Firstly, if you take out 5%, you need less. Secondly, on average, I made about what high school teachers make in my area and I saved/invested enough to reach the $2M. Lived on 25%, paid over 35% in taxes, saved 25% for retirement, kids college, gifting, tithe, and recreation with the remainder. 19 year old truck and modest home.
Just saw this, interesting video on the number you posted. Being 62 and still working I have been working on our retirement numbers for a few years now. I have come up with the $100K to $104K needed to live comfortably in retirement. Sounds like a lot but my yearly budget today is about $55K for living expenses; assuming they stay about the same there still needs to have income taxes and medical insurance added to the living expenses. I think the $100K amount is reasonable depending on where you live. I plan on working until 65. Retiring at 62 means that SS will be lower, withdrawal will be higher and taxes on that withdrawal will be higher, at a certain income level SS will be taxed at either 50% or 85% and working longer to get more SS will net more non taxed income. If I have my figures correct Medicare is less expensive than insurance we can obtain from private insurance companies because of the income we need to live on. A few of the things that aren't mentioned on the withdrawal strategy (and may have been mentioned in other videos) are dividends, growth of investments and a cash reserve. They can play a large role in how much you deplete your savings during withdrawal and your money might actually grow in the right market conditions.
scrub your expenses, and do it more as you get close to your retirement date, it is likely lower than you think. More than likely if your total social security is only 2400/mo, based on your wage history, you should not need 100K of income. 50K total will support your pre-retirement lifestyle.
there is "support" then there is enjoy. Some folks are good with non expensive hobbies other like travel, golf, etc. If you are in the latter. 50K is not going to do it. If you just want to garden and fish maybe 50K is enough
As someone who has done elder care, I am definitely planning on saving more for retirement than what I live on now. Money is options, and as you get older and lose capabilities. The last thing I would ever wish on a person is extremely limited options as they experience more pain and their body is giving out on them. I see that as a huge source of depression in the elderly.
The comments on videos like these really run the gambit. Everyone needs to realize it’s an example. It could be a real one if you live in a high cost area and haven’t paid off your debts for mortgages and cars. You still have to look at your individual situation and determine your own savings plan. That is the point.
You can do anything you want with it. However your conscious will reward or punish you accordingly. So I’d suggest listening to your conscious and do what you know is right.
I get the feeling that the more retirement savings you have the more you need to know what this guy is saying. Conversely if you only have a million bucks you can probably get by just fine on your own.
To achieve a secure retirement, aiming to save at least 15% of your income in a 401(k) is advisable. Online tools can assist in calculating the best savings strategy for you, considering factors like age and income. Consistently saving this percentage can help build your retirement fund effectively, thanks to the benefits of compound interest.
I've been retired for going on 6 years now and we have not touched one dime of our retirement savings. I can't imagine what I would spend $110K per year on. Truth of the matter is, everyone is different. If you have lived your life and are getting close to retirement age, you already know how much money you will need. If you planned ahead you already have that money. If you don't, then you screwed up. It's just math folks and it's grade school math at that.
I figure he's talking about people retired with a lot of debt,leasing a car,paying alimony,renting,etc. at retirement. My total living expense with my primary home is about $1200/month and that's everything including personal property tax,and HOA. I'm in an upper middle class area. So my $2400/mo. pension is enough for a while. Spending over $8k/mo. in retirement makes no sense to me. Heck I spent the first part of the year traveling in RV from Tampa to Alaska,three weeks in Hawaii,two months in Europe, and still within my monthly pension.
I think it depends on what you are used to. If you made 50K a year when working you probably could not imagine that. If you made 300K, 110K per year seems like a big stepdown.
Wholeheartedly agree, but a lot of choices should have been years earlier. Having just turned 60, I love the fact that I could have retired easily for several years but enjoy my work enough to keep going a few more. I just hope every young person could be in my state and try to advise them so. Sadly I find them just as hard headed and foolish as I was lol.
Are you assuming they need $100k in income? Isn't it better to look at expenses? How many retirees need $100k if they have the house paid off, no car payments, no credit card debt? Maybe if they want to travel a bit. Expenses usually go down except for maybe medical. You have the go-go years, then slow-go years, and finally no-go years. I suspect a retiry needs only 1/2 the $100k unless they have an extravagant life style or live in a high cost major city. And if they do, they probably had a higher income, though they may not have saved properly. Modern couples where both work probably come close to 60% of that figure with Social Security alone.
Yes. The $100k was just a plug number to give an example for the video. You're correct that it's best to start with your individual wants and needs before starting your retirement income plan. After helping people for over 12 years, I'd give a rough estimate that 40% of the people we help retire have expenses that stay the same or go up when they retire. Those are the people that want to travel and spend money on dining out and entertainment. Everyone is different so it's best to spend some focused time on what's best for you. Thanks for your comment, Dan.
Not so true thought about the income needs increase as lots of items might increase lot less than inflation figure. I have tracked my expenditure for last 10 years, it’s hasn’t change much at all. One category goes up, the other goes down.
Everyone is in a different situation, so 100k is a nice number to use as an example. In my case, I imagine I will need 100k/year for some of those years as still have 2 kids to put through school.
Financial advisors have been using the same 100k income figure for the last 20 years (at least) and yet they factor inflation into the equation. Makes no sense because in 5 or 10 years they will STILL be using 100k as the income figure.
I have over 2 million + social security and the best I can do is $80k a year. A person should never spend principal. Please raise interest rates. My life savings are being heavily devalued with inflation and little income from investments. Interest should be 6%/ At 6%, 2 million + social security should be $150k/yr.
I don't get 100K. I race cars for a hobby which cost $20K per year and my total expenses including that is $50K per year. I'm most likely not going to be racing in my 80's and beyond.
Not sure if you are still reading comments, but ... I wonder about your calculation for the 57-year-old at at the 5:30 mark. You account for inflation in computing that a $100,000 income today would equate to a $112,000 income in 5 years assuming 3%. But you assume that Social Security would still be $24,000 per year in 5 years. But we know that SS is always reported in current dollars and receives COLA adjustments. So, don't we need to account for that? Again, as you said, this was just a simple experiment. If we desire to refine the experiment, we probably want the $100,000 yearly payment to account for inflation, meaning it increases each year. Of course, to be fair, we would also want to then account for the fact that the original retirement nest egg ($1.9 million) is also growing year year after subtracting the yearly withdrawal. I'm not sure what would be the next refinement would be, but maybe I can compute all this for fun with a spreadsheet. Thanks for the fun excercise.
Nothing. Ride it out... If you try to get out and jump back in there's a high probability that you will be worse off than if you'd have just left it alone. I'm not retired yet, but very close, I own a small business and have managed to keep about 3 years of living expenses in cash. If the worst happens... market crash and if I went out of business, I have enough cash to get by until the market corrects again. But if you're not close to retiring... relax. Keep adding to your investment portfolio, and you will be fine.
Hi Bruce. You're right that a lot of people can live on social security alone but there are many different types of people who have different wants and needs. The $100k was really just a plug number to use as an example for the video. Maybe it's because we live near an expensive city, but we have quite a lot of clients who are spending over $100k per year. When real estate tax is 20k-30k per year, expenses add up quickly. Thanks for your comment.
Not really. Have a friend and his wife who enjoy living on $150k (gross) per year. Retired at 50 and simply doing whatever they want. If only I could be so lucky!!
Firstly, if you take out 5%, you need less. Secondly, on average, I made about what high school teachers make in my area and I saved/invested enough to reach the $2M. Lived on 25%, paid over 35% in taxes, saved 25% for retirement, kids college, gifting, tithe, and recreation with the remainder. 19 year old truck and modest home.
That’s impressive and thanks for the wisdom!
Good for you, you are doing better than many Americans.
Just saw this, interesting video on the number you posted.
Being 62 and still working I have been working on our retirement numbers for a few years now. I have come up with the $100K to $104K needed to live comfortably in retirement. Sounds like a lot but my yearly budget today is about $55K for living expenses; assuming they stay about the same there still needs to have income taxes and medical insurance added to the living expenses. I think the $100K amount is reasonable depending on where you live. I plan on working until 65.
Retiring at 62 means that SS will be lower, withdrawal will be higher and taxes on that withdrawal will be higher, at a certain income level SS will be taxed at either 50% or 85% and working longer to get more SS will net more non taxed income. If I have my figures correct Medicare is less expensive than insurance we can obtain from private insurance companies because of the income we need to live on.
A few of the things that aren't mentioned on the withdrawal strategy (and may have been mentioned in other videos) are dividends, growth of investments and a cash reserve. They can play a large role in how much you deplete your savings during withdrawal and your money might actually grow in the right market conditions.
Thank you for posting this helpful video
Glad it was helpful!
Been watching, listening, and paying attention to all of predictions and forecasts since early Covid. He hasn't disappointed yet 👌
You are very well spoken and knowledgeable. I appreciate the work you put into these videos.
That is so nice of you. Thank you, Lewis!
Not hitting on you, but your skin! Just flawless and glowing!
scrub your expenses, and do it more as you get close to your retirement date, it is likely lower than you think. More than likely if your total social security is only 2400/mo, based on your wage history, you should not need 100K of income. 50K total will support your pre-retirement lifestyle.
there is "support" then there is enjoy. Some folks are good with non expensive hobbies other like travel, golf, etc. If you are in the latter. 50K is not going to do it. If you just want to garden and fish maybe 50K is enough
As someone who has done elder care, I am definitely planning on saving more for retirement than what I live on now. Money is options, and as you get older and lose capabilities. The last thing I would ever wish on a person is extremely limited options as they experience more pain and their body is giving out on them. I see that as a huge source of depression in the elderly.
The comments on videos like these really run the gambit. Everyone needs to realize it’s an example. It could be a real one if you live in a high cost area and haven’t paid off your debts for mortgages and cars. You still have to look at your individual situation and determine your own savings plan. That is the point.
$100K a year!! I'd love someone to break down their expenses that come to $100K a year? Mind boggling.
Not hard. If that is pre tax, then you get perhaps $70k. Then $50k for housing, that leaves only $20k for everything else. Not much at all.
Lol very easy especially with paying student loan debt
Cottage. ...boat. ..vacations...... cars.... restaurants. ... 😂
If my pension and social security is 135k I guess I don’t have to save anything. What do I do with millions in the bank?
You can do anything you want with it. However your conscious will reward or punish you accordingly. So I’d suggest listening to your conscious and do what you know is right.
Not sure 4% rule is applicable today. Maybe you can do a video that talks about why you think it should still be the rule of thumb.
I really like the way you explain things. Thank you.
Thanks so much, Barbie! :)
Very simple, if you’re stressing on if you’ll have enough to retire, I recommend that you don’t retire.
I get the feeling that the more retirement savings you have the more you need to know what this guy is saying. Conversely if you only have a million bucks you can probably get by just fine on your own.
We find that true as well. 😊
Thanks for the comment.
You throw around a bunch of numbers without any white boarding or graphics. Might help for following along.
Great recommendation! Thank you.
Ya this prevented me from skipping ahead to the meat of the video, so I gave up.
To achieve a secure retirement, aiming to save at least 15% of your income in a 401(k) is advisable. Online tools can assist in calculating the best savings strategy for you, considering factors like age and income. Consistently saving this percentage can help build your retirement fund effectively, thanks to the benefits of compound interest.
its easy to learn , when you are the one teaching
That's so nice of you. Thanks, Nicole!
I've been retired for going on 6 years now and we have not touched one dime of our retirement savings. I can't imagine what I would spend $110K per year on. Truth of the matter is, everyone is different. If you have lived your life and are getting close to retirement age, you already know how much money you will need. If you planned ahead you already have that money. If you don't, then you screwed up. It's just math folks and it's grade school math at that.
I figure he's talking about people retired with a lot of debt,leasing a car,paying alimony,renting,etc. at retirement.
My total living expense with my primary home is about $1200/month and that's everything including personal property tax,and HOA. I'm in an upper middle class area.
So my $2400/mo. pension is enough for a while.
Spending over $8k/mo. in retirement makes no sense to me.
Heck I spent the first part of the year traveling in RV from Tampa to Alaska,three weeks in Hawaii,two months in Europe, and still within my monthly pension.
I think it depends on what you are used to. If you made 50K a year when working you probably could not imagine that. If you made 300K, 110K per year seems like a big stepdown.
Travel travel travel.
Wholeheartedly agree, but a lot of choices should have been years earlier. Having just turned 60, I love the fact that I could have retired easily for several years but enjoy my work enough to keep going a few more. I just hope every young person could be in my state and try to advise them so. Sadly I find them just as hard headed and foolish as I was lol.
Are you assuming they need $100k in income? Isn't it better to look at expenses? How many retirees need $100k if they have the house paid off, no car payments, no credit card debt? Maybe if they want to travel a bit. Expenses usually go down except for maybe medical. You have the go-go years, then slow-go years, and finally no-go years. I suspect a retiry needs only 1/2 the $100k unless they have an extravagant life style or live in a high cost major city. And if they do, they probably had a higher income, though they may not have saved properly. Modern couples where both work probably come close to 60% of that figure with Social Security alone.
Yes. The $100k was just a plug number to give an example for the video.
You're correct that it's best to start with your individual wants and needs before starting your retirement income plan.
After helping people for over 12 years, I'd give a rough estimate that 40% of the people we help retire have expenses that stay the same or go up when they retire. Those are the people that want to travel and spend money on dining out and entertainment.
Everyone is different so it's best to spend some focused time on what's best for you.
Thanks for your comment, Dan.
Not so true thought about the income needs increase as lots of items might increase lot less than inflation figure. I have tracked my expenditure for last 10 years, it’s hasn’t change much at all. One category goes up, the other goes down.
great video! very helpful!
Good! I'm glad it was helpful, Joe.
Great overview.. we hope to have you do a more detailed personal plan for us this year
Thank you, Steve. Glad it was helpful.
in 30 years 100k will feel like 50k...I have a feeling you're gonna need 200-300k a year min to be comfortable with the way inflation is going...
Not to be overly critical, but why would you need $100k in retirement?
It's just a target point.
I'm sure many could live off half of that or less just fine.
Because I need 150k today to live.
Everyone is in a different situation, so 100k is a nice number to use as an example. In my case, I imagine I will need 100k/year for some of those years as still have 2 kids to put through school.
great video dude
Thanks, Jason!
How did you leave out the must important thing ! Expenses!!!!
I’m retiring next month. And I’m a bit nervous on how to keep up with my kids.
Percentage of folks who could actually save nearly 2M has to be extremely small?
On the 4% rule? What percentage of return are you figuring on getting on the 1.9 million, needed to retire? Thanks
It would be good if you could show on a board or paper how this works!
Financial advisors have been using the same 100k income figure for the last 20 years (at least) and yet they factor inflation into the equation. Makes no sense because in 5 or 10 years they will STILL be using 100k as the income figure.
I have over 2 million + social security and the best I can do is $80k a year. A person should never spend principal. Please raise interest rates. My life savings are being heavily devalued with inflation and little income from investments. Interest should be 6%/ At 6%, 2 million + social security should be $150k/yr.
Can someone better explain the adjusted inflation math for me? Its not coming out right on my end. Thanks and informative video!
I have 6k in my savings...where does a regular Joe at 39 start? Ima late bloomer when it comes to finances
wife and husband retire and take Social Security at age 66. If they have pensions plus S.S., they need much less to achieve $100,000.
That could be true, Jani.
It could depend on how much their SS and pensions are.
I don't get 100K. I race cars for a hobby which cost $20K per year and my total expenses including that is $50K per year. I'm most likely not going to be racing in my 80's and beyond.
Not sure if you are still reading comments, but ...
I wonder about your calculation for the 57-year-old at at the 5:30 mark. You account for inflation in computing that a $100,000 income today would equate to a $112,000 income in 5 years assuming 3%. But you assume that Social Security would still be $24,000 per year in 5 years. But we know that SS is always reported in current dollars and receives COLA adjustments. So, don't we need to account for that?
Again, as you said, this was just a simple experiment. If we desire to refine the experiment, we probably want the $100,000 yearly payment to account for inflation, meaning it increases each year. Of course, to be fair, we would also want to then account for the fact that the original retirement nest egg ($1.9 million) is also growing year year after subtracting the yearly withdrawal.
I'm not sure what would be the next refinement would be, but maybe I can compute all this for fun with a spreadsheet.
Thanks for the fun excercise.
Wouldn’t the social security increase for the 57 year old in line with inflation ?
$60k in defined benefit pension
$22k in early (62) SS
500k in Roth&IRA
Yeah, unions suck.
Stock market is down 4% after the huge run up Everyone"its crashing again....what the next move🤦🤦
Nothing. Ride it out... If you try to get out and jump back in there's a high probability that you will be worse off than if you'd have just left it alone. I'm not retired yet, but very close, I own a small business and have managed to keep about 3 years of living expenses in cash. If the worst happens... market crash and if I went out of business, I have enough cash to get by until the market corrects again. But if you're not close to retiring... relax. Keep adding to your investment portfolio, and you will be fine.
Time to buy!
🤣Imagine what you can afford in 20 years for $100К 🤣Yah 3% inflation suuuure
Suz Ormand saz u need at least 7 million and I believe her. My pool boy scares me.
👍🏻💰
My Federal welfare check, SS, will only be $4,100. I will need to spend some of my own money when I retire.
great video but too much talking... get to the point.
With the green new deal Biden is giving us we won’t have any green left!
My Federal welfare benefit, SS, will only br $4,100 per month.
There are other countries where you can live just fine on that income. You should consider it.
Crazy....no freaking. People live just on Social Security so this is BS. What 85yr old spends 100k a year, haha. Foolish video
Hi Bruce. You're right that a lot of people can live on social security alone but there are many different types of people who have different wants and needs.
The $100k was really just a plug number to use as an example for the video.
Maybe it's because we live near an expensive city, but we have quite a lot of clients who are spending over $100k per year. When real estate tax is 20k-30k per year, expenses add up quickly.
Thanks for your comment.
Not really. Have a friend and his wife who enjoy living on $150k (gross) per year. Retired at 50 and simply doing whatever they want. If only I could be so lucky!!
It makes the math easier if you only need half then just adjust the numbers.
Once you start pulling social security will the monthly payment issued increase like inflation?