I agree with you!! Money actually grow on trees but only on trees that was planted by you!! These tress are referred to as investments. How you diversify your investment portfolio matters
Diversification is the key. My portfolio is well diversified with the help of a financial adviser. This helps me make more than +400% monthly on my investments.
I'm intrigued by this. I've searched for financial advisers online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I've experimented with a few over the past years, but I've stuck with ‘’Nicole Anastasia Plumlee” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
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
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 ❤
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.
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.
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.
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.
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. 😉
@@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.
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'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.
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).
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'm old enough to remember when the goal was saving 250k and becoming a millionaire was just a dream...now it's a million dollars and becoming a billionaire is the dream..
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.
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.
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.
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.
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!
I don't know if this is a joke or not but if it is true, then that's the American dream come true for him. Same here. I am 53 and retired at 50. One thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real estate and I am now a Limited Partner in about 3500+ units. I do not work.
I learned about government actions from Desiree Ruth Hoffman. Ms. Hoffman explained the benefits of long-term Treasuries and alternative investments, which the government doesn't disclose.
they have been investing in solid start-ups, bonds, digital currencies, and precious metals with real backing, while manipulating the stock market decisions as influenced by Congress, driven by year-round events and consumer sentiment in the past half-decade.
The stock market has top-performing stocks at record highs, the economy SEEMS better, time will tell in a period like this to best position yourself to reap gains. FOR A FEE, it's wise to consult with industry professionals. I set up a call with Desiree, hopefully, I'm not ignored.
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!!!
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.
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.
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.
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.
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.
I withdraw $50,000 per year which along with our Social Security gives us a comfortable life (with no debt) There is no way we could have retired without at least 1-million.
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.
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.
All the best and good video. In my opinion it is still a good time to invest in different stocks like gold, silver and digital currencies. This is one of the most important skills to learn and everyone should invest instead of saving. Some may agree, some may disagree. My big compliments to Natalie Rose Strayer for improving my portfolio!!....
Natalie Strayer has really set the standard for others to follow, we love her here in Canada 🇨🇦 as she has been really helpful and changed lots of life's
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.
Well explain thank you for bringing up this video Financial education is indeed required for more than 80% of the society in the country as very few are literate on the subject. The value of the US dollar is declining due to inflation, but it is increasing in comparison to other currencies and commodities such as gold and real estate. I'm worried that rising inflation will cause my 550k in my retirement funds to lose value, But with the help of Sandy Barclays I hit 220k this week from my investment of 45k, I am truly grateful for all the knowledge and nuggets you have given me over the past few months.
Exploring new investment opportunities demonstrates your proactive stance towards financial growth during these volatile times. Diversifying your portfolio can play a crucial role in effectiveIy mitigating risks..
Over the years, I've been a part of numerous trading programs, sifting through a barrage of information. Yet, nothing has come close to the sheer clarity, depth, and precision of Sandy insights. It's akin to finding a diamond in a coal mine.
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.
From $37K to $45K that's the minimum range of profit return every week I thinks it's not a bad one for me, now I have enough to pay bills and take care of my family.
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.
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.
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).
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.
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
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.
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 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.
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.
Месяц назад
Zero debt is the key. Retiring in two years, at 62. Military retirement and disability, teachers pension (I’m exempt from WEP), $2400 in monthly social security. Projected to have $600-$800K, just in my IRA. My wife has her own. May, or may not work part/time, just to have something to do. I think we’re in good shape.
Yes it was. I’ve been stressing over the notion that we have to retire as millionaires to make it during retirement. I can’t see myself fully retiring. I think I’d get bored quick lol.
She concluded that you don't need $1M... She also concluded that $100K is not enough... Here's the formula: How much you need to live in a year (adjust for inflation), multiply that by 30years (to live beyond retirement age = the $$$ you need for retirement. The bitter and hard conversation is that most people won't hit that target.
Great briefing. I have only 50k in dividend stock but pensions of 5k a month and rents of 4k. I am hoping to scrape by until 70 so I can draw social security of $3,700. A month.
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?
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.
Going into retirement with a paid off home can be more of a liability than a benefit. Even a paid off home has high expenses for property taxes, insurance, maintenance, and repairs. Insurance companies are forcing people to upgrade homes, such as their roof, wiring and plumbing, or they won’t give insurance. Just a roof could cost you $15-$20,000. And insurance wants you to put a new one on every 10 years. If you have aluminum wiring that could be 10 grand, and if you have any other problems, it’s measured in $10,000 for home repairs these days. So, basically if you own your own home and you don’t have a lot of savings, then you need to sell your home and move into a rental apartment.
Based on the fact that there isn’t a huge population of retirees living on the street, and that very few retirees actually have $1M, we know that $1M is just a vanity figure.
Yea I dont think retired people with not enough money just lose all their possessions and become homeless. So finding retired people living on the street would be many steps after finding out they didn't have enough to retire on. Far more likely "not having enough in retirement" will manifest in the person needing to be very cheap in retirement, needing to go back to work or relying on family members for assistance. I bet there's all sorts of retired folks that have to do one of those three, and maybe don't have enough in retirement.
True. They just become un-retired, move in with family, get a roommate, depend on assistance programs, lower their quality of life or expectations, etc. Being alive and living are different things.
I’d say it depends on a few things. 1)do you have a paid for house? 1) how much are your property taxes? . 3) will you have to buy healthcare? 4) will you have to pay taxes or penalties on your 401k withdrawals?
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!
Truth be told, I retired because of poor health that was brought about by my career choice, 27 years later. I mean ready or not, we may have to retire earlier than anticipated. Hope for the future, and be prepared for a slippery slope to early retirement.
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.
Until you have a health issue or need elderly care. Also who knows how prices will evolve in these countries in the future, usually they have much higher inflation
@@TBasianeyes Thailand has world class health care. For a fraction of the cost here. Reasonable insurance can be bought. You can get a 24/7 live in nurse for $1000 a month if need be.
No debt is actually more important than how much you have saved. I retired at 43 years old with zero debt. Now I just do whatever work I want (as little or as much as I want). That wouldn't be possible if I was carrying a mortgage, car payments, credit card bills, etc.
Em noooo....it's not a million dollars....you need to just have enough to cover your annual expenses year in year out. Work out your expenses then find out what income and where that income will come from to cover your expenses. It's not rocket science
Don't forget inflation, at 3% a year your expenses will be almost double in year 20 of retirement. Just because you can generate enough income in year 1 doesn't mean you can in year 15 or 20.
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.
One thing people should brace themselves for is social security changes. In 6 years SS checks will be cut by 25%. Most of that will be taxed, then take out medicare and your left with less than half of the number you see currently on the ss website. If your future SS payment is listed as 1600 you can expect to only get about 800 per month to spend.
Very unlikely those currently on SS will see anything like that. I remember the last time all the dire predictions. Those on SS didn't see 1 penny of reductions, except maybe tax if they had high pensions. Likely as she said, a rise in age of eligibility and caps. Maybe higher payroll tax. Maybe new enrollees have lower payments. Younger people need to be better than boomers at saving for the future.
@@greggpurviance7252I agree with you on this, if the government tried to reduce people’s s by half the violence would be out of control…if anything it’ll effect the younger generation
I think it all depends on WHEN you want to retire. The earlier you wish to retire, the more money you will need. Also, you have to assume you are going to live a longer life than you think due to medical advances.
A huge percentage of retirees didn't get to choose when they retired, they were let go or downsized or got sick. Better to save more than you think you'll need, in case you get "retired" early...
@@dstevens518 for sure, there's no telling what AI will do to disrupt or enhance existing jobs (we'll have to wait and see how it plays out). But, better to save more and not need it than to need it and not have enough, it is the better of two problems.
IMHO that the key is multiple smaller streams of income . Example: SS + Pe sion (mine is small) + 401k + equiry in my home (sell home, pay off mortgage buy smaller home out-right, add remainder to the 401k or IRA) + sell of life insurance (add that to 401k/IRA) = retirement. No debt is important here. If you restructure your lifestyle, you can retire. She is right, sez I.
Thanks for speaking the truth. "Comfortable" is a relative term. And the big financial institutions love to scare us (they love us paying those fees). Learning to live within your means is the solution.
Everybody’s situation is different. We all have different debt and retirement income levels, varying health and support systems and our own expectations about what we want to do when we retire. But it is probably better to have too much than too little.
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!
I retired to the Philippines at 51. My wife and I already owned property, worth USD1M, which we bought while we lived in HK. We have an income, from our business interests and property, of around USD 40, 000 p.a., plus investments. We have full family healthcare insurance plus educational plans for the kids. We are doing just fine. Our income far exceeds our expenditure. We won't go hungry, nor will the kids.
Your talking about retired ppl getting a pension, and ssi and everything else, your not talking about the 20 something in 40yrs there is no more ssi and pensions are starting to be a thing of the past
You have 40 years to compound your money and have multiple ways to have it sheltered from future taxes (ROTH 401K, ROTH IRA, HSA). That's powerful stuff that many Boomers didn't have. Some pensions don't even adjust for COLA (cost of living adjustment), so your purchasing power shrinks each year. When you die with a pension, there is nothing owed to you and you can't pass on the wealth to your beneficiaries. There's no way to create generational wealth with pensions or social security. However, if you invest 40 years into ROTH accounts and not forced to take required minimum distributions in a ROTH, then that money will compound for many years to come and it gets passed down when you are gone.
You'll hear all these RU-vidrs saying it. They'll even scare you into saying you'll die in poverty if you don't. I never bought into that stuff, because at a certain point in age I don't want to pay any mind to money talk anymore.
you guys are hilarious Move to DC area for access to more high income jobs compared to the cost of a renovated bedroom bathroom suite Plenty of good options for under 300k per bedroom bathroom suite Payoff your mortgage ASAP with roommates Buy assets for long-term capital gains with zero federal taxes Property taxes utilities groceries and transportation yearly per person is only 15k yearly that's required in capital gains Most people can get this with 100k portfolio ❤ 400k net worth is more than enough per person If ok with a high crime neighborhood, 200k net worth is more than enough.
How about a survey that isolates 75-85 yr olds who have been retired for a min of 10 yrs and their account balances and how they feel about it? Let's talk to those who 'have been there, done that!"
That is my Dad. Just passed in February at 99. Retired in 1980 with a $1400 a month pension and when he passed, his SS was about $1900, before medicare / supplemental deductions. He probably had about $250k saved when he retired, mostly in cd's and Money markets, and a few stocks. He died with about $750k in investments, and that's after laying out about $300k in nursing home costs for my Mom from 2015 - 2018. So, those older folks are doing ok. And no, he didn't just sit at home doing nothing. He travelwd every year to my Mom's family reunion and his Navy reunion. He traveled to various states to visit his kids.
My husband has retired for 10 years, I for 2-1/2 years, our investments account have gone up since then even with RMD, and my taking my 401k. 😂 go figure.
1) Really what the Fidelty chart shows is that you need 4x your salary in savings by age 40 and then compounding will do the rest. 2) Social Security has already been cut in half for younger people. Those retiring now it was easy to make the maximum earnings towards social security. Today you have to make $168,000 a year to get the maximum social security. Future generations are getting substantial less payments because of these crazy increases.
I’ve heard an equation that makes sense, albeit conservative: take the amount you think you will need to spend every year and multiply that by 25 years.
The fidelity algoriithm is based on the 10x rule replacinng 45% of your income (the chart #4:34 shows this) ---- since SS is supposed to replace 40% of your income, that is the 95% replacement rate ---- if you think you're going to need more than what you earned during your working years, then you'll have to have more streams of income or your portfolio will have to be increased as you said - does the chart higher % meet your expectations?
@@kevinkanter2537I don’t believe SS will ever replace 40% of your income if you made a 6 figure income. I retired early and my savings rate was about 27% due to an extremely generous 401k match. I have about 25x peak earnings invested and a house worth 10x peak earnings. No debt. A 1 million buffer in my plan. My standard of living is the same as when I was working. I think people who have pensions can retire without a lot of savings. I would be very worried for people that only have 700k planning on retiring at 67 without a pension.
$100,000 saved and the 4% rule applied would only be $333/month from investments. I appreciate the alternative view of his article but that would scare me, even with govt support.
It never occurred to me that those recommendations are a potential conflict of interest. That's interesting. So, they might be suggesting higher than necessary balances. Which... ...which means I'm off to the Ferrari Rolex store! What time is it at 100 mph? I'll tell you in 6.2 seconds. Great stuff as always, Erin. Super interesting one.
Actually, the financial advisors are not lying. They simply assume same level or more of spending, same cost of living, as well as inflation and conservatively projected (read rather expensive) medical insurance expenses.
Sorry, missed the humor/perspective. Recently I’ve been reevaluating my financial needs for retirement and came to the same conclusion as Erin, just put a different way. This video really made me start looking at setting up a lower cost of living to set myself up for the next 30-35 years. I’m thinking of getting into aviation (holding off on Ferrari/Rolex) 😉
Most people spend less after 65 and each decade after we typically spend less and less. Funny how we save save save our whole youth to hopefully enjoy our golden years. Money goes up, quality of life goes down. 🤔 Enjoy the present!
My number is actually $2.5 million and a paid off house to retire TODAY, or about $1.5 million and a paid off house at age 67 (once Social Security and Medicare have kicked in). Needless to say, that with my numbers, retirement before age 67 is unlikely for me.
It all depends on your definition of "Comfortable", I certainly don't need $1m to survive, but to be comfortable and live my best life I determined I would need about $2.5m. I was conservative in my estimates of returns so my saving rate was higher than it really needed to be. Retired this year at 55 with over $4m and definitely looking forward to this next chapter.
@@alanwong8307 Same thing it has been for my entire life (self employed person). Pay for private insurance with a high deductible. Presently at 60 it is $588/mo and $7000 deductible and get an HSA. Really not that difficult.
@@bruced.370 I actually have in the plan $1m left for my heir. In actuality it is more of a hedge if things go bad, will be much larger if returns are normal. My house is paid off and represents long term care insurance.
@@alanwong8307 Currently paying Cobra for my previously very good work health plan. That is only good for a maximum of 3 years, will need to go on the marketplace at some point, have $20-25k in the budget for premiums.
