Retirement seems so much harder now than it was a decade ago. The rising cost of living, inflation, and unpredictable markets are making it impossible to calculate a safe number
It really depends on your lifestyle and goals. For example, do you want to travel often, or are you planning to live a modest life? A lot of people overlook healthcare costs-those can easily eat into your savings. I’ve heard some recommend at least 80% of your pre-retirement income annually, but that may not even be enough with today’s inflation.
Great point. I’m also worried about underestimating how long I’ll live. Running out of money at 70 or 80 sounds like a nightmare. I’ve been managing my investments myself, but honestly, I think I’ve made some bad decisions. I’ve barely grown my portfolio, and now I’m panicking!
After a hurricane destroyed my beachside business in 2017, I learned a valuable lesson about diversification. I've since spread my investments across various assets and enlisted a financial advisor to manage my surplus funds. Now, as a semi-retired sailor, I enjoy a relaxed schedule, dedicating just 9 hours a week to maintaining my yacht. Thanks to smart investment decisions, I'm nearing my retirement goal of $3.4 million, with only 5% left to reach my target.
Thanks for sharing your experience! I've been managing my portfolio myself, but it's not working out. Do you have any recommendations for a good investment advisor? I could really use some help
My CFA, Joseph Nick Cahill, is a renowned figure in his field. I recommend researching his name online; you'll find all his credentials and everything you need to work with a reliable professional. With many years of experience, he is a valuable resource for anyone looking to navigate the financial market.
The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for.it's especially difficult for people who are retired.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
Even if you’re not skilled, it is still possible to hire one. I was a project manager and my personal portfolio of approximately $850k of my retirement pension took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $250k since then.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Sharon Ann Meny for the last five years or so, and her returns have been pretty much amazing.
As said in the video, how the question is framed changes the answers you get. If you asked these same clients if they regret not going on that international vacation or buying that RV that they always wanted to save more for retirement you might have some different answers.
@@Tisargian There's nothing that says those are mutually exclusive. You have to pick your battles, and not necessarily live like paupers, but you can certainly regret getting a new leased car every 3 years, since that alone could have paid for multiple international vacations. There are people in America making $300k/yr with $80k credit card debt and almost nothing saved. You're certainly not going to be doing many international vacations on social security alone.
OK, I regret saving too much, LOL... Nevertheless, oversaving can mean losing the best (physical) years of retirement, when you are still young and mobile enough to enjoy bucket list travel and activities. So, yeah, I could have retired 2 or 3 years earlier, had I really been paying attention and making better moves; those are years you can't get back.
Finally someone who talks practical savings rather than in millions.. my mental peace level has gone up one notch after watching this.. thanks Erin much love ❤
Too many people are depending on SS when the system is bankrupt. You are actually right to worry. That most people have tiny nest egg means they are ALL in trouble. It's a weird mentality thinking "if most people have little then it MUST mean it's okay to have little"
For what its worth, I plan on retiring at 55. I'll have about HALF a million in savings. My mortgage will be paid off, I'll have zero debt. I also live in a low cost of living area. I want to get out of the stressful work environment and enjoy my years I have left. I can live a very frugal lifestyle while I hunt, fish, hike, garden, and enjoy the FREE outdoors. Retirement doesn't need to cost millions of dollars IF you live somewhere affordable and don't have expenses that are through the roof. The freedom to do what I want, when I want, and have no stress, is worth more money than I could ever count!
500k in cash or investments? Cause if that money is not diversified in the stock market then 500k cash will not last yoy more than 15 years if you are frugal like you said.
@MaullerTwin Combination of 401k, Roth IRA, and savings. I am single (widowed) and will have zero debt, low cost of living area, and minimal property taxes ($300 per year), and zero mortgage. My investments are on track to earn me $10,000 per year in dividend income. If I choose to take Social Security early at 62, I will qualify for $2200 per month, or slightly over $3100 at FRA of 67. Living a frugal life I do not see how I can run out of money unless the stock market is down for multiple years in a row, all my dividend investments stop paying dividends, and social security completely goes away. (I doubt any of those will COMPLETELY happen.)
@@CarrieLovesLife.So true! Some folks aren't happy unless they are traveling the world. Others are content sitting at home and working in the garden, maybe doing volunteer work. Everyone is different.
Great video, Erin. One major factor that helps moderate income retirees nowadays is working part time or having a side hustle. In 2024, people of retirement age are the fastest growing workforce in the U. S. That's the new retirement model for a lot of people.
I’d be retiring or working less in 5 years, and curious to know how best people split their pay, how much of it goes into savings, spendings or investments, I earn around $250k per year but nothing to show for it yet.
Money advice is subjective, what works for you may not work for me. I would suggest getting rid of any unnecessary purchases, especially things that cost you monthly, or better still consider financial advisory
Agreed, I'm quite lucky exposed to finance at early age, started full time job at 19, purchased first home 28. Going forward, got laid off 36 amid covid-outbreak and at once consulted an advisor. As of today, I'm barely 10% short of $1m after 100s of thousands invested.
I've worked in real estate for over 25 years and have neglected a major stock portfolio. This served me well when I was flipping and renting houses, however I need a different plan now.. mind if I look up the professional guiding you please?
Teresa L Athas is the licensed advisor I use. Just google the name and you’d find necessary details. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thanks for sharing. i searched her full name and found her web instantly. After reviewing her credentials and conducting due diligence, i reached out to her.
@@CamdenVanderlaan no it grows free by a Democrat Adminstration. Hired another 100K government workers, after all we are borrowing everyday. 620 billion in 1 month for interest on the National Debts, more money than the Military and VA combine to operate in a year!
@BrigetteWaltershield thank you for your perspective. I believe in discipline execution which has allowed me to build wealth in investing in turnkey multifamily units
I have savings of $1,000,000 and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire comfortably, or do I need some sort of money management?
I believe the average life expectancy in the US is around 77.5 years, but many individuals live into their 80s. Therefore, $1 million needs to cover all those years as well as any unexpected expenses. While $1 million is a solid beginning, I recommend seeking financial advice just to be safe.
I’m quite lucky exposed to personal finance at early age, started job 19, purchased first home 28. Going forward, got laid-off at 46 just after covid-outbreak, and at once hired an advisor with grit to help stay afloat. As of today, my portfolio has yielded over 300%, summing up $836k. Stay motivated friends
My dad retired at 67 with $160k in his 401K in PA. He had zero debt. He was able to live off just social security and didn't start tapping into his 401K until the law said he had to. He's now 82. He uses SS to pay his bills and the 401K withdraws for his bus trips. Take-home message....no debt!
So, he retired in 2009 and was probably freaking out about how his 401k had dropped during the great recession. I’m glad he’s doing okay, but it also sounds like he isn’t living the grand retirement that people are hoping for. I do taxes for low income folks, many who are just living on SS and/or disability benefits. They are not thriving.
Depends on what is meant by thriving. If you have pretty simple pleasures, life doesn't have to be all that expensive. Especially in PA... I mean, outside of the cities there are some beautiful and cheap places to live out there, with some lovely scenery to keep you occupied. If you are jet setting, and not buying the latest iPhone and laptop every year, and have a working car and paid off home... Books, parks, TV, board games, coffee and meals with friends. You can have a great life on the cheap if you want to. Just a question of if you have a personality that allows for that.
@@CaedenV I would agree with you solely because those would be things in your control. But medical/healthcare costs will eat into that savings in no time unfortunately
@@shawnbrennan7526 OP said his dad retired at 67 with $160K balance (which you have done the math and figured it was 2009). OP also said his dad didn't need to tap his 401K until Required Minimum Distribution age kicked in (which we can fairly assumed if he didn't have to withdraw it until forced by the RMD law, then he probably didn't spend it and just put it back in the market via a standard brokerage account). So, if he didn't touch the $160K since 2009, it is worth $1.2M today with years of bull market run-up and OP said his dad has no debt. An 82 year old that manages his budget with over $1M to his name is kind of thriving by all measures of retirement statistics shown by this video. Is the guy popping bottles of the finest vintage on his private boat off the coast of Maui? Probably not, but he can say he doesn't and hasn't had to sell his time for money for the past 15 years (full financial independence) and still has a Million bucks to his name and sleeps well at night knowing creditors won't call him (keeping his dignity). He is kind of thriving.
Lucky he is. I enjoyed what I did but my company moved to FL and I didn't go so I retired. That was 3 years ago. I have had two knee replacements, skin cancer surgery and back surgery to fuse two discs. If this is my retirement I want to go back to work. 😉
This is a very good video! This might be the first video I have seen talking about retirement that makes economic sense. Retirement is a lot more affordable when you have no debt! Having no house payment and no car payment, no student loan payments, no revolving debt payments, etc makes retiring fairly simple. This girl gets it.
I'm here and commenting before I watch the video because I just hit the $1 million benchmark in my 401k. I'm excited and nervous and not retiring soon, I'm 61, but let's watch and see. I'll edit this post afterwards concluding my thoughts. I'm sure it will be a great video as I've watched two of your videos already and very, very informative. Here we go......Just watched the video in its entirety. I'm good and am going to use the Vanguard withdrawal strategy you mentioned in the first video watched. FIrst year, 4% with my floor 2.5% and ceiling 5%. Thanks again. On to watching more of your, Erin!
The end statement is the only thing that needs to be said in this video. If you save 10-20% when you are young, you will EASILY be able to retire with a seven figure nest egg. Americans go through so much effort to make money and so little effort to save any of it. Once you get your first "adult" job, live within your income and don't buy anything on credit except a modest reliable car. Cars and consumer debt are a sucking black hole. Once you are living within your means, then every pay raise you get on your job, save HALF of that raise and use the other half to slowly improve your standard of living. It's a dead simple formula.
Erin you rocked it on this one. Ive been watching all these financial videos. And ive had a huge problem with people giving ideal life situations and thinking it applies to others. Their whole shtick is sacrifice now so your olderself can thank you. So they go out and scare people to thinking if you dont have millions then you are behind. Saying if you sacrifice now you can live it up later. Scaring people with statistics and stories worthy of alec Baldwin glen gary ross. Im in no position to tell people how to spend their money. But these videos should be a reminder telling people its not hard to take control of your finances. But to think you can come back to your 20s in your 60s is crazy. Interest rates will probably never be 2.5 percent again. So if a person missed on that they cant get it back. I used these videos to keep me on track and if i get behind im okay with that. I know how to get ahead thanks erin, money guys, smart money bro, and white board finance.
Some food for thought…My plan had always been to retire at 62 but I’m currently 66 and still working full-time. 4 years ago, unbelievably, both of my parents got diagnosed with dementia. They had to go to a memory care facility, and here where I live, California, we are paying $12k per person per month, so $24k a month total. The cheapest place we found was $16k per month, for both of them, for full time live-in dementia care but my parents had the money so we put them in the more deluxe $24k per month accommodations but if you consider $8K a month is going to be the minimum you need for a single person’s decent full-time memory care for dementia, which is not covered by Medicare, and if you didn’t have the foresight to buy a long term health care plan to fund it, you will have to deplete all your assets and then go to a state run facility, which is not fit for a dog - believe me I visited. I get it that this is a worst case scenario, but I am living it and it really got me thinking that what if this happens to me? After all both my parents have dementia (as did my grandparents) so there’s probably a decent chance this will happen to me and if it does, the burden of some of this cost will fall to my children, which I would never want to see happen. It is because of this, I don’t feel I can ever retire. I will continue to work as long as I am able just to minimize the potential financial burden to my children. The only solution is if you get a dementia diagnosis you pretty much have to kill yourself before you’re too demented to know how.😢 In my parents case we have already spent over $1M on their long-term dementia care. None of you You Tube financial gurus talk about this reality. So agreed, you don’t need 1M to retire. You probably need at least 2M. You say you are the person who asks the “what if“ questions but you missed a very obvious one!
Sure, if both parents suffer from advanced dementia or Alzheimers, or if they both end up in the wheel chair, unable to take care of themselves, all odds are off. I would never want to find myself in such a situation, and I won't. If the quality of life isn't there anymore, I'm out. That said, a top-notch assisted living facility in the finest areas of Mexico, i.e., in Ajijic, Lake Chapala, costs about $2,500 per month. Many Canadians and Americans take advantage of that.
I’m 55 from southeastern Ohio but worked overseas all my life. I have savings of $1,000,000 and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire comfortably, Or do I need some sort of money management?
I would get money management just in case. You’re only 55. I think the average life expectancy in the US is 77.5 years, but many people live well into their 80s so that $1 million has to last you all of that and the unforeseen. $1m is a great start though. Good for you!
Generally speaking, a good number of people discredit the effectiveness of a certified fiduciary in planning for retirement, For over the past 10years, I’ve had a CFA consistently restructure and diversify my portfolio/expenses and I’ve made over $3m in gains.Might not be a lot but retirement doesn’t seem so farfetched anymore.
@@DanielPanuzi Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
Great video! Very good points!!! There are so many parameters that come into play: debts, living expenses, mortgage paid off or renting, location of retirement (US or overseas). There are so many options!
I'm 48. My parents and their friends have all retired at this point. Only a few are millionaires. All the rest are just thrilled not to be working. They're living their best lives with no complaints, even if they have to pinch pennies. Contentment combined with social security and no debt seems make a baseline for joy when you're 67.
No debt is the biggest part of that game plan. I am 70 and retired 4 years ago. Let my investmens grow whille living on SS and finally reached a million about 2 months ago. We'll be living llike kings when I tap into that at 4% withdrawal rate.
@@fml5910 4% annually is roughly $40k. This is a starting point that you can adjust to correct for inflation and try to maintain a lifestyle as time goes on. The first few years you are living on only your interest and never touching the base sum in the account(s) because hopefully your money is earning at least 5% so still growing. Maybe in a few years I will adjust that to 5%... and in a few more years to 6%. You can play with the numbers to suit your needs and timeline. In my case I am projecting 25 years, but I doubt I will live to be 95. Another formula suggested is divide by the number of years you project, 25 in this case, and go into your nest egg. 25 years into $1 million = $40k. (first year) Your nest egg grows / maintains so the following year you pull out 1/24 (24 years to go) and that number is $41,600. The following years you pull out 1/23 = $43,400. Somewhere in here you will be passing that threshold of exceeding the 5% interest rate and start going into the original sum, but this is doable for a LONG time.... and also keeps ahead of inflation while lasting at least 25 years.
So much of the FIRE content is consumed by people in their 20's and 30's. I can imagine it being really discouraging if you are older and less able to capitalize on compounding. What a great video to put into the mix! Never too late to start.
I started what turned out to be a FIRE plan at age 41 with nothing but a very old car. Age 60 now with multiple properties free and clear and enough to live on indefinitely even without SS. Acquiring a frugal mindset was a big key that shifted things for me, as was leveraging my unique skill sets to the max. Age should not stop one!
@@davidbrooks8809 there are two main types in financial vids - the “to the moon with AMX3000” or whatever BS product it is this time, or an overly polite waffling post of some description, sometimes saying how much they are “benefited” by some financial investment of some kind, with anywhere between 5 to 20 responses. The responses serve one purpose, to create some kind of narrative to drop the name of an advisor. The comment will have a bazillion likes so that it ends up at the top of the rated comments list.
Another excellent video Erin. I love how you do a deep dive into the data and thoroughly analyze all of the opinions in the articles you discuss. As I have mentioned in comments many times before, I retired at the end of 2021 at the age of 65.5. I worked 30 years for a Fortune 500 insurance company and was lucky enough to get grandfathered for excellent retirement benefits. I get retiree health insurance; retiree life insurance and I had a defined benefits pension. In addition, my company had a 401k that they matched up to 6% of your salary. In 2016, they froze the pension but I got grandfathered so my pension benefits continued; however, as a trade off they increased the 401k match to 9%. I was also able to get the 9% match. My wife passed away 3 months before I retired, so that changed my plans regarding the pension. Instead of taking a monthly pension payment, I decided to take it as a lump sum. My lump sum payment was over $1 million. I rolled it into an IRA and didn’t touch it during my first 2 years of retirement. When the interest rates went up in 2022 and 2023, I decided to create my own pension so to speak by buying an immediate annuity. I have it set to pay me monthly for the rest of my life with 20 years guaranteed. My monthly payment is about $7,000. In addition, I am collecting my wife’s social security as a survivor benefit. This is about $3600 a month. After the Medicare Part B premium is taken out, I net around $3300 a month. I plan on letting my social security benefit grow until I am 70 in two years and then switch to mine. Not only is the annuity payment and social security enough to live on, I am saving about $1500 to $2000 a month. I currently have 2 years worth of expenses covered in my emergency funds which I keep in high yield online savings accounts and a money market account. I also have about $5,000,000 in an IRA which is actively managed by a brokerage firm and about $1,000,000 in a non qualified actively managed Index fund with Fidelity. I switched to an actively managed account to be able to harvest losses for tax purposes. To get back to your point, you don’t need a million dollars to retire. I have well over that amount but I will never touch any of it in my lifetime. I have an estate plan where it will all go to the Humane Society as I have no relatives that I want to give it to and I like animals much more than humans. Thanks again Erin for creating and maintaining this excellent channel.
OMG thank you so much for this video. I made a comment to an older video you posted a while back, saying that the "rules of thumb" just break down at some point, and that it sure seemed that Fidelity wanted you to work until you die, always trying to scare people into saving every last penny and investing it with...Fidelity. $1M is a boatload of cash. $6M at age 55 is a ludicrous amount, yet they say that if you want to maintain your lifestyle you need more more more. I ain't flying into Monaco and playing Baccarat with James Bond here, I'm just trying to freaking retire like a normal person! I'm pretty sure I can retire and not be eating beans out of a can in 20 years, as Fidelity would have you believe.
Exceptionally well done presentation. Thank you. Your mention of financial institutions promoting the amounts we should have in retirement, reminds me of other slogans such as, 'Breakfast, the most important meal of the day' which is not really true for many people. Of course, this slogan was started by a cereal company! And many people take this as gospel.
I retired from a 40 year teaching career at age 70 to care for a new granddaughter. At the time I had saved a mere $135,000, but had pensions from two states. I was a single mom with four kids. Now at age 81, living off the grid in a paid off house, I've managed to accumulate a total of $350,000 in savings and investments. Note that under certain circumstances one can still increase income during retirement while not working!
That's excellent! Kudos! That's what I want when I'm retired, for my savings and investments to keep appreciating, so I feel worry free (at least finanacially speaking).
I have 800k, retiring end of this year just shy of 60. Feel very comfortable with that number. GREAT video by the way and you are spot on it is not about the amount you have but the expenses you have. Know your expenses and you can easily determine the number you need for investments.
Thanks for pointing out that everyone's circumstances are different. Some people have a large family to support and medical issues that use a lot of money. Others are single with paid off home and no responsibilities. It is hard to have a specific number or percentage that works for everyone.
This message is so needed! Thanks for sharing. We were worried that my auntie only had $150,000 in her 401k, but if she didn’t need the $ in her 401k to live, there was no need to worry! Plus sadly she passed away with that amount still there.
@@mikeriksheim1087 you hit the other key point! No debt is crucial, I've been retired 3 years and made certain I had no mortgage or consumer credit debts. But property taxes, or where you live can be a huge issue! My property taxes are apparently tiny compared to yours, but I live in a small rural community nowhere near any real major city. That may not be everyones "cup of tea", but looking back on when I bought my house I'm now really glad I opted for the longer commute rather than living closer to the city...
@@mikeriksheim1087 stop your whining! If $25,000 per year does not cover the property taxes on your home even in one of the highest property tax states in the nation you really shouldn’t have any money issues in regards to retirement unless your 1.2 million dollar home is mortgaged to the hillt and you do not have the income to support the life style you are living. Live within your means! Some people can retire on $500K and social security. You apparently cannot because you spend more than you have and are able to generate.
Thank you for this video. You cleared up a question that I had which is Why do so many people rely on investing for their retirement. I know I'm going to sound very "Soft up the stairs" as my granny would've said but that's because If and when I ever step away from the workforce, I will have 3 very stable vested pensions as income. I didn't realize that so few workers these days had access to pensions.
Social security for myself and wife will cover ALL retirement expenses....not including our retirement savings.....save and invest regularly but you'll be fine
After working in marketing for the wealth management industry for a few years, I realized that a lot of these numbers that people see as standard are actually persistent sales messaging from the industry. The wealth management industry does not want you to feel comfortable with where you are at. That's not profitable for them. So so much of the "information" out there gets skewed and is really marketing and sales materials for that industry.
The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.
$50k dividend oh my goodness.. not even $100k worth of stocks could gave ya that. You're probably on track with my mentor (spiritual, I only observe him from distance at seminar)
When I first started reading about finance when in high school in the early 70's many of those books had some variation of "in order to live like a millionaire you needed an annual income equal to the interest you would draw on $,1,000,000.00". I always figured through the normal meaning migration we see became you need $1,000,000.00 to retire.
This is totally dependent on where you live and what your situation is. I'm 59 years old and have two young children of 5 and 8 years old. Based on our current spending and the 4% rule I would need more than $4 million to retire assuming taxes would zero... If you have any significant amount of assets apart from your house here in Australia you will not get any social security type income from the government so you will depend entirely on my own investments. If I retire next year or in 5 years, my spending is not going to be going down. So do your own calculations based on your situation is.
As long as you can be flexible on how and where you will live you can retire on much less than $1,000,000. I retired 2 years ago at 58 with just a modest pension and $130,000 in home equity and personal property. I sold my small house in the big city and just from the equity on that I paid cash for a comparable house in a rural part of a much less costly state than where I had been living. Here I can be fairly comfortable on my pension, while I would have been really stressed trying to live on it in my former state. I have an emergency reserve in the bank and in a year and a half I will be able to start drawing Social Security and will then feel positively comfortable.
@@boloone1418 I'm currently living on just my pension, which is about $2100 per month. By eliminating rent or a mortgage payment it's very liveable. When Social Security kicks in in a year, my monthly income will increase by about $1500.
I disagree. We probably need more than $1 million + to retire. One of the biggest problems is people are counting on the Social Security Medicare benefits to retire. However, the US government is racking up debts massively as of late. Those benefits will either be cut or monetization of debt will result in higher inflation that erodes the value of those benefits.
I agree. Start saving while you are young and let the compound interest do its thing. This video will not age well, we will see a lot of people in the next decade suffering because they have no nest egg. I see a lot of comments from people who say "I'm living on $30k a year and I take two vacations". My widowed 88 year old father would be in big trouble if we did not help him out with many of his bills.
You can't say that. It is all about what your monthly expenses will be in retirement, state you will retire in, your health, part time work in retirement, etc. For the majority, you DONT need 1 million to retire comfortably!
What has not been mentioned is whether WHATEVER amount is saved from retirement is in PRE or POST tax accounts. Whatever your tax bracket is, if you’re pulling from Pre-tax accounts, it shrinks your savings.
Good video. It hits all the right spots. To determine our income need in retirement, we used our expenditures. We divided them between recurring, non-recurrimg, discretionary, and excess. We baselined the recurring and non-recurring on a monthly and yearly basis to establish minimum income need. The discretionary represented our safety margin and excess income, our legacy or bucket 🪣 list. Our baseline expenditure burn rate is 42% of our retirement income. So, we have a safety margin and excess income. After years in retirement, our expenses have gone down in relation to our Pre-retirement and early retirement estimates. We still have a 2.5% mortgage that could be paid off at any time from our investments but chose not to. Questions?
I agree with you completely. The amount of money you will need in retirement has nothing to do with your income. I made two budgets. One includes the necessities only and the other includes the necessities and all the extras I would like to do, like travel, shopping, hobbies, etc. That gave me a spread. When I retire, I will be somewhere in-between. I will be able to do all the things I wanted, but not as often as I originally planned. I can live with that.
That retirement savings number is so specific to everyone's situation. Both in living expenses and how you want to spend your retirement. One person is covering basic needs ,while another is traveling and actively spending. For me, be intentional and informed about what you plan to do in retirement, what you will need, and try to plan accordingly.
my dad retired at 62 took social security and had 200k in a retirement account. He also had a paid for house and no debt. He retired comfortably. He didn't travel the world and go on vacations.
The question of "how much do I need in retirement?" is the most anxious one in retirement finance. That's in part due to the fact that it's tangled up with our mortality, as we need to finance the amount of time we have left to live after retirement, and of course that's naturally uncertain. And also implicated in our genuine concerns as to living a life with dignity in our later years, not depending on family for support, or assuming that social security (or in my case, the Canada Pension Plan and Old Age Security, the two public foundations of retirement here) are sufficient to our needs. The benefit of the 1 million dollar figure is that, given that there are such divergent views and data around the question of "how much do I need?", it represents a clear and compelling number. It may be unrealistic, it may be more than we need, or inadequate to what we require--much depends on the individual's situation, where and how they live, inflation, etc. But I doubt the appeal of the 1 million dollar standard will ever disappear because that seventh digit has a kind of charisma about it, irrespective of its actual value in determining whether we have enough or not.
big problem in retirement is the risk ( or insurance cost ) of increased medical costs, inflation on big ticket (or repairs) items,. long term assisted living, adult children needing bail outs- so just because you cover normal cost of food and shelter doesnt mean thats all the money you need
Many factors to consider. Amount of debt and how to pay for healthcare if you retire before 65. It's really about much time before you retire, portfolio allocation and how much you need monthly in retirement. My wife and I are 51 and our portfolio is 59% in stocks, 16% in bonds, 8.5% in fixed annuity, 7% in CD and 8.8% in cash. 59 1/2 is the target and with an average market return between now and then, it should happen. We are debt free and max out 401Ks. If you don't have a planner and feel overwhelmed, it might be worth your time and money to sit down with a CFP and talk about your options so that you have a clear path forward.
4:13 Love that Fidelity recommended savings chart .. tells me I need a LOWER paying job to retire sooner. If I get a $25/yr Walmart job at age 67, I only need $250K saved for retirement.
This hits home for me. My wife and I have about $70,000 in pension and social security income, and a little over $2 million in investment assets like stocks, bonds, and cash. However, it does not seem like enough. We are still frugal, and reluctant to spend. Learning to let go, is harder than it would seem. We are starting to travel, and go out to eat more, but we still don't feel we are rich or 'set for life'. And, yes you are correct about being able to build up a net egg. We were not given anything. We followed the save 10% of our income and invest concept. It did work.
It sounds like you have done well for yourself. I hope you spend some of it and enjoy your life, don't worry about leaving it to someone else who will more than likely blow through it pretty quickly. It seems like people who are given free money(money they didn't work hard for) spend it unwisely and in a hurry.
I was so hoping and waiting for you to say the amount you needed is based on EXPENSES and not income. Once I realized that I knew I could retire at 52. That was 7+ years ago. I never lived to keep up with the Jones'. I don't have a million dollars and I am VERY comfortable in retirement. Lots of cruises ;) Sent you a message and didn't hear back. Hope all is ok.
That Fidelity chart on multiples of income is the simplified one. The more you earn the lower percentage soc. Sec. Replaces. High earners need 12-14 times annual income saved.
The 1 million thing is a psychological amount. Years ago it was a 1 million German Marks limit in Germany, which today corresponds to around EUR 500,000 in nominal terms. Even 1 million in euros is not the same as 1 million in US dollars. It is therefore simply a 'symbolic' amount. The fact that in many cities you can't even buy a one-bedroom apartment for this amount is only a side note, while elsewhere you could live incredibly well on it. Wealth has nothing to do with the 1 million threshold. I am rich when I always have one unit of money more than I need. So the key to wealth lies in what I *really* need.
Nope, respectfully disagree. To retire without worry, afford decent medical protection, cover increasing expenses due to inflation and contingent plan if the government safety net of SS gives way....yes, $1M plus is needed. I'm 67, recently retired and am experiencing this right now. Of course you can (if you have to) retire with $500K in reserves over SS benefits, but from my perspective, living/home/transportation upkeep will erode that quickly. I draw close to $3700/mo in SS, and see an outflow of over $700 a month on medical insurance payments and medication. With a paid-off 40 year old home, I have still budget for taxes/insurance/repairs appliance/cooling/heating breakdowns and general maintenance. Other general expenses run about $2K a month. Those are expenses TODAY. I use 5% divys from $750K of T-bills to supplement SS. The T-Bill income gives me (after taxes) @$2K/mo. of buffer. If you can believe reports from the Govt, SS is expected to erode by @ 2030. Because of that I have another $750K in equities I'm trying to grow as a stop-gap. I'm assuming I'll stay alive another 10-15 years, so I have to factor inflation of food/healthcare/energy/housing expenses, plus additional for assisted care expenses as I age. I don't want to accelerate my own demise by living under stress that I'll run out of money before I die. I'm thinking you'd want to live like this, too.
Excellent breakdown, and a good reality check. I know people scrape by on much less, but I’m often shocked at how people think they are going to live and travel in luxury on $10k per month.
It sounds like you live in an expensive house, therefore have real estate taxes, and maintenance. Your SS is $3700 that means you are high income, average SS is below $2k. What you speak of most people don’t have, like central AC. Most people don’t live like you. I certainly don’t.
It depends on your burn rate. I financially free, but just trying to figure out my burn rate. I am doing it backwards. I retired early without a million dollars.
In 2011 I retired at 55 and fall into that 56% who have a traditional pension. I “only” had $500,000 in savings. My wealth is my monthly pension income (which is pretty generous) + my Social Security (taken at 62). I leverage that income by living in Thailand which has a lower cost of living. I am doing just fine. I do agree though that today’s work environment and probably the future economic environment is very different than my life circumstances. All we can do is responsibly adapt to circumstances as we find them. My one piece of advice - LBYM or live below your means. You can’t save otherwise and you will be comfortable with a lower standard of living when you do retire. Learn to enjoy life at whatever standard you find yourself in. Hi Erin - remember our interview from a couple of years ago?
The problem we have is because Most people always taught that " you only need a good job to become rich". These billionaires are operating on a whole other playbook that many don't even know exists.
Personally, I would say have a mentor. Not sure where you will get an experienced one, but if your knowledge of the market is limited, it seems like a good bet.
My parents were mostly low paying blue collar jobs and my dad hardly didn’t work his entire life. They are living off old age security and rental income. They had no retirement income and they have enough to live comfortably.
I’m 55 with 10-11 years until retirement and my portfolio hovers around $1.6M. If I plan it right I may consider ramping down and working a little less in 5 five years - kinda like easing into retirement.
My folks retired 5 years ago with about $500K in savings. Their monthly income is about $5K (SS and a small pension). They take 2-3 nice vacations every year, drive a nice car, etc. They have never taken a penny from their savings! So essentially their savings is a BIG emergency fund that will keep growing every year (yes, they own NVDA). How do they do it! Simple, they have ZERO DEBT! With no mortgage, no car payment, no credit cards, etc. they have an amazing retirement! Who needs $1M to retire!
@@vulpixelful capital gains are tax free 366 days after buying the asset Better than a Roth Don't have to wait until 40 50 or 60 years old, like most pensions
Happy for your folks. Looks like they'll do fine especially when you consider that there $500k will continue to grow every year and that the dividend income will also grow every year. It's likely that they'll always stay ahead of inflation especially when they aren't even drawing from their savings every month! Also, since their joint taxable income is less than $80k all those dividends will be TAX FREE!!!
I remember hitting the 1 million mark in 2021. I immediately felt that I had made my goal but I also started to feel that it was not enough? Now in 2024 I just broke the 2 million mark. This time I plan to retire in 6 months when I turn 55.
It's because of the threat of nursing homes. Costs $100k per year or more to live in one. Imagine needing to live in one for 10 years... that's a million dollars. When the money runs out, Medicaid it is and those facilities are pretty awful.
Private pay and Medicaid facilities are the same. I’m a nurse and have worked in nursing homes and memory care facilities you are treated the same way no matter how you are paying for it do you think the nurses and aides have time to look and see who is private pay and who is Medicaid. It doesn’t matter same if you are in the hospital we as nurses treat everyone the same we don’t care who is paying for it because it doesn’t change how we get paid. Nursing homes want to be full they will take whoever Medicaid or private pay. Point I am making is spend your money they won’t put you out on the street if you need to be in a nursing home and you can’t afford it. Additionally the 1st thing nursing home tells you is drop your long term care insurance so don’t waste your money on that either. Let’s face it if you have to go to a nursing home it’s not going to be pleasant I don’t care who you are!
I need 1.65mil in today's dollars in order to retire and live the lifestyle I want. I wonder how many of these retirees are comfortably retired. Take a trip to the local grocery store and I see many seniors working at the till. Walk into a dollar store and I see retirees or single parents with multiple kids as their main customers. When I did community nursing work, an alarming number of seniors have their fridges filled with cheap, low nutrition foods like hot dogs, white bread, and canned soup. These retirees are living in poverty out of necessity.
"Out of necessity" is a strong leap. If retirees are still working, it could well be because they're otherwise sitting on a couch all day watching tv, and they know that's extremely dangerous. Basically a guaranteed premature death. Regarding their fridges, maybe that's what they grew up on and they're happy with it? Maybe it's simple and they don't want to have to cook? I'm not saying you're wrong -- in fact, I suspect you're right in a lot of cases, but we can't just lump everybody who exhibits certain behaviors into the poverty bucket.
My Grandpa started eating like that near the end because he liked those foods and felt like “wheat bread” wasn’t going to prolong his life nice for the taste switch.
@@bvoyelr Good points. I can't speak to the people who are working. Perhaps they just want something to do. I volunteer for the same reason. Regarding the people I saw in their homes, I actually do have insight into their finances because I need to know that to calculate their government-determined cost. I'd say 80% of them receive free care because their income from all sources is below $10,250/year (in Canada). It's hard to make ends meet on that income without family support or cutting costs. The assessments we do are comprehensive... from education, ancestry, health, family, finances, hobbies etc. We ask whether they need to choose between health care and rent/food. There's not much left to assume. Also, this isn't a regional issue as I live in one of Canada's retirement capitals and we have people from all over the country here. I do recognize that people who are wealthy may never require our support so perhaps I don't meet them... that's the best case scenario. The point I'm trying to make is that just because someone retired with a small nest egg and is managing to stay alive, doesn't mean that's enough.
Im 45, have $500k in 401k, wife and i have $70k total in Roth IRAs, and wife is a teacher so have a pension when she retires. I still want $1.5-2M when we retire because i wanna be able to do ANYTHING we want when we retire
You don't need even 500k to retire most people are retiring with 200-300k in savings yeah you won't be cruising in France but for some people it's doable and last for the length of their retirement.
I think a person can still occasionally cruise in France and do more traveling. My mother retired with not much savings and has been on more cruises than I can count,not to mention traveling to other places.
Thanks for this take on blanket retirement statements for everyone. If I had to wait until I reached 10x my annual income, I would never retire. Luckily, after figuring out my living expenses, I found that with SS delayed until 69 or 70, and a couple of hundred grand in CDs, plus my relatively small, as of yet, 401k, I can retire in decent comfort. One thing I am looking at is enjoying a gradual transition over the next few years into retirement by cutting my hours at work; my company allows this, so why not? I can get a taste of retirement while still having outside money coming in. BTW, I will be 65 later this year and I’m putting away 27% of my pay, including the 6% match my company provides.
Please retire ASAP and enjoy time to travel. Life is too short, take your SS at 65, please don't wait, no one knows tomorrow. You cannot buy back time, you can make more money, what happens if the health is so bad you can't do anything. Just a thought.
@@johnsonajayi7846I appreciate your advice. One thing I neglected to mention earlier was that I will reassess things each year to see how I feel. I know tomorrow is not guaranteed for any of us and that I may be making a mistake by waiting, but I will take full responsibility for my actions and not blame others if I choose wrongly. I am, after all, a man. At the very least I’m going to try to wait until FRA.
sounds great - if you have measured twice/thrice ... cut the work!!! Enjoy. I've found i might have lasted on the job a few years too long, but i had family problems to address (that only money could provide ... sigh) so i retired at 68 ---- while i have no regrets -- reality!! -- still at 73 it woul have been good to have a plan to retire at 65. Good Luck!!
I'm 61. I have a bit over 2 million saved. Just retired this May. I think I'm in good shape since my financial advisor wants me to take more money than I can spend. Having my zero debt is what made me feel comfortable.
@Cenlalowell already have moved 400k to Roth. Will move 20k a year until I get on medicare and than go up to covert to the max before having to pay extra
ALWAYS overshoot your retirement income. You’ll never know what sort of debilitating physical or mental disability will take away all your assets within a short period of time. I would not want to force one of my loved ones to take care of me, while their family is short one income.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both ALSO most importantly, Thank you sir TOMAS CALEZ ANTONIO , for introducing me to YOUR platform since I joined this your trading network I have got back all the funds I lose from other platform and still gaining my profits off the market trends, thank you I really appreciate it. it's near impossible to not out-perform the market hassles, been using my advisor for over 3years+ and I've netted a good reasonable amount of profits
Another thoughtful video. So much of the retirement talk is polls about savings numbers rather than the most important question: what is your budget for retirement, and how will you main the necessary cash flow? It has been a while since we talked. Sorry that chanel didn't get traction. Still very comfortable in retirement. Actually, I have more than I retired with. Greetings from portugal
Your retirement success is heavily dependent on your debt, expenses and your investments. If you have a home paid off and no credit card, auto debt, personal loans it is a big advantage in retirement. Keeping your monthly expenses low will optimize your success also. For example, my home is paid off so I pay property tax $4500/year home insurance $1130/year. Total $5630 divided by 12 = $469/month to live in my home. Where in the USA can you live for $469/month? I keep my expenses to 13 items. 1. Electric 2. Natural gas 3 water/sewage 4. trash/recycling. 5.internet 6. cell phone. 7. auto insurance 8. home insurance 9. property tax 10. gasoline 11. auto/home repair budget 12. entertainment budget. 13. Food No subscriptions, no pets, no cable TV. I can cover all of these for $2200/month. I do not have $1 million.
There are lots of places in US where one can live on less than $500 a month. Not in a huge house but a modest one. It would cost me more to live in 3rd world country than here, and with a lower standard of living---why do you think they are all trying to move here?
@@keralee People are coming to America illegally so that Biden can give free housing, free medical, food stamps, free cell phones, $10,000 credit card, tax breaks, and they vote for the people handing out free shit.
One thing I don’t see many financial advisers talk about is the cost of healthcare you need to spend for insurance before 65. That is going to be a big number if you have any ongoing healthcare needs. Many do. Consider ongoing conditions cost if you have diabetes, heart disease or many other common costly healthcare needs.
That's the game I am in at the moment i.e. I retired last week at the age of sixty one with the numbers saying I can coast for five years on what I have prepared. But beyond that I will need to look at either hopping back into work (and probably sooner rather than later so as to not find the door permanently closed) or selling the house and spending my last days in a foreign land.
My Dad just passed in February at 99 years old. He retired in 1980 with a pension of $1400 a month, which never changed during rhe 44 years. His SS when he passed was about $1900 a month, or around $1400 after medicare and Supplemental deducted. He ritired with no 401k, but had probably around $200,000 in savings, mostly cd's and money markets, but a couple stocks also. His savings grew during retirement, even with paying 3 years of nursing home costs for my Mom at rhe end of her life. So, can you live comfortably with low savings, yes. It depends on your spending habits. He took at least 2 trips each year, one to my Mom's family reunion, and one to his Navy reunion in various states. He also took various trips to visit out of state kids.
@@dallassukerkin6878 Retirement is whatever YOU want to do with your life. But also looking ahead, 5 years you will be 66 and have the chance to have Medicare and Social Security to fill in some gaps you might have now. Another thing to think about is the older you get, what physical health might you be in? Take your trips and do the things while you can, these are your Go-Go years. When you are 80, you won't want to really go anywhere (No-Go years).
1) It’s expensive to have a job. 2) When the big investment firms say you need $1M what they’re really saying is that you need $1M to be a client they want.
I retired in late 2022 at the age of 70 and am doing just fine. My home was paid for and I didn't have any debt. I have about $550,000 in savings, IRAs, and a brokerage account.
@InfiniteQuest86 There's always someone with more ....and less! You're obviously smart enough to know he's above the median and you are way above. Good for you. My brother-in-law is 79 with $50M. How you doin' now?!!! With greater income, typically comes a higher standard of living. This guy probably had a good salary and may be able to live solely off his Social Security so that may be all play money. Couple that with a life expectancy of another 15 years and he's in fine shape. Good luck making your's last 40 years! You're off to a good start but who knows what your future holds. I know a guy that retired in his mid 50's, fit financially and physically. He enjoyed a few years of retirement then fell off a step ladder and is a quadriplegic now. You may be working hard and think you're self made but, you better say some prayers and thank God for the gifts you've received.
Fidelity is looking out for fidelity more than retirees when they produce these guidelines. If I had 10x my salary and social security at age 67, I don’t know what I would do with all the money. I mean if you get 7% return on your investment and you have 10x your income saved that equates to 70% of your annual income. Add social security on top and you have more income than you had when you were working. If you are at fidelitys estimates and you are 60 you might consider early retirement.
Retirement seems so much harder now than it was a decade ago. The rising cost of living, inflation, and unpredictable markets are making it impossible to calculate a safe number
It really depends on your lifestyle and goals. For example, do you want to travel often, or are you planning to live a modest life? A lot of people overlook healthcare costs-those can easily eat into your savings. I’ve heard some recommend at least 80% of your pre-retirement income annually, but that may not even be enough with today’s inflation.
Great point. I’m also worried about underestimating how long I’ll live. Running out of money at 70 or 80 sounds like a nightmare. I’ve been managing my investments myself, but honestly, I think I’ve made some bad decisions. I’ve barely grown my portfolio, and now I’m panicking!
After a hurricane destroyed my beachside business in 2017, I learned a valuable lesson about diversification. I've since spread my investments across various assets and enlisted a financial advisor to manage my surplus funds. Now, as a semi-retired sailor, I enjoy a relaxed schedule, dedicating just 9 hours a week to maintaining my yacht. Thanks to smart investment decisions, I'm nearing my retirement goal of $3.4 million, with only 5% left to reach my target.
Thanks for sharing your experience! I've been managing my portfolio myself, but it's not working out. Do you have any recommendations for a good investment advisor? I could really use some help
My CFA, Joseph Nick Cahill, is a renowned figure in his field. I recommend researching his name online; you'll find all his credentials and everything you need to work with a reliable professional. With many years of experience, he is a valuable resource for anyone looking to navigate the financial market.
The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for.it's especially difficult for people who are retired.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
Even if you’re not skilled, it is still possible to hire one. I was a project manager and my personal portfolio of approximately $850k of my retirement pension took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $250k since then.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Sharon Ann Meny for the last five years or so, and her returns have been pretty much amazing.
She seems to be well-educated and well-read. I ran a Google search for her name and came across his website; thank you for sharing.
@@emilydeep Sharon Ann Meny stole all my money and slept with my brother in law. She's a thief and an adulterer. I hope she gets sued.
I was told by a financial advisor at my company that many of his clients regret not saving more but none regret saving too much.
As said in the video, how the question is framed changes the answers you get. If you asked these same clients if they regret not going on that international vacation or buying that RV that they always wanted to save more for retirement you might have some different answers.
@@Tisargian There's nothing that says those are mutually exclusive. You have to pick your battles, and not necessarily live like paupers, but you can certainly regret getting a new leased car every 3 years, since that alone could have paid for multiple international vacations.
There are people in America making $300k/yr with $80k credit card debt and almost nothing saved. You're certainly not going to be doing many international vacations on social security alone.
Of course he said that.
OK, I regret saving too much, LOL...
Nevertheless, oversaving can mean losing the best (physical) years of retirement, when you are still young and mobile enough to enjoy bucket list travel and activities. So, yeah, I could have retired 2 or 3 years earlier, had I really been paying attention and making better moves; those are years you can't get back.
Many regret the extra years they worked to save more than they needed.
Finally someone who talks practical savings rather than in millions.. my mental peace level has gone up one notch after watching this.. thanks Erin much love ❤
That makes me so happy!!! 😁
Agreed. It’s a scam put out by big investment companies. Retire with zero debt and low expenses.
Too many people are depending on SS when the system is bankrupt. You are actually right to worry. That most people have tiny nest egg means they are ALL in trouble. It's a weird mentality thinking "if most people have little then it MUST mean it's okay to have little"
Biggest item, house, being paid off going into retirement is a HUGE part. Keeps expenses down and can use it for cash flow in a crunch.
@@animalsarebeautifulpeople3094 SS is not "bankrupt". If we could keep Republican fingers out of the till it would be doing just fine.
For what its worth, I plan on retiring at 55. I'll have about HALF a million in savings. My mortgage will be paid off, I'll have zero debt. I also live in a low cost of living area. I want to get out of the stressful work environment and enjoy my years I have left. I can live a very frugal lifestyle while I hunt, fish, hike, garden, and enjoy the FREE outdoors. Retirement doesn't need to cost millions of dollars IF you live somewhere affordable and don't have expenses that are through the roof. The freedom to do what I want, when I want, and have no stress, is worth more money than I could ever count!
You sound like a wise and content person. Nice to see
500k in cash or investments? Cause if that money is not diversified in the stock market then 500k cash will not last yoy more than 15 years if you are frugal like you said.
@MaullerTwin Combination of 401k, Roth IRA, and savings. I am single (widowed) and will have zero debt, low cost of living area, and minimal property taxes ($300 per year), and zero mortgage. My investments are on track to earn me $10,000 per year in dividend income. If I choose to take Social Security early at 62, I will qualify for $2200 per month, or slightly over $3100 at FRA of 67.
Living a frugal life I do not see how I can run out of money unless the stock market is down for multiple years in a row, all my dividend investments stop paying dividends, and social security completely goes away. (I doubt any of those will COMPLETELY happen.)
I love this, without being specific lol, what part of the country do you live in?
When I implement my plan and retire, I will be in the Ozarks in Arkansas...
Completely agree, retirement is all about controlling and managing your cash flow. While a million dollar benchmark is a great goal, it is not needed.
The wealthiest is not the one who has the most. It is the one who needs the least.
@@CarrieLovesLife.So true! Some folks aren't happy unless they are traveling the world. Others are content sitting at home and working in the garden, maybe doing volunteer work. Everyone is different.
Make more or spend less. Either one works. If you do the 2nd, you will never need to do the 1st and spend your life at the office.
Finally! A realistic video about retirement. Almost nobody does this!
Great video, Erin. One major factor that helps moderate income retirees nowadays is working part time or having a side hustle. In 2024, people of retirement age are the fastest growing workforce in the U. S. That's the new retirement model for a lot of people.
It's really hard to find videos that discuss retirement like this. Thanks Erin!
I’d be retiring or working less in 5 years, and curious to know how best people split their pay, how much of it goes into savings, spendings or investments, I earn around $250k per year but nothing to show for it yet.
Money advice is subjective, what works for you may not work for me. I would suggest getting rid of any unnecessary purchases, especially things that cost you monthly, or better still consider financial advisory
Agreed, I'm quite lucky exposed to finance at early age, started full time job at 19, purchased first home 28. Going forward, got laid off 36 amid covid-outbreak and at once consulted an advisor. As of today, I'm barely 10% short of $1m after 100s of thousands invested.
I've worked in real estate for over 25 years and have neglected a major stock portfolio. This served me well when I was flipping and renting houses, however I need a different plan now.. mind if I look up the professional guiding you please?
Teresa L Athas is the licensed advisor I use. Just google the name and you’d find necessary details. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thanks for sharing. i searched her full name and found her web instantly. After reviewing her credentials and conducting due diligence, i reached out to her.
The BIGGEST LIE You've Been Told About Money is that it doesn't grow on TREES!! 🤣
Wow, can I get in on this scam.😮
@@CamdenVanderlaan no it grows free by a Democrat Adminstration. Hired another 100K government workers, after all we are borrowing everyday. 620 billion in 1 month for interest on the National Debts, more money than the Military and VA combine to operate in a year!
U still need freaking money to manage the money tree 🌳. We just need a genie to give me at least 3 wishes , 1 being money
SCAMMERS
@BrigetteWaltershield thank you for your perspective. I believe in discipline execution which has allowed me to build wealth in investing in turnkey multifamily units
I have savings of $1,000,000 and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire comfortably, or do I need some sort of money management?
I believe the average life expectancy in the US is around 77.5 years, but many individuals live into their 80s. Therefore, $1 million needs to cover all those years as well as any unexpected expenses. While $1 million is a solid beginning, I recommend seeking financial advice just to be safe.
I’m quite lucky exposed to personal finance at early age, started job 19, purchased first home 28. Going forward, got laid-off at 46 just after covid-outbreak, and at once hired an advisor with grit to help stay afloat. As of today, my portfolio has yielded over 300%, summing up $836k. Stay motivated friends
Scammmmmm! This conversation comes up again and again!
worry about inflation only? Gold preserves the value of your dollar.
@@bobsacamano7653 land too.
My dad retired at 67 with $160k in his 401K in PA. He had zero debt. He was able to live off just social security and didn't start tapping into his 401K until the law said he had to. He's now 82. He uses SS to pay his bills and the 401K withdraws for his bus trips. Take-home message....no debt!
So, he retired in 2009 and was probably freaking out about how his 401k had dropped during the great recession. I’m glad he’s doing okay, but it also sounds like he isn’t living the grand retirement that people are hoping for.
I do taxes for low income folks, many who are just living on SS and/or disability benefits. They are not thriving.
Depends on what is meant by thriving. If you have pretty simple pleasures, life doesn't have to be all that expensive. Especially in PA... I mean, outside of the cities there are some beautiful and cheap places to live out there, with some lovely scenery to keep you occupied.
If you are jet setting, and not buying the latest iPhone and laptop every year, and have a working car and paid off home... Books, parks, TV, board games, coffee and meals with friends. You can have a great life on the cheap if you want to. Just a question of if you have a personality that allows for that.
@@CaedenV I would agree with you solely because those would be things in your control. But medical/healthcare costs will eat into that savings in no time unfortunately
@@0Pain0Gain Have you not heard of Medicare?
@@shawnbrennan7526 OP said his dad retired at 67 with $160K balance (which you have done the math and figured it was 2009). OP also said his dad didn't need to tap his 401K until Required Minimum Distribution age kicked in (which we can fairly assumed if he didn't have to withdraw it until forced by the RMD law, then he probably didn't spend it and just put it back in the market via a standard brokerage account). So, if he didn't touch the $160K since 2009, it is worth $1.2M today with years of bull market run-up and OP said his dad has no debt. An 82 year old that manages his budget with over $1M to his name is kind of thriving by all measures of retirement statistics shown by this video. Is the guy popping bottles of the finest vintage on his private boat off the coast of Maui? Probably not, but he can say he doesn't and hasn't had to sell his time for money for the past 15 years (full financial independence) and still has a Million bucks to his name and sleeps well at night knowing creditors won't call him (keeping his dignity). He is kind of thriving.
My husband is 74 and is still working because he loves his job.
Lucky he is. I enjoyed what I did but my company moved to FL and I didn't go so I retired. That was 3 years ago. I have had two knee replacements, skin cancer surgery and back surgery to fuse two discs. If this is my retirement I want to go back to work. 😉
This is a very good video! This might be the first video I have seen talking about retirement that makes economic sense. Retirement is a lot more affordable when you have no debt! Having no house payment and no car payment, no student loan payments, no revolving debt payments, etc makes retiring fairly simple. This girl gets it.
I can retire any time I want.
I just can’t live too long
About 10 minutes for me.
@@tomhuston8880😂😂
Stewart Francis told a joke something along the lines of: "I've got all the money I'll need for the rest of my life.... provided I die next Tuesday."
I suggest a diversified portfolio of investments.... and lots of bacon
That is a great joke. And his delivery is terrific. He is the best one line joke teller around.
I'm here and commenting before I watch the video because I just hit the $1 million benchmark in my 401k. I'm excited and nervous and not retiring soon, I'm 61, but let's watch and see. I'll edit this post afterwards concluding my thoughts. I'm sure it will be a great video as I've watched two of your videos already and very, very informative. Here we go......Just watched the video in its entirety. I'm good and am going to use the Vanguard withdrawal strategy you mentioned in the first video watched. FIrst year, 4% with my floor 2.5% and ceiling 5%. Thanks again. On to watching more of your, Erin!
The end statement is the only thing that needs to be said in this video. If you save 10-20% when you are young, you will EASILY be able to retire with a seven figure nest egg. Americans go through so much effort to make money and so little effort to save any of it. Once you get your first "adult" job, live within your income and don't buy anything on credit except a modest reliable car. Cars and consumer debt are a sucking black hole. Once you are living within your means, then every pay raise you get on your job, save HALF of that raise and use the other half to slowly improve your standard of living. It's a dead simple formula.
Erin you rocked it on this one. Ive been watching all these financial videos. And ive had a huge problem with people giving ideal life situations and thinking it applies to others. Their whole shtick is sacrifice now so your olderself can thank you. So they go out and scare people to thinking if you dont have millions then you are behind. Saying if you sacrifice now you can live it up later. Scaring people with statistics and stories worthy of alec Baldwin glen gary ross. Im in no position to tell people how to spend their money. But these videos should be a reminder telling people its not hard to take control of your finances. But to think you can come back to your 20s in your 60s is crazy. Interest rates will probably never be 2.5 percent again. So if a person missed on that they cant get it back. I used these videos to keep me on track and if i get behind im okay with that. I know how to get ahead thanks erin, money guys, smart money bro, and white board finance.
Joe Kuhn and ESI money are good resources, too
Some food for thought…My plan had always been to retire at 62 but I’m currently 66 and still working full-time. 4 years ago, unbelievably, both of my parents got diagnosed with dementia.
They had to go to a memory care facility, and here where I live, California, we are paying $12k per person per month, so $24k a month total. The cheapest place we found was $16k per month, for both of them, for full time live-in dementia care but my parents had the money so we put them in the more deluxe $24k per month accommodations but if you consider $8K a month is going to be the minimum you need for a single person’s decent full-time memory care for dementia, which is not covered by Medicare, and if you didn’t have the foresight to buy a long term health care plan to fund it, you will have to deplete all your assets and then go to a state run facility, which is not fit for a dog - believe me I visited. I get it that this is a worst case scenario, but I am living it and it really got me thinking that what if this happens to me? After all both my parents have dementia (as did my grandparents) so there’s probably a decent chance this will happen to me and if it does, the burden of some of this cost will fall to my children, which I would never want to see happen. It is because of this, I don’t feel I can ever retire. I will continue to work as long as I am able just to minimize the potential financial burden to my children. The only solution is if you get a dementia diagnosis you pretty much have to kill yourself before you’re too demented to know how.😢
In my parents case we have already spent over $1M on their long-term dementia care. None of you You Tube financial gurus talk about this reality. So agreed, you don’t need 1M to retire. You probably need at least 2M. You say you are the person who asks the “what if“ questions but you missed a very obvious one!
Sure, if both parents suffer from advanced dementia or Alzheimers, or if they both end up in the wheel chair, unable to take care of themselves, all odds are off. I would never want to find myself in such a situation, and I won't. If the quality of life isn't there anymore, I'm out.
That said, a top-notch assisted living facility in the finest areas of Mexico, i.e., in Ajijic, Lake Chapala, costs about $2,500 per month. Many Canadians and Americans take advantage of that.
I’m 55 from southeastern Ohio but worked overseas all my life. I have savings of $1,000,000 and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire comfortably, Or do I need some sort of money management?
I would get money management just in case. You’re only 55. I think the average life expectancy in the US is 77.5 years, but many people live well into their 80s so that $1 million has to last you all of that and the unforeseen. $1m is a great start though. Good for you!
Generally speaking, a good number of people discredit the effectiveness of a certified fiduciary in planning for retirement, For over the past 10years, I’ve had a CFA consistently restructure and diversify my portfolio/expenses and I’ve made over $3m in gains.Might not be a lot but retirement doesn’t seem so farfetched anymore.
@@DanielPanuziYour advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
@@DanielPanuzi Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
Comfortable retirement with $1 million and 55 years old? Wake up, please. Unless you live a very simple lifestyle.
Well said, retirement is going to come sooner than everyone thinks. It is just best to do your best.
Great video! Very good points!!! There are so many parameters that come into play: debts, living expenses, mortgage paid off or renting, location of retirement (US or overseas). There are so many options!
I'm 48. My parents and their friends have all retired at this point. Only a few are millionaires. All the rest are just thrilled not to be working. They're living their best lives with no complaints, even if they have to pinch pennies. Contentment combined with social security and no debt seems make a baseline for joy when you're 67.
@@fml5910 He is working because lots of men enjoy working unless it is a really annoying job - what work is he doing?
No debt is the biggest part of that game plan. I am 70 and retired 4 years ago. Let my investmens grow whille living on SS and finally reached a million about 2 months ago. We'll be living llike kings when I tap into that at 4% withdrawal rate.
@@fml5910 4% annually is roughly $40k. This is a starting point that you can adjust to correct for inflation and try to maintain a lifestyle as time goes on. The first few years you are living on only your interest and never touching the base sum in the account(s) because hopefully your money is earning at least 5% so still growing. Maybe in a few years I will adjust that to 5%... and in a few more years to 6%. You can play with the numbers to suit your needs and timeline. In my case I am projecting 25 years, but I doubt I will live to be 95. Another formula suggested is divide by the number of years you project, 25 in this case, and go into your nest egg. 25 years into $1 million = $40k. (first year) Your nest egg grows / maintains so the following year you pull out 1/24 (24 years to go) and that number is $41,600. The following years you pull out 1/23 = $43,400. Somewhere in here you will be passing that threshold of exceeding the 5% interest rate and start going into the original sum, but this is doable for a LONG time.... and also keeps ahead of inflation while lasting at least 25 years.
@@fml5910 4% per year
@@fml5910 it's per year
So much of the FIRE content is consumed by people in their 20's and 30's. I can imagine it being really discouraging if you are older and less able to capitalize on compounding. What a great video to put into the mix! Never too late to start.
Thank you!!!
I started what turned out to be a FIRE plan at age 41 with nothing but a very old car. Age 60 now with multiple properties free and clear and enough to live on indefinitely even without SS. Acquiring a frugal mindset was a big key that shifted things for me, as was leveraging my unique skill sets to the max. Age should not stop one!
Dang there are so many robots in the comments.
And they aren’t hard to pick… it amazes me YT doesn’t stop them.
Those bots suggesting advisors seem to be the majority in every financial youtube post.
Report as spam. Takes less time than this post.
How can you tell the robots😮
@@davidbrooks8809 there are two main types in financial vids - the “to the moon with AMX3000” or whatever BS product it is this time, or an overly polite waffling post of some description, sometimes saying how much they are “benefited” by some financial investment of some kind, with anywhere between 5 to 20 responses. The responses serve one purpose, to create some kind of narrative to drop the name of an advisor. The comment will have a bazillion likes so that it ends up at the top of the rated comments list.
Great points regarding who has been telling us what we need to buy and how much we need to have saved before we retire.
Another excellent video Erin. I love how you do a deep dive into the data and thoroughly analyze all of the opinions in the articles you discuss. As I have mentioned in comments many times before, I retired at the end of 2021 at the age of 65.5. I worked 30 years for a Fortune 500 insurance company and was lucky enough to get grandfathered for excellent retirement benefits. I get retiree health insurance; retiree life insurance and I had a defined benefits pension. In addition, my company had a 401k that they matched up to 6% of your salary. In 2016, they froze the pension but I got grandfathered so my pension benefits continued; however, as a trade off they increased the 401k match to 9%. I was also able to get the 9% match. My wife passed away 3 months before I retired, so that changed my plans regarding the pension. Instead of taking a monthly pension payment, I decided to take it as a lump sum. My lump sum payment was over $1 million. I rolled it into an IRA and didn’t touch it during my first 2 years of retirement. When the interest rates went up in 2022 and 2023, I decided to create my own pension so to speak by buying an immediate annuity. I have it set to pay me monthly for the rest of my life with 20 years guaranteed. My monthly payment is about $7,000. In addition, I am collecting my wife’s social security as a survivor benefit. This is about $3600 a month. After the Medicare Part B premium is taken out, I net around $3300 a month. I plan on letting my social security benefit grow until I am 70 in two years and then switch to mine. Not only is the annuity payment and social security enough to live on, I am saving about $1500 to $2000 a month. I currently have 2 years worth of expenses covered in my emergency funds which I keep in high yield online savings accounts and a money market account. I also have about $5,000,000 in an IRA which is actively managed by a brokerage firm and about $1,000,000 in a non qualified actively managed Index fund with Fidelity. I switched to an actively managed account to be able to harvest losses for tax purposes. To get back to your point, you don’t need a million dollars to retire. I have well over that amount but I will never touch any of it in my lifetime. I have an estate plan where it will all go to the Humane Society as I have no relatives that I want to give it to and I like animals much more than humans. Thanks again Erin for creating and maintaining this excellent channel.
I am really impressed with your analysis. Its smart and also very logical.
OMG thank you so much for this video. I made a comment to an older video you posted a while back, saying that the "rules of thumb" just break down at some point, and that it sure seemed that Fidelity wanted you to work until you die, always trying to scare people into saving every last penny and investing it with...Fidelity. $1M is a boatload of cash. $6M at age 55 is a ludicrous amount, yet they say that if you want to maintain your lifestyle you need more more more. I ain't flying into Monaco and playing Baccarat with James Bond here, I'm just trying to freaking retire like a normal person! I'm pretty sure I can retire and not be eating beans out of a can in 20 years, as Fidelity would have you believe.
Exceptionally well done presentation. Thank you. Your mention of financial institutions promoting the amounts we should have in retirement, reminds me of other slogans such as, 'Breakfast, the most important meal of the day' which is not really true for many people. Of course, this slogan was started by a cereal company! And many people take this as gospel.
I retired from a 40 year teaching career at age 70 to care for a new granddaughter. At the time I had saved a mere $135,000, but had pensions from two states. I was a single mom with four kids. Now at age 81, living off the grid in a paid off house, I've managed to accumulate a total of $350,000 in savings and investments. Note that under certain circumstances one can still increase income during retirement while not working!
That's excellent! Kudos! That's what I want when I'm retired, for my savings and investments to keep appreciating, so I feel worry free (at least finanacially speaking).
Great job. You are a strong women.
Pensions count for a lot. Every $40k annually in pension is worth a million in a 401k.
why
That's awesome! good job.
I have 800k, retiring end of this year just shy of 60. Feel very comfortable with that number. GREAT video by the way and you are spot on it is not about the amount you have but the expenses you have. Know your expenses and you can easily determine the number you need for investments.
Thanks for pointing out that everyone's circumstances are different. Some people have a large family to support and medical issues that use a lot of money. Others are single with paid off home and no responsibilities. It is hard to have a specific number or percentage that works for everyone.
This message is so needed! Thanks for sharing. We were worried that my auntie only had $150,000 in her 401k, but if she didn’t need the $ in her 401k to live, there was no need to worry! Plus sadly she passed away with that amount still there.
I am glad you addressed this topic. Thanks for all the great information.
This video should have more views! I have not heard this viewpoint before and it's very correct
No debt. 5% withdrawal rate on 500k with social security. That’s enough.
enough for what? That barely covers property taxes where I live
@@mikeriksheim1087 you hit the other key point! No debt is crucial, I've been retired 3 years and made certain I had no mortgage or consumer credit debts. But property taxes, or where you live can be a huge issue! My property taxes are apparently tiny compared to yours, but I live in a small rural community nowhere near any real major city. That may not be everyones "cup of tea", but looking back on when I bought my house I'm now really glad I opted for the longer commute rather than living closer to the city...
@@mikeriksheim1087 stop your whining! If $25,000 per year does not cover the property taxes on your home even in one of the highest property tax states in the nation you really shouldn’t have any money issues in regards to retirement unless your 1.2 million dollar home is mortgaged to the hillt and you do not have the income to support the life style you are living. Live within your means! Some people can retire on $500K and social security. You apparently cannot because you spend more than you have and are able to generate.
@@mikeriksheim1087 You might consider moving out of the country. 😅
@@mikeriksheim1087You must be well off then or just keeping up with the rich Jones's. Keep saving and investing.
Thank you for this video. You cleared up a question that I had which is Why do so many people rely on investing for their retirement. I know I'm going to sound very "Soft up the stairs" as my granny would've said but that's because If and when I ever step away from the workforce, I will have 3 very stable vested pensions as income. I didn't realize that so few workers these days had access to pensions.
Social security for myself and wife will cover ALL retirement expenses....not including our retirement savings.....save and invest regularly but you'll be fine
After working in marketing for the wealth management industry for a few years, I realized that a lot of these numbers that people see as standard are actually persistent sales messaging from the industry.
The wealth management industry does not want you to feel comfortable with where you are at. That's not profitable for them. So so much of the "information" out there gets skewed and is really marketing and sales materials for that industry.
The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.
$50k dividend oh my goodness.. not even $100k worth of stocks could gave ya that. You're probably on track with my mentor (spiritual, I only observe him from distance at seminar)
When I first started reading about finance when in high school in the early 70's many of those books had some variation of "in order to live like a millionaire you needed an annual income equal to the interest you would draw on $,1,000,000.00". I always figured through the normal meaning migration we see became you need $1,000,000.00 to retire.
This is totally dependent on where you live and what your situation is. I'm 59 years old and have two young children of 5 and 8 years old. Based on our current spending and the 4% rule I would need more than $4 million to retire assuming taxes would zero... If you have any significant amount of assets apart from your house here in Australia you will not get any social security type income from the government so you will depend entirely on my own investments. If I retire next year or in 5 years, my spending is not going to be going down. So do your own calculations based on your situation is.
Depends on where you live and if you have dual incomes, A single person in CA or some NE states you will need 2 or 3 million or more.
I just take money out as I need it. No 4% rule. Great video as usual. You are very knowledgeable and present your videos very well
As long as you can be flexible on how and where you will live you can retire on much less than $1,000,000. I retired 2 years ago at 58 with just a modest pension and $130,000 in home equity and personal property. I sold my small house in the big city and just from the equity on that I paid cash for a comparable house in a rural part of a much less costly state than where I had been living. Here I can be fairly comfortable on my pension, while I would have been really stressed trying to live on it in my former state. I have an emergency reserve in the bank and in a year and a half I will be able to start drawing Social Security and will then feel positively comfortable.
So if I can ask with your pension and SS about what will you have monthly to live on?
@@boloone1418 I'm currently living on just my pension, which is about $2100 per month. By eliminating rent or a mortgage payment it's very liveable. When Social Security kicks in in a year, my monthly income will increase by about $1500.
I disagree. We probably need more than $1 million + to retire. One of the biggest problems is people are counting on the Social Security Medicare benefits to retire. However, the US government is racking up debts massively as of late. Those benefits will either be cut or monetization of debt will result in higher inflation that erodes the value of those benefits.
I agree. Start saving while you are young and let the compound interest do its thing. This video will not age well, we will see a lot of people in the next decade suffering because they have no nest egg. I see a lot of comments from people who say "I'm living on $30k a year and I take two vacations". My widowed 88 year old father would be in big trouble if we did not help him out with many of his bills.
You can't say that. It is all about what your monthly expenses will be in retirement, state you will retire in, your health, part time work in retirement, etc. For the majority, you DONT need 1 million to retire comfortably!
What has not been mentioned is whether WHATEVER amount is saved from retirement is in PRE or POST tax accounts. Whatever your tax bracket is, if you’re pulling from Pre-tax accounts, it shrinks your savings.
Good video. It hits all the right spots.
To determine our income need in retirement, we used our expenditures. We divided them between recurring, non-recurrimg, discretionary, and excess. We baselined the recurring and non-recurring on a monthly and yearly basis to establish minimum income need. The discretionary represented our safety margin and excess income, our legacy or bucket 🪣 list. Our baseline expenditure burn rate is 42% of our retirement income. So, we have a safety margin and excess income.
After years in retirement, our expenses have gone down in relation to our Pre-retirement and early retirement estimates. We still have a 2.5% mortgage that could be paid off at any time from our investments but chose not to. Questions?
The most important thing in this life, the life itself! So, the health is the key for the happy retirement.
I agree with you completely. The amount of money you will need in retirement has nothing to do with your income. I made two budgets. One includes the necessities only and the other includes the necessities and all the extras I would like to do, like travel, shopping, hobbies, etc. That gave me a spread. When I retire, I will be somewhere in-between. I will be able to do all the things I wanted, but not as often as I originally planned. I can live with that.
That retirement savings number is so specific to everyone's situation. Both in living expenses and how you want to spend your retirement. One person is covering basic needs ,while another is traveling and actively spending. For me, be intentional and informed about what you plan to do in retirement, what you will need, and try to plan accordingly.
my dad retired at 62 took social security and had 200k in a retirement account. He also had a paid for house and no debt. He retired comfortably. He didn't travel the world and go on vacations.
Brilliant video. I love your channel and the quality of the content. Thanks so much for sharing and your passion.
Glad you enjoy it!
Thankfully I do have over $1m saved, and a pension (Gen Xer).
well done.
Your pension is a huge plus !
Wow, thank you for this video. Opened my eyes to so much. Subscribed.
The question of "how much do I need in retirement?" is the most anxious one in retirement finance. That's in part due to the fact that it's tangled up with our mortality, as we need to finance the amount of time we have left to live after retirement, and of course that's naturally uncertain. And also implicated in our genuine concerns as to living a life with dignity in our later years, not depending on family for support, or assuming that social security (or in my case, the Canada Pension Plan and Old Age Security, the two public foundations of retirement here) are sufficient to our needs.
The benefit of the 1 million dollar figure is that, given that there are such divergent views and data around the question of "how much do I need?", it represents a clear and compelling number. It may be unrealistic, it may be more than we need, or inadequate to what we require--much depends on the individual's situation, where and how they live, inflation, etc. But I doubt the appeal of the 1 million dollar standard will ever disappear because that seventh digit has a kind of charisma about it, irrespective of its actual value in determining whether we have enough or not.
big problem in retirement is the risk ( or insurance cost ) of increased medical costs, inflation on big ticket (or repairs) items,. long term assisted living, adult children needing bail outs- so just because you cover normal cost of food and shelter doesnt mean thats all the money you need
Great information. Thanks Erin
Many factors to consider. Amount of debt and how to pay for healthcare if you retire before 65. It's really about much time before you retire, portfolio allocation and how much you need monthly in retirement. My wife and I are 51 and our portfolio is 59% in stocks, 16% in bonds, 8.5% in fixed annuity, 7% in CD and 8.8% in cash. 59 1/2 is the target and with an average market return between now and then, it should happen. We are debt free and max out 401Ks. If you don't have a planner and feel overwhelmed, it might be worth your time and money to sit down with a CFP and talk about your options so that you have a clear path forward.
4:13 Love that Fidelity recommended savings chart .. tells me I need a LOWER paying job to retire sooner. If I get a $25/yr Walmart job at age 67, I only need $250K saved for retirement.
This hits home for me. My wife and I have about $70,000 in pension and social security income, and a little over $2 million in investment assets like stocks, bonds, and cash.
However, it does not seem like enough. We are still frugal, and reluctant to spend.
Learning to let go, is harder than it would seem. We are starting to travel, and go out to eat more, but we still don't feel we are rich or 'set for life'.
And, yes you are correct about being able to build up a net egg. We were not given anything. We followed the save 10% of our income and invest concept. It did work.
It sounds like you have done well for yourself. I hope you spend some of it and enjoy your life, don't worry about leaving it to someone else who will more than likely blow through it pretty quickly. It seems like people who are given free money(money they didn't work hard for) spend it unwisely and in a hurry.
$1 million is not enough with the current inflationary policies.
Good info, well presented. Thanks for sharing this with us.
I was so hoping and waiting for you to say the amount you needed is based on EXPENSES and not income. Once I realized that I knew I could retire at 52. That was 7+ years ago. I never lived to keep up with the Jones'.
I don't have a million dollars and I am VERY comfortable in retirement. Lots of cruises ;) Sent you a message and didn't hear back. Hope all is ok.
That Fidelity chart on multiples of income is the simplified one. The more you earn the lower percentage soc. Sec. Replaces. High earners need 12-14 times annual income saved.
We are dividend investors and have a goal of earning 15% more in dividends than our current salaries.. we are on pace to hit that in7 years
Well done!
@@JBoy340a 🤜🤛
Why are you obsessed with dividends? You do know dividends are just a forced sell, right?
I always want to fix the corner of your couch when it's up like this :) great content as always
The corner of the cushion, me too? It was delivered like that. And oh my goodness, so frustrating! Haha 😂
I didn’t notice that, too funny
I won't give a dollar amount but as a retiree, the expense that worries me the most is medical.
With Medicare and a supplemental plan you'll pay for nothing but prescriptions.
The 1 million thing is a psychological amount. Years ago it was a 1 million German Marks limit in Germany, which today corresponds to around EUR 500,000 in nominal terms. Even 1 million in euros is not the same as 1 million in US dollars. It is therefore simply a 'symbolic' amount. The fact that in many cities you can't even buy a one-bedroom apartment for this amount is only a side note, while elsewhere you could live incredibly well on it. Wealth has nothing to do with the 1 million threshold. I am rich when I always have one unit of money more than I need. So the key to wealth lies in what I *really* need.
Nope, respectfully disagree. To retire without worry, afford decent medical protection, cover increasing expenses due to inflation and contingent plan if the government safety net of SS gives way....yes, $1M plus is needed. I'm 67, recently retired and am experiencing this right now. Of course you can (if you have to) retire with $500K in reserves over SS benefits, but from my perspective, living/home/transportation upkeep will erode that quickly. I draw close to $3700/mo in SS, and see an outflow of over $700 a month on medical insurance payments and medication. With a paid-off 40 year old home, I have still budget for taxes/insurance/repairs appliance/cooling/heating breakdowns and general maintenance. Other general expenses run about $2K a month. Those are expenses TODAY. I use 5% divys from $750K of T-bills to supplement SS. The T-Bill income gives me (after taxes) @$2K/mo. of buffer. If you can believe reports from the Govt, SS is expected to erode by @ 2030. Because of that I have another $750K in equities I'm trying to grow as a stop-gap. I'm assuming I'll stay alive another 10-15 years, so I have to factor inflation of food/healthcare/energy/housing expenses, plus additional for assisted care expenses as I age. I don't want to accelerate my own demise by living under stress that I'll run out of money before I die. I'm thinking you'd want to live like this, too.
Excellent breakdown, and a good reality check.
I know people scrape by on much less, but I’m often shocked at how people think they are going to live and travel in luxury on $10k per month.
I have a paid off home add no other debt, and I have nowhere near the expenses that you have. I live in a Southern state.
@@kburkes4245 Exactly! $5k a month with NO DEBT in a state like SC goes a long way.
It sounds like you live in an expensive house, therefore have real estate taxes, and maintenance. Your SS is $3700 that means you are high income, average SS is below $2k. What you speak of most people don’t have, like central AC. Most people don’t live like you. I certainly don’t.
It depends on your burn rate. I financially free, but just trying to figure out my burn rate. I am doing it backwards. I retired early without a million dollars.
In 2011 I retired at 55 and fall into that 56% who have a traditional pension. I “only” had $500,000 in savings. My wealth is my monthly pension income (which is pretty generous) + my Social Security (taken at 62). I leverage that income by living in Thailand which has a lower cost of living. I am doing just fine. I do agree though that today’s work environment and probably the future economic environment is very different than my life circumstances. All we can do is responsibly adapt to circumstances as we find them.
My one piece of advice - LBYM or live below your means. You can’t save otherwise and you will be comfortable with a lower standard of living when you do retire. Learn to enjoy life at whatever standard you find yourself in.
Hi Erin - remember our interview from a couple of years ago?
The problem we have is because Most people always taught that " you only need a good job to become rich". These billionaires are operating on a whole other playbook that many don't even know exists.
Personally, I would say have a mentor. Not sure where you will get an experienced one, but if your knowledge of the market is limited, it seems like a good bet.
Everyone needs more than their salary to be financially stable. Investing it with a reliable source is the best
You need a good job in order to get money for investments. The investments eventually provide financial security. Jobs can be lost.
My parents were mostly low paying blue collar jobs and my dad hardly didn’t work his entire life. They are living off old age security and rental income. They had no retirement income and they have enough to live comfortably.
Nice De Beers analogy 😊
I thought that was smart too!
I’m 55 with 10-11 years until retirement and my portfolio hovers around $1.6M. If I plan it right I may consider ramping down and working a little less in 5 five years - kinda like easing into retirement.
My folks retired 5 years ago with about $500K in savings. Their monthly income is about $5K (SS and a small pension). They take 2-3 nice vacations every year, drive a nice car, etc. They have never taken a penny from their savings! So essentially their savings is a BIG emergency fund that will keep growing every year (yes, they own NVDA). How do they do it! Simple, they have ZERO DEBT! With no mortgage, no car payment, no credit cards, etc. they have an amazing retirement! Who needs $1M to retire!
Another example of a millionaire who claims they're not a millionaire.
60k in pensions x 25 is the equivalent of a millionaire by net worth
Those of us who won't have pensions, obviously
@@vulpixelful capital gains are tax free 366 days after buying the asset
Better than a Roth
Don't have to wait until 40 50 or 60 years old, like most pensions
Happy for your folks. Looks like they'll do fine especially when you consider that there $500k will continue to grow every year and that the dividend income will also grow every year. It's likely that they'll always stay ahead of inflation especially when they aren't even drawing from their savings every month! Also, since their joint taxable income is less than $80k all those dividends will be TAX FREE!!!
I remember hitting the 1 million mark in 2021. I immediately felt that I had made my goal but I also started to feel that it was not enough? Now in 2024 I just broke the 2 million mark. This time I plan to retire in 6 months when I turn 55.
It's because of the threat of nursing homes. Costs $100k per year or more to live in one. Imagine needing to live in one for 10 years... that's a million dollars. When the money runs out, Medicaid it is and those facilities are pretty awful.
Private pay and Medicaid facilities are the same. I’m a nurse and have worked in nursing homes and memory care facilities you are treated the same way no matter how you are paying for it do you think the nurses and aides have time to look and see who is private pay and who is Medicaid. It doesn’t matter same if you are in the hospital we as nurses treat everyone the same we don’t care who is paying for it because it doesn’t change how we get paid. Nursing homes want to be full they will take whoever Medicaid or private pay. Point I am making is spend your money they won’t put you out on the street if you need to be in a nursing home and you can’t afford it. Additionally the 1st thing nursing home tells you is drop your long term care insurance so don’t waste your money on that either. Let’s face it if you have to go to a nursing home it’s not going to be pleasant I don’t care who you are!
. Why drop long term health care? My friend had it and it pays all kinds of things when he got sick.
Best retirement video I've I've seen and agree with
I need 1.65mil in today's dollars in order to retire and live the lifestyle I want.
I wonder how many of these retirees are comfortably retired. Take a trip to the local grocery store and I see many seniors working at the till. Walk into a dollar store and I see retirees or single parents with multiple kids as their main customers. When I did community nursing work, an alarming number of seniors have their fridges filled with cheap, low nutrition foods like hot dogs, white bread, and canned soup. These retirees are living in poverty out of necessity.
Agreed, I need about that amount too and I have a pension. Especially in todays environment with inflation out of control
"Out of necessity" is a strong leap. If retirees are still working, it could well be because they're otherwise sitting on a couch all day watching tv, and they know that's extremely dangerous. Basically a guaranteed premature death.
Regarding their fridges, maybe that's what they grew up on and they're happy with it? Maybe it's simple and they don't want to have to cook?
I'm not saying you're wrong -- in fact, I suspect you're right in a lot of cases, but we can't just lump everybody who exhibits certain behaviors into the poverty bucket.
My Grandpa started eating like that near the end because he liked those foods and felt like “wheat bread” wasn’t going to prolong his life nice for the taste switch.
@@bvoyelr Good points. I can't speak to the people who are working. Perhaps they just want something to do. I volunteer for the same reason.
Regarding the people I saw in their homes, I actually do have insight into their finances because I need to know that to calculate their government-determined cost. I'd say 80% of them receive free care because their income from all sources is below $10,250/year (in Canada). It's hard to make ends meet on that income without family support or cutting costs. The assessments we do are comprehensive... from education, ancestry, health, family, finances, hobbies etc. We ask whether they need to choose between health care and rent/food. There's not much left to assume. Also, this isn't a regional issue as I live in one of Canada's retirement capitals and we have people from all over the country here. I do recognize that people who are wealthy may never require our support so perhaps I don't meet them... that's the best case scenario. The point I'm trying to make is that just because someone retired with a small nest egg and is managing to stay alive, doesn't mean that's enough.
@@dantheman6607 If you are real, Inflation has been a part of the world for thousands of years
Im 45, have $500k in 401k, wife and i have $70k total in Roth IRAs, and wife is a teacher so have a pension when she retires. I still want $1.5-2M when we retire because i wanna be able to do ANYTHING we want when we retire
You don't need even 500k to retire most people are retiring with 200-300k in savings yeah you won't be cruising in France but for some people it's doable and last for the length of their retirement.
great news! My mom is doing it like this.
I think a person can still occasionally cruise in France and do more traveling. My mother retired with not much savings and has been on more cruises than I can count,not to mention traveling to other places.
Thank you for this video!
Thanks for this take on blanket retirement statements for everyone. If I had to wait until I reached 10x my annual income, I would never retire. Luckily, after figuring out my living expenses, I found that with SS delayed until 69 or 70, and a couple of hundred grand in CDs, plus my relatively small, as of yet, 401k, I can retire in decent comfort.
One thing I am looking at is enjoying a gradual transition over the next few years into retirement by cutting my hours at work; my company allows this, so why not? I can get a taste of retirement while still having outside money coming in.
BTW, I will be 65 later this year and I’m putting away 27% of my pay, including the 6% match my company provides.
Please retire ASAP and enjoy time to travel. Life is too short, take your SS at 65, please don't wait, no one knows tomorrow. You cannot buy back time, you can make more money, what happens if the health is so bad you can't do anything. Just a thought.
@@johnsonajayi7846I appreciate your advice. One thing I neglected to mention earlier was that I will reassess things each year to see how I feel. I know tomorrow is not guaranteed for any of us and that I may be making a mistake by waiting, but I will take full responsibility for my actions and not blame others if I choose wrongly. I am, after all, a man.
At the very least I’m going to try to wait until FRA.
sounds great - if you have measured twice/thrice ... cut the work!!! Enjoy. I've found i might have lasted on the job a few years too long, but i had family problems to address (that only money could provide ... sigh) so i retired at 68 ---- while i have no regrets -- reality!! -- still at 73 it woul have been good to have a plan to retire at 65. Good Luck!!
What is the definition of a fully funded emergency fund I know it's based on monthly expenses but some experts say 3 months other experts say a year!
I'm 61. I have a bit over 2 million saved. Just retired this May. I think I'm in good shape since my financial advisor wants me to take more money than I can spend.
Having my zero debt is what made me feel comfortable.
This is to get in front of RMDs. Listen to his advice
@Cenlalowell already have moved 400k to Roth. Will move 20k a year until I get on medicare and than go up to covert to the max before having to pay extra
Great info, i was wondering.... I want to do the 4% rule with a bucket amount the first year, then base on performance increase the percent
ALWAYS overshoot your retirement income. You’ll never know what sort of debilitating physical or mental disability will take away all your assets within a short period of time. I would not want to force one of my loved ones to take care of me, while their family is short one income.
Why did waste the last 5 years???
Thank you for sharing this video, much appreciated!
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both
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Current retirees have pensions. The last cohort for that to be the majority.
Another thoughtful video. So much of the retirement talk is polls about savings numbers rather than the most important question: what is your budget for retirement, and how will you main the necessary cash flow?
It has been a while since we talked. Sorry that chanel didn't get traction. Still very comfortable in retirement. Actually, I have more than I retired with. Greetings from portugal
Your retirement success is heavily dependent on your debt, expenses and your investments. If you have a home paid off and no credit card, auto debt, personal loans it is a big advantage in retirement. Keeping your monthly expenses low will optimize your success also. For example, my home is paid off so I pay property tax $4500/year home insurance $1130/year. Total $5630 divided by 12 = $469/month to live in my home. Where in the USA can you live for $469/month?
I keep my expenses to 13 items. 1. Electric 2. Natural gas 3 water/sewage 4. trash/recycling. 5.internet 6. cell phone. 7. auto insurance 8. home insurance 9. property tax 10. gasoline 11. auto/home repair budget 12. entertainment budget. 13. Food No subscriptions, no pets, no cable TV. I can cover all of these for $2200/month. I do not have $1 million.
I agree with everything you are doing, except maybe a pet would do you good. 😊
I admire your frugality. That is below the lifestyle I want to live in retirement. You are 100% correct.
@@sct4040 I had a pet in the past but I'm allergic to pet dander. My neighbors have pets which is good enough for me.
There are lots of places in US where one can live on less than $500 a month. Not in a huge house but a modest one. It would cost me more to live in 3rd world country than here, and with a lower standard of living---why do you think they are all trying to move here?
@@keralee People are coming to America illegally so that Biden can give free housing, free medical, food stamps, free cell phones, $10,000 credit card, tax breaks, and they vote for the people handing out free shit.
One thing I don’t see many financial advisers talk about is the cost of healthcare you need to spend for insurance before 65. That is going to be a big number if you have any ongoing healthcare needs. Many do. Consider ongoing conditions cost if you have diabetes, heart disease or many other common costly healthcare needs.
But how are the 80 year olds doing financially? Anyone can retire for a couple years and be okay. Lasting 30 years is another ballgame.
That's the game I am in at the moment i.e. I retired last week at the age of sixty one with the numbers saying I can coast for five years on what I have prepared. But beyond that I will need to look at either hopping back into work (and probably sooner rather than later so as to not find the door permanently closed) or selling the house and spending my last days in a foreign land.
My Dad just passed in February at 99 years old. He retired in 1980 with a pension of $1400 a month, which never changed during rhe 44 years. His SS when he passed was about $1900 a month, or around $1400 after medicare and Supplemental deducted. He ritired with no 401k, but had probably around $200,000 in savings, mostly cd's and money markets, but a couple stocks also. His savings grew during retirement, even with paying 3 years of nursing home costs for my Mom at rhe end of her life. So, can you live comfortably with low savings, yes. It depends on your spending habits. He took at least 2 trips each year, one to my Mom's family reunion, and one to his Navy reunion in various states. He also took various trips to visit out of state kids.
@@dallassukerkin6878 Retirement is whatever YOU want to do with your life. But also looking ahead, 5 years you will be 66 and have the chance to have Medicare and Social Security to fill in some gaps you might have now. Another thing to think about is the older you get, what physical health might you be in? Take your trips and do the things while you can, these are your Go-Go years. When you are 80, you won't want to really go anywhere (No-Go years).
@@heatherlw13 That line of thinking is what prompted me, aye. I am not infirm yet but I can feel the years starting to get their claws out!
@@jdgolf499 $200k in 1980 would be like 800k today at nominal inflation rates of around 3%. But inflation in recent years has been in excess of 100%.
1) It’s expensive to have a job.
2) When the big investment firms say you need $1M what they’re really saying is that you need $1M to be a client they want.
I retired in late 2022 at the age of 70 and am doing just fine. My home was paid for and I didn't have any debt. I have about $550,000 in savings, IRAs, and a brokerage account.
Spend the brokerage money first! If you get sued, that brokerage money is gone!
What? I'm 38 and have more than triple that and am no where near being able to retire.
@@InfiniteQuest86 WOW we are beyond impressed! Do you know the meaning of TOOL!
@@InfiniteQuest86 move to the congo and you can retire - or burkina faso.
@InfiniteQuest86 There's always someone with more ....and less! You're obviously smart enough to know he's above the median and you are way above. Good for you. My brother-in-law is 79 with $50M. How you doin' now?!!! With greater income, typically comes a higher standard of living. This guy probably had a good salary and may be able to live solely off his Social Security so that may be all play money. Couple that with a life expectancy of another 15 years and he's in fine shape. Good luck making your's last 40 years! You're off to a good start but who knows what your future holds. I know a guy that retired in his mid 50's, fit financially and physically. He enjoyed a few years of retirement then fell off a step ladder and is a quadriplegic now. You may be working hard and think you're self made but, you better say some prayers and thank God for the gifts you've received.
Fidelity is looking out for fidelity more than retirees when they produce these guidelines. If I had 10x my salary and social security at age 67, I don’t know what I would do with all the money. I mean if you get 7% return on your investment and you have 10x your income saved that equates to 70% of your annual income. Add social security on top and you have more income than you had when you were working. If you are at fidelitys estimates and you are 60 you might consider early retirement.