The concept of mini-retirement changed my life. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that piña colada by the beach does help. I wouldn't have been able to do it otherwise.
Yeah, people miss that part. You don't jet out to Puerto Rico with your life savings. Proper investing and a good business acumen are big pluses. Invest in the stock market, real estate, build businesses. That's just it.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial advisor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
Vivian Jean Wilhelm is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
I’ve been diligently working, saving and contributing towards financial freedom and early retirement, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Sophia Maurine Lanting” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Thank you for this tip. It was easy to find your coach on google . Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I have two pensions. I would much rather have had a Roth 401k throughout my working lifetime. $500/month invested from 25 - 65 at 9% is $2.3mil. I hate my job but can't leave because of I won't get my state pension. What do you think about doing a 70/30 stocks bond ratio?
I would avoid the index funds, mutual funds, or specific stocks for the time being. 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows signs of recovery
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
Generally speaking, a good number of people discredit the effectiveness of financial advisor in planning for retirement, For over the past 5years, I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $1million in gains… might not be a lot but retirement doesn’t seem so farfetched anymore.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
I’ve got about $3M at 63.5 years and i’m trying to get to 65. Now you’ve got me questioning my choice. On the other hand, my brother think i should go 9 more years, which is insane. I don’t think my money is going to be worth much in heaven, or wherever i end up,
I would love for you to do a similar situation only with the calculation of spending more in the beginning (i.e. go - go years) and less for slow-go years and no-go years. Watching my parents' expenses in their 80's, it's noticeable that they spend ALOT less, even with inflation.
Great point. I suppose the elephant in the room as we age is the type and duration of long term care we need. It would be interesting to know if assuming a flat spending trajectory statistically would cover those costs. Probably one of the biggest ‘black swans’ we can’t predict!
In this scenario it seems if they worked 2 more years much would change. 2 less years drawing down savings at $120k a year = $240k. Two more years that they could max out the 401k at $30k plus some match would be about $75k and 2 more years of growth on the $2 million @ a modest 6% = $120k x 2 = $240k all in is $555. Then run the numbers at age 62 drawing $120k a year.
Many retirees end life with a lot of money left. Fear of having not enough leads to conservative withdrawals. As a consequence they leave the money behind. It's a tradeoff.
If having the money, vs spending it, gives you a sense of security and autonomy it is a good thing. There might be some better things. But not a complete waste.
8% stock returns and 4% bonds. I would take that! I definitely would never retire based on a plan that used those assumptions, though. Better to go more conservative than that
Everyone has a different risk tolerance and spending goal in retirement. If you want your money to last 30+ more years, and you're not willing to work anymore then you might need to either adjust your spending or your your risk tolerance in order to achieve that goal.
When you were 30, did you expect the stock market (S&P500) to return over the long haul til retirement about 10% on average? Well, it did. Now you’re 60 and God willing you’ll live about another 30 years. Do you think the S&P will return on average about 10% over the next 30 years? I didn’t have ‘Honestmath’ when I was contemplating retirement and so did a bunch of scenarios with my portfolio returning 5%, 7%, 8%, 10% and built in some big stock market downturns at the beginning to see how I would fair. Turns out that the S&P retuned just over 12% on average since I retired almost ten years ago.
@@glasshalffull2930sequence of negative return at beginning of retirement would be detrimental long term effect. However, buffer with 5 years cash to sustain the down turn would be minimize the effect.
@@mfamily3301 You are exactly right. I cannot remember the exact amount, but we had about 3+ years of funds to ride out a downturn and only stopped withdrawing from the retirement plan once. After the passing of my mother, the inheritance we received now has us at about 5 years of funds. We’ve used laddered CDs.
Azul, love your videos. I’m in Australia, 65 years old and retired 12 years. I do use an investment adviser. I tried your tool versus my own spreadsheet and think the Monte Carlo logic is a valuable addition. I have $2M in Superannuation and here this is non taxable to a maximum balance of $3M. The honestmath simulation yields a very positive result. In Australia median wealth of a 65 year old is $410K mainly due to high home ownership and equally high real estate values. I can reinforce your advice on when to retire. I traded off 4 days a week away from home to be with my children when they were young and enjoy 6-8 weeks of vacation together each year of their school lives. This was achieved by living a very modest lifestyle. Compounding over this period has been the only magic to now put me in a position to start spending and enjoy my retirement. Time is more important than money. Good work.
Azul; I'm 45 without retirement savings nor 401K. But, I'm living off $6K/month on a pension plus a passive income off a rentals = $2K. After a tragic accident that nearly cost my life; decided to travel the world with my family while still willing and able. It was stressful at 1st; but, best decision ever made! We get to be with our 12 and 14 year olds and enjoy seeing them grow. We will likely go back to the workforce, but for now our income has given us flexibility to spend more time with the kiddos and built memories. Writing from South Korea enroute to Japan. All the best everyone!
@@InvestingWithAdamK hi! Yes; kids are home schooled through Liberty University Online Academy; their fees are about $550/monthly for both; it's an accredited school. Hope that helps.
I'm 49 and hubby is 48. We have three teens and doing the same as your family. Been traveling 3 1/2 years. First two years were through rving and we got back about 3 months ago from a 6 month Asia trip and we also went to Korea and Japan. We loved it so much we are going back this fall for Asia 2.0 trip.
83 -85% on a monte Carlo is the sweet spot in my opinion. But you are right in that adjustments may need to be made as time goes on. Black swan events are scary. So are just lousy market years. But history shows it all evens out. A good bucket strategy is the way to go.
I believe spending is different when you are healthy and active. Assuming flat spending until 90 is not the reality. I would add some extras in the first 10 years, the go go years. The tool can do that, great.
This matches my scenario very closely so its another validation of our plan. I retired nearly 2 years ago at 55 but my wife still works since its a low pressure job and so-so pay. She'll likely retire at the end of this year. Our net worth is just slightly under this video's scenario currently and we're looking to spend about $9.5k/month but about $3K of that is discretionary spending so we can adjust how much we spend month to month whenever necessary. I use three different retirement planners (Fidelity, Right Capital and New Retirement) and they're all similar but different, each having their strengths and weaknesses. At $9.5k I have about a 60% probability of success but if we make small tweak's here and there, it jumps up to about 75%. Close enough for me since we're debt free and flexible. I'm a retired Engineer and my wife works in accounting so there's no lack of confidence sticking to a budget and/or making adjustments over time. The last thing we want is to go to the grave with a small fortune since both our kids and their spouses are doing very well for themselves in their respective careers.
not entirely matching the scenario, since you are saying net worth versus the scenario which is investable assets. As an example, $2m net worth with $1m house is only $1m investable assets vs $2m in the scenario, which is a considerable difference. $6500/mo nondiscretionary seems pretty high if you are debt free. Also, the probability only speaks to your investable asset nest egg, you still have social security.
@@hanwagu9967 Close... most of our assets are in cash and investments and we're in the process of selling a highly desirable 1.25 acre parcel in Hawaii so it'll all be liquid very shortly. We sold our home about 3.5 years ago and have been travelling the last 2+ years or so since the wife works remotely. SS is factored into our plan and we're still below 80% but I think I'm over estimating healthcare. Once she retires and we're off her health care plan, we'll have a better idea how close our estimates are since we have to carry it for about 6-7 years until Medicare kicks in. The reason for the high non-discretionary budget is it includes a decent amount for rent. The placeholder is about $3500/month which includes utilities... we've rented at that amount for 1.5yrs in a downtown high-rise (pre-retirement), 1 year in a house in Hawaii and about half that amount when traveling abroad (AirBnB's on a discounted monthly basis).
@@hanwagu9967 good point in most cases but what I didn't go into was that I'm in the process of selling a highly desirable 1 acre lot we own in Hawaii so once that's done, all of our assets will be investable/liquid assets. Our SS is already calculated in our numbers so our low score is simply the longevity of our retirement, our spends and I believe I'm being overly conservative on medical costs. I got a recent quote on travel insurance from Cigna that's 1/3rd our planned budget but its 50% US coverage and 50% out of country which fits our plan for about 2 years, who knows what that cost will be when we need 100% US coverage once we scale back on our travels. Btw, since we sold our house nearly 3 years ago, whether its rent or Airbnb's when travelling, we've managed to spend less than our monthly budget so our spends have been encouraging since I've retired.
Considered retiring & was told by financial planner I could. However, decided to put it off because a) I enjoy what I do, b) I’d get bored c) while I enjoy traveling I can’t do it year round. Currently 58 years old.
I'm 55, have all sorts of medical issues and probably have 2 or 3 years left in me. I'm worried about affording medical coverage. I lived like I was broke for 20 years.... but now inflation is robbing my next egg.
Azul, love the channel but the notion of not retiring in your late 40s or early 50s is somehow a poor choice seems way off base. Many people I speak with who retired are bored and don’t have enough to do. I believe finding a balance between work, family, and recreation is more important than being myopically focused on when one can stop working.
What was omitted was the potential impact of taking SS earlier.. in some cases .. especially those where individuals are looking to retire early but still want a significant monthly outlay.. early SS can benefit them greatly as it protects more of their portfolio earlier .. the gains realized exceed the delta of the lower monthly SS receipts.
People should realize that if you make it through the first few years of retirement unscathed in the market…you’re odds of finishing in great standing goes up at a significant rate
The biggest issue by far is people not educating themselves. There are a lot strategies that can allow you to live on a much smaller portfolio. For instance i retired at 51 and living off my brokerage account while doing roth conversions until 59.5. From a 500k portfolio i pulling 6k a month out and still up from my original amount when i retired. Instead of a strategy that has you selling shares to live i use dividends and options to create my income. Imo covered call etfs have changed playing field for income investors. And selling puts and calls is an easy strategy to earn more income. To be fair tho this 500k i can be aggressive because i have my retirement accounts at 59.5 then ss and pension at 62
But you have not accounted for taxes. If the person "spends" or withdrawals $8k or $9K/month, they will be taxed on that amount and they will have less than that to spend. With a withdrawal rate of $8k/month, this puts them in the 22% tax bracket, $96k/year, they would pay about $21k/year in taxes on the $96k withdrawn. Now this gives them only $6250/month to spend after having to pay tax!
Do any of the stimulations take into account that $9000 a month at 65 can drop to $8000 or less, during your 70's before increasing again due to medical reasons. To say you are going to spend that amount ever6 month is a huge assumption.
I 100% agree with you that giving up those few healthy, active years that you have to really enjoy your retirement would be a mistake. Also, if you delay collecting SS until 67 and can anticipate getting a rather substantial bump in income at 67, why not spend a little more early in retirement - $1000 extra a month each year in your early 60's might mean the difference between taking a once in a lifetime trip or not ever taking the trip at all.
I would say no one spends exactly same all retirement. Most people according to stats will spend way less as they age. Also most people would be smarter during down markets and adjust their spending. So I think you can do 10k but you need to modify based on market and I am sure 65 year old is not as active as a 85+ year old. The chances both wife and husband live to 90 is so so slim so expenses should drop from that and SS will be modified as well. Last if you own your home you use the old reverse mortgage when your liquid assets are almost used up. So many people retire with way less and do okay. Good video
Agreed, do you think in that first Monte Carlo, someone is going to continue to spend $10,000 a month when their portfolio is crashing and burning. People will lower their expenses. Take Monte Carlo with a grain of salt, like the 4% percent rule. Monte Carlo does not account for one's adjustments in spending and does not account for events of the previous year, which we all know effects the outcome of the following year. It is random.
stop with the use the old reverse mortgage. A reverse mortgage isn't guaranteed, doesn't get what people think it gets, etc. You should never count on the old reverse mortgage as a financial back stop. If you need money, then sell the home and rent.
@@ChristopherEvans-650 the 4% rule has held up pretty well. Most people misapply or misunderstand the 4% rule. There aren't any studies, for good reason, on MC sim predictive performance, though.
I would say this program is inaccurate. If the dark blue line is the median (mid point), it is nearly impossible to get the dark blue line very close or touching the top/bottom ranges... especially further out in time. This does not make sense.
You may be thinking of average. Median is a different. The median is calculated by taking the “middle” value, the value for which half of the observations are larger and half are smaller.
@@TomcatSTL Yes, that's why i said "mid piont" which is the middle. If there is 10,000 scenarios for that particular year, why would the middle or mid point value touch the extreme high/low ranges. That makes no sense unless the vast majority (say 90% or 95%) of the outcomes are at the extreme high/low ranges.
@@mrallan8063 ultimately that range is a collection of hundreds of graphing lines and they may be ‘pooled up’ towards the top or bottom of the range we are left with for a given year. Bottom line, this is how these Monte Carlo results look like. They litter the finance landscape. If it doesn’t look right or make sense that simply means we need a better understanding of what we are looking at.
One of the challenges of the simulation that needs to be highlighted is to avoid using the words "run out of money" because in this example they had a very high level of income independent of their investments and this should be highlighted
I started with $800 in 1980 and am now having a hard time spending all the money acquired. I have been working and saving for so long. Thank god I did talk myself into early retirement. Spending Example: I was looking at replacing a screen door and wondering if I should spend the money... I have some real issues to deal with... 😞
My plan is to see what I can spend with a, to us, comfortable chance of success and live our lives accordingly. If it's rice and beans and backyard staycations that's fine with us. Things have never been that important to us. But also we have been fortunate. Good paying career and we've been living below our means and investing. And we live in an area where the cost of living is a bit lower than average. I think our retirement expenses will be a bit higher than average though. Our house is pretty long in the tooth and I know there's going to be some work needed there. Not interested in moving though, that would be a bigger pain.
@@info781 My mother stayed in the home I grew up in that my parents bought in 1964. She would say, “I want to die in this house.” At 93 she passed. Only a couple of neighbors were still alive, but it gave her comfort being in her familiar surroundings.
It’s the outlier scenarios that have multiple stock market downturns at the beginning of your retirement. Plus, they’re pulling $120K a year which is 8% withdrawal. (Only that Ramsey guy talks about pulling 8% a year)
@@glasshalffull2930Honest Math accounts for these early market downturns without selecting black swan in the program? If they’re only pulling $10K - $5.5K(SS) = $54K annually, that would be a safer 2.7%, no?
I am doing very well and find it hard to believe how you can spend 10k a month. I spend about 5k a month and am doing fabulous with a tremendous bank account with hard assets. A collection of cars, a new RV. Helping family….how much more do you need.
BTW- it’s pulling $10K a month. Not ‘spending’ $10K. After taxes you’ve got $8K to spend. (Edit: I was wrong about this. The software subtracts the taxes)
The $2M is what’s in your investment portfolio (stock, index, bonds, gov securities, etc) that will ‘hope’ grow over time even though you are making withdrawals during retirement.
I find it hard to figure out at what point of my life I had any particular (specific) amount of savings. I kind of know what we have now. This is mainly because I was just saving and living my life. I had set my approximate retirement age and stuck to that age. now I am watching the slow bleed of assets. We will see how this plays out.
i use amex platinum. I’ve had the delta gold for a long time. May get the reserve later this year for the 2500 MQDs and lounge access and maintain platinum. my daughter uses the platinum for her travel that often includes non-Delta and abroad. I like most of the Platinum credits.
If they wait until 67 to take social security and social security is $5000+ a year then suddenly their income goes up to ($8500 + $5000 = $13,500/month) and then next thing they know it'll be time for RMDs at 73....
If you have $2M in investable money and put it into a simple money market account at 5% interest you’d generate $100K a year and not even touch your nest egg. Add in SS you’re never going to run out of money. Yes I know there is inflation and such, but if someone with $2M is going to run out of money at 80 then 95% of Americans with not nearly so much saved are screwed.
Also, this model is assuming that the spouse remains alive and continues to receive social security. If the spouse dies - you get either your or their benefits, NOT BOTH. So at some point when your spouse dies, your SSI income is going to decrease.
@@arthrodea Your expenses will decrease as well. It's a model, it's not going to account for every possible outcome, but it's a useful tool. If you personally want to tweak the variables to ensure the outcome says that you can't retire, then more power to you.
Hi Azul! Thanks for the content it's made me consider things I hadn't before like getting a fee only financial planner is a must! I honestly thought I could go at it alone. No way. Still 3 years away though! Also, what happened with the questions we could send in? Was this from one of them? I did a quick video back then. just wondering.
I'm 38 with 1.5 mil. No kids. Pulled the trigger last year and retired at 37. Honest math calculator checks out. Planning up to 6k a month withdrawal. Currently spending less than half that traveling around the world.
Oh! Hey I got money more than 2% of retirees. Oh my God what I'm I going to do. Enough let's hear why I keep running in to people with 400K and 500k with no debt living the dream. How do I know? Got friends with plenty of money. They keep asking why we're having so much fun and so active. Answer is good family, know what we love, and money is not what we live for. It's just a tool to get to point A to B. Live to be health and live for today. Why is it important to spend several thousands a month? We are 65 and can't spend three thousand a month with all the trimmings. Brick home, garden, four boats. three trucks (1 classic) and one sports car. At the golf club, gym, and still at lions club. Annoying business kids in the rotary club. Maybe I get a blonde and go to Vegas would help spend money. My love SueLee said with a missing appendage,😎
Afternoon. I used the Honest Math application, but I was confused by the result and believe I didn't plug numbers in correctly. Currently 58. Plan on retiring in 6 months at 59. Portfolio $1.5 million, pension at 7K and SS low at $1000. I was surprised that the numbers weren't more optimistic. I'm only wanting to draw $3000/mo from portfolio. Can you assist or comment on what I may be doing wrong? Thanks and love your channel.
How the hell can you spend 10K a month. Our situation is basically identical, we retire in 6 months. Our monthly expenses are 5-6K per month. Everything is new and paid off. If we die at 90 our kids get 10-12 million. How do you spend 328$ every day!!!!
It's easy. If you can afford to, why wouldn't you? Your lifestyle isn't the same as someone else's lifestyle. I'm not retiring to save money to pass it on; I'm retiring to live my retirement life. If you value retiring to save and pass it on, good on you. That's a personal choice.
My neighbors worked for a very successful company and bought in on all the stock options. They retired early and are traveling the world and have been doing so for about ten years. I guarantee they are spending well over $10K a month.
Look for stocks that at least track the market over time, or stocks with yields that beat the market. To create a long term plan that works, you need think about effective financial planning.
Indeed with the assistance of a financial planner, I was able to diversify my portfolio across multiple markets and attain a net profit of over one million dollars by utilizing high yielding bonds, ETFs, and shares. Having exposure to a range of companies, including ones that are currently producing cash flows, is important.
keep your beer an gas money to about thousand two thousand bucks a month ish an hope your wife can do all the bill stuff so you can do nothing , it's really no harder than that if you have a good wife or get the bank to pay the bills for you an send you a notice if you spend to much on beer over the month , eat out everyday an save the food at home in case you get hungry in the middle of the night , if your not married or your wife is gone to see the kids alot get a live-in woman to clean an feed the dog an stuff living rent free as long as you get the happy tuckin at night , an get off your butt go fishing an change the oil in your cars stuff like that , learn how to mow a lawn or trim a hedge , that's a life changer 🙂
With current high inflation and interest rates being seen as the new norm and the USA "decoupling" from China ,where most of the cheaper products and services come from, high federal debts and funding of overseas military expenditures and wars, it’s unlikely future USA inflation be at 2%. Above 4% would be the norm for USA.
Exactly. We're in for a decade of higher interest rates (5 to 8% at least) in order to deflate the $34 trillion in national debt back to a manageable level. People have no idea how bad it's going get. The only way to survive that will be to invest a large percentage of your savings in very hard assets like gold and Bitcoin. The latter in particular will be a massive life saver while the dollar disintegrates under financial repression/devaluation.
Azul. I get the feeling you are hedging towards thinking the markets are topping out and may be in for a large correction. My question,do you think the downturn will be a lengthy one?❤🇺🇸
To achieve a secure retirement, aiming to save at least 15% of your income in a 401(k) is advisable. Online tools can assist in calculating the best savings strategy for you, considering factors like age and income. Consistently saving this percentage can help build your retirement fund effectively, thanks to the benefits of compound interest.
Tell me about it. My 401k? Practically useless right now. I’ve got over $500k in there, but with everything going on, I’m wondering if I should just cash out and figure something else out. I’m getting closer to retirement, and the idea of relying on that fund is stressing me out.
Keep it simple, buy things you understand, take some risk but don't try to shoot the lights out. I currently have 75% SCHD and 25% ROTH IRA. Brokerage account is 40% VOO, 35% SCHD, 25% XLK. Combine balance ~$3.3m Less than 3 years until retirement.... I have about 400k in cash. My portfolio has yielded far more than I expected for my retirement. Kudos to my advisor.
My TIAA advisor says that if I completely annuitize a $2 M portfolio it will pay me $14 K/month. Of course, if I die 2 months after I begin drawing the $$& my spouse/heirs get nothing.
Nope. My average yearly gains are 21.7% over the last 23 yrs. I retired at 40. I watch my investments daily. I balance and move trades and play options very successfully. I had 2m at 40 and retired 7 yrs ago. I now have 9m and have been spending about 13% of my total income yearly. I will continue to do so as I outperform the market and never need to touch my principal base of 4m (which is my minimum comfort amount for the rest of my life). If you're good at accounting and estimating stocks-stay away from these people advice-they are way off to those of us who know how to invest. This advice is for people who go to work and buy mutual funds all the time or 401k which 1/2 of their investments are losers so it's a hard way to make gains.
You’re the exception not the norm. Most day traders or what ever you are doing lose their shirts, then their spouse and 1/2 of what ever they had left over.
2 million in high yield ETFs at an average of 12% yield, gives you 240k a year or 20k a month in dividends every single month. How much more do you need?
These videos are ridiculous to me, who won the world is concerned about being able to retire with $2 million saved that’s $80,000 a year and you’ll never run out of money that’s $120,000 a year for 40 years? Just completely stupid….
You guys are missing the point that whatever you have, this is the ‘method’ that a wise person would use to figure out what they can expect if they retire.
Can't... not worth it. Too little commission to be made, and the results will be bad news. Based on assumptions, no one wants to pay $10k to get bad news they need to work till 70, and spend less than they expected.
Main issue for me would be the country you are retiring in , in the U.S 2 million bucks won't go far with medical bills you better work till you die or win the lottery because your kids if they care for you could be hit with hefty bills when you die or you could run out of money , my government pays for healthcare and i have company benefits for it as well it was in the package called work and we will try an keep you healthy until you die , in the U.S it's pay till your broke an die then your kids get raped for anything left , two million leaving healthcare out of it is enough if you can live on 50/75 thousand a year you won't run out of money an will be able to splurge from time to time like a wedding or trip , going at sixty put a new roof on the house an buy new everything , stove , fridge , dishwasher , clothes washer , dryer , furnace , air , ect... everything , if you don't do the car thing buy a new one an plan on having to pay close to hundred thousand for a new one that will break down all the time or buy a old car an learn to fix it , for most 2 million would be comfortable and those would be people making over hundred a year so a step down but that's retirement , never heard of anyone retiring with more money than they have 🙂
if retiring abroad was that great, more people would do it, wouldn't they? Plus, the 50million people on social security in the US sure don't seem to be going bankrupt because of medical bills.
Many Americans live retire with plenty of money for everything, but they don't talk about it. $100k for a new car? Lots of people drive Camry's that are 24k.
@@info781 i comment so he makes more from you tube an most of the time say whatever comes to mind it may not be true depending on how many beers i had lol
@@glasshalffull2930, AGI will become everyone's personal tutor soon. higher education establishments will be either bankrupt or pure elite networking/finishing schools for the hyper rich in 5 years time.
It all depends on if you have debt, people to support, living style. I plan to have 10M at least by the time I retire (around 10 more years). It is my goal! I have around 2M now.
The concept of mini-retirement changed my life. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that piña colada by the beach does help. I wouldn't have been able to do it otherwise.
Yeah, people miss that part. You don't jet out to Puerto Rico with your life savings. Proper investing and a good business acumen are big pluses. Invest in the stock market, real estate, build businesses. That's just it.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial advisor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
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.
Vivian Jean Wilhelm is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
I’ve been diligently working, saving and contributing towards financial freedom and early retirement, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Just try to diversify your portfolio to other market sectors, that way your investment is balanced and you don’t get to make so much losses.
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Sophia Maurine Lanting” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Thank you for this tip. It was easy to find your coach on google . Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
Retirement isn’t an end goal, but a journey best secured by careful and consistent investments.,..
Retirement is the reward of disciplined investing over the long term, not just a destination.
My adviser guided me through retirement planning, ensuring my investments were strategically positioned for long-term rewards.
Mind if I ask you to recommend this particular coach you using their service? Seems you've figured it all out.
Nicole Anastasia Plumlee can't divulge much. Most likely, the internet should have her basic info, you can research if you like.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I have two pensions. I would much rather have had a Roth 401k throughout my working lifetime. $500/month invested from 25 - 65 at 9% is $2.3mil. I hate my job but can't leave because of I won't get my state pension. What do you think about doing a 70/30 stocks bond ratio?
I would avoid the index funds, mutual funds, or specific stocks for the time being. 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows signs of recovery
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
Generally speaking, a good number of people discredit the effectiveness of financial advisor in planning for retirement, For over the past 5years, I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $1million in gains… might not be a lot but retirement doesn’t seem so farfetched anymore.
Great gains there! mind sharing details of your advisor please?
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Mind if I ask you to recommend this particular coach you using their service?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
Adjust your expenses and retire as early as possible.
I’ve got about $3M at 63.5 years and i’m trying to get to 65. Now you’ve got me questioning my choice. On the other hand, my brother think i should go 9 more years, which is insane. I don’t think my money is going to be worth much in heaven, or wherever i end up,
Each year you can adjust your income to insure success e.g. if the Market is down spend $7K/mos if it's up spend $11K/mos.
I would love for you to do a similar situation only with the calculation of spending more in the beginning (i.e. go - go years) and less for slow-go years and no-go years. Watching my parents' expenses in their 80's, it's noticeable that they spend ALOT less, even with inflation.
Great point. I suppose the elephant in the room as we age is the type and duration of long term care we need. It would be interesting to know if assuming a flat spending trajectory statistically would cover those costs. Probably one of the biggest ‘black swans’ we can’t predict!
I think you missed the point. This is about not running out of money.
Remember, it's OK to Die With Zero, but you don't want to have to Live With Zero....
Yes, I want the same analysis…go-go years versus lower spending once 75, etc.
Is 90 years of life what most planners are using?
In this scenario it seems if they worked 2 more years much would change. 2 less years drawing down savings at $120k a year = $240k. Two more years that they could max out the 401k at $30k plus some match would be about $75k and 2 more years of growth on the $2 million @ a modest 6% = $120k x 2 = $240k all in is $555. Then run the numbers at age 62 drawing $120k a year.
Take SS at 62 and not take as much out of savings early to let the nest grow more for future years
Many retirees end life with a lot of money left. Fear of having not enough leads to conservative withdrawals. As a consequence they leave the money behind. It's a tradeoff.
If having the money, vs spending it, gives you a sense of security and autonomy it is a good thing. There might be some better things. But not a complete waste.
8% stock returns and 4% bonds. I would take that! I definitely would never retire based on a plan that used those assumptions, though. Better to go more conservative than that
Everyone has a different risk tolerance and spending goal in retirement. If you want your money to last 30+ more years, and you're not willing to work anymore then you might need to either adjust your spending or your your risk tolerance in order to achieve that goal.
When you were 30, did you expect the stock market (S&P500) to return over the long haul til retirement about 10% on average? Well, it did. Now you’re 60 and God willing you’ll live about another 30 years. Do you think the S&P will return on average about 10% over the next 30 years? I didn’t have ‘Honestmath’ when I was contemplating retirement and so did a bunch of scenarios with my portfolio returning 5%, 7%, 8%, 10% and built in some big stock market downturns at the beginning to see how I would fair. Turns out that the S&P retuned just over 12% on average since I retired almost ten years ago.
@@glasshalffull2930sequence of negative return at beginning of retirement would be detrimental long term effect. However, buffer with 5 years cash to sustain the down turn would be minimize the effect.
@@mfamily3301 You are exactly right. I cannot remember the exact amount, but we had about 3+ years of funds to ride out a downturn and only stopped withdrawing from the retirement plan once. After the passing of my mother, the inheritance we received now has us at about 5 years of funds. We’ve used laddered CDs.
Azul, love your videos. I’m in Australia, 65 years old and retired 12 years. I do use an investment adviser. I tried your tool versus my own spreadsheet and think the Monte Carlo logic is a valuable addition. I have $2M in Superannuation and here this is non taxable to a maximum balance of $3M. The honestmath simulation yields a very positive result. In Australia median wealth of a 65 year old is $410K mainly due to high home ownership and equally high real estate values. I can reinforce your advice on when to retire. I traded off 4 days a week away from home to be with my children when they were young and enjoy 6-8 weeks of vacation together each year of their school lives. This was achieved by living a very modest lifestyle. Compounding over this period has been the only magic to now put me in a position to start spending and enjoy my retirement. Time is more important than money. Good work.
10 K a month. I dont even make 4500 a month and manage to live on that very well.
It’s for 2 people.
Azul; I'm 45 without retirement savings nor 401K. But, I'm living off $6K/month on a pension plus a passive income off a rentals = $2K. After a tragic accident that nearly cost my life; decided to travel the world with my family while still willing and able. It was stressful at 1st; but, best decision ever made! We get to be with our 12 and 14 year olds and enjoy seeing them grow. We will likely go back to the workforce, but for now our income has given us flexibility to spend more time with the kiddos and built memories. Writing from South Korea enroute to Japan. All the best everyone!
A pension is retirement savings, just a different bucket.
Do the kids do online school? How do you handle their education? I’ve thought of doing similar
@@InvestingWithAdamK hi! Yes; kids are home schooled through Liberty University Online Academy; their fees are about $550/monthly for both; it's an accredited school. Hope that helps.
@@havenpersonalcare7968 thank you
I'm 49 and hubby is 48. We have three teens and doing the same as your family. Been traveling 3 1/2 years. First two years were through rving and we got back about 3 months ago from a 6 month Asia trip and we also went to Korea and Japan. We loved it so much we are going back this fall for Asia 2.0 trip.
83 -85% on a monte Carlo is the sweet spot in my opinion. But you are right in that adjustments may need to be made as time goes on. Black swan events are scary. So are just lousy market years. But history shows it all evens out. A good bucket strategy is the way to go.
Thank God that I actually Love my job.
I believe spending is different when you are healthy and active. Assuming flat spending until 90 is not the reality. I would add some extras in the first 10 years, the go go years. The tool can do that, great.
You should always make the choice to retire. And you should always make the choice to spend it within reason
Need to check what the ramifications are if they take SS at 62.
This matches my scenario very closely so its another validation of our plan. I retired nearly 2 years ago at 55 but my wife still works since its a low pressure job and so-so pay. She'll likely retire at the end of this year. Our net worth is just slightly under this video's scenario currently and we're looking to spend about $9.5k/month but about $3K of that is discretionary spending so we can adjust how much we spend month to month whenever necessary. I use three different retirement planners (Fidelity, Right Capital and New Retirement) and they're all similar but different, each having their strengths and weaknesses. At $9.5k I have about a 60% probability of success but if we make small tweak's here and there, it jumps up to about 75%. Close enough for me since we're debt free and flexible. I'm a retired Engineer and my wife works in accounting so there's no lack of confidence sticking to a budget and/or making adjustments over time. The last thing we want is to go to the grave with a small fortune since both our kids and their spouses are doing very well for themselves in their respective careers.
not entirely matching the scenario, since you are saying net worth versus the scenario which is investable assets. As an example, $2m net worth with $1m house is only $1m investable assets vs $2m in the scenario, which is a considerable difference. $6500/mo nondiscretionary seems pretty high if you are debt free. Also, the probability only speaks to your investable asset nest egg, you still have social security.
@@hanwagu9967 Close... most of our assets are in cash and investments and we're in the process of selling a highly desirable 1.25 acre parcel in Hawaii so it'll all be liquid very shortly. We sold our home about 3.5 years ago and have been travelling the last 2+ years or so since the wife works remotely. SS is factored into our plan and we're still below 80% but I think I'm over estimating healthcare. Once she retires and we're off her health care plan, we'll have a better idea how close our estimates are since we have to carry it for about 6-7 years until Medicare kicks in. The reason for the high non-discretionary budget is it includes a decent amount for rent. The placeholder is about $3500/month which includes utilities... we've rented at that amount for 1.5yrs in a downtown high-rise (pre-retirement), 1 year in a house in Hawaii and about half that amount when traveling abroad (AirBnB's on a discounted monthly basis).
@@hanwagu9967 good point in most cases but what I didn't go into was that I'm in the process of selling a highly desirable 1 acre lot we own in Hawaii so once that's done, all of our assets will be investable/liquid assets. Our SS is already calculated in our numbers so our low score is simply the longevity of our retirement, our spends and I believe I'm being overly conservative on medical costs. I got a recent quote on travel insurance from Cigna that's 1/3rd our planned budget but its 50% US coverage and 50% out of country which fits our plan for about 2 years, who knows what that cost will be when we need 100% US coverage once we scale back on our travels. Btw, since we sold our house nearly 3 years ago, whether its rent or Airbnb's when travelling, we've managed to spend less than our monthly budget so our spends have been encouraging since I've retired.
Considered retiring & was told by financial planner I could. However, decided to put it off because a) I enjoy what I do, b) I’d get bored c) while I enjoy traveling I can’t do it year round. Currently 58 years old.
I'm 55, have all sorts of medical issues and probably have 2 or 3 years left in me. I'm worried about affording medical coverage. I lived like I was broke for 20 years.... but now inflation is robbing my next egg.
What are you going to do for health care? Are you still working?
@@imveryhungry112 work until I can't and try to buy insurance
Azul, love the channel but the notion of not retiring in your late 40s or early 50s is somehow a poor choice seems way off base. Many people I speak with who retired are bored and don’t have enough to do. I believe finding a balance between work, family, and recreation is more important than being myopically focused on when one can stop working.
What was omitted was the potential impact of taking SS earlier.. in some cases .. especially those where individuals are looking to retire early but still want a significant monthly outlay.. early SS can benefit them greatly as it protects more of their portfolio earlier .. the gains realized exceed the delta of the lower monthly SS receipts.
Agree
At least he should have run those options in the simulation to see the impact.
Why not just lookup the SS for the individual from the government site. There was a time when we received a paper statement. Now it’s online.
People should realize that if you make it through the first few years of retirement unscathed in the market…you’re odds of finishing in great standing goes up at a significant rate
The biggest issue by far is people not educating themselves. There are a lot strategies that can allow you to live on a much smaller portfolio. For instance i retired at 51 and living off my brokerage account while doing roth conversions until 59.5. From a 500k portfolio i pulling 6k a month out and still up from my original amount when i retired.
Instead of a strategy that has you selling shares to live i use dividends and options to create my income.
Imo covered call etfs have changed playing field for income investors. And selling puts and calls is an easy strategy to earn more income.
To be fair tho this 500k i can be aggressive because i have my retirement accounts at 59.5 then ss and pension at 62
But you have not accounted for taxes. If the person "spends" or withdrawals $8k or $9K/month, they will be taxed on that amount and they will have less than that to spend. With a withdrawal rate of $8k/month, this puts them in the 22% tax bracket, $96k/year, they would pay about $21k/year in taxes on the $96k withdrawn. Now this gives them only $6250/month to spend after having to pay tax!
After all these years of saving, the concept of spending down the money you have accumulated over a lifetime and no longer earning, freaks me out!
Me too!!!
Do any of the stimulations take into account that $9000 a month at 65 can drop to $8000 or less, during your 70's before increasing again due to medical reasons. To say you are going to spend that amount ever6 month is a huge assumption.
What about 70% stocks, 30% bonds instead of 60/40 split?
I 100% agree with you that giving up those few healthy, active years that you have to really enjoy your retirement would be a mistake. Also, if you delay collecting SS until 67 and can anticipate getting a rather substantial bump in income at 67, why not spend a little more early in retirement - $1000 extra a month each year in your early 60's might mean the difference between taking a once in a lifetime trip or not ever taking the trip at all.
I would say no one spends exactly same all retirement. Most people according to stats will spend way less as they age. Also most people would be smarter during down markets and adjust their spending. So I think you can do 10k but you need to modify based on market and I am sure 65 year old is not as active as a 85+ year old. The chances both wife and husband live to 90 is so so slim so expenses should drop from that and SS will be modified as well. Last if you own your home you use the old reverse mortgage when your liquid assets are almost used up. So many people retire with way less and do okay.
Good video
Agreed, do you think in that first Monte Carlo, someone is going to continue to spend $10,000 a month when their portfolio is crashing and burning. People will lower their expenses. Take Monte Carlo with a grain of salt, like the 4% percent rule. Monte Carlo does not account for one's adjustments in spending and does not account for events of the previous year, which we all know effects the outcome of the following year. It is random.
stop with the use the old reverse mortgage. A reverse mortgage isn't guaranteed, doesn't get what people think it gets, etc. You should never count on the old reverse mortgage as a financial back stop. If you need money, then sell the home and rent.
@@ChristopherEvans-650 the 4% rule has held up pretty well. Most people misapply or misunderstand the 4% rule. There aren't any studies, for good reason, on MC sim predictive performance, though.
I would say this program is inaccurate. If the dark blue line is the median (mid point), it is nearly impossible to get the dark blue line very close or touching the top/bottom ranges... especially further out in time. This does not make sense.
You may be thinking of average. Median is a different. The median is calculated by taking the “middle” value, the value for which half of the observations are larger and half are smaller.
@@TomcatSTL Yes, that's why i said "mid piont" which is the middle. If there is 10,000 scenarios for that particular year, why would the middle or mid point value touch the extreme high/low ranges. That makes no sense unless the vast majority (say 90% or 95%) of the outcomes are at the extreme high/low ranges.
@@mrallan8063 ultimately that range is a collection of hundreds of graphing lines and they may be ‘pooled up’ towards the top or bottom of the range we are left with for a given year. Bottom line, this is how these Monte Carlo results look like. They litter the finance landscape. If it doesn’t look right or make sense that simply means we need a better understanding of what we are looking at.
One of the challenges of the simulation that needs to be highlighted is to avoid using the words "run out of money" because in this example they had a very high level of income independent of their investments and this should be highlighted
It’s not how much you’ve saved, it’s ensuring you have no debt then determine how much to spend. 🤓
I started with $800 in 1980 and am now having a hard time spending all the money acquired. I have been working and saving for so long. Thank god I did talk myself into early retirement. Spending Example: I was looking at replacing a screen door and wondering if I should spend the money... I have some real issues to deal with... 😞
That is a super common challenge (and one that I struggle with as well). It’s a journey going from “saver” to “spender” … 🚶♂️Azul
@@AzulWells Ohhhh, and THANKS! You helped encourage my wife and I into seeing a retirement financial advisor and going for it at the age of 56!
My plan is to see what I can spend with a, to us, comfortable chance of success and live our lives accordingly. If it's rice and beans and backyard staycations that's fine with us. Things have never been that important to us. But also we have been fortunate. Good paying career and we've been living below our means and investing. And we live in an area where the cost of living is a bit lower than average. I think our retirement expenses will be a bit higher than average though. Our house is pretty long in the tooth and I know there's going to be some work needed there. Not interested in moving though, that would be a bigger pain.
Should home equity be calculated into this? I’ll retire in 3 years with my house paid off. It would increase my retirement new worth by 40%.
No not unless you plan to downsize, but that may cost as much. My father stayed in his house until the end did not want to move.
You can do reversed mortgate if you want. I am in the same situation. My home equity in $2M range. Few more yrs of mortgage.
@@info781 My mother stayed in the home I grew up in that my parents bought in 1964. She would say, “I want to die in this house.” At 93 she passed. Only a couple of neighbors were still alive, but it gave her comfort being in her familiar surroundings.
@@johnnguyen4152true but reverse mortgage can have many fees. Long story short keep the house or sell to pay for nursing home if needed.
$2mil in savings. $5.5k in SS. $10k/mo spending. Possibly going broke around 80 yrs old? Doesn't seem right
Agree. Investing 2mil at an extremely conservatively 3% annual like govt bonds will give you 5k/month for spending, never touching the capital
It’s the outlier scenarios that have multiple stock market downturns at the beginning of your retirement. Plus, they’re pulling $120K a year which is 8% withdrawal. (Only that Ramsey guy talks about pulling 8% a year)
@@glasshalffull2930Honest Math accounts for these early market downturns without selecting black swan in the program? If they’re only pulling $10K - $5.5K(SS) = $54K annually, that would be a safer 2.7%, no?
He's not a proponent of taking SS at 62. This would provide a 90% success of living on 9K a month.
I am doing very well and find it hard to believe how you can spend 10k a month. I spend about 5k a month and am doing fabulous with a tremendous bank account with hard assets.
A collection of cars, a new RV. Helping family….how much more do you need.
I’ve never spent 10k in a single month in my life. 🤔
Someone with $2 million should not be spending $10,000 a month, that's stupid! Especially while waiting to collect their SS until their FRA.
Not owning a home outright can significantly increase monthly expenses especially in high cost of living areas.
Rent alone can be $3k
BTW- it’s pulling $10K a month. Not ‘spending’ $10K. After taxes you’ve got $8K to spend. (Edit: I was wrong about this. The software subtracts the taxes)
I hear all these levels and having no idea where at ? Earning 40's and just ticked over 1M net worth at 66. How do I gauge against all the info?
Sounds like you’re in a good spot. 4% will replace your pre retirement income fully without social security
This 2 million, does it include everything? real estate, 401k, SS, etc?
The $2M is what’s in your investment portfolio (stock, index, bonds, gov securities, etc) that will ‘hope’ grow over time even though you are making withdrawals during retirement.
I’m 58 with 2M but I also have a pension. My wife is 56 and she’s got 2M also. Need to figure out how much a month we can spend.
I would definitely use higher % for the inflation.
I find it hard to figure out at what point of my life I had any particular (specific) amount of savings. I kind of know what we have now. This is mainly because I was just saving and living my life. I had set my approximate retirement age and stuck to that age. now I am watching the slow bleed of assets. We will see how this plays out.
How does that simulation adjust once you start drawing social security? Does it assume you’re going to withdraw that 8500 even when SS kicks in?
People spend too much, Want too much. I do.. But we make decent money and we save a ton
Again, It comes down to health insurance and health cost!!
i use amex platinum. I’ve had the delta gold for a long time. May get the reserve later this year for the 2500 MQDs and lounge access and maintain platinum. my daughter uses the platinum for her travel that often includes non-Delta and abroad. I like most of the Platinum credits.
What no millionaire has ever said. I got it using my Amex card
Thing is you won’t run out of money because they would still be getting social security
Thank you Azul. Great video
I had 2.5m at 60
I decided to wait until 63 to retire
Turned out to be a great decision as my pension gained 10% in 2021
Your mileage may vary
What’s a pension?
Health insurance. That's 99% of why I feel I have to keep working. What are others doing for health insurance?
The ACA. I’ve been on it for 6 years now. Excellent affordable insurance.
$18,000/yr. for a couple. But it is great coverage. That is what I spend.
If they wait until 67 to take social security and social security is $5000+ a year then suddenly their income goes up to ($8500 + $5000 = $13,500/month) and then next thing they know it'll be time for RMDs at 73....
Why not do a video using an average couple that are NOT millionaires and only have 100K 250k in IRA because we need that help as much or more❤
Great talk AZUL!
How do you feel about being all in on the S&P 500 in my 401(k)?
If you have $2M in investable money and put it into a simple money market account at 5% interest you’d generate $100K a year and not even touch your nest egg. Add in SS you’re never going to run out of money. Yes I know there is inflation and such, but if someone with $2M is going to run out of money at 80 then 95% of Americans with not nearly so much saved are screwed.
The problem is taxes on moving a portfolio like that. Right now there’s no vehicle to get a 401k into a HYSA without getting rolled by Uncle Sam
Shouldnt we be using HIGHER inflation rates? it makes a massive difference.
Also, this model is assuming that the spouse remains alive and continues to receive social security. If the spouse dies - you get either your or their benefits, NOT BOTH. So at some point when your spouse dies, your SSI income is going to decrease.
@@arthrodea Your expenses will decrease as well. It's a model, it's not going to account for every possible outcome, but it's a useful tool. If you personally want to tweak the variables to ensure the outcome says that you can't retire, then more power to you.
Super helpful, thank you!
Hey Azul, where do you enter the brokerage account portfolio in Honest Math?
Hi Azul! Thanks for the content it's made me consider things I hadn't before like getting a fee only financial planner is a must! I honestly thought I could go at it alone. No way. Still 3 years away though! Also, what happened with the questions we could send in? Was this from one of them? I did a quick video back then. just wondering.
When you save 2 million in your life you’d corse correct if you started to see the account drop like the bottom of the chart!
Iwill never understand people that trust advisors.I made.I manage it!
I'm 38 with 1.5 mil. No kids. Pulled the trigger last year and retired at 37. Honest math calculator checks out. Planning up to 6k a month withdrawal. Currently spending less than half that traveling around the world.
Right
@@Michaelmontana08 ?
@@JW-ku7nn tin tincupping to be exact.
Not a problem with 70% of American adults being obese most aren't getting much past mid 70s problem solved
Azul - how would this tool account for a pension?
Oh! Hey I got money more than 2% of retirees. Oh my God what I'm I going to do. Enough let's hear why I keep running in to people with 400K and 500k with no debt living the dream. How do I know? Got friends with plenty of money. They keep asking why we're having so much fun and so active. Answer is good family, know what we love, and money is not what we live for. It's just a tool to get to point A to B. Live to be health and live for today. Why is it important to spend several thousands a month? We are 65 and can't spend three thousand a month with all the trimmings. Brick home, garden, four boats. three trucks (1 classic) and one sports car. At the golf club, gym, and still at lions club. Annoying business kids in the rotary club. Maybe I get a blonde and go to Vegas would help spend money. My love SueLee said with a missing appendage,😎
Great perspective! Thank you.
Really great videos. I use Honest Math a lot thanks to you. Have you used AI to run Monte Carlos simulations? I think they do a pretty good job.
You wouldn’t actually run out because SS would not stop
I'm lucky to reach $1M 😫
Afternoon. I used the Honest Math application, but I was confused by the result and believe I didn't plug numbers in correctly. Currently 58. Plan on retiring in 6 months at 59. Portfolio $1.5 million, pension at 7K and SS low at $1000. I was surprised that the numbers weren't more optimistic. I'm only wanting to draw $3000/mo from portfolio. Can you assist or comment on what I may be doing wrong? Thanks and love your channel.
How the hell can you spend 10K a month. Our situation is basically identical, we retire in 6 months. Our monthly expenses are 5-6K per month. Everything is new and paid off. If we die at 90 our kids get 10-12 million.
How do you spend 328$ every day!!!!
It's easy. If you can afford to, why wouldn't you? Your lifestyle isn't the same as someone else's lifestyle. I'm not retiring to save money to pass it on; I'm retiring to live my retirement life. If you value retiring to save and pass it on, good on you. That's a personal choice.
@@hanwagu9967 Of course it’s a personal choice. I still don’t see how you can spend 328$ per day every day for 40 years.
@@timsmith6815 $5k/mo is like my sushi budget
@@timsmith6815 Might not be $328 today, but in 25-30 years from now it will be more.
My neighbors worked for a very successful company and bought in on all the stock options. They retired early and are traveling the world and have been doing so for about ten years. I guarantee they are spending well over $10K a month.
Strong firms make up my portfolio, but this year it has stagnated. I need to raise the almost $200k that is now in my reserve.
Look for stocks that at least track the market over time, or stocks with yields that beat the market. To create a long term plan that works, you need think about effective financial planning.
Indeed with the assistance of a financial planner, I was able to diversify my portfolio across multiple markets and attain a net profit of over one million dollars by utilizing high yielding bonds, ETFs, and shares. Having exposure to a range of companies, including ones that are currently producing cash flows, is important.
Who is this planner you're hiring?
‘Leah Foster Alderman’
If you search for her online, you'll probably find out more details about her.
keep your beer an gas money to about thousand two thousand bucks a month ish an hope your wife can do all the bill stuff so you can do nothing , it's really no harder than that if you have a good wife or get the bank to pay the bills for you an send you a notice if you spend to much on beer over the month , eat out everyday an save the food at home in case you get hungry in the middle of the night , if your not married or your wife is gone to see the kids alot get a live-in woman to clean an feed the dog an stuff living rent free as long as you get the happy tuckin at night , an get off your butt go fishing an change the oil in your cars stuff like that , learn how to mow a lawn or trim a hedge , that's a life changer 🙂
"If you have a good wife" - What % have that?
How much can U spend? The answer is $ 2 million.
No... you have to factor in the growth over retirement. Its not a straight line calculation.
Spend 2M in a day (today)! Spend them all. It is not that hard.
With current high inflation and interest rates being seen as the new norm and the USA "decoupling" from China ,where most of the cheaper products and services come from, high federal debts and funding of overseas military expenditures and wars, it’s unlikely future USA inflation be at 2%. Above 4% would be the norm for USA.
Exactly. We're in for a decade of higher interest rates (5 to 8% at least) in order to deflate the $34 trillion in national debt back to a manageable level. People have no idea how bad it's going get. The only way to survive that will be to invest a large percentage of your savings in very hard assets like gold and Bitcoin. The latter in particular will be a massive life saver while the dollar disintegrates under financial repression/devaluation.
Azul. I get the feeling you are hedging towards thinking the markets are topping out and may be in for a large correction. My question,do you think the downturn will be a lengthy one?❤🇺🇸
You should easily be able to count on 6%.
To achieve a secure retirement, aiming to save at least 15% of your income in a 401(k) is advisable. Online tools can assist in calculating the best savings strategy for you, considering factors like age and income. Consistently saving this percentage can help build your retirement fund effectively, thanks to the benefits of compound interest.
Tell me about it. My 401k? Practically useless right now. I’ve got over $500k in there, but with everything going on, I’m wondering if I should just cash out and figure something else out. I’m getting closer to retirement, and the idea of relying on that fund is stressing me out.
Keep it simple, buy things you understand, take some risk but don't try to shoot the lights out. I currently have 75% SCHD and 25% ROTH IRA. Brokerage account is 40% VOO, 35% SCHD, 25% XLK. Combine balance ~$3.3m Less than 3 years until retirement.... I have about 400k in cash. My portfolio has yielded far more than I expected for my retirement. Kudos to my advisor.
My TIAA advisor says that if I completely annuitize a $2 M portfolio it will pay me $14 K/month. Of course, if I die 2 months after I begin drawing the $$& my spouse/heirs get nothing.
Nope. My average yearly gains are 21.7% over the last 23 yrs. I retired at 40. I watch my investments daily. I balance and move trades and play options very successfully. I had 2m at 40 and retired 7 yrs ago. I now have 9m and have been spending about 13% of my total income yearly. I will continue to do so as I outperform the market and never need to touch my principal base of 4m (which is my minimum comfort amount for the rest of my life). If you're good at accounting and estimating stocks-stay away from these people advice-they are way off to those of us who know how to invest. This advice is for people who go to work and buy mutual funds all the time or 401k which 1/2 of their investments are losers so it's a hard way to make gains.
Ok...sure Jan....
You’re the exception not the norm. Most day traders or what ever you are doing lose their shirts, then their spouse and 1/2 of what ever they had left over.
$2M with a paid off house
2 million in high yield ETFs at an average of 12% yield, gives you 240k a year or 20k a month in dividends every single month. How much more do you need?
12% yield isn't reasonable going forward.
Well, if you have a financial advisor I would say less than ten percent since that crook stole the rest.
So Azul .. what’s your networth like ?
These videos are ridiculous to me, who won the world is concerned about being able to retire with $2 million saved that’s $80,000 a year and you’ll never run out of money that’s $120,000 a year for 40 years? Just completely stupid….
the economy doesn't operate on simple math and linear outcomes. You have inflation, taxes, and market performance to consider.
The more money you have the more you complain about money.
You guys are missing the point that whatever you have, this is the ‘method’ that a wise person would use to figure out what they can expect if they retire.
Talk about the real world where people have less than $500,000 saved.
Can't... not worth it. Too little commission to be made, and the results will be bad news. Based on assumptions, no one wants to pay $10k to get bad news they need to work till 70, and spend less than they expected.
He has numerous times, just search his earlier videos. He does reviews at all different net worth amounts at different ages.
I’ll make it easy …you can spend 2 million dollars👍
Main issue for me would be the country you are retiring in , in the U.S 2 million bucks won't go far with medical bills you better work till you die or win the lottery because your kids if they care for you could be hit with hefty bills when you die or you could run out of money , my government pays for healthcare and i have company benefits for it as well it was in the package called work and we will try an keep you healthy until you die , in the U.S it's pay till your broke an die then your kids get raped for anything left , two million leaving healthcare out of it is enough if you can live on 50/75 thousand a year you won't run out of money an will be able to splurge from time to time like a wedding or trip , going at sixty put a new roof on the house an buy new everything , stove , fridge , dishwasher , clothes washer , dryer , furnace , air , ect... everything , if you don't do the car thing buy a new one an plan on having to pay close to hundred thousand for a new one that will break down all the time or buy a old car an learn to fix it , for most 2 million would be comfortable and those would be people making over hundred a year so a step down but that's retirement , never heard of anyone retiring with more money than they have 🙂
if retiring abroad was that great, more people would do it, wouldn't they? Plus, the 50million people on social security in the US sure don't seem to be going bankrupt because of medical bills.
Many Americans live retire with plenty of money for everything, but they don't talk about it. $100k for a new car? Lots of people drive Camry's that are 24k.
@@info781 i comment so he makes more from you tube an most of the time say whatever comes to mind it may not be true depending on how many beers i had lol
@@pl7868 makes sense
@@info781 Thx I just looked at it an thought wow sure type alot after six beers 😂
Azul, life expectancy is going to 100 so consider longer lives for your clients. We are close to cure many terminal illnesses.
Not even close dude. You statistically won’t even come close to 100.
Before or after taxes?
The $10K is what they are pulling from the 401K and you still have taxes.
You should keep working and never retire
Some people enjoy working, if you have a non physical job.
I'm 51 and have around $3m but still afraid to retire.
I think he is talking about US currency
You can always donate it when you are older. Some people are just savers.
If you’ve got kids to send to college, BE AFRAID! BE VERY AFRAID!!!!! 😬
@@glasshalffull2930, AGI will become everyone's personal tutor soon. higher education establishments will be either bankrupt or pure elite networking/finishing schools for the hyper rich in 5 years time.
It all depends on if you have debt, people to support, living style.
I plan to have 10M at least by the time I retire (around 10 more years). It is my goal! I have around 2M now.
50% of spousal benefit is only for those who are born before 1953.
This is not correct and I have no idea where you came up this. The only thing your year of birth impacts is what's considered full retirement age.
Well this is stupid @ 💯%
Hi I'm looking for a rich man greetings from Romania !!!!1
Suze Orman says that you will need $5-6 million to retire.