With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.
For the average person, the strategies are fairly demanding. In actuality, most professionals who have the necessary abilities and knowledge to complete such occupations do so successfully.
At 69 I retired 9 years ago at 60 years old with 1 million, I have spent an average of $45,000 per year and I still have a net worth of $1.1 million. I'm enjoyed the first 9 years of my retirement I'm hoping for another 20:-) the first 9 years I traveled extensively internationally and went on cruises at least once a year as well as more than a dozen road trips all over the USA and all over Thailand as well as bali, Kuala Lumpur, Hong Kong, Shanghai. I'm loving retirement and enjoying helping out giving to the poor or the disabled
@@honorhonor3352 I'm self-insured. In the USA I have Medicare Advantage it is free with my medicare. In Thailand Healthcare is Pennies on the dollar and the Thai health insurance is better than us health insurance. Living in the USA and paying for health insurance premiums is a scam! There are lots of countries that have actually better health care than the USA. America has brainwashed its citizens to believe that their Healthcare is the best in the world. Talk to any doctor and they will dispute that. Healthcare premiums are expensive even in Thailand I don't pay for them I pay for my health care out of pocket it doesn't amount to $200 a year and I go to the doctor often for wellness checkups
My in-laws have 1/3 of that and they are retired and happy. I don’t think they are missing out on anything they enjoy. With $1M you should live as simply as possible - the peace of mind of knowing you have enough for most emergencies is priceless.
@@neomage2021 I did it on 1.1 mil and have been traveling internationally. But living the majority of the time in Chiang Mai Thailand. Which cost about 1/3 of the US costs. 1.1 mil has grown to 1.4 mil in the first nine years of my retirement from 60 years to 69 years. You don’t need 3 million. However I had 3.5 million but I gave more than half of thatTurn the ball and chain to get away and was happy with that arrangement. It worked out well. You can easily travel internationally and go on cruises I can also afford to support my tie wife and her daughter all the way through college no problem :-)
Joined the Navy at 18 with 7k in the bank. I did janitorial and smoked a lot of pot in high school. Left the Navy after months with 40k in the bank. Invested 30k in the S&P stocks. Started working at UPS, Exide Battery and did concrete on Saturdays. Invested 1k a month every month into it with my Financial advisor James Fletcher Brennan, Cashed out 350k from the S&P Cashed out and Semi retired at 31. Took a year off. Traveled. Came home and started working part time just for the insurance, entertainment and pocket change and still investing in stocks with a 3 million net worth, Work isn't work when you don't have to work. Becoming wealthy can be done in few years. It feels like 60hr work weeks. Feel the pain of discipline early or feel the pain of regret later. I wish everyone well!
I completely agree. I'm 60 years old, recently retired, and have relatively little retirement money compared to the value of my trading portfolio over the previous three years. I also have no debt and roughly 1.2 million dollars in other retirement accounts. Actually, the investment advisors may only be neglected rather than rejected. You only need to investigate them to locate a reliable one.
I’m 50 and my wife is 44 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle in the stock market made it possible for us this early even till now we earn weekly. Thanks to FIRE movement.
Well here's a food for thought for folks about to retire or plan their future: Place a sizeable portion of your capital/savings in fixed-income securities like treasury bills, corporate bonds, government securities, debentures and let it grow. It will take you far I promise.
@B I’m not trying to be insensitive, I understand the situation is not the same for every one but it's very important to cut your coat according to your size and find contingent ways to save, then you can find the best options to invest that money. It's possible for anyone.
All I see are excuses upon excuses. Well y'all should keep telling yourselves it's impossible to make it. With this mentality how wouldn't it be. Come out of your goddamn shell and take the risks.
So very helpful - thank you! My wife and I are 54, plan to retire at 60. I'm working but already drawing $5000 a month school pension. Plus we should have close to a million at 60 in retirement - plus a paid for house to sell (we're paying on the condo we'll move to now). This makes me feel good about supplementing our income with 4% or so each year, vs getting some kind of annuity.
I wasn’t financial free until my 30’s and I’m still in my 30’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made. Great video! Thanks for sharing! Very inspiring!
This reference seems valid.. Just looked up her full name on my browser and found her webpage without sweat, over 15 years of experience is certainly striking! very much appreciate this.
I like the variable analysis. The inflation example is basically reality now, so this couple has only a 50% chance of success. Don't even think about buying a new car unless it's a Toyota Corolla and you keep it until you die :)
Retirees who are struggling to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k. My mom retired with about 4.2 million, but my dad retired with roughly 1.8 million.
You have packed a lot of good information into this. The one thing I think is missing is a discussion of this couple's expenses preretirement. The spending plan does make sense without understanding their current actual expenses and spending patterns.
I retired 7 years ago at 57. I now have a couple of million. Living on about $50,000 a year. Take a couple of cruises a year (first class) and just like doing anything we want. We do not spend much except on vacation and food. We have a brand new house and cars. All are paid for.
Move to Mexico!! I own my home outright in a 27 hole golf resort on the beach with 24 hour security (50 miles south of San Diego), and my fixed monthly living expenses is less than USD500. I made a move at 44 and have not looked back.
You should do a separate video on how to get a solid estimate of your expenses during retirement. That is step 1, and the earlier you retire, the more important it is. Lifestyle, debt, health varies greatly.
Best advice I ever got, was that about 2 years before you plan to retire, use a credit card to pay for everything, regardless of how small the purchase. This will give you a record of exactly how much you spend. This is the start of your retirement budget. It is amazing how much people spend with cash, be it a bottle of pop at the gas station, a meal at rhe drivethrough at McDonald's, etc.
Expect that they expenses will go up! Its retirement why limit yourself? Go out spend money and have fun. Expect higher returns while your saving and into retirement. Start with a investment return that you think will work than 10x it!
I'm 60 with $1M and retired last year at 59 (not by choice). I feel like I'll be okay, but can't imagine retiring this early and supporting two people (I'm single). Owning a home is so expensive. Utilities have gone up 30%, which is $600/mo for me now, and my property taxes are $11k/year and rising. Doesn't seem sustainable. God forbid if I ever need a new roof! I'm looking into moving to Mexico, Spain or Italy.
I had the light bulb moment at 60. We were in a similar position. I was earning well and enjoying my job, so we deferred retirement till 65 and darned near doubled the savings. That gave enough of a buffer that we have no worries. It is hard to appreciate how much comfort that brings to the party. I don't worry about inflation, market crashes or longevity and that alone makes retirement more enjoyable. I'd rather leave money on the table than worry about it all the time.
If it's not a stock market crash people are fearing it's something else. Will high inflation be here and continue? Who knows? I just know to make an assumption on 20-30 years of retirement you don't just use one data point.
Even if Inflation isn't transitory, if you have $1M+ in investments already, then all that means is that you need to tweak your allocations towards Investments that are more profitable during high inflation and perhaps adjust that your annual withdrawals may not go as far as initially thought. It's all the rest of us that are more f**ked...
The low inflation rates he was assuming really jumped out at me, too. His slider didn't even go above 5.25%. I remember inflation rates of 18% in the late 70's. Don't think it can't happen again!
@@tjtreks7134 I know, I have the one million too, and watch all these shows that say it may not be enough, especially with inflation starting now. But then I see other data that says I'm in the 1.7% of Americans with over one million, so I always wonder about the rest of the country. I have 5 brothers and sisters and I know that none of them have that kind of money stashed away.
The start of the video, where you have all these important questions about retiring with your hard earned nest egg, is exactly why my wife and I searched for a trusted financial advisor.
I would like to see more videos on single people. I would like to see what extra steps are needed since I don’t have another person to depend on financially
Me too regarding singles, but many retired people are still in the accumulation stage because we are spending less than what we are taking in each year. In this long bull market, it is pretty common. Not forever, not guaranteed, but for the past several years.
@@TheOky777 If you see that the person will only have 10 million to retire. This video makes zero sense. He can spend that 1 million in a minute if he wanted to. If he has a stroke tomorrow that 1 million will gone the next day. Very few people have a million laying around. At his age he went through the financial crisis and that wiped out many.
So true, your portfolio needs to earn 6.25% minimal 2021, just to keep up with inflation. The printed money from Biden and Congress is killing those of us who have saved for years, just to have inflation kill our years of being frugal.
@@cpmiller1965 it is a form of theft. We the frugal savers get shafted while the people holding stocks and realestate feel a positive effect from inflation. All there holdings go up in value at the rate of 30%. Once again the chasm between rich and the sub class widens.
@@brianmeegan6384 SO vote for the party that supports domestic terrorists that burn down hundreds of businesses, destroy people's livihoods, and harrass and beat up innocent civilians. Got it.
Thank you. Awhile back I saw a video talking about soon to be retirees being in shock when they realized they were going to start drawing money out of their savings once they retired. This hit me like a ton of bricks. No way did I want to take money out of my savings. I made a new plan. Trying to work to age 70. That said, when my husband passes away, I will probably have to start taking some money from my savings.
Hot digity...This was the best video! This is the closest video I have seen to what the average citizen might have saved for retirement. Im tired of the "I have $2 million can I retire" or the "I only have $500,000.00 can I retire" videos. This was right in the sweet spot for us financially speaking and really addressed many of the concerns that we have been discussing as a couple as we get closer to retirement. Your roth conversion strategy was exactly what I was needing to hear. Thanks for the great content...as always!!
@@finspiration2666 They are usually not watching these videos. They’re watching “how to go to Vegas with the whole family ion a credit card and save 20% on the buffet.
I wish there were videos like this for the Australian setting/scenario. I’m 62 and my wife is 61. Currently we are talking to a financial adviser and waiting for our next meeting.
Recently, I've been thinking a lot about retirement. It's difficult for me to decide how much I should spend and how to invest my savings. I've heard of index funds and exchange-traded funds (ETFs). They provide diversified stock market exposure while spreading risk. I have over $400K in savings; when should I begin investing in the stock market for retirement without taking too many risks?
I’m 40. I and my wife have ~ 1 million lucidity which includes stock, cash and 401K. We have invest in stock ~400K with all blue chips like google, Apple, Amazon, Tesla, Palantir, SMCI.. 400 in cash ~200K in 401K. We plan to buy our first home.
Thanks for the video. Makes me feel good about where I am financially. Confirms what my financial guy says. I'm 60 and my wife 56. Between the two of us we have 1 million in our 401K's plus savings. We plan on retiring in 4 years when the house is paid off and will have zero debt so It looks like we'll be ok. Not bad for a teacher and a mid level GS employee.
I’m 60 and I have 60k. Husband and husband not wife. Husband is 49. The only thing I’ll have is a railroad retirement check to live on and willl still have a mortgage in Palm Springs
Thank you for sharing your situation, @SFDOM415! It sounds like you have some unique challenges to consider. Railroad retirement benefits are a helpful source of income, which is great. If you ever need help with your retirement plan, we definitely recommend consulting a financial advisor to gain more personalized advice! Wishing you and your husband the best as you plan for retirement in Palm Springs!
Pulling out $100k/year for 10 years seems like a poor way to retire compared to taking that same $1 Million and putting it into a 5 star ETF vehicle like JP Morgan's JEPI (7.1% dividends/year circa Nov 2021) and large pipelines like EPD (7.97% divs) which would pay you $75,350 per year in income while leaving all of your nest egg intact save for any non-realized (because you aren't selling them) changes in market prices for them. Even if the stock market dropped your holdings by 17.5% every year (an absurd worst-case scenario), you'd still be $3,500 ahead of the same retirees who pulled out $100k/year while having no nest-egg-income.
Food for thought on long term care. Mom was in a good facility, not the top of the line but good and was on hospice for her year and half so that helped with medicine and equipment. The cost of that stay is now $10,000/month, $120,000 a year for a semi private room. It would have been less at home but we physically could not do the care anymore. To plan, thinking that the big money output is going to be all on the front end is short sighted and could land you at age 88 or 90 in a place you really don't want to be.
Take simple easy lifestyle, take care of your health, that 1 million will last longer. Nowadays everything is expensive, 1 million is actually a small amount.
Enjoyed the insight. Let the financial planner do what they are best , growing your portfolio based on your risk tolerance. When to retire "Distribution Phase" is totally up to you. I like my advisor, but it would be a conflict of interest to ask that question. Compensation depends on my continuing investing and him following industrial norms. With a little arithmatic and self evaluation, you can figure for yourself. Keep in mind, YOU CAN'T TAKE IT WITH YOU....
It's your money. Spend it all. To be fair. Set aside money for emergencies. Set aside money for your final expenses. (this can be prepaid) Set aside the amount of money you want to leave to your next of kin to fight over and then spend the rest. You can't take it with you. One more thing. Each of us learned how figure out how long our money will last. We learned it in Grade School. Back then, we called it math.
It's not this complex. IF you can save 50 times your annual income you can retire tomorrow. If you can save 30 times your annual income you can retire with a high likely hood of success. In either scenario you simply withdraw up to 4% of your portfolio balance per year (and you can adjust for inflation) for the rest of your life and you still have the million dollars in your account to leave to your heirs.
Retiring with $1M is doable in the present conditions. Retiring with $1M and high debt is another story. If what one needs is truly $100K per year for 10 years in the initial Go-Go stage, so be it. But having that spending as discretionary instead of obligatory makes a big difference because with the former one can easily scale back as necessary, but not so with the latter. So, to me the key is not just having the $1M + portfolio, but actually having low or no debt.
Take the million, go to Vegas, talk to casino management. They will give you one $1million dollar chip. Walk to the roulette table, put it down on red of black. 49% chance you'll win. You'll either double your money, or be entitled to government freebies. A win-win situation.
Great video again! I am planning to retire at 60 (wife retires at 56). Your videos really help us in thinking through our plan. Only variable we are watching closely is the runaway inflation that is underway. This is the only thing that could keep us in the workforce longer.
oh, i dont think inflation will continue at these rates as he explained in the beginning. We have had such low inflation for the past decades it was bound to catch up eventually!!
@@alcw625 Served a lifetime in the Air Force and Air National Guard. Start collecting retirement and have military retiree medical beginning at age 60.
Current portfolio is worth 1.3M, monthly cash flow is 10K, retired age 59 currently will never need to draw from my portfolio until RMD at 72. Moral of the story….., make wise choices in your 20’s, thru 50’s saving is much more important then toys and experiences. Disclosure: cash flow is Pensions and SS.
Looking forward to seeing your video presentation at the end of September. I’m sure the 8 1/2% inflation rate is going to have a big impact on everybody’s portfolio and retirement plans.
Depends on your definition of ‘retirement’. With the rise of homes, cars, cost of living, it’s becoming increasingly harder. Plus - how much golfing can you really do?
What a sad thought! Retired 5 years now and golfed ZERO times. Love home improvements, helping others, everyday tasks, bike riding, boating (and maintenance) and a little travel. Never bored!
@@hogroamer260 We’re not discussing those already retired, we’re talking about how with rising expenses, high home cost and vehicle cost, taxes, cost of living etc that make it increasingly difficult for working people to save and plan for retirement in today’s market. The median home cost 30% more in just the last few years.
Rick, if you already own your home (and perhaps car) you don't need to be concerned about a 30% house price increase or car prices (for a while). I'm with Hog, you can keep pretty busy with out spending much. Also do yourself a favour and calculate how much it cost you to be employed - ie fuel, car wear and tear, clothing, lunch etc. Now apply that to your having fun in retirement fund.....
six months after this video was put out, inflation is no longer 3%. It's 8 % , and rising. It will be over 10% by the end of 2022. Those who doubt this have their head in the sand. Real good financial planner. The economy and the national debt is often ignored by the financial planning industry.
@@giainto5564 and today tesla lost 12.18 %. , equates to $ 125 billion value decrease. How much was the purchase price of that social media thing ? Be better hope that the Donald get back on .
The bad part of this example is it only represents a small percentage of the population. If you get to this point and have this much, just reduce your spending to a reasonable level. And put the money somewhere safe and diversified.
If they'd just spend 15% less [investing that into index funds] in the go-go and slo-go from $100k to $85k and $75k to $63k, keep the no-go at $50k and if at least one of them got a pension which he doesn't mention is this video and others, I believe their success rate percentage would go up from 80% into the 90's.
@@kennethboehnen271 , not if they were already spending at that level in the first place to be able to accumulate that wealth. I’m also assuming that their house is paid off, they no longer have to commute, contribute to SS, etc. pay less taxes.
start at 30 squat, 30 push-up every day. (your thick thigh will prevent you from becoming a diabetic) by 65 pay off mortgage pay off a Landcruiser make your children be independent then no matter how much money you have left over you will die a happy person
BWAHAHAHA. You have a point. Should be a 100. Incorporate calf raises too. The goal is to be bill free before you retire. Then reality sets in when you are staring at a fixed income.
As a 30 yr old who does not plan to retire to my mid 60s I would enjoy seeing 2 things: 1 - Things i can be doing now to optimize my opportunities later (How much to save, What types of accounts to put it in, What should I be investing in (bonds, index, mutual funds)) 2 - I would really like to see a simulation that is NOT about people with the least amount possible and how they can barely make it. Maybe 5-10 million and wanting to plan to live comfortably and plan to leave a legacy to the next generation. I really enjoy your content (especially the simulation testing) but would also like to see more content toward people in the "accumulation phase"
@@LWRC the economy is on fire! Demand is up for everything. The last 120 years don’t lie, look at the stock market performance when a democrat is in office vs a republicon.
First contribute up to limit on every type of tax advantage account you can. 401k's, IRA's, Roth. Second for the long run invest a market index eft. Anything you can save above that is gravy. Owning a house in an inflationary environment is a good investment. In my younger years I was very conservative and hated losing money in major market turndowns, so I put money in conservative fixed interest investments. Had I just let it ride in the market I would have about three times what I have now. Just let it ride in stocks. Do a spreadsheet with assumptions about investment earnings to see how much you have to save to meet your goals. Then you have to make a decision, "how much do you want to defer spending now, to have more savings later"
Years ago I thought about this problem and I came up with a solution. I settled on a plan to make way more money than I needed. This way, in retirement I will have as I said. Way more money than I need. I have a little over 7 million. All I have to do is restrict my spending to no more than a drunken sailor. Should work out fine.
If you are planning on securities to stay for heirs to inherit then you should take SS at 62, markets over time will give much better returns that that 6% reduction penalty. Numbers game, but markets work out close to 9% over time.
The question of can I retire with … makes no sense without a solid understanding of your current monthly expenses. 100k a year seems pretty extravagant considering the median household income in for 2 people in 2020 was $67,521.
Actually thats not the case. The case has to be made more the couple that they need to know what their expenses are to know if $100,000.00 will cover their expenses plus extra. The purpose of this video was to find out if they can retire with what they have while needing $100,000.00 annually. 2 totally different things. I agree with you that the couple needs to know their expenses but to find out if there nest egg will last they only need to know withdrawal rates.
How much of that $100K is left over after paying taxes and inflation costs? Property taxes, income taxes, sales taxes, etc... The government screws all of us over.
@@lukewarme9121 they do huh? We are paying historically low tax rates yet you think it’s too much! How much do you think it costs to maintain our roads, bridges, police and fire, our schools etc. people like you always say we should go back to times like in the 50’s. Check out the income tax rates in the 50’s! That’s why the economy was so strong. Money was being spent on infrastructure, and research. Jobs were created and the middle class was created. Now the money just goes to the top 10%! How is that working out for you?
@@NipItInTheBud100 Really? You don’t know what “HISTORICALLY” low tax tates are. Typical leftist. What were the federal and state tax rates before the democrat Woodrow Wilson???
@@NipItInTheBud100 The 1950s tax rates were high to pay off WW2 debt. Democrat JFK lowered them to stimulate the economy. The national debt then was way below a Trillion dollars. Today, the federal national debt is over $29 Trillion. You leftists are totally clueless and is why America is bankrupt.
A very simple way to approximate what you can/cant spend is the 4% rule. Basically says that you can take 4% of your retirement fund each year adjusted for inflation without the risk of outliving your money. In this case, the couple can take $40K/year safely. Candidly, they cant retire as healthcare is going to cost $12-15K, leaving very little for living expenses. For most, healthcare is the single biggest gating factor when considering retirement early.
Trying to add to the discussion here... it really depends on the couple's income for the years before their age allows them to qualify for Medicare. At $43k or less, they should qualify for the ACA and thus get some assistance to lower those costs. And while it is unfortunate... if they really end up withdrawing $100k+ during their "GoGo Years" then they'll need to account for $12-15k of that $100k+ being spent on Health Insurance sadly
Why have health insurance anymore. I don’t. If something happens to me, I guess it’s my time to die. Big deal. We’re all going someday anyway. I refuse to be ripped off by the insurance companies anymore. 12k- 13k deductibles. Ridiculous! Also my premium for me(57) and one of my sons(22) would be over 1700 a month. Screw that!
@japanwatchconnection If people 'in that age bracket' are retiring early or forced out of a job because of age, how will they pay for Medicare - or are the rest of us expected to pick up their tab?
I would say you should not spend any of the $1 million for at least 5 years. Invest in assets that throw off income and only live on that for the first 5 years. Or better yet do NOT retire until you are 65. He is giving terrible advice to live on $100K for the first ten years. Huge mistake to draw down that much of your corpus so quickly.
I agree. It can really hurt your situation to take out a large amount from your savings early in retirement. $1million sounds like a lot, but it really isn’t for two people. Also, my financial planner uses a life expectancy of 100 for anyone under 70 years old. People are living longer and longer, but not always healthy. Long term care is expensive, and the insurance for that is becoming extremely costly, if you can even find it.
@@suzanneemerson9787 Could easily turn that 1 million into 2 million by age 67. What a different retirement that would be with 2 million vs 1 million. Live on the cash flow and never touch the principal.
@@JustinMarchegiani don’t forget though, that during the go go years if you don’t spend enough, when you get to the slo go or no go years and are forced to take out income, coupled with any rental income etc from above scenarios, you’ll just be giving more of your savings to the government through taxes on an income that’s too large. It’s a bit of a paradigm shift after years of savings…
You are only partially correct. People have different goals. I’m looking at retire at 50 with 1 million but only drawing about 45k a year. Peoples lifestyles and desires very wildly. As long as they don’t go entirely broke. Who cares what they do.
It’s always good to have a financial plan. I work with a licensed planner and fixed-income strategist in LA that helps me sort out these plans of investments
Thank you for this video. It makes you think. I think I have too much in 401, but I have Roth as well. Conventional thinking is you shouldnt touch the Roth and let it continue to grow tax free as you age, but that makes you pay taxes on the 401K money should you need it. Lots to ponder, but thank you.
Better to pay taxes on the 401(k) money gradually as you need it than to get drilled later in life once your RMD’s start to kick in! Goal would be to have your 401(k) drawn down enough by 72 that RMD’s are a non-issue - defer your Roth withdrawals (and if possible, Social Security) and use those to fund your later retirement years.
But I am retired and still in the accumulation stage because my investments are doing so incredibly well in this bull market. I know it's not guaranteed, but neither is a job.
I'm retired and suppose to be in the Distibution Phase. This pandemic is stopping me to travel . I have no reason to double up my already generous travel budget for next year. All the 2021 dividends are selfishly being reinvested. I may need to revisit my selfishness.
At 60 years old you have maybe 10 - 12 years of being young enough to do the things you've always wanted to do (travel, etc). Sometimes it's hard to make the transition from a lifetime of working and saving to a life of spending and enjoying. The future is now.
Interesting video and presentation. I would not encourage this couple to retire at age 60 with car payments other debts, it just doesn’t make sense…to carry That burden into your old age. I would advise him on how to cut down on expenses so they can survive on cautious withdrawals from their savings and Social Security.
Hi @Thom3748, thanks for watching and sharing your thoughts! There are many different ways we could advise these clients, and this was just a representation of one of the possible paths! In our appointments, we also go far more in depth than we do in these videos. As fiduciaries, our top priority is looking out for the best interests of our clients. Take care!
well if you plan to live for 20 years after retirement you can do the math... $1000000 / 20yrs = $50K/yr.... and you can add on your SS checks and what ever else you have... pretty simple isn't it...
Yup....that's basically my thinking. 20k wife SS plus 30k my SS plus $50k in IRA/401k/Roth withdraws and I am living "la vida buena". Retirement is 5 or 6 years away.
I would not spend $$100,000 a year in retirement when everything is paid off unless I have millions and high standard living . I only Need food insurance and walking, going to Hawaii sometimes
My biggest fear about retiring before 65 at a minimum is the cost of health insurance. You did not mention that for those thinking of retiring before the age of Medicare eligibility.
Thank you for watching and sharing your concern! You're absolutely right that the cost of health insurance is a significant factor to consider, especially for those planning to retire before Medicare eligibility kicks in at age 65. Many times we don't have time to get into health care planning in some of these more general retirement planning videos, however it's a big part of our planning process as a firm, and we have made several videos that are focused on running these same kinds of scenarios and primarily focusing video content on the health care aspect. Here's the link to one we did recently ua-cam.com/video/flVXKx2PRlc/v-deo.html Thank you for bringing up this important point, and if you have any more questions or topics you'd like to see addressed, feel free to let me know! You're always welcome to schedule a complimentary appointment with our team as well to get your questions answered. Always here to help.
find myself in a similar situation, retired a year ago at 62, have over 1Mil in a fixed accountb earning 3%, have pension and SSI that covers more than my expenses and over 100k in cash, I know I should be thinking about getting into the market , but have idea when to start , I have a feeling we have at least another 6 months of pain coming.
Good info, thanks. But I’m curious on one thing. Given this particular couple, I would assume they own a home with no mortgage. A reasonable assumption is that their equity could easily be $500,000. Assuming they want to continue living there, why wouldn’t you incorporate this large component of their net worth (they worked hard to build it) in the analysis? Could use the “new” reverse mortgage to avoid sequence risk, cover tax liability for Roth conversion, or bridge the cash flow gap before taking social security? Some combination of these things could be done without incurring a mortgage payment, and likely leave a growing line of credit for unexpected expenses down the road so they would not have to reduce their portfolio to cover such expenses. Thanks for helping so many with your counsel.
You forgot the most important part, what are your baseline expenses? Typically a person can withdraw 4% of their portfolio that is comprised of 60% or more in stocks. That typically lasts at least 30 years. So a conservative estimate would be 40k a year. If you can’t live on that but can with your SS benefit then take it. If you can’t, don’t retire.
@@thomasreedy4751 ... absolutely! One of the things this video keeps harping on is wanting $100k a year with no mention of what they really need. I retired almost 2 years ago at 66 and my first thought was to see what I could adjust to for my SS income level. So far I am coasting fairly well on SS (only) despite pushing 6 figures while working. My figuring is to let my investments grow till I need them and the rest should be easier. I mean, 5 years from now I might need a car or some other major item, right? I own my home free and clear plus no outstanding debt so I will eventually downsize and add some of that to my retirement egg.... OR... come up with a number that selling my home will generate and rent for my last few years based on investment return. At some point I should hide part of my money as well, which many people do but few talk about it.
@@DavidEVogel ... the same income is taxed different with two people. If the number is low enough the tax could be almost nothing. Of course this can vary from state to state as well.
SOOO much to try and figure out it takes a lifetime to manage yeah thats what i want to do when i retire is fight ,bite, scratch, yell and scream about managing retirement throughout the year chasing the changes just to start it all over year after year
FYI if you retire in Thailand there is a USA Thailand tax treaty. You pay zero tax on qualified Investments. That means you pay zero tax in the USA, you also pay zero tax in Thailand. All you have to do is transfer the money from your USA bank account/ investment account into your Thailand bank account you can spend the money on your living expenses in Thailand totally tax-free it's not a scam it's true I'm doing it now and I know guys that have been doing it for 20 years here. Thailand is a beautiful place to retire oh by the way the cost of living is about 25 to 30% of what it is in the USA so your money goes a long ways. Just thought I'd mention for anybody that's looking for a great opportunity to save on your taxes
Excellent analyses and recommendations. Question are the withdrawals before taxes meaning $100,000 withdrawal will provide $75,000 after taxes for annual spending ?
With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.
For the average person, the strategies are fairly demanding. In actuality, most professionals who have the necessary abilities and knowledge to complete such occupations do so successfully.
Am 60
Years
At 69 I retired 9 years ago at 60 years old with 1 million, I have spent an average of $45,000 per year and I still have a net worth of $1.1 million. I'm enjoyed the first 9 years of my retirement I'm hoping for another 20:-) the first 9 years I traveled extensively internationally and went on cruises at least once a year as well as more than a dozen road trips all over the USA and all over Thailand as well as bali, Kuala Lumpur, Hong Kong, Shanghai. I'm loving retirement and enjoying helping out giving to the poor or the disabled
That is what I want to do, you are a role model.
In exact situation as you but I have $40k in bills before I even start spending on trips
How much is your Health Insurance premium?
A positive sequence of return result.
@@honorhonor3352 I'm self-insured. In the USA I have Medicare Advantage it is free with my medicare. In Thailand Healthcare is Pennies on the dollar and the Thai health insurance is better than us health insurance. Living in the USA and paying for health insurance premiums is a scam! There are lots of countries that have actually better health care than the USA. America has brainwashed its citizens to believe that their Healthcare is the best in the world. Talk to any doctor and they will dispute that. Healthcare premiums are expensive even in Thailand I don't pay for them I pay for my health care out of pocket it doesn't amount to $200 a year and I go to the doctor often for wellness checkups
My in-laws have 1/3 of that and they are retired and happy. I don’t think they are missing out on anything they enjoy. With $1M you should live as simply as possible - the peace of mind of knowing you have enough for most emergencies is priceless.
How old were they when they retired?
@@TheGregWallace about 63 I believe.
If that's what you want. I plan on continuing to travel, have a vacation house, etc. Im going to need 3.5 million or so to retire.
@@neomage2021 I did it on 1.1 mil and have been traveling internationally. But living the majority of the time in Chiang Mai Thailand. Which cost about 1/3 of the US costs. 1.1 mil has grown to 1.4 mil in the first nine years of my retirement from 60 years to 69 years. You don’t need 3 million. However I had 3.5 million but I gave more than half of thatTurn the ball and chain to get away and was happy with that arrangement. It worked out well. You can easily travel internationally and go on cruises I can also afford to support my tie wife and her daughter all the way through college no problem :-)
@@neomage2021bs
Joined the Navy at 18 with 7k in the bank. I did janitorial and smoked a lot of pot in high school. Left the Navy after months with 40k in the bank. Invested 30k in the S&P stocks. Started working at UPS, Exide Battery and did concrete on Saturdays. Invested 1k a month every month into it with my Financial advisor James Fletcher Brennan, Cashed out 350k from the S&P Cashed out and Semi retired at 31. Took a year off. Traveled. Came home and started working part time just for the insurance, entertainment and pocket change and still investing in stocks with a 3 million net worth, Work isn't work when you don't have to work. Becoming wealthy can be done in few years. It feels like 60hr work weeks. Feel the pain of discipline early or feel the pain of regret later. I wish everyone well!
I completely agree. I'm 60 years old, recently retired, and have relatively little retirement money compared to the value of my trading portfolio over the previous three years. I also have no debt and roughly 1.2 million dollars in other retirement accounts. Actually, the investment advisors may only be neglected rather than rejected. You only need to investigate them to locate a reliable one.
I’m 50 and my wife is 44 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle in the stock market made it possible for us this early even till now we earn weekly. Thanks to FIRE movement.
I hope to talk to James Brennan, if he's still available, for perhaps to create a similar outcome. What state does he work in? Thanks for the story.
Well here's a food for thought for folks about to retire or plan their future: Place a sizeable portion of your capital/savings in fixed-income securities like treasury bills, corporate bonds, government securities, debentures and let it grow. It will take you far I promise.
@B I’m not trying to be insensitive, I understand the situation is not the same for every one but it's very important to cut your coat according to your size and find contingent ways to save, then you can find the best options to invest that money. It's possible for anyone.
Assuming U have money to begin with
All I see are excuses upon excuses. Well y'all should keep telling yourselves it's impossible to make it. With this mentality how wouldn't it be. Come out of your goddamn shell and take the risks.
Just check out a great fiduciary that can navigate a great plan to build your wealth and retirement.
Good one I know is Klaus Cassius
So very helpful - thank you! My wife and I are 54, plan to retire at 60. I'm working but already drawing $5000 a month school pension. Plus we should have close to a million at 60 in retirement - plus a paid for house to sell (we're paying on the condo we'll move to now). This makes me feel good about supplementing our income with 4% or so each year, vs getting some kind of annuity.
I wasn’t financial free until my 30’s and I’m still in my 30’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made. Great video! Thanks for sharing! Very inspiring!
I just googled her I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
This reference seems valid.. Just looked up her full name on my browser and found her webpage without sweat, over 15 years of experience is certainly striking! very much appreciate this.
I like the variable analysis. The inflation example is basically reality now, so this couple has only a 50% chance of success. Don't even think about buying a new car unless it's a Toyota Corolla and you keep it until you die :)
Retirees who are struggling to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k. My mom retired with about 4.2 million, but my dad retired with roughly 1.8 million.
Thanks for watching!
You have packed a lot of good information into this. The one thing I think is missing is a discussion of this couple's expenses preretirement. The spending plan does make sense without understanding their current actual expenses and spending patterns.
I retired 7 years ago at 57. I now have a couple of million. Living on about $50,000 a year. Take a couple of cruises a year (first class) and just like doing anything we want. We do not spend much except on vacation and food. We have a brand new house and cars. All are paid for.
Hey @teams3345! We're very happy to hear that - congrats on your retirement!
Move to Mexico!! I own my home outright in a 27 hole golf resort on the beach with 24 hour security (50 miles south of San Diego), and my fixed monthly living expenses is less than USD500. I made a move at 44 and have not looked back.
good plan
If it’s so great, why are so many coming from MEX to the US?
IQ< 90, obviously...will not waste my time arguing with you...
Spending less would solve most of this strenuous prediction exercise.
You should do a separate video on how to get a solid estimate of your expenses during retirement. That is step 1, and the earlier you retire, the more important it is. Lifestyle, debt, health varies greatly.
Best advice I ever got, was that about 2 years before you plan to retire, use a credit card to pay for everything, regardless of how small the purchase. This will give you a record of exactly how much you spend. This is the start of your retirement budget. It is amazing how much people spend with cash, be it a bottle of pop at the gas station, a meal at rhe drivethrough at McDonald's, etc.
@@jdgolf499 Don't expect what you don't inspect.😀
Expect that they expenses will go up! Its retirement why limit yourself? Go out spend money and have fun. Expect higher returns while your saving and into retirement. Start with a investment return that you think will work than 10x it!
I'm 60 with $1M and retired last year at 59 (not by choice). I feel like I'll be okay, but can't imagine retiring this early and supporting two people (I'm single). Owning a home is so expensive. Utilities have gone up 30%, which is $600/mo for me now, and my property taxes are $11k/year and rising. Doesn't seem sustainable. God forbid if I ever need a new roof! I'm looking into moving to Mexico, Spain or Italy.
Sounds like a fellow Texan!
I had the light bulb moment at 60. We were in a similar position. I was earning well and enjoying my job, so we deferred retirement till 65 and darned near doubled the savings. That gave enough of a buffer that we have no worries. It is hard to appreciate how much comfort that brings to the party. I don't worry about inflation, market crashes or longevity and that alone makes retirement more enjoyable. I'd rather leave money on the table than worry about it all the time.
Great story and thanks for sharing!
👏 I completely understand
How much did you retire on?
@@kbro7484 Basically a nice house in Toronto and a similar value in cash.
With 1M how is it not gone in 14 /15 years if taking 100k per year for 10 years? Plus increasing cola?
I like the information you have for us, but good luck with that low 2.5% and even the 3.5% CPI (inflation rate) in 2021 and moving forward.
Agree, I think they make these leaving info out so you'll have to hire them to work out your individual situation.
If it's not a stock market crash people are fearing it's something else. Will high inflation be here and continue? Who knows? I just know to make an assumption on 20-30 years of retirement you don't just use one data point.
Even if Inflation isn't transitory, if you have $1M+ in investments already, then all that means is that you need to tweak your allocations towards Investments that are more profitable during high inflation and perhaps adjust that your annual withdrawals may not go as far as initially thought. It's all the rest of us that are more f**ked...
The low inflation rates he was assuming really jumped out at me, too. His slider didn't even go above 5.25%. I remember inflation rates of 18% in the late 70's. Don't think it can't happen again!
@@tjtreks7134 I know, I have the one million too, and watch all these shows that say it may not be enough, especially with inflation starting now. But then I see other data that says I'm in the 1.7% of Americans with over one million, so I always wonder about the rest of the country. I have 5 brothers and sisters and I know that none of them have that kind of money stashed away.
Retired two years ago. Still in the accumulation mode. Suppose rampant inflation will change that.
The start of the video, where you have all these important questions about retiring with your hard earned nest egg, is exactly why my wife and I searched for a trusted financial advisor.
Pleases don’t forget about the assisted leaving cost you may have to payout of your retirement account.
Good video. Make a spreadsheet, play with the numbers and assumptions. Thanks for a good overview.
Excellent presentation!! One of the best I’ve seen.
I would like to see more videos on single people. I would like to see what extra steps are needed since I don’t have another person to depend on financially
Same here! I am a widow with only one SS & Pension to count on.
I too would like to see a single person scenario .
@@TheOky777 me too
Me too regarding singles, but many retired people are still in the accumulation stage because we are spending less than what we are taking in each year. In this long bull market, it is pretty common. Not forever, not guaranteed, but for the past several years.
@@TheOky777 If you see that the person will only have 10 million to retire. This video makes zero sense. He can spend that 1 million in a minute if he wanted to. If he has a stroke tomorrow that 1 million will gone the next day. Very few people have a million laying around. At his age he went through the financial crisis and that wiped out many.
Nov 30 2021. They stopped using the language of "transitory inflation ".
Printing lots of money means lots of inflation.
So true, your portfolio needs to earn 6.25% minimal 2021, just to keep up with inflation. The printed money from Biden and Congress is killing those of us who have saved for years, just to have inflation kill our years of being frugal.
@@cpmiller1965 it is a form of theft. We the frugal savers get shafted while the people holding stocks and realestate feel a positive effect from inflation. All there holdings go up in value at the rate of 30%. Once again the chasm between rich and the sub class widens.
With one mill you can't afford a lavished lifestyle,but a simple lifestyle.
I plan to pull out of my RRSP first. This is estate planning 101. And keep investing in my TFSA - this is what I will leave in my will.
Had to look those two acronyms up. Learned they are savings accounts for Canadian citizens.
Why do people look for ways to avoid and eliminate taxes, and then turn around and vote for people that raise taxes??
Some people are just stuck on stupid.
Maybe because they do not want to support the candidate who supports an Insurrection.
@@brianmeegan6384 BS on your libtard Insurrection nonsense, pit breath
Because they're idiots?
@@brianmeegan6384 SO vote for the party that supports domestic terrorists that burn down hundreds of businesses, destroy people's livihoods, and harrass and beat up innocent civilians. Got it.
Thank you. Awhile back I saw a video talking about soon to be retirees being in shock when they realized they were going to start drawing money out of their savings once they retired. This hit me like a ton of bricks. No way did I want to take money out of my savings. I made a new plan. Trying to work to age 70.
That said, when my husband passes away, I will probably have to start taking some money from my savings.
Hot digity...This was the best video! This is the closest video I have seen to what the average citizen might have saved for retirement. Im tired of the "I have $2 million can I retire" or the "I only have $500,000.00 can I retire" videos. This was right in the sweet spot for us financially speaking and really addressed many of the concerns that we have been discussing as a couple as we get closer to retirement. Your roth conversion strategy was exactly what I was needing to hear. Thanks for the great content...as always!!
I need a I am 60 and have zero video.
Totally agree .. this is exactly where I am except I hav a bit more and I am a little more diversified.
1/3 of retiring americans have zero. The percentage who have $1M is very small by comparison.
@@finspiration2666 I agree and they made poor life discussions along the way. You can eat an elephant if you take a bite at a time over a long period.
@@finspiration2666 They are usually not watching these videos. They’re watching “how to go to Vegas with the whole family ion a credit card and save 20% on the buffet.
I wish there were videos like this for the Australian setting/scenario. I’m 62 and my wife is 61. Currently we are talking to a financial adviser and waiting for our next meeting.
Thank you, Well done. I love the software you use. Is it available commercially?
VERY well presented thanks for sharing!
Recently, I've been thinking a lot about retirement. It's difficult for me to decide how much I should spend and how to invest my savings. I've heard of index funds and exchange-traded funds (ETFs). They provide diversified stock market exposure while spreading risk. I have over $400K in savings; when should I begin investing in the stock market for retirement without taking too many risks?
Very good - opened my eyes to some things I had not considered
Good overview! All good points! I am almost for retired 2 years and got these covered.
I’m 40. I and my wife have ~ 1 million lucidity which includes stock, cash and 401K. We have invest in stock ~400K with all blue chips like google, Apple, Amazon, Tesla, Palantir, SMCI..
400 in cash
~200K in 401K.
We plan to buy our first home.
Hi @peruvoddu2373! Thanks for watching and sharing where you're at.
Thanks for the video. Makes me feel good about where I am financially. Confirms what my financial guy says. I'm 60 and my wife 56. Between the two of us we have 1 million in our 401K's plus savings. We plan on retiring in 4 years when the house is paid off and will have zero debt so It looks like we'll be ok. Not bad for a teacher and a mid level GS employee.
Whats gs?
@@Fornwith Government employee. GS is the government pay system
You leave out the defined pension and health care benefits you will receive. The million dollars is gravy……….
Sadly many people do not receive a pension.
Are you on the new or old system? If you are on the new system the match is great with the 5%
I’m 60 and I have 60k.
Husband and husband not wife.
Husband is 49.
The only thing I’ll have is a railroad retirement check to live on and willl still have a mortgage in Palm Springs
Thank you for sharing your situation, @SFDOM415! It sounds like you have some unique challenges to consider. Railroad retirement benefits are a helpful source of income, which is great. If you ever need help with your retirement plan, we definitely recommend consulting a financial advisor to gain more personalized advice! Wishing you and your husband the best as you plan for retirement in Palm Springs!
Pulling out $100k/year for 10 years seems like a poor way to retire compared to taking that same $1 Million and putting it into a 5 star ETF vehicle like JP Morgan's JEPI (7.1% dividends/year circa Nov 2021) and large pipelines like EPD (7.97% divs) which would pay you $75,350 per year in income while leaving all of your nest egg intact save for any non-realized (because you aren't selling them) changes in market prices for them. Even if the stock market dropped your holdings by 17.5% every year (an absurd worst-case scenario), you'd still be $3,500 ahead of the same retirees who pulled out $100k/year while having no nest-egg-income.
Food for thought on long term care. Mom was in a good facility, not the top of the line but good and was on hospice for her year and half so that helped with medicine and equipment. The cost of that stay is now $10,000/month, $120,000 a year for a semi private room. It would have been less at home but we physically could not do the care anymore. To plan, thinking that the big money output is going to be all on the front end is short sighted and could land you at age 88 or 90 in a place you really don't want to be.
Take simple easy lifestyle, take care of your health, that 1 million will last longer. Nowadays everything is expensive, 1 million is actually a small amount.
Taking care of health is the best advice for sure.
Enjoyed the insight. Let the financial planner do what they are best , growing your portfolio based on your risk tolerance. When to retire "Distribution Phase" is totally up to you. I like my advisor, but it would be a conflict of interest to ask that question. Compensation depends on my continuing investing and him following industrial norms. With a little arithmatic and self evaluation, you can figure for yourself. Keep in mind, YOU CAN'T TAKE IT WITH YOU....
No need to waste money on a planner.
It's your money. Spend it all. To be fair. Set aside money for emergencies. Set aside money for your final expenses. (this can be prepaid) Set aside the amount of money you want to leave to your next of kin to fight over and then spend the rest. You can't take it with you. One more thing. Each of us learned how figure out how long our money will last. We learned it in Grade School. Back then, we called it math.
It's not this complex. IF you can save 50 times your annual income you can retire tomorrow. If you can save 30 times your annual income you can retire with a high likely hood of success. In either scenario you simply withdraw up to 4% of your portfolio balance per year (and you can adjust for inflation) for the rest of your life and you still have the million dollars in your account to leave to your heirs.
Retiring with $1M is doable in the present conditions. Retiring with $1M and high debt is another story. If what one needs is truly $100K per year for 10 years in the initial Go-Go stage, so be it. But having that spending as discretionary instead of obligatory makes a big difference because with the former one can easily scale back as necessary, but not so with the latter. So, to me the key is not just having the $1M + portfolio, but actually having low or no debt.
That's not a clever approach. Spend like crazy guy for 10 years, run out of cash and rely on SS. Bad idea.
Great Video!
Take the million, go to Vegas, talk to casino management. They will give you one $1million dollar chip. Walk to the roulette table, put it down on red of black. 49% chance you'll win. You'll either double your money, or be entitled to government freebies. A win-win situation.
Scary that someone would actually do that !
Light Bulb Moment. An apt and accurate name.
depends on your social security and if you get a pension.
Great video, well done
Thanks @KITESURFPARAMOTOR, we're glad it helped.
Great video again! I am planning to retire at 60 (wife retires at 56). Your videos really help us in thinking through our plan. Only variable we are watching closely is the runaway inflation that is underway. This is the only thing that could keep us in the workforce longer.
oh, i dont think inflation will continue at these rates as he explained in the beginning. We have had such low inflation for the past decades it was bound to catch up eventually!!
Would your investments cover "runaway inflation?"
How are you getting medical care? Medicare isn’t till 65….private insurance is 2k per month or more
@@alcw625 Served a lifetime in the Air Force and Air National Guard. Start collecting retirement and have military retiree medical beginning at age 60.
@@NipItInTheBud100 this comment didn’t age well
Excellent video! I'm definitely Subscribed!
We appreciate it and thank you!! Happy New Year!
1M is 10x100K so you must be assuming a Steller return to have much left after the first 10 years.
Current portfolio is worth 1.3M, monthly cash flow is 10K, retired age 59 currently will never need to draw from my portfolio until RMD at 72. Moral of the story….., make wise choices in your 20’s, thru 50’s saving is much more important then toys and experiences. Disclosure: cash flow is Pensions and SS.
Current age now? What are your investments and allocations?
I have 200K and am doing just fine. For that to work, you shouldn't have any mortgage or any debts. Also it helps not to have kids or a wife.
That depends on if your wife has a good job and is worth more than you🤔
@@Unitedflyier So true!
Really?sounds like you have pensions as well:)
Looking forward to seeing your video presentation at the end of September. I’m sure the 8 1/2% inflation rate is going to have a big impact on everybody’s portfolio and retirement plans.
Depends on your definition of ‘retirement’. With the rise of homes, cars, cost of living, it’s becoming increasingly harder. Plus - how much golfing can you really do?
What a sad thought! Retired 5 years now and golfed ZERO times. Love home improvements, helping others, everyday tasks, bike riding, boating (and maintenance) and a little travel. Never bored!
@@hogroamer260 We’re not discussing those already retired, we’re talking about how with rising expenses, high home cost and vehicle cost, taxes, cost of living etc that make it increasingly difficult for working people to save and plan for retirement in today’s market. The median home cost 30% more in just the last few years.
@Rick Stokes I get that but your last statement asks " how much golfing can you really do?"
I’d rather keep working if I was forced to golf every day in retirement…..😱
Rick, if you already own your home (and perhaps car) you don't need to be concerned about a 30% house price increase or car prices (for a while).
I'm with Hog, you can keep pretty busy with out spending much.
Also do yourself a favour and calculate how much it cost you to be employed - ie fuel, car wear and tear, clothing, lunch etc. Now apply that to your having fun in retirement fund.....
Thanks for this informative video
six months after this video was put out, inflation is no longer 3%. It's 8 % , and rising. It will be over 10% by the end of 2022. Those who doubt this have their head in the sand.
Real good financial planner. The economy and the national debt is often ignored by the financial planning industry.
I was thinking the same too. The whole “calculation” is now completely wrong because inflation rate is very different from what the host used lol
@@giainto5564 and today tesla lost 12.18 %. , equates to $ 125 billion value decrease. How much was the purchase price of that social media thing ? Be better hope that the Donald get back on .
@@bobzelley5100 he got us in this mess. Might wanna stop watching Faux News?
@@kennethboehnen271 What news do you watch that tells you Trump got us in this mess? NYTimes reader?
8-10% inflation isn't permanent. It may last 6 months or a year. But never permanent. Just a blip on your lifetime spending
I am a CPA with 3 masters in taxation, accounting and finance. You guys in advisory are not too bright!
The bad part of this example is it only represents a small percentage of the population. If you get to this point and have this much, just reduce your spending to a reasonable level. And put the money somewhere safe and diversified.
Small % and they're still not sure if they can retire. Does not bode well for the rest of the peasants.
I would think that their spending was already well below their means which is why they saved up 1 million dollars.
If they'd just spend 15% less [investing that into index funds] in the go-go and slo-go from $100k to $85k and $75k to $63k, keep the no-go at $50k and if at least one of them got a pension which he doesn't mention is this video and others, I believe their success rate percentage would go up from 80% into the 90's.
@@Dave-sw2dm but now they have to spend less because no more paychecks are coming in.
@@kennethboehnen271 , not if they were already spending at that level in the first place to be able to accumulate that wealth. I’m also assuming that their house is paid off, they no longer have to commute, contribute to SS, etc. pay less taxes.
The title lead me to believe this was for one person but you had two people in your explanation
start at 30 squat, 30 push-up every day.
(your thick thigh will prevent you from becoming a diabetic)
by 65
pay off mortgage
pay off a Landcruiser
make your children be independent
then no matter how much money you have left over you will die a happy person
BWAHAHAHA. You have a point. Should be a 100. Incorporate calf raises too. The goal is to be bill free before you retire. Then reality sets in when you are staring at a fixed income.
As a 30 yr old who does not plan to retire to my mid 60s I would enjoy seeing 2 things:
1 - Things i can be doing now to optimize my opportunities later (How much to save, What types of accounts to put it in, What should I be investing in (bonds, index, mutual funds))
2 - I would really like to see a simulation that is NOT about people with the least amount possible and how they can barely make it. Maybe 5-10 million and wanting to plan to live comfortably and plan to leave a legacy to the next generation.
I really enjoy your content (especially the simulation testing) but would also like to see more content toward people in the "accumulation phase"
Look at Dave Ramsay videos. He's talks a lot about decisions for younger investors.
I don't think anyone can reliably predict 30 years in the future. They cannot even reliably predict the stock market three months ahead! LOL.
DO NOT LISTEN TO DAVE RAMSEY! Unless you like giving money to his “ELP’s” lol. Which he gets kickbacks on, along with his books, counseling, lol.
@@LWRC the economy is on fire! Demand is up for everything. The last 120 years don’t lie, look at the stock market performance when a democrat is in office vs a republicon.
First contribute up to limit on every type of tax advantage account you can. 401k's, IRA's, Roth. Second for the long run invest a market index eft. Anything you can save above that is gravy. Owning a house in an inflationary environment is a good investment.
In my younger years I was very conservative and hated losing money in major market turndowns, so I put money in conservative fixed interest investments. Had I just let it ride in the market I would have about three times what I have now. Just let it ride in stocks.
Do a spreadsheet with assumptions about investment earnings to see how much you have to save to meet your goals. Then you have to make a decision, "how much do you want to defer spending now, to have more savings later"
Would like to see similar video explaining impact of a $4000 monthly pension at retirement.
You need an explanation?
Years ago I thought about this problem and I came up with a solution. I settled on a plan to make way more money than I needed. This way, in retirement I will have as I said. Way more money than I need. I have a little over 7 million. All I have to do is restrict my spending to no more than a drunken sailor. Should work out fine.
Spend all of it , you cant take it with you, and there is no guarantee your health will always be good.
I thought Biden or Harris made this comment. Except I didn't see "Screw the next generation" in the comment.
If you are planning on securities to stay for heirs to inherit then you should take SS at 62, markets over time will give much better returns that that 6% reduction penalty. Numbers game, but markets work out close to 9% over time.
The question of can I retire with … makes no sense without a solid understanding of your current monthly expenses.
100k a year seems pretty extravagant considering the median household income in for 2 people in 2020 was $67,521.
Actually thats not the case. The case has to be made more the couple that they need to know what their expenses are to know if $100,000.00 will cover their expenses plus extra. The purpose of this video was to find out if they can retire with what they have while needing $100,000.00 annually. 2 totally different things. I agree with you that the couple needs to know their expenses but to find out if there nest egg will last they only need to know withdrawal rates.
How much of that $100K is left over after paying taxes and inflation costs? Property taxes, income taxes, sales taxes, etc... The government screws all of us over.
@@lukewarme9121 they do huh? We are paying historically low tax rates yet you think it’s too much! How much do you think it costs to maintain our roads, bridges, police and fire, our schools etc. people like you always say we should go back to times like in the 50’s. Check out the income tax rates in the 50’s! That’s why the economy was so strong. Money was being spent on infrastructure, and research. Jobs were created and the middle class was created. Now the money just goes to the top 10%! How is that working out for you?
@@NipItInTheBud100
Really? You don’t know what “HISTORICALLY” low tax tates are. Typical leftist. What were the federal and state tax rates before the democrat Woodrow Wilson???
@@NipItInTheBud100
The 1950s tax rates were high to pay off WW2 debt. Democrat JFK lowered them to stimulate the economy. The national debt then was way below a Trillion dollars. Today, the federal national debt is over $29 Trillion. You leftists are totally clueless and is why America is bankrupt.
Thanks for the video. I enjoyed it.
A very simple way to approximate what you can/cant spend is the 4% rule. Basically says that you can take 4% of your retirement fund each year adjusted for inflation without the risk of outliving your money. In this case, the couple can take $40K/year safely. Candidly, they cant retire as healthcare is going to cost $12-15K, leaving very little for living expenses. For most, healthcare is the single biggest gating factor when considering retirement early.
True, my Cobra is $1128 per month.
I like your comments. Too complicated math may not even worth the effort since there are too many hidden factors that were missed in that math.
Trying to add to the discussion here... it really depends on the couple's income for the years before their age allows them to qualify for Medicare. At $43k or less, they should qualify for the ACA and thus get some assistance to lower those costs. And while it is unfortunate... if they really end up withdrawing $100k+ during their "GoGo Years" then they'll need to account for $12-15k of that $100k+ being spent on Health Insurance sadly
Why have health insurance anymore. I don’t. If something happens to me, I guess it’s my time to die. Big deal. We’re all going someday anyway. I refuse to be ripped off by the insurance companies anymore. 12k- 13k deductibles. Ridiculous! Also my premium for me(57) and one of my sons(22) would be over 1700 a month. Screw that!
@japanwatchconnection If people 'in that age bracket' are retiring early or forced out of a job because of age, how will they pay for Medicare - or are the rest of us expected to pick up their tab?
Hey, thanks! I’m 47 and n ver quite thought of things this way before. How massively helpful. 🙏🙏🙏
I would say you should not spend any of the $1 million for at least 5 years. Invest in assets that throw off income and only live on that for the first 5 years. Or better yet do NOT retire until you are 65. He is giving terrible advice to live on $100K for the first ten years. Huge mistake to draw down that much of your corpus so quickly.
Totally agree, should be investing in cash flow assets. Live on the cash flow and don’t touch the principle investment.
I agree. It can really hurt your situation to take out a large amount from your savings early in retirement. $1million sounds like a lot, but it really isn’t for two people. Also, my financial planner uses a life expectancy of 100 for anyone under 70 years old. People are living longer and longer, but not always healthy. Long term care is expensive, and the insurance for that is becoming extremely costly, if you can even find it.
@@suzanneemerson9787 Could easily turn that 1 million into 2 million by age 67. What a different retirement that would be with 2 million vs 1 million. Live on the cash flow and never touch the principal.
@@JustinMarchegiani don’t forget though, that during the go go years if you don’t spend enough, when you get to the slo go or no go years and are forced to take out income, coupled with any rental income etc from above scenarios, you’ll just be giving more of your savings to the government through taxes on an income that’s too large. It’s a bit of a paradigm shift after years of savings…
You are only partially correct. People have different goals. I’m looking at retire at 50 with 1 million but only drawing about 45k a year. Peoples lifestyles and desires very wildly. As long as they don’t go entirely broke. Who cares what they do.
It’s always good to have a financial plan. I work with a licensed planner and fixed-income strategist in LA that helps me sort out these plans of investments
Thank you for this video. It makes you think. I think I have too much in 401, but I have Roth as well. Conventional thinking is you shouldnt touch the Roth and let it continue to grow tax free as you age, but that makes you pay taxes on the 401K money should you need it.
Lots to ponder, but thank you.
Better to pay taxes on the 401(k) money gradually as you need it than to get drilled later in life once your RMD’s start to kick in! Goal would be to have your 401(k) drawn down enough by 72 that RMD’s are a non-issue - defer your Roth withdrawals (and if possible, Social Security) and use those to fund your later retirement years.
Neat tool. Enjoyed the video. Thanks.
But I am retired and still in the accumulation stage because my investments are doing so incredibly well in this bull market. I know it's not guaranteed, but neither is a job.
I'm approaching retirement and enjoying the accumulation. 29% last 12 months.
I'm retired and suppose to be in the Distibution Phase. This pandemic is stopping me to travel . I have no reason to double up my already generous travel budget for next year. All the 2021 dividends are selfishly being reinvested. I may need to revisit my selfishness.
Bull Market?
@@roberttompkins6489 Not this year! I went to all cash in December 2021, & will be getting back in fairly soon ( I think).
At 60 years old you have maybe 10 - 12 years of being young enough to do the things you've always wanted to do (travel, etc). Sometimes it's hard to make the transition from a lifetime of working and saving to a life of spending and enjoying. The future is now.
I think a baseline on minimum required in retirement provides more information than maximum spending. Needs vs wants.
Correct. You are to spend ONLY 3% of your Total Investments value and not some I WANT AMOUNT. That is insane PLANNING.
Interesting video and presentation. I would not encourage this couple to retire at age 60 with car payments other debts, it just doesn’t make sense…to carry That burden into your old age. I would advise him on how to cut down on expenses so they can survive on cautious withdrawals from their savings and Social Security.
Hi @Thom3748, thanks for watching and sharing your thoughts! There are many different ways we could advise these clients, and this was just a representation of one of the possible paths! In our appointments, we also go far more in depth than we do in these videos. As fiduciaries, our top priority is looking out for the best interests of our clients. Take care!
well if you plan to live for 20 years after retirement you can do the math... $1000000 / 20yrs = $50K/yr.... and you can add on your SS checks and what ever else you have... pretty simple isn't it...
Yup....that's basically my thinking. 20k wife SS plus 30k my SS plus $50k in IRA/401k/Roth withdraws and I am living "la vida buena". Retirement is 5 or 6 years away.
Fine until one of you gets dementia.
I would not spend $$100,000 a year in retirement when everything is paid off unless I have millions and high standard living . I only Need food insurance and walking, going to Hawaii sometimes
I’m embarrassed to say, I’m 60 and I only have 200k saved. How much trouble am I in?
Not a lot if you move to a cheap country in Latin America or SE Asia
If you watch Holy Schmidt! you're still doing better than 60% your age.
Start saving 20% of your income invested in a diversified portfolio... and work till you are AT LEAST 67.
My biggest fear about retiring before 65 at a minimum is the cost of health insurance. You did not mention that for those thinking of retiring before the age of Medicare eligibility.
Thank you for watching and sharing your concern! You're absolutely right that the cost of health insurance is a significant factor to consider, especially for those planning to retire before Medicare eligibility kicks in at age 65. Many times we don't have time to get into health care planning in some of these more general retirement planning videos, however it's a big part of our planning process as a firm, and we have made several videos that are focused on running these same kinds of scenarios and primarily focusing video content on the health care aspect. Here's the link to one we did recently ua-cam.com/video/flVXKx2PRlc/v-deo.html
Thank you for bringing up this important point, and if you have any more questions or topics you'd like to see addressed, feel free to let me know! You're always welcome to schedule a complimentary appointment with our team as well to get your questions answered. Always here to help.
I retired at 61 with 2.7 million dollars and I am now pushing 70 and almost broke! Don't retire if you don't have to!!
How the heck did that happen
You should have invested in etfs not individual stocks. 5 k a month for 10 yrs you will still be left with 2 mil even if you did make any gains!
that's scares the heck out of me. I'm about to retire at 60. What could you have done better?
@@bjreacher6402 Invested money better, if you invest correctly you could be making passive income as well from properties
Johniboz1 Burning it up on the GO years!
find myself in a similar situation, retired a year ago at 62, have over 1Mil in a fixed accountb earning 3%, have pension and SSI that covers more than my expenses and over 100k in cash, I know I should be thinking about getting into the market , but have idea when to start , I have a feeling we have at least another 6 months of pain coming.
You have to count the pension, a 40k pension if like having a million that pays 4%.
Stay invested and budget 36Kper year to live well in Thailand..
Good info, thanks. But I’m curious on one thing. Given this particular couple, I would assume they own a home with no mortgage. A reasonable assumption is that their equity could easily be $500,000. Assuming they want to continue living there, why wouldn’t you incorporate this large component of their net worth (they worked hard to build it) in the analysis? Could use the “new” reverse mortgage to avoid sequence risk, cover tax liability for Roth conversion, or bridge the cash flow gap before taking social security? Some combination of these things could be done without incurring a mortgage payment, and likely leave a growing line of credit for unexpected expenses down the road so they would not have to reduce their portfolio to cover such expenses. Thanks for helping so many with your counsel.
I think the better question would be, "How should I live in order to make this $million last me?"
$1,000,000 might sound like a lot of money, but it isn't. Develop a LONG TERM financial plan. I've been retired 23 years.
Hey @ronsmith2241, creating a long-term plan is definitely a must! Thanks for watching.
Please do a video on a single person retiring 6,2 with 1.2 million when to take SS etc
taking SS depends on when you need it and how much you will get.
You forgot the most important part, what are your baseline expenses?
Typically a person can withdraw 4% of their portfolio that is comprised of 60% or more in stocks. That typically lasts at least 30 years.
So a conservative estimate would be 40k a year. If you can’t live on that but can with your SS benefit then take it. If you can’t, don’t retire.
@@thomasreedy4751 ... absolutely! One of the things this video keeps harping on is wanting $100k a year with no mention of what they really need. I retired almost 2 years ago at 66 and my first thought was to see what I could adjust to for my SS income level. So far I am coasting fairly well on SS (only) despite pushing 6 figures while working. My figuring is to let my investments grow till I need them and the rest should be easier. I mean, 5 years from now I might need a car or some other major item, right? I own my home free and clear plus no outstanding debt so I will eventually downsize and add some of that to my retirement egg.... OR... come up with a number that selling my home will generate and rent for my last few years based on investment return. At some point I should hide part of my money as well, which many people do but few talk about it.
Single or married what difference does it make?
@@DavidEVogel ... the same income is taxed different with two people. If the number is low enough the tax could be almost nothing. Of course this can vary from state to state as well.
SOOO much to try and figure out it takes a lifetime to manage yeah thats what i want to do when i retire is fight ,bite, scratch, yell and scream about managing retirement throughout the year chasing the changes just to start it all over year after year
Its not that complicated. I'll do it myself and keep the 1 to 2%. keep the pretty spreadsheets.
New rate of inflation changes this big time. Higher interest rates and market downturn. Amazing how quick the tables turned.
I wouldn"t care how much money I had. I wouldn't retire until I were eligible for Medicare.
...and die at 66.
@@Old_Sailor85 That's why you don't wait to enjoy life until you retire. I've been traveling the world since I was 24.
FYI if you retire in Thailand there is a USA Thailand tax treaty. You pay zero tax on qualified Investments. That means you pay zero tax in the USA, you also pay zero tax in Thailand. All you have to do is transfer the money from your USA bank account/ investment account into your Thailand bank account you can spend the money on your living expenses in Thailand totally tax-free it's not a scam it's true I'm doing it now and I know guys that have been doing it for 20 years here. Thailand is a beautiful place to retire oh by the way the cost of living is about 25 to 30% of what it is in the USA so your money goes a long ways. Just thought I'd mention for anybody that's looking for a great opportunity to save on your taxes
4% rule works….don’t make it unnecessarily complicated.
Quality information!
Excellent analyses and recommendations.
Question are the withdrawals before taxes meaning $100,000 withdrawal will provide $75,000 after taxes for annual spending ?
inflation not an issue for the next several years??? How is that working out?