I retired at 56 almost 57. I had $1.4 million in 401K assets. At 58 started taking $2500 a month in income. Almost all in interest. I plan to take $4,000 a month at 62
Your video is a breath of fresh air compared to most of the ridiculous retirement video's I have watched. You are real and down to earth. I am retiring in 2023 with no worries but enjoy watching retirement and investing video's. In my state I get a homestead exemption on my property taxes of 25% and have filed the application and was approved in one week. My taxes were 3100 per year so 25% is a Big Savings.
Thanks for sharing a more realistic scenario. Some who have retirement videos/podcasts feature clients with multimillion dollar portfolios who are stressed if they have enough for retirement and keeping up with a $10 k/month lifestyle. Good luck. It becomes discouraging at times as we look at our fractional sized portfolio. Often those who may have less are much better managers of their money than those who have so much that costs are seemingly irrelevant.
New listener today! Thank you for the information you teach. Regarding the 'average' social security benefit, we often hear the average of what ALL retirees get right now, but that does not reflect what new retirees need to know. We need to know what we can expect. Knowing what is the average benefit of what we will get this year or next or the next when we apply would be much more helpful. Current retirees may be 62 to 92 yrs. old and that represents a huge span of benefits. I know we can find out our own benefit estimate from the social security site, but even a guesstimate from online teachers would be great to hear as it would surely be more accurate than the $1600 per month or whatever that is so often quoted. Surely with wages increasing over the last few decades, new retirees would often get more than $1600 per month; even quoting $2000 per month would be more accurate, I would think. Also, for those who do not file at/before FRA, and choose to delay filing, their benefits would be even greater. I did appreciate that you used a more realistic goal of $300k than a million $$ for your other example as the average joe doesn't have a million.
Healthcare is 100% free before 65 IF you keep income below a level defined in your state ($15-18k I think) IF you live in a Medicaid expansion state. You can also get a free smartphone (LifeLine) and in home internet (ACP). Live off savings.
Don’t forget keeping your income (MAGI) below the ACA limit to qualify for a subsidy on health insurance. In 2023, the top limit for income (MAGI) about $54.000 for an individual and about $74,000 for a couple.
If I retire at 50, house paid off, and 300k in the stock market (say an ETF like Vanguard VTI), if I take out only profits from the investment, I should be able to earn 20-30k per year right? I'd pay taxes on the 20-30k though.
That's a good question. While I can't predict the future, I'd personally be uncomfortable assuming that you'd consistently get 20-30k of earnings each year on 300k. Sometimes investments lose money, sometimes they're flat, and sometimes you only get small gains. Taking withdrawals during those years would take a big bite out of the nest egg and could eventually derail the plan. Strategists are currently projecting single-digit returns in the coming years (no guarantees, of course, anything higher or lower is possible), and getting 30k requires a 10% return, as you probably already know. Even 20k is a healthy return. Now, if you only take out the amount in excess of 300k each year-whatever that happens to be-that's a different story. But in some years (potentially multiple continuous years, or an extended period) that amount might be zero, so you'd need to be okay with that.
This retirement quote always strike me as a relevant,because I've seen far too many people retire at a specific target age and then following a few months or year of retirement, wonder why they are so bored
I do not personally believe $300K is enough to retire so early, even with a paid-for house. The reason is as Justin said. While your average yield might be enough to live on, your actual yield in a given year might be well below that. I see you asked this question 7 months ago, and the market performance in the past couple months is a stark illustration of what I'm talking about. Your $300K is now down to $240,000 or lower. Now what? Dip into principal when the market is down? Take zero living expenses? Your choices are not great. Easiest option (assuming good health) is to keep working a few more years.
Don't forget you won't qualify for Medicare until you're 65. In the mean time, you'll have to self fund for health insurance, which takes a big bite out of a shoestring budget. You won't have much slack to deal with things like inflation or unexpected medical bills or home repairs.
I can't really say for sure without knowing all of your specifics. But off the top of my head, I can't think of any SS increases you'd get (besides any inflation adjustments that SSA offers and any improvement based on your current earnings) if you're 70 now and you've already claimed. The work you're doing now could potentially lead to a higher SS income if you add higher-earning years to your earnings record (and replace lower-earning years in the calculation using your highest-earning 35 years). But I'm not aware of any opportunity for delayed retirement credits in a case like this.
@@ApproachFinancial BOTTOM LINE IS: I’m collecting SS since I was 66 (& my wife was just a housewife all her life is also getting 40-50% of what I’m getting)…AND AS I AM STILL WORKING & CONTRIBUTING IN SS; will it benefit me upon my retirement?!
That's an excellent question, and it's probably something that deserves a careful review, which I can't really do here. I'd feel terrible if I was just giving quick advice in UA-cam comments it and ended up leading you astray (with expensive consequences). Since I don't know all of your specifics, there's a very real risk of missing something, and neither of us wants that. I'd suggest having a professional like a CPA or financial planner go through that with you. Alternatively, you can probably also check with the Social Security Administration to see what they say. There's an online calculator where you can enter your earnings and see if it changes anything.
Take money away from the principal amount every year? That's horrible advice. Is it possible to retire off of $300,000 or less? Sure! But you should never have to touch your principal assets. So if you can't retire without touching the goose that lays the eggs, that means you need to save up a bigger principal amount.
That's great for anybody who can make that work, and I'm happy for you if you can live off the earnings. You're certainly not alone in that view, and you will make a meaningful difference to heirs and/or charities. For many of the people I work with, there's a real need to spend down assets wisely over time. When you look at average account balances along with current economic conditions, I think that's the reality for most people in the U.S. (otherwise they'd have to work until the day they die, and that's not their first choice). Ultimately, it comes down to your goals, preferences, and resources. Some people prioritize leaving their life savings as a legacy while others don't-and for many, it's not even feasible. Thanks, and best wishes.
I’m retiring next year. I will retire a few months before I turn 60. I have a net worth, including a paid off house, of $800,000 or so. I will not be collecting SS until 64 or 65, depending on market conditions. Why would it be a bad idea to take money out of my IRA? My budget is around $3000 per month. I will be taking around 7% withdrawals until SS. And I will have plenty of money into my 90’s if I need it. Advice like this is not one size fits all.
@@glenburr6755 Unless you plan on selling your house, or doing a reverse mortgage, the value of your house means nothing, so including that inyour net worth for wtiemwntassets means nothing. It won't generate income.
@@jdgolf499 exactly. And even if you plan to liquidate, you still need a place to live. So counting the full value of the home as an asset is a big over-estimation, especially when housing prices are so high.
@@glenburr6755 effectively you're counting your home twice. EITHER count it as paid-for housing that will enable you to live cheaply (I hope the $3000/month includes property taxes and maintenance such as a new roof). OR you plan to sell your house and generate income off the proceeds. In which case your housing cost will go up.
Thank you for giving an example that is realistic for many Americans. Most videos keep talk about retiring on 1 million dollar or more.
Yes! Agreed.
I retired at 56 almost 57. I had $1.4 million in 401K assets. At 58 started taking $2500 a month in income. Almost all in interest. I plan to take $4,000 a month at 62
Your video is a breath of fresh air compared to most of the ridiculous retirement video's I have watched. You are real and down to earth. I am retiring in 2023 with no worries but enjoy watching retirement and investing video's. In my state I get a homestead exemption on my property taxes of 25% and have filed the application and was approved in one week. My taxes were 3100 per year so 25% is a Big Savings.
Thank you for this feedback, glad to hear it resonated.
Retired at 52. Best thing I ever did. You don't need a million. You DO need to know what you spend monthly.
Thanks for sharing a more realistic scenario. Some who have retirement videos/podcasts feature clients with multimillion dollar portfolios who are stressed if they have enough for retirement and keeping up with a $10 k/month lifestyle. Good luck. It becomes discouraging at times as we look at our fractional sized portfolio. Often those who may have less are much better managers of their money than those who have so much that costs are seemingly irrelevant.
Excellent information, thanks for taking the time to teach us all 👍
I do appreciate you Sir.
New listener today! Thank you for the information you teach. Regarding the 'average' social security benefit, we often hear the average of what ALL retirees get right now, but that does not reflect what new retirees need to know. We need to know what we can expect. Knowing what is the average benefit of what we will get this year or next or the next when we apply would be much more helpful. Current retirees may be 62 to 92 yrs. old and that represents a huge span of benefits. I know we can find out our own benefit estimate from the social security site, but even a guesstimate from online teachers would be great to hear as it would surely be more accurate than the $1600 per month or whatever that is so often quoted. Surely with wages increasing over the last few decades, new retirees would often get more than $1600 per month; even quoting $2000 per month would be more accurate, I would think. Also, for those who do not file at/before FRA, and choose to delay filing, their benefits would be even greater.
I did appreciate that you used a more realistic goal of $300k than a million $$ for your other example as the average joe doesn't have a million.
Thank you, and you make some good points about the average SS benefit!
I'm planning to move to SE Asia. Long term care that I might need someday is very cheap there.
Nice summary
Just found your channel. I need this info! Thank you!
Thank you, and glad to have you here!
Good info. Thanks.
Very well explained sr
Healthcare is 100% free before 65 IF you keep income below a level defined in your state ($15-18k I think) IF you live in a Medicaid expansion state. You can also get a free smartphone (LifeLine) and in home internet (ACP). Live off savings.
Don’t forget keeping your income (MAGI) below the ACA limit to qualify for a subsidy on health insurance. In 2023, the top limit for income (MAGI) about $54.000 for an individual and about $74,000 for a couple.
Good information but would be nice if you would slow down a little bit.
Excellent information.
Surprisingly little in taxes ….some retire w more/ some less *( average $426,000)
average benefit $426,000
thank you
And take my SS. I am already saving $1000 plus a month so most of my SS will go into savings unless I really step up my travel plans.
I wonder how many retired people are reading this and going, "I wish!"
I expect 85% of our social security income to be taxed.
Not a bad idea-that is probably the safe assumption if you have meaningful assets in pre-tax accounts.
If I retire at 50, house paid off, and 300k in the stock market (say an ETF like Vanguard VTI), if I take out only profits from the investment, I should be able to earn 20-30k per year right? I'd pay taxes on the 20-30k though.
That's a good question. While I can't predict the future, I'd personally be uncomfortable assuming that you'd consistently get 20-30k of earnings each year on 300k.
Sometimes investments lose money, sometimes they're flat, and sometimes you only get small gains. Taking withdrawals during those years would take a big bite out of the nest egg and could eventually derail the plan. Strategists are currently projecting single-digit returns in the coming years (no guarantees, of course, anything higher or lower is possible), and getting 30k requires a 10% return, as you probably already know. Even 20k is a healthy return.
Now, if you only take out the amount in excess of 300k each year-whatever that happens to be-that's a different story. But in some years (potentially multiple continuous years, or an extended period) that amount might be zero, so you'd need to be okay with that.
This retirement quote always strike me as a relevant,because I've seen far too many people retire at a specific target age and then following a few months or year of retirement, wonder why they are so bored
I do not personally believe $300K is enough to retire so early, even with a paid-for house. The reason is as Justin said. While your average yield might be enough to live on, your actual yield in a given year might be well below that. I see you asked this question 7 months ago, and the market performance in the past couple months is a stark illustration of what I'm talking about. Your $300K is now down to $240,000 or lower. Now what? Dip into principal when the market is down? Take zero living expenses? Your choices are not great. Easiest option (assuming good health) is to keep working a few more years.
Don't forget you won't qualify for Medicare until you're 65. In the mean time, you'll have to self fund for health insurance, which takes a big bite out of a shoestring budget. You won't have much slack to deal with things like inflation or unexpected medical bills or home repairs.
I started taking my SS at the age of 66 & still working (maybe work until 71… 2022)… will my SS INCOME will go up when I retire?
I can't really say for sure without knowing all of your specifics. But off the top of my head, I can't think of any SS increases you'd get (besides any inflation adjustments that SSA offers and any improvement based on your current earnings) if you're 70 now and you've already claimed. The work you're doing now could potentially lead to a higher SS income if you add higher-earning years to your earnings record (and replace lower-earning years in the calculation using your highest-earning 35 years). But I'm not aware of any opportunity for delayed retirement credits in a case like this.
@@ApproachFinancial
BOTTOM LINE IS: I’m collecting SS since I was 66 (& my wife was just a housewife all her life is also getting 40-50% of what I’m getting)…AND AS I AM STILL WORKING & CONTRIBUTING IN SS; will it benefit me upon my retirement?!
That's an excellent question, and it's probably something that deserves a careful review, which I can't really do here. I'd feel terrible if I was just giving quick advice in UA-cam comments it and ended up leading you astray (with expensive consequences). Since I don't know all of your specifics, there's a very real risk of missing something, and neither of us wants that. I'd suggest having a professional like a CPA or financial planner go through that with you. Alternatively, you can probably also check with the Social Security Administration to see what they say. There's an online calculator where you can enter your earnings and see if it changes anything.
Take money away from the principal amount every year? That's horrible advice. Is it possible to retire off of $300,000 or less? Sure! But you should never have to touch your principal assets. So if you can't retire without touching the goose that lays the eggs, that means you need to save up a bigger principal amount.
That's great for anybody who can make that work, and I'm happy for you if you can live off the earnings. You're certainly not alone in that view, and you will make a meaningful difference to heirs and/or charities. For many of the people I work with, there's a real need to spend down assets wisely over time. When you look at average account balances along with current economic conditions, I think that's the reality for most people in the U.S. (otherwise they'd have to work until the day they die, and that's not their first choice). Ultimately, it comes down to your goals, preferences, and resources. Some people prioritize leaving their life savings as a legacy while others don't-and for many, it's not even feasible. Thanks, and best wishes.
I’m retiring next year. I will retire a few months before I turn 60. I have a net worth, including a paid off house, of $800,000 or so. I will not be collecting SS until 64 or 65, depending on market conditions. Why would it be a bad idea to take money out of my IRA? My budget is around $3000 per month. I will be taking around 7% withdrawals until SS. And I will have plenty of money into my 90’s if I need it. Advice like this is not one size fits all.
@@glenburr6755 Unless you plan on selling your house, or doing a reverse mortgage, the value of your house means nothing, so including that inyour net worth for wtiemwntassets means nothing. It won't generate income.
@@jdgolf499 exactly. And even if you plan to liquidate, you still need a place to live. So counting the full value of the home as an asset is a big over-estimation, especially when housing prices are so high.
@@glenburr6755 effectively you're counting your home twice. EITHER count it as paid-for housing that will enable you to live cheaply (I hope the $3000/month includes property taxes and maintenance such as a new roof). OR you plan to sell your house and generate income off the proceeds. In which case your housing cost will go up.