The simplest retirement plan ever.

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The simplest retirement plan ever... seriously.
We overcomplicate a lot of things in life. Retirement is one of them. While there are several retirement plans out there that can get incredibly complicated, not all of them have to in order to work. Today we're talking about two of the simplest retirement plans ever created.
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Опубликовано:

8 сен 2024

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Комментарии : 49

@lion4life954 Год назад

Hard to make a video like this to please everyone my friend you did great !, im42 and retired this year. The cost of living has sky rocketed in Nz - my home. I live off 2 houses paid off and the rents, and have no kids but live very tightly . So what I’m saying is , everyone’s situation is so different, we all need to work out what we really value in life and design life according to that . It can be done people just value every single dollar and make them work for you so you work less, I truely value the extra freedom and peace that’s what I value. You can do it peps

@garyvancamp5452 3 года назад

😊 I use the fixed dollar withdrawal amount and will lower my withdrawal amount when I pick up Social Security. Retirement is fairly cheap so long as you don't go hog wild with your money, I still am able to spend 2 months in Florida in the winter. You can easily find part time work, maybe 1 to 2 days a week vs full time work.

@NextLevelLife 3 года назад

That is awesome, Gary! Yes, finding some part time work (even if only during a portion of retirement) can seriously help :)

@garyvancamp5452 3 года назад

@@NextLevelLife 😊 good video ~ you must have a retirement plan and really stick to it, It is really nice to be retired and leave all the work related drama far behind.

@henryrobinson4678 3 года назад

The inspiration from this video is 💯. after seeing this video I decided that have to make more money after my retirement

@marktalksmoney1956 5 лет назад

The best plan is to reduce expenses like paying off house and cars

@NextLevelLife 5 лет назад

Cliff, that would definitely make financial independence much easier to achieve, no doubt! With the average mortgage payment and car payment in the US being about $1,000 and $500 a month respectively we could be talking about nearly a half-million dollars difference in our savings goals for FI :)

@mikeroyce8926 3 года назад

Agreed, but a better plan is to never get a car loan in the first place.

@IrajMatthee 5 лет назад

By the time one retires your portfolio should be focused mainly on conservative funds like the money market or income funds as the returns ranges between 6% to 8% here in emerging markets. So if you ignore the equity funds and only withdraw 4% annually, your net return is 2%-4% using the fixed percent approach. Meaning that all the green tick boxes are shown for income, risk, stability and buying power.

@tslee8236 5 лет назад

If you are getting between 6% to 8%, CPI increase there is probably higher than the 2% to 3% in developed country. You need to consider the inflation erosion of capital in that return. If you are not living there, you are also exposed to additional currency risk. There is an alternative strategy to have a more aggressive 'balanced' investment portfolio to try to maintain capital growth that is more in line with inflation. This is contrary to the traditional thought that retirement strategy should be more conservative than wealth accumulation strategy. The strategy assumes that your risk appetite do not change at retirement. It swaps inflation risks for market risks.

@UltimateBargains 5 лет назад

If you have heirs or a worthy cause to inherit your wealth, then set up your retirement strategy so that you *NEVER spend the principal.* Your principal wealth earns income for you that exceeds your consumption to offset price inflation and unexpected expenses. You could work with someone who understands financial structures, say, in real estate like me, that can minimize risk and volatility, and exceed the long-term yields of the stock market. Real estate is very responsive to interest rates, very tolerant of price inflation, appropriate for leverage, and has very beneficial tax structures for passive cash flow and equity accumulation.

@geoffspitzer5673 5 лет назад

Seems like combining the 4% rule with “The Bucket(s) strategy” would help to check the “stability box” by having 1 1/2 to 2 years of living expenses in safe, money market funds or CD’s. During a recession, the investor would use the money market funds instead of selling funds at a low price. Historically, most recessions are over within 18 - 24 months. Arguably, this strategy would also allow a retired investor to have a more aggressive investment portfolio which would also help to hedge against the 4th box (buying power/inflation)?

@james7017 4 года назад

Best video explain inflation and what it does to your dollars I have seen. Real inflation is a lot higher than 3 percent in the last 10 years but it’s hidden all over the place. Great video and the best part to take away from this is what inflation does and will do faster as we come into the years ahead. Research inflation protecting your assets after this video

@brittla200 5 лет назад

Glad to see you back!

@NextLevelLife 5 лет назад

Glad to be back! :)

@manuelroberto93 5 лет назад

Welcome back. We have missed you

@KonamiGames 5 лет назад

"Traditional Retirement" is old-fashioned and out-of-date. You'll always be earning side-hustle money, thanks to the internet and your smartphones. Gone are the days where you spend 40 years doing the same back-breaking repetitive tasks counting down the years. Don't wait until "retirement" to travel and do what you've always wanted. Its almost 2020-- plane tickets and gasoline is cheap! AIRBnB/Uber is available. Stop making excuses and LIVE LIFE.

@dirtydorte8355 5 лет назад

Why not take the best of both worlds? Define a range of money you want to withdraw each year, for example 30-40k (maybe you are fine with 35k but a litte less or a little more money is okay for you too :) ) . Then withdraw each year X % of your portfolio but never less than 30k and never more than 40k. (You should probably adjust your range each year by inflation). By this method, you are able to offset economic bad years (at least a bit).

@NextLevelLife 5 лет назад

That's an interesting idea that I hadn't considered before. I'd be interested to see how it stacked up to these and other retirement strategies like the 4% rule. May have to do some research on it ;)

@dirtydorte8355 5 лет назад

@@NextLevelLife Cool! :) Let me know if you have some results. On second thought, what I meant is basicly doing the 4% rule (or 3-5% depending on how huch risk you're willing to take) but cutting your income in both directions. So, you have a upper limit: that's how much money you need to have a good life (and that is also the cash flow you aim for!). There is no need to take more money than this. Instead you use the surplus to build reserves for bad years (by leaving the surplus in your savings account). And on the other hand, there are probably some things you wish for but you would be also fine with not having them. So here comes your lower limit: how much money you at least need. That is also how much money you at least withdraw (even during crashes). Before your retirement, you should still aim for so much money that it's likely that the 4% rule (or whatever % you apply) gives you your upper limit. But the cutting strategy may give a bit more stability. :)

@tslee8236 5 лет назад

You need to have two components, must have and nice to have, in you retirement budget. You trim the nice to have budget in a bad year. In a good year, you put the extras in reserve for bad years.

@GreetingsFromArrakis 5 лет назад

I’m from Europe (NL) so the terms are difficult to translate for me literally aswell as figuratively. I like your videos but can you do a few focused on Europe maybe? Cheers

@peterg.9388 4 года назад

@@jeevang7853 it is a continent which consists from over 20 countries

@stevenbeck7282 5 лет назад

Great video! The downside of the "holy 4% rule" is often misunderstood by its devotees in the FIRE movement. Either of those strategies are fine when people are thinking of a traditional retirement or even in their 50s. However, once you are looking beyond living off any nest egg (unless it is so large you are only drawing 1-2%) you risk being victim to one of life's many curve balls. What about catastrophic illness, divorce, kids who need more help getting started in life than you expected or any of the countless variables that can cut into the savings of someone in their 30s or 40s. If you look at your 4% draw as a baseline to free you up for other income producing activities you will have an easier time than if you simply say to yourself that I can live on $40,000 a year so once I have a million dollars I'm done!

@dangeles95 4 года назад

Two things. 1) I love seeing you post more videos Daniel! Keep them coming! 2) when you talk about monthly withdrawals, I am assuming this is before taxes are taken out, correct?

@NextLevelLife 4 года назад

Dan, thanks for the support! In response to your tax question, it was not something I really considered with this video. I suppose it would depend on where the money they're withdrawing was invested. Obviously if it were some kind of ROTH IRA or ROTH 401K it would be after tax income. If not, then it would've been before taxes and thus the budgets would've likely been even tighter over the longer retirements than originally shown in the video. One way or another, it's tough to do accurate tax-related things with these retirement videos since most of my viewers are in their 20s and 30s. So unless they plan on retiring early, the tax calculations will likely be somewhat different by the time they are implementing these strategies :)

@barraabus 5 лет назад

Do everything you want when you are young and able. No point wasting the best years of you life to enable yourself the joys of driving a golf cart around when you can hardly walk. Besides, by the time you have that nestegg, the powers that be will figure a way of taking it off you.

@lilybee_ 3 года назад

No kidding! I'm retiring early at 54 with a pension. I need to work 2 more years to make sure our home is paid off. That 2 years is prob 10% of the time I have left so part of me wants to just make the house payment from our pensions and live cheaply. This doesnt protect us from unexpected events even though we have a 5 year of income nest egg. I dont wanna give up 2 years of travelling and enjoying life with my husband but prob will for security sake.

@Steveo_00700 3 года назад

The best way to hedge against inflation and make your money last longer is to live in a country where the dollar is stronger and cost of living is lower.

@bunkerhillguy2542 4 года назад

Yeah I think people are gonna run into major problems with stock investing when the retire with a million then hit a recession and also their buying power is decreased. The more I look at FIRE people, they never seem to look at the tech stock crash of 2001 or the Great Recession of 2008. People lost a lot of money, did they recover? Yes, but from what I see, it’s better to wait for a 10 year stock market cycle crash which seems like it will happen in 2020-2021.

@EasternElectric2012 4 года назад

Bunker Hill Guy What are you talking about? Take a look at the stock market starting with the crash 2000, The terrorist attacks in 2001 and the total market collapse in 2008. The market recovered incredibly fast after all those events. The stock market is the greatest opportunity for wealth that you could dream of. Obviously the closer you get to retirement do you want to adjust your portfolio. Nobody lost money in 2008 unless they got scared and took their money out. Because in just 10 short years the market has gone from 6000 to 28,000. That’s making money my friend

@bunkerhillguy2542 4 года назад

Eastern it’s a bit of a Ponzi scheme.... people hate to say that timing is important but for the lucky ones, it is

@3flgator 5 лет назад

Hi there, what's your take on building a Ray Dalio like all weather portfolio now for me as a newbie investor given the looming recession talks. I have 10 to 15k to invest now. Im already contributing the employers match to a 401k and maxing out a roth IRA ($6000). Love your videos, thanks.

@TheRosswise 3 года назад

There is always a looming recession, according to the 'experts'.

@tslee8236 5 лет назад

As a general rule, you should plan to pay off your debt at retirement. Interest on debt is generally higher than your investment return which is often unpredictable.

@danawood8103 5 лет назад

Missed your videos!

@angelabakloyvovtchaikovsky1609 3 года назад

Simple is less messy

@basantchoubey5137 7 месяцев назад

the title was simplest retirement plan whereas the video makes people more confused.. didn't like it..

@MichaelMMorganm984638 5 лет назад

This works until you turn 70.5 and will be in the window to take your RMD each year. Withdrawals aren't a problem if your RMD is less than or equal to your 4%. Then again, I guess it depends how early you start taking withdrawals (59.5 vs 65 vs 68, etc.). Correct?

@Leftists_are_Losers 2 года назад

The simplest strategy for retirement is ... work til you die. Don’t retire, just keep working.

@ZezimaContra 5 лет назад

Sucks to have your saved money be valued less to inflation, we need fiat that doesn’t lose value every year.

@elshubi52 5 лет назад

Hey thanks so much for this video, interested in seeing more. I work in a retirement fund r & d team in South Africa, perhaps we can chat?

@fredost1504 5 лет назад

Except you omitted SS income from your analysis which changes everything, except for FIRE people who without paying into the fund for 35 years are going to get nearly nothing from it at FRA. In that case if their investments didnt work, they would be in serious penury in retirement.

@NextLevelLife 5 лет назад

Fred, that's true social security can certainly help out the success rates of our retirements :)

@fredost1504 5 лет назад

@@NextLevelLife What alot of people dont think about is how much taxes must go up in the future to pay for all the socialism stupidity of millenials, etal.. If it doesnt happen now it seems it might in 2025. What makes sense to me being in early retirement is file at 62 for SS, use SPIAs to supplement for basic expense needs, and then withdraw non taxable savings to supplement the above. If we keep income low we qualify for ACA, keep Medicare premiums low, permitting more Medigap/Advantage coverage, and keep our overall taxes low as well. Oh and living debt free, house paid for, and in a no income or pension tax state helps a ton. You can put inflation factors in your SPIAs if concerned about that and of SS has COLA built in.

@shayslay3416 5 лет назад

@@fredost1504 you realize that if taxes go up because of "millennial stupidity," that means you wont have to worry about things such as qualifying for ACA and medicare premiums to begin with, right? I've never heard anyone upset about taxes that go towards fixing/creating roads that we all use. But my god let someone talk about taxes that help people see doctors or feed kids at school and all of a sudden we're ready for war.

@shayslay3416 5 лет назад

Also ironic that SOCIAL security is a socialist style program, but no one has a problem with it, especially when its time to draw money from it....but oh the idea of any other social program is just terrible right...