Retire at 60 With $1 Million: What to Expect
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- เผยแพร่เมื่อ 30 มิ.ย. 2024
- What do you need to know about retiring at 60 years old with $1 million? Let’s cover some of the most important topics and see how the numbers look in my financial planning tool (Right Capital). We’ll look at a fake client named Jane who is currently 59 and retiring within one year.
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If you’re married or coupled, things should look even better for your household, as you’ll likely have more retirement income from Social Security or pensions.
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Having $1 million at age 60 puts you in a relatively good position. Of course, it depends on where you live, your health, and other factors, but many people never build up a $1 million nest egg.
But that also means you’ll likely need to think about taxes. You’ll probably pay tax on your Social Security retirement benefit, and you’ll want to look ahead toward your required minimum distributions (RMDs) after age 72. Fortunately, you have some time.
More on this topic:
Article and simplified calculator: www.approachfp.com/retire-at-...
Do you pay taxes on Social Security? • Social Security Tax: W...
LTC cost estimates: www.genworth.com/aging-and-yo...
Figure out how much you can withdraw from your assets, and make some estimates on how much tax you’ll pay in retirement. Figure out what health care expenses might look like, and explore different health insurance options for the years between now and age 65 (when you’re typically eligible for Medicare).
In addition to the financial aspects, it’s important to take steps that can promote your happiness in retirement. Especially if you retire at 60 years old, you may have several decades of life left, and you might not be satisfied with sitting around or pursuing one or two hobbies. So, evaluate what you’ll do and how things might look. Start designing the life you want to retire to (as opposed to just retiring from work).
As you move through the topics we discuss in this video, you’ll improve your retirement readiness.
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CHAPTERS
00:00 How Is This Going to Look?
01:05 You Have More Than Average
02:24 Withdrawals and Taxes
06:51 How Much Can You Withdraw?
08:13 Why Would You Delay Social Security?
10:15 Can I Live Off the Principal Without Spending Down Assets?
11:27 Social Security Review
13:42 Health Care Options and Costs Before and After Medicare
18:23 Long-Term Care (LTC) Costs
20:38 Roll Assets Over or Stay Put?
22:08 The Softer Side of Retirement
IMPORTANT:
It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. ““Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
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Note: I do not discuss offerings, pricing, etc. in these comments. Please proceed to the website, where you can find a substantial amount of detail.
The most important thing (in my world) is to adjust your lifestyle. I hated my job but would have stayed, however, I got laid off and it was a blessing in disguise. I was under so much stress at work, I'll adjust my lifestyle to make a million work. I'm 59 and a half and have never been happier living without the stress of that horrible job.
I'm the same age and the exact same thing happened to me. At first, I was going to get a new job until age 62, but I decided to just cut back and sell a few things I didn't need--motorcycle, watch collection, etc.--and make this an early retirement. Couldn't be happier!
I retired 20 years ago at 45. I had about $100k cash, $400k home equity and a $2200/mo mortgage. Crazy right? I was surprised it worked. Today at 65 I have $550k home equity, $22k cash and haven't taken SS yet and don't plan to until 70. Crazy right? It's all about lifestyle. When I was working I spent a lot of money on entertainment, eating out and buying crap I thought was fun. But in retirement I gained 2 important assets...time and freedom. Those 2 assets can be used to live a happier and simpler life.
TH-cam is full of retirement videos based on the concept of living basically the same life as when working...just more time available to buy more crap you don't need. There are other ways.
Making it out at a young age is quite difficult. I started a side hustle at 17, saved up and made some good investments. l'm 28,live on my own and having a good life for myself. Big ups to you and everyone out there trying
I retired at 47 remarried now worth 3 million.. I rent the rest is invested.. wiffey works.. I took ss at 62 why to allow my investments to grow.. Why remove growing assets only to get a pittance from ss.. In that time I doubled my investments.. You do not have enough cash.. your mortgage is eatting you alive.. Observation..
Water, your numbers don't make sense. How did you only spend 3,900 cash p/year?? Your mort alone was 26,400 a year. Please explain.
I needed to see this as I'm 59 and just got laid off. I have a little over a million saved and I might just retire. I paid off my house years ago, but still have a car note and some credit card debt. You are great at explaining this. Thank you!
You’re golden if you can keep your expenses modest
Retirement planning means preparing today for your future life so that you continue to meet all your goals and dreams independently
This is close enough to my situation. I find this content very helpful. Thank you Justin.
I'm glad to hear the assumptions were pretty close for at least one or two viewers. Thank you!
Thank you for creating such a detailed video..
Excellent video - great coverage of the main issues and the example of Jane was nice a refreshing (usually it’s a married couple!). I retired early 18 months ago and have studied this topic quite deeply. Only 53 so I had to figure out if I could retire and be financially set. After researching I feel quite comfortable now.
Thanks for the great video 👍
You are one of the few financial advisors that I enjoy listening to. Great delivery, excellent content.
I appreciate that!
good stuff my good man! Keep it going
How to retire on one million:
1) get one million
2) retire
Your visual tools to follow your talking points are superb.
Thank you!
Very timely as I am 60 and starting to think about things like retiring from my job. I do know I need to sit down with a financial advisor at some point to plan out a strategy, but like many I am a procrastinator (the first rule about overcoming a challenge is recognizing you have it ;) ).
One step at a time - thanks for watching!
Great video . Thank you
Thank you, Justin. Your videos are always informative, practical, and cover so many considerations.
It's great to hear this, thank you so much!
Informative! Thx for sharing.
Thanks for watching!
Love your videos.
Thank you, I truly appreciate it
Going out sooner. We have hit our numbers. Getting off the hamster wheel at 57. Going to do ACA until medicare. Then turn on SS which will cover our household expenses alone.
I am curious about that possibility also. I have chronic health problems and don't think I have another 10 years that I can keep working 12 hour days. The website is quite confusing so I am not sure what income levels are required.
@@chrisniner8772 Find a ACA broker. They know the system.
@@chrisniner8772 yes get ACA broker. I had never heard of them until my friend used one for Medicare. He was ever so helpful and submitted all the paperwork for me too! And he doesn’t cost me any money 💪
Thanks for the info. With family, the San Juans and SE UT to continue exploring, and too many other hobbies, retirement should be plenty busy for us. When to switch from accumulate to distribution is our question.
Sounds like you are not too far away from here. And yes, when to flip that switch is one of the biggest questions pre-retirees face. It can certainly be a scary one, as there's no way to predict the future. You can do all of the right things before you quit working, but we can't eliminate the unknowns. And on the flip side, it's important to enjoy life while we can.
Our offices are about two blocks apart. 🙂 I moved here for similar reasons as you. Been learning about retirement planning, watching videos, and the YT algorithm included yours. I kept thinking gosh those look like San Juan and Electric Hills background pictures. Hah.
Well, that explains it! Yes, I had to use some of the nearby scenery to make things pretty. Great to hear that the videos are getting into the mix, and please say hi if we ever cross paths out in the real world.
Most people don’t want to be a millionaire, they want to spend a million dollars.
2 years ago I was planning on a 5 year time horizon, now i have to add 5 more years. This free crap feels expensive when you are one of the few paying.
Wow! Thank you for the video-
I’ve got a lot 0f work to do I guess!
😆
I’m 58 and retiring next year at 59. I have about $900K in retirement accounts and about $30K in the bank and owe $62K on my mortgage. I’m lucky though, I have a pension which is close to $9K a month plus my medical is paid by my union.
It IS relative - 1 million saved. I have a pension & no debt - so my costs are low, which maximizes the amount I have to pull out each year.
I recently turned 60 and my net worth will pass one million shortly. If there was national health care and elder care I'd retire now and free up a job for a younger worker. But as the US has such a Darwinian view of both I plan to hold on to my job (and employer health care and life insurance) a very long time.
You can get free or low cost heath care through the ACA (a/k/a Obamacare). I just did that and it's better than the healthcare I had at work.
Yes 24hr in-home care is very expensive, I was writing almost 10K check every three weeks as her PoA.. Luckily my Moms assets outlived her and was never in danger having to sell her condo.
Thanks for chiming in and sharing that experience. Those costs can be shocking.
For me, golf gets old after about the third hole…….😂
Million dollars is not a lot? Many people will not even see 6 figures, much less 7 figures.
Speak it bud
“A lot” is a relative term - “a lot” for what? $1m is dirt cheap for, say, getting an entire office building in midtown Manhattan. $1m is extremely expensive for, say, a hot dog. Obviously, $1m isn’t a trivial sum of money no matter who you are. The question here is whether it is enough, let alone “a lot”, for needing to cover the full living expenses for an individual living somewhere in the U.S. across a typical 20-30 year retirement.
@@joefunk76A lot as in terms of retirement for the average population who would be lucky to retire with $300,000.
@@joefunk76only 9% of retirees will have 7 figures
If I had 1million at 60
It would be a no brainer and retire
Totally depends on your expenses in retirement. Many people could do it at 60 with a million. But not everybody
@@johngill2853 then that’s pretty sad! Choosing living the vida loca for sanity and freedom
@0:58 Jane Doe needs 5.2% withdrawal rate until age 67 then a 2.8% rate to make up the difference with social security. Seems reasonable. Now to watch the video and see how you plan it. 😎
I read this and gave away 2 millions, I can retire on just one.. Brilliant idea/....
I plan on working till im 70yrs old as long as health permits I love my job.
You are lucky!!
What if you have a mortgage and have to also pay for health insurance?
How did Jane at age 59 (0:27) file income tax the previous year and have a social security distribution of $44k (3:44)?
I know it's supposed to be a fictional example, but there seems to be a clear problem, unless I'm not understanding something of which is the reason I'm interested in researching with this video as a reference help.
Good question, and that tax return is for tax year 2033 (obviously just a projection/estimate). By that point, she's old enough for benefits. You might be able to see a little drop-down menu at the top of the screen where we can change the year.
Interesting. I will turn 62 this summer, single, no kids, ZERO debt, with $970,000 in retirement savings. I project my monthly expenses in retirement to be just under $4000.
Can I retire at the end of the year and not run out of money? I recently moved to a conservative allocation of 45% equities, 55% fixed. The savings is a mix of my 403B and my Roth IRA.
Dividend stocks account for about 20% of my retirement portfolio. I started moving part of my retirement savings into dividends about 5 years ago. They are currently paying about 3.5%, based on today's prices, or closer to 5% when looking at purchase price of the stock. Along with the dividend, these stocks, all being very strong, long term dividend payers, have increased in price also, and there is no reson to expect them not to grow in the future. Dividends are a great PART of any retirement plan.
Dividends are just part of total return. No magic in dividends
I assume your using right capital for the planning aspect of this demo? It would be good to know what assumptions are made based on that platform
You are correct, it is Right Capital. Thanks for that feedback, and I can work on getting more assumptions visible in future videos.
61 and retired. Have about 900000 in deferred accounts. When i run online roth conversion programs (many of them) they tell me its not worth doing a roth conversion while staying in 12 % bracket. WHat am i doing wrong?
That's tough to say without knowing all of the details and doing the calculations myself. Those calculators could be assuming that future tax rates are low for some reason, but I can only guess. The more advanced the calculator, the more moving parts. For example, Right Capital or New Retirement should be able to provide some helpful guidance once you get the numbers/assumptions in the way you want.
Wish social security was that high in Canada I have made more than her and I would make 690 a 60 years old
Yes. I was surprised that the benefits in Canada for CPP and OAS were so much less than SS.
I think you need at least $15 million to retire comfortably!
Lol
That puts you in the top 1%
According to the investors busines daily the average is $500,000 in 2021
Really? How much do you plan on spending? Will you have your house paid off? You will likely have less taxes. No SSA payroll deductions.
@@toantruong4370no you need that much to retire not we😂 you work all your life and speak for yourself
there's no utility in comparing what you saved versus median or average on the survey, since it has zero impact on your situation. So saying that having a million dollars saved puts you in a relatively good position is absolutely meaningless, since it is just comparing yourself against someone else. Yes, you are in a better situation than other people, but there's like no utility in that comparison. i enjoyed the rest of the video though.
Please stop with the whole "you need a million dollars to retire" stuff. It isn't true and it's never been true. I retired almost 8 years ago and have not touched a dime of the retirement savings. That basically means If I only had 10 bucks in my savings I would still have the 10 bucks. The key to a smooth retirement is being debt free by the time you walk away from your job. Just remember, it matters more how much you owe than it does how much you have.
Get real ,really a million?
Truth is Jane is cutting it too close. She should work longer. ..As far as LTC she would probably become a ward of the state...
LTC is certainly one of the biggest challenges in retirement. She has her home equity, but we don't really dive into those details, and there are a lot of unknowns. How much is the property worth, and how would she access that money? Will she just need help around the house for a few hours, or will she need round-the-clock supervision and care in a facility? Does anybody else need to live in the home, etc.? That would all be worth examining.
She isn't cutting anything close. She's in her early 60s with $1 million, social security at full retirement age for people able accumulate that type of nest egg will be in the $2000 to $3000 range. Assuming she will get $2500 a month and her expenses are $3800 per month plus $500 for medical coverage on the ACA so $4300/month is what she needs from savings until she reaches age 65 and goes on Medicare. That drops her monthly expenses to about $4000/month. Age 67 she gets $2500/month from social security leaving only $1500/month she needs to pull from her savings. She can solidly retire.
I totally disagree. She could probably retire a year earlier if she wanted to. Also, LTC is not always needed. If you maintain a healthy lifestyle and don't let yourself fall apart, most people can maintain a high level of vitality until the very end. We are so use to seeing people spend their last several years in a terrible state that we've forgotten that it doesn't need to be that way. That kind of deterioration is often self-inflicted by poor lifestyle choices. In any case, all the different variables that can be tweaked, as illustrated in this video, pretty much prove that you can retire with confidence with even less than a million, as long as you are flexible, willing to make changes in real time, based on current market conditions, etc.