Retire with $1,000,000 in Retirement Savings? (Not so fast) || Retirement Planning
In this video, we will explore a common question asked by many individuals as they plan for their retirement: “Can I Retire with $1,000,000 in Retirement Savings?”
We will discuss the factors that can impact your ability to retire comfortably with a one million retirement savings portfolio, including your expected lifestyle expenses, inflation, retirement investment returns, and other potential sources of income such as Social Security benefits or pensions.
We’ll also review various retirement withdrawal strategies and how they can affect the sustainability of your retirement savings.
By the end of this video, you will have a better understanding of whether or not you can retire with one million in retirement savings and what steps you may need to take to achieve your desired retirement lifestyle. So, join us as we delve into this important retirement planning topic.
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Retirement income strategies and retirement income planning are two big pieces to anyones retirement planning calculator. Whether you are wanting to know strategies for “retirement planning at 30”, “retirement planning at 40”, “retirement planning at 50”, or even “retirement planning at 60” understanding how much retirement income that you want versus how much you need gives you a roadmap to follow to and through retirement.
Here at Pearl Wealth Group, we run a trademarked retirement investment and retirement income plan for individuals and families who are wanting to retire called “Your Financial EKG™.” What we are trying to visualize is how long a persons retirement savings are going to last throughout retirement. If you are looking for early retirement planning tips or trying to saving for retirement in your 50’s, You Financial EKG™ is a great tool to help you understand where you are retirement planning. Retirement planning and retirement income strategies shouldn’t be complicated. They should just be done right.
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Pearl Wealth Group
Drew Blackston, CRC® & RFC®
Office: 813-807-5060
Info@pearlwealthgroup.com
Getting you to Retirement, through Retirement, & protecting YOUR ability to stay in Retirement!
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Retirement planning is a crucial aspect of financial management today. People are living longer, and it is more important than ever to have enough savings for the golden years. One of the most popular benchmarks for retirement savings is $1,000,000. It is often touted as the threshold for living a comfortable retirement, but is that really the case? Not so fast.
First, let’s look at the math. If you retire at 65 and have $1,000,000 in savings, you can withdraw 4% per year or $40,000 in annual income, adjusted for inflation. This may seem like a lot, but it really depends on your lifestyle and where you live. If you plan on traveling around the world or living in an expensive city, $40,000 might not cover all your expenses. Additionally, healthcare costs are rising exponentially, and that $40,000 may not be enough to cover all the medical bills.
Second, let’s consider how much the cost of living will increase over time. Inflation is a fact of life and tends to increase the prices of goods and services. This means that the spending power of your $1,000,000 will likely decrease over time. Many experts suggest that a 2-3% inflation rate should be factored into retirement planning to ensure sufficient savings.
Third, let’s not forget about taxes. Taxes can significantly impact the amount of money you end up with in retirement. Depending on your income and where you live, taxes can take a big bite out of your retirement savings. Therefore, it is essential to have a good tax planning strategy that maximizes tax efficiency for withdrawals.
Lastly, life is unpredictable, and unexpected events can quickly deplete retirement savings. This includes health issues, natural disasters, and other unforeseen circumstances that can drain savings quickly. Having enough savings for contingencies is crucial for long-term financial stability.
So, what should you do if you want to retire comfortably? Start by understanding your retirement needs and expectations. This includes evaluating your lifestyle, anticipated expenses, and where you want to live. Once you have a sense of your needs, factor in inflation and taxes to determine your savings goal. It is also critical to create a diversified investment portfolio that balances risk and return to maximize growth potential. Finally, don’t forget about contingencies and make sure to have a sufficient emergency fund.
In summary, while having $1,000,000 in retirement savings is an attractive goal, it should not be the sole criterion for retirement planning. By understanding your lifestyle needs, inflation, taxes, and unexpected events, you can create a well-rounded plan that ensures financial stability for the long haul.
With changes in the economy leading to instability in the stock market, some individuals may face a decrease in their investments in an effort to benefit from the current market conditions, I am considering liquidating my $725k portfolio consisting of bonds and stocks. Someone else in the same situation? Please tell me in the comments!..
With changes in the economy leading to instability in the stock market, some individuals may face a decrease in their investments in an effort to benefit from the current market conditions, I am considering liquidating my $725k portfolio consisting of bonds and stocks. Someone else in the same situation? Please tell me in the comments!..
Doesn't seem like you take into account down years.
Based on what I have learned from all these YouTube lessons, I developed my own plan. took that plan to one of the major financial house. The financial advisor told me – let us execute your plan. In other words, my plan is almost perfect. For us, we will take SS at 70, do about $120,000 a year Roth conversion, at 70, our SS and pension will be around $7500 a month. We will use cd, and other safe means to make sure we have enough for years before 70.
I think one important thing you missed is how important it is for you to diversify your portfolio investment profile to account for frequent market volatility,
Hi Drew…for that last scenario, what would the age to zero if you took social security at 62?
You are so patient with our comments. Thank you. The approach of assuming lower expenses seems very constrained and lacks resiliency. I do think people are likely to need $100,000 per year in expenses. Many people spend this amount pre retirement and it’s hard to envision a lower budget given home expenses, costs of various insurance, taxes, car expenses, hobbies, etc. yet people want to retire early. Can you actually expect your investments to increase in the short term? Despite contributions my 401k hasn’t increased for over 2 years after a drop in 2021.
Great video, Drew
Hey Drew – Your assumptions are extremely conservative. You are assuming a real return of only 3% when the historical average of the S&P 500 is 8%. Why? I get that you want give your clients the best chance of having enough money through retirement, but have you considered the negative consequences of advising someone to work longer than necessary. I suggest reading "Die with Zero".
I HATE that question!!!!!!!! How old are you? Do you have a pension? What's your SS benefit? Are you married? Do you have debt???????? Etc, etc, etc!
I guess what makes me lack confidence in this is the lack of discussion about the cost of healthcare, especially as one nears 80s and 90s. Otherwise I really enjoy and benefit from your videos. Thanks.
Depends on how old you are and how much you want to spend. Thanks so much for doing my EKG Drew – Great !