It can seem overwhelming when it comes to calculating whether or not you’re in a position to retire.
In today’s video you’ll learn how to never run out of money. Social Security, Income, Taxes, Investments, etc.
These three numbers will tell you if you’re in a strong position to retire, or whether or not there are strategies you can implement to help you get there.
00:00 – Introduction
:58 – Rules of Thumb Don’t Apply
3:00 – Know Your Expenses
5:16 – Non-Portfolio Income Sources
7:26 – Portfolio Goal
8:51 – Arbitrary Number
10:00 – Working With Us
Learn the tips & strategies to get the most out of life with your money.
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Happy Holidays! Can you recommend a free online retirement tracking tool? I don't want to link my accounts with the app or tool. Thank you!
Thanks for the great content, and for helping us understand and navigate the road to retirement
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I have been retired for 11 years. Forecasting the future is a difficult proposition at best and your approach is overly simplistic for a variety of reasons. You did not cover inflation impacts which are significant especially in recent years. You also need to consider health insurance costs which can increase significantly when you retire. My employer offered retiree health insurance benefits at a group rate but I was responsible for premiums that my employer previously paid. Additionally, in the year after I retired, my employer changed the plan and grouped all retirees in a separate group from active employees so behold, health insurance premiums went up. They also unexpectedly changed again the year I started on Medicare which increased my costs yet again. The bottom line is that employers can change retiree benefits on a whim so be prepared for the worst.
If you really want to know if you can retire or not, try living on your expected retirement income for at least 1 year before you retire saving any excess income. Monitor closely any draws you make on your savings to see any shortfalls. This was the best confidence indicator to me to determine if I had enough saved for retirement and it worked.
Depending on where your funds come from, your taxes could be much less in retirement. If you’re using long term capital gains, dividends, or funds from anything but a tax deferred account, your tax rate should go down a lot.
you are smart and cute subscribing!
Eight years retired, I always enjoy your YouTubes. Though luck or being born in the right zip code, etc., has been more heavily factored by economists in the last decades, I'd be interested in your take. My wife and I both got to Masters' degrees, worked hard, were lucky, and got promoted over the years to about the highest paying jobs in our professions. Not especially frugal or diligent about our savings, we've invested, with long-term humility, since about 1980, and find ourselves very comfortable in retirement. No doubt luck, or its darker cousin privilege, will play its part in our futures as well. Thanks!
Awesome video
Good suggestions, but an approach that has worked well for us(retired one year ago)is to figure our base expenses with no frills. We looked at the checkbook, bank statements, and the credit card statements(always paid off) to get the data. Then looked at a budget with a bit of discretionary income for travel and food, and another budget with what we would like at the most.
We have found that our spending is quite different in retirement.
Ironically we got a taste of this during COVID.
Much more food at home, no need to buy clothes, less car expenses(able to downsize). We are able to travel MUCH cheaper, eat out less and cheaper, lots of senior discounts and don’t travel at peak times. We quit buying “stuff”.
So our base budget is almost half of our previous take home. we are now adding in travel and such as seems reasonable.
We have some base income and spending down some portfolio to get a larger SS check. We think that our base SS income will be about $6000 per month which more than covers our base expenses. So the portfolio will then just be for fun and old age.
Creating a scenario where money is not a substantial worry is priceless.
BTW no debt is the foundation!
You always deliver great information. I like this format of video over your first set of videos. It is a much more casual setting. Makes me feel more at home.
Anyone who needs to ask a financial planner if they have enough money to retire is a Total Loser in my opinion. Their finances are probably a Total Mess. What are your thoughts Root Man ? I am Happily retiring in January 2023. I have been doing my own investing for over 30 years and the future looks Great-:)
What inflation factor would be helpful to use in future calculation of expenses?
We are retired and we do quite a bit of traveling. Traveling is not cheap, and if you wish to travel a decent amount in retirement, you will have to be realistic with the costs and funding.. Our travel budget is about $40,000 + a year, which is pretty generous. Nonetheless, when you are on the road and doing stuff, the money goes quickly. And we are careful how we spend.
Nice graphics, James. Adds value to your outstanding content!