to withdraw 3.5% of their retirement accounts because an effective tax rate is much lower (definitely not 20%!!!!, but a single digit at most). Probably less than 3% is enough to generate $7,000 required income a month
They are pulling 3.5% every year, but why don't they invest a million in etfs like VOO which will pay them a great div and continue to grow 15% a yr? Also add some VYM and VT VTI and collect 30 grand in divvy and still grow.
Having $1.5 million in total assets saved for retirement is certainly an accomplishment to be proud of. With that said, it all depends on how much you spend on a monthly basis, and how those expenses could potentially change over the course of a retirement that runs 20, 30 or even 40 years in length. Things like inflation, cost of living, healthcare expense, and other unpredictable expenses could throw a wrench into the equation if not properly planned for! Thanks for watching!
How did you come up with 20% for taxes? That would be extremely high! Let's assume the full requirement of $7000 a month, or $84,000 a year was taxable, after standard deduction, they would pay Federal tax on about $57,000. Their effective tax rate would be under 8%. I doubt any state and local tax would be near 12%.
When we put an example like this together, we like to err on the side of caution and assume a conservative number for tax withholdings, mainly because we don’t get into all of the minute details that cases like this usually present. While you make a good point, there could be several things that are going on outside of the wages, Social Security, pension, and distribution side of this equation that could cause the client more tax and bring that tax burden up. If they have an inherited IRA, they could be forced to take a required minimum distribution every year that affects their income tax. If they have non-qualified money that is invested and producing taxable dividends and interest, that could affect their income tax. In phase 1 of our example, the gross distribution from the portfolio alone is $6,250 per month or $75,000 per year. The wages are $2,000 per month, but those are net of taxes, so the gross wage before tax is higher. Just between those two things, they are over $100,000 of gross income in phase 1 without even considering some of the other items we mentioned. With that said, doing a deep dive on the specific tax scenario of each one of these is important to make sure you are using the right tax assumption! Thanks for watching!
It depends on who you ask… We’ve seen scholars, analysts, professors, etc. promoting many different numbers here as what they deem a “safe withdrawal rate” from your portfolio on an annual basis. We agree that a 3.5% withdrawal rate is a really good figure to plan around. Even a conservative investor should be able to continue to grow their portfolio while still pulling the income they need from it at the same time. Having a lower withdrawal rate also allows people to adjust on the fly for the unpredictable things that occur that could cause the withdrawal need to go up over time, such as inflation, healthcare expenses, taxes, etc.
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As a soon-to-be retiree, keeping my 401k on track after a bumpy 2023 is a high goal. I've read about investors generating up to $250k ROI in this present economy, any suggestions for increasing my ROI before retirement would be greatly appreciated.
there are strategies that could be put in place for solid gains regardless of economy or market condition, but such executions are usually carried out by seasoned investment advisors
True, a lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to keep my business growing, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $355k to approx.$800k as of today.
@@albertzalez32 this is awesome! can you please leave the info of your advsor here? i’m in dire need of financial advisory
this is awesome! can you please leave the info of your advsor here? i’m in dire need of financial advisory
Katherine Nance Dietz is the licensed advisor I use. Just google the name and you’d find necessary details. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
If GAP is $5,000 a month, that is $60,000 for a whole year. After a standard deduction, only about $30,000 withdrawal from retirement accounts will be taxed. That is about 5% effective tax rate, not 20%.
Likewise, Tom doesn’t need to withdraw 3.5% of their retirement accounts because an effective tax rate is much lower (definitely not 20%!!!!, but a single digit at most). Probably less than 3% is enough to generate $7,000 required income a month
They are pulling 3.5% every year, but why don't they invest a million in etfs like VOO which will pay them a great div and continue to grow 15% a yr? Also add some VYM and VT VTI and collect 30 grand in divvy and still grow.
If you have no debt then $1.5mil is plenty enough
Having $1.5 million in total assets saved for retirement is certainly an accomplishment to be proud of. With that said, it all depends on how much you spend on a monthly basis, and how those expenses could potentially change over the course of a retirement that runs 20, 30 or even 40 years in length. Things like inflation, cost of living, healthcare expense, and other unpredictable expenses could throw a wrench into the equation if not properly planned for! Thanks for watching!
@@wasmithfingroup OK how about $2.5M?
You forgot to factor your fee
Thank you
What will Tom and Judy do for health insurance until Medicare at 65? Does Judy’s school district job provide retiree coverage? Thanks.
In NYC it does.
Thanks for the example
Happy to help! Thanks for watching!
How did you come up with 20% for taxes? That would be extremely high! Let's assume the full requirement of $7000 a month, or $84,000 a year was taxable, after standard deduction, they would pay Federal tax on about $57,000. Their effective tax rate would be under 8%. I doubt any state and local tax would be near 12%.
When we put an example like this together, we like to err on the side of caution and assume a conservative number for tax withholdings, mainly because we don’t get into all of the minute details that cases like this usually present. While you make a good point, there could be several things that are going on outside of the wages, Social Security, pension, and distribution side of this equation that could cause the client more tax and bring that tax burden up. If they have an inherited IRA, they could be forced to take a required minimum distribution every year that affects their income tax. If they have non-qualified money that is invested and producing taxable dividends and interest, that could affect their income tax. In phase 1 of our example, the gross distribution from the portfolio alone is $6,250 per month or $75,000 per year. The wages are $2,000 per month, but those are net of taxes, so the gross wage before tax is higher. Just between those two things, they are over $100,000 of gross income in phase 1 without even considering some of the other items we mentioned. With that said, doing a deep dive on the specific tax scenario of each one of these is important to make sure you are using the right tax assumption! Thanks for watching!
@@wasmithfingroupstill not 20% effective tax rate!!! That’s impossible!!! At most 10%
3.5 is way low.
It depends on who you ask… We’ve seen scholars, analysts, professors, etc. promoting many different numbers here as what they deem a “safe withdrawal rate” from your portfolio on an annual basis. We agree that a 3.5% withdrawal rate is a really good figure to plan around. Even a conservative investor should be able to continue to grow their portfolio while still pulling the income they need from it at the same time. Having a lower withdrawal rate also allows people to adjust on the fly for the unpredictable things that occur that could cause the withdrawal need to go up over time, such as inflation, healthcare expenses, taxes, etc.