I retired at63, I was totally burned out as a nurse...I needed to for my health...within 1 year I lost 25 pounds of stress weight...7 years later I have been practicing yoga 3-5 times a week for 19 months and I am in the best health ever, and no stress...I am happy, I laugh, and enjoy life
Congratulations. Just left ER nursing myself after 30 years. I agree with the burnout you feel. Did you have 8-9X your income when you retired? Did you feel comfortable with your decision? If yes, are you still comfortable. I’m soon to be 58 and seriously considering retiring. I’m doing nurse advice line currently but wonder if I have enough already. Love to know your thoughts.
I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than a million dollars by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like *Layan Talia Chokr* who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Fidelity is assuming you've gauged your expenses based on your income, which a growing number have not with record debt. I've had a Fidelity 401K with past companies for over 30 years, now IRA. I followed their guidelines when I retired at 64 and after 6 years haven't needed any of it because of like you said, rental, pension and SS. Glad your bringing this up to get people to save, but also look for alternate income streams in retirement, not on the (Dave Ramsey) "roller coaster". Great video.
Great information and additional detail on these guidelines! These numbers can definitely be used for ballpark information prior to hitting the retirement red zone - but once you are within 10 or so years of retirement it is best to start using more robust calculators and more specific numbers to you (as you indicated). Love the bloopers!!
Thank you for this video Erin! I guess I'm doing good then, I have 20 time my salary and going to retire at 60 the end of this year! Also, love the bloopers at the end!!
Thanks for your often overlooked perspective on this. As a 50 year old I would need : 60,000 salary = 360,000 200k salary = 1.2 m That’s a very large swing and doesn’t take into account just how stingy I plan to be in retirement and my willingness to subsist on ramen noodles if it means I can retire early :)
@@jhammons2310 no. In those numbers I was noting that based on the multiplier rules by age someone on a 60K salary would need to have 360K saved while someone with a current 200k salary at age 50 would need to have 1.2 million saved and noting just how large of a gap that is between the needs to two different people who MAY have the same expenses in retirement. It’s more of a critique of the assertion that one formula (multiplier) works for everyone.
Erin I like how you provide different aspects in your conversations about retirement options. I for one will be retiring as soon as I can. After a career in the military, 24 years, too many injuries to discuss, and the inability to believe or continue to work in a society driven off of selfish ambitions. Currently working for the DoD and will retire shortly after reaching my MRA +10 which I will reach in the next couple of years. Very fortunate to also be building a fun money nest egg from my TSP. Keep up the good work.
Like most planning websites they use withdrawal rates that are off course and usually upside down. Using firsthand experience from our retirement group, normal you start out on the higher withdraw rate and drop off as you get older. Key is don't go into retirement with debt or bare minimum at least and educate yourself on the subject and get a flexible plan, crap happens. If you can't do that hire a CFP, but interview at least 3 or 4 and see how their plans are different. Great Insite on all your videos.
People that think that at 70 they are going to travel around the world and do all of these kind of things, I think they're kidding themselves. First they have no idea how their health is going to be when they reach that age and what kind of limitations that might put on them. To me it really makes more sense to retire at 55 and enjoy those next 15 years and then come up with some kind of a side hustle or part-time job at 70 if you need it.
Erin, great video! It’s interesting because then you have to factor in a couple vs being single. It may make a difference when each collect ss. I’m actually thinking of retiring at 58 and my husband will work a few more years and is five years older than I. My 401k doesn’t have any where near amounts here but hope to hold off from touch it for 5 years since we will have my husband’s salary and pension to carry us over that time. Need to be careful with budget but hope should work and then add in ss.
My goal is 59.5. Or at least switch careers by then and do something else with more life flexibility. I doubt we will hit those earning / age milestones by Fidelity. We might come close if you take what we make and subtract the investment contributions for retirement and our mortgage. The amount left over multiplied by the Fidelity guidelines is closer, but still a little short.
Your income at retirement really means nothing if you don't need that income. I paid off my home prior to retirement and had an excess of disposable income. What I needed after retirement was far lower than what I made during my working years. It's all about the expenses. Nothing else really.
The basic premise here is that you will need to generate income in retirement to cover your expenses, since you are no longer working to generate that income. You need a nestegg of $x in order to generate enough income to pay for those expenses. It's dumbfounding that people don't understand this. Based on SSA's current data from July 2024, the average ss check rounded up is $21,400/yr at 65yo (which equates to last salary of $57k/yr). If your retirement expense need is $45,600k/yr (80% of $57k/yr income) based of of Fidelity's guide, you need $24,200/yr income from your investments, which equates to at least $605k in investable assets for a 4% safe withdrawal rate. Fidelity's guide at 65yo 8x of $57k/yr is $456k savings. A 4% safe withdrawal rate investment income plus social security combined equals $39,640/yr or 69.5% of $57k/yr active work salary. So, even though Fidelity assumes 80% salary in retirement, it actually comes out to be 69.5% when you use actual, current SSA data on ss checks if you use Fidelity's x-factor.
Agree… there’s no way we’re going to have anything close to this. But, we’re saving roughly 20 percent of income now in retirement accounts, will have house hopefully paid off, and kids through college. So, I’m thinking I’ll need 1/2 of what fidelity estimates. Plus, they don’t factor in other income sources like pension. It’s in fidelity’s best interest to overstate what someone needs for retirement as that’s how they generate income.
I would like to retire from at 55 and hopefully find a job I really enjoy! It is nice to know a few more years can really make a difference though! Please don’t run out of air on us Erin😂
@silentnot4812 well if you look at what you can spend, I could bankrupt myself in 6 months. Pay down debt before you retire. If you're planning on future large purchases, you better reconsider retirement
@@craigschray4486 It's a balance of both. Future large expenses happen, whether you plan on them or not. Cars die, houses need major repair, health concerns arise. Multiples of income seem to exaggerate what's needed, but calculating from present expenses means you'll have no buffer space in the future. Shoot for the middle, give yourself some breathing room.
Absolutely. However, most people don't know what their expenses are, let alone will be in the future, so that is VERY difficult to plan for. Most people do, however, understand their income, and what they can spend - or allow their expenses to be - relative to that income, which is why income is used as the base metric. We just understand it better intuitively.
@@VernonJettlundsure you can. My credit union has my regular withdrawals like utilities... etc. I've studied my expenses for many years and have a pretty good understanding of my 'unplanned ' expenses like family entertainment... eating out.... etc. True, you can never know down to the last dollar. But you can get pretty close
@@craigschray4486 oh, you absolutely *can*, my point is that few people *do*. Most people spend up to their income (or beyond), and their spending grows with their income - just look at the statistics for how many people who are living paycheck to paycheck. As such, it makes more sense - assuming your goal is to communicate with and have the most impact with the most people - to address it from the income side, because for the people who don't know what they spend, they are far more likely to understand what they can afford based on what they make.
I see posts from a lot of people that feel that social security is trying to cheat them out of their benefit, that they want you to wait until 70 because you'll likely die before you collect your benefit. The real answer is that social security is giving you a choice, realizing that everyone's circumstances are different. You get to choose which is best for you.
My wife and I retired at 55, no regrets. Now 16 years later, it has just gotten better. P.S. your info would have shown (I think- no info for 55) we were ok with our nest egg.
What's kind of weird about these benchmarks is that once you hit one, the rest are pretty close to being inevitable unless you have large jumps in income. For the example case where the person makes the same salary adjusted for inflation their whole career, as long as they have 1x at 30, then *even without saving another dime* at an annualized, inflation-adjusted 7.2% rate of return, they will have 8x at 60. Even if, once you hit 1x at 30, you only contribute enough to max out an employer match, you'll still blow way past the later benchmarks. So these things are handy to have early in your financial journey, but later on it makes way more sense to focus on expenses. And even then you can't often can't use your current expenses to estimate unless you're very close to retirement! For example my wife and I are in our early 40s with 4 kids (and all of their food, clothing, school, and activities) in our house with a mortgage. By age 55 we will likely have zero kids in a fully paid-for house. Our expenses in retirement are going to bear very little resemblance to how they look now!
At age of 35, we got similar advice from our investment adviser, a large West Coast Bank. It didn't work. At 42, we had to start all over again. Just be careful if somebody bases your financial future on unrealistic interest rate. Thank you
If you have rental properties take the net income divided by the value and work that number into the 4% rule. Gives you an easy way to line it up with the numbers everyone uses with the stock market.
Somewhere between 47 and 54 months, but who is counting. 47 months keeps my medical school student on my insurance until he graduates. 54 months gets me to another pension, albeit small. The oldest I will be is 61. Living debt free and continuing to contribute to investments has been the key to confidence in early retirement.
I retired at 57 and an intake of just 40% of my pre-retirement income is plenty for me. I am definitely middle-class, not high income by any stretch of the imagination. The 80% replacement rule probably scares people unnecessarily.
Studies show most seniors don't spend anywhere near 80% of what they used to make, and what's needed is actually closer to 50%! Obviously that number will vary depending on your desired lifestyle and situation, so you have to actually add up your expenses to find out....
For me when I retire I’m going to immediately stop paying 7.62% of my income into Social Security and Medicare and another 5.5% of my income into my Roth IRA. That is slightly over 13% of my income that I won’t be “spending” in retirement. I also won’t be investing in my 401k plan which is another 25% of my income. I might need to replace 62% of my income when I retire at the most, which is much less than the 80% rule.
Fact! For those who lived on a budget, meaning far less than they earned, the 80% rule is nonsense. I'd have to almost double my spending to use 80% of current income.
For those that have been living below their means (with the goal of retiring early) certainly don't need those income multiplier numbers. Knowing your current spending is far more important than knowing your current income.
My wife and I are both 68. We both retired at 62. Currently both drawing SS, and my wife receives a monthly pension from being a banker for 25 years. The house is owned F/C. It’s not necessary for either of us to draw from our retirement accounts, our monthly income far exceeds our expenses. Life is good.😊
Retiring at 65. Not looking to "preserve" my portfolio. Both of my kids are doing better than me, so they don't need or want any money from us. I plan on spending the money. Not all of it. Current calculations, not accounting for growth, I will have several hundred thousand dollars left when I start taking SS at age 70. My SS and my wife taking half of mine will net us more income than what we have lived on to date. Plus, no mortgage, lower utility costs and a simple lifestyle will still let us leave something for the kids. Good video, Erin. There really is a lot to unpack and number's presented have to be applied to each person's situation. After all, 10x someone making $60k is much different than 10x someone making $160k, right?
Excellent video. The thing I worry about is inflation. I don’t think we ever get accurate data from the goverment about the real rate of inflation. Saying it’s 2 to 3 percent is a joke.
It Does depend...in retirement are you planning to travel, have season tickets, get your pilots license...OR...sit on your frontporch drink lemonade and watch the birds? I'm Not saying one is better than the other just different and needing different amounts of $$$. Also, geography plays a huge role. San Fran is different than Omaha.
It's about time someone went into detail on this. The basic fidelity model that is routinely referenced by many of the TH-cam financial content creators is over-simplified and misses what you've explained. You are the first one I've seen that actually points out the longer you wait to retire the less you need because you have fewer years in retirement. Excellent job, well done.
Yeah, the "it depends" is tricky... These general rules are interesting and great to see as a general guide... But like us for instance, we have pensions in play which as you mention will totally change these type of things... But it is still interesting to see the median type of guides. We just have to remember that it doesn't totally apply to us.
I'm aiming for 51. It all comes down to whether I have enough money to generate a passive income I can live on. I don't plan on reducing my principle during retirement. I plan to keep growing it, then passing it on to my daughter when I die.
I think I'll technically be able to retire by then, but I doubt I'll want to. I think the mere change from "working because I have to" to "working because I want to" will be enough to keep me going another decade or so. If I can keep my will power going through 67, I'll have me a country club retirement 🧐
@@bvoyelr I hope it works out for you. I’m only retiring from working for other people. I still plan to make custom knives until I’m physically unable.
51... nice and early! How many times the 70K example figure would one need for that....? And keeping principal intact implies a withdraw rate equal to or lower than your locked in yields.... sound right?
Can you do a story on the importance of having a summer job in high school? Back in the 1970s, you needed a B average to work in a fast food restaurant. You coveted that type of job. Now a HS by me has summer football workouts in the morning and lifting in the evening just about all summer long. Atheltes cannot work summer jobs.
Interesting! I don’t know if I could do this subject justice. I held summer jobs and jobs throughout the school year when I was a high school student, but none of mine had a GPA requirement. I certainly don’t like the idea of high school sports saying that athletes are unable to have jobs in the summer. I think having a job as a teen and still a lot of really great work ethic and responsibility. (I also think team sports build a great deal of character.) so, I find this really interesting.
in the 70s and 80s seems to me most people working had lower than B averages, because they were working to offset lower family household income. Hogwash that athletes cannot work summer jobs. I had a full time job throughout high school as well as summer and I was training year round at an elite level. It's a matter of choice, not a matter of ability to work. There's plenty of time in the day.
@@ErinTalksMoney Erin, With you living in Rhode Island, I believe lacrosse is the most popular sport up their with ice hockey. Lacrosse is easy to play year round with indoor facilities. Stop by the local high school and chat with boys and girls' lacrosse players and see how they balance having a job and playing lacrosse.
Eons ago I noticed several of my dads co workers died 5 years after retirement. Then the same thing happened to my dad. I retired over 15 years ago. And D* glad that I did.
I've saved way more than I need based on those multiples. We live on a budget of 84k a year, and I've saved enough to retire at 120k a year. It is good to know if things don't go well, there will be a way to budget and make it on less.
Vanguard certainly does offer guidelines, they don’t seem to display it in a table format that has been so widely popular as Fidelity’s. But they certainly do give similar information, just in written format.
It depends 80% on your expenses where you live etc. What state you live in, plus urban, vs. suburbs vs. countryside. A significant category (perhaps the largest) not specifically covered here is for married couples with elderly parents needing care. A couple can also be different ages with one retired and the other not; one on Medicare and the other not, etc. and all permutations between. How to manage withdrawals while one person is still working but not making enough to support the family on their own, then increase the withdrawals when both are retired? Complicates SS taxes filing jointly too. Another common scenario is taking care of elderly parents who are living off SS income and do not have funds to pay for assisted living or a nursing home? This seems like a common scenario that can significantly affect couples in the first decade of retirement. I would though assume a combined retirement nestegg for a couple, and a modest increase in expenses (two mouths, two medicare, two cars, etc.), but lower taxes.
Now in my early 60's, I retired last year. My goal is to never touch any of my retirement accounts (a Rollover IRA and 457 plan), until the year of mandatory withdraws at age 75. Currently, my monthly expenses are fully coved using both my private sector and public sector pensions. In December 2024, my monthly social security will start and be deposited into a high yield savings account (smile ... smile).
You should probably check out the windfall elimination provision. It very well could wipe out your Social Security. Worth looking into so you don’t get blindsided.
I would love to see you do a video on how a military pension and or VA disability would and can affect the expect magic investment retirement numbers. Thanks!
Fidelity's guide is based on someone expecting to only life off of investable assets and social security. Now, you can replace your investable asset requirement with your military retirement income and VA disability if you want, but that is not the basic premise of Fidelity's guide.
I think that the Fidelity tool is useful. I would change one element from salary to expected expenses (spend) in retirement. I realize not everyone knows what their expenses will be once retired, but you could potentially estimate it based your current expenses minus some items you wont continue to spend on and maybe new items you will spend on (e.g. travel) once retired.
You nailed it, I have been retired for 2 years now and my plan had me spending over 108K a year, after two years I have not hit 90K a year. The best thing we did was get a Gym membership with a pool, we spend time there six days a week and with all our other activities we find it's just better to come home make dinner, and crash by 10 each day.
@@kirklandphil Great call on the gym membership! I’m fortunate that my former employer allows retirees to use the company gym at no cost. That is my continued investment in my health. I just retired in June of this year and I spent a good deal of time looking at our spend about 2 years prior to the actual retirement date. So far, we are actually spending a little under my estimates.
Those targets drive me a little nuts. They are particularly hard for those of us who were low income for the first decade and a half of working. If your income rises significantly, the saving targets quickly become much higher. So instead of a 20% savings rate, I’m now closer to 40% and still behind.
"It Depends". Absolutely! Say if you make 1 Million dollars per year and decide to retire at age 62, (as per Fidelity's calculation) you should have saved 14 Million dollars! Wow! Your chances of running out of money would be slim I guess. Fidelity should have made specific brackets of different ranges of income, so that their study/analysis would make sense at most levels.
Fidelity's suggested withdrawal rates are WAY too conservative. They just want to keep more of your money for longer, at the expense of your retirement lifestyle, because holding your money makes them money. You need to go far beyond Fidelity's cookie-cutter recommendations when building your own retirement plan. As Erin says, a market dependent flexible withdrawal strategy will allow for more spending in retirement, overall, while reducing your risk of depleting your funds too quickly. I will definitely utilize a dynamic spending strategy when I retire.
Good rule of thumb, but dosn't take into account pensions. My wife and I will have both a military and Fed civil service pension, in addition to our TSP portfolios. Good thing is, even without our pensions calculated in, we meet the retirement savings base. Well set for retirement!
You can’t cover it all Erin, but building generational wealth can also be a factor. Those of us baby boomers who believe we had it easier, want to ensure our offspring have added financial stability, by preserving all our principal (even adjusted for inflation). And this legacy can build a brighter future indefinitely. So aiming for 7-8% rates of return on an investments, while withdrawing 4% or less for retirement income, ensures at least 3% growth to offset inflation. Thus protecting ‘all’ principal going forward. Peace John
I plan to retire as late as possible like 70. But at the same time, I would like to have investments that would help me pay basic expenses as maintaining my home and food. No, there is no formula....it's very personal. I'm not counting on collecting ss.
Savings 20% would give you 1X every 5 years. I started at 26, but this past year I had to give up about $20K for a medical bill, since I had a "health sharing" company, not actual health insurance. I have an HSA now, so I'm maxing out my HSA and 5th year maxing out my Roth IRA now. (I'm 30 years old).
I just retired. At 67. At first I felt guilty but now I am glad. I have almost 18 times my income . An investment property almost paid off and same w home. I think I will be ok.
Actually, penalties and delaying credits are both figured up on a monthly basis. However, the delaying credits are only added to your benefit in January each year. The exception to this is waiting until 70 to collect. Your first check after you turn 70 has all of your accumulated credits added to it.
I actually had a discussion with an estate planning attorney recently about long-term care insurance and whether it was worth it nowadays. Perhaps this could become a video. I know it’s a question a lot of people consider. Thank you so much for the suggestion!
@@ErinTalksMoney I think that the cap on total benefits that most policies have has become quite low, relative to costs of LTC, and this make me wonder what the actual value of these policies is? I would enjoy getting your take.
I knew a woman approaching 65 and had nothing saved. The only asset she had was a decent condo in western Massachusetts, but I think that was only worth about $300-350K. And with it having an HOA, I imagine it would be harder to sell these days
I like the idea of having an emergency fund that suits the needs of you or your family. Making it specific to your household. so I think something more in the idea of basing it off your expenses is better than an arbitrary number. And whether that looks like three months or six months or even longer, depends on your family dynamics, and your career field.
Great video, Erin, but I have a question. If the savings factor at 62 is 14x, what is that savings factor at 55, or at 60? Some of your fans may want to retire before 62. Thank you!
look at the video @ 0:15. Keep in mind that the chart is based off of retiring at 67yo, so the multipliers are progressive leading to retiring at 67yo. If you are planning on retiring earlier than 67yo, then the chart isn't for you. The chart doesn't mean you need $x at 62yo to retire at 62yo.
I aim to retire at 55 years old. My wife and I are 41. Our only child, my daughter, will be 18 and moving on to do something bigger and better with life.
Disagree with Fidelity, though I’ve not read the “nitty gritty”. Everyone’s situation is different and these blanket 10x, 14x, etc. recommendations mislead individuals. Agree with you Erin that the required amount needed is based on EXPENSES. That’s the first question that needs to be answered, yet the vast majority of financial advisors don’t ask it. If one has annual expenses of say, $40k, and the plan is to withdraw 4% (too low in my estimation for 25-30 year retirement) then the required amount needed would be $1M (25 x $40k). This may or may not be anywhere near the 10x income of the retiree at 67yo. The amount needed is driven by the individual’s annual expenses, not a general “x-income” factor. The latter could be way off, either in a good or bad way.
My formula : Annual salary minus savings. Adjust for any debt, that should be paid off by then. Realistic guess for what age you will live to, Add 5 years. You need that amount of money, for that amount of years. Hit the charts and do the math.
If you own your home and have no other debt, I feel I can retire at 62 with my current savings which is not at what Fidelity recommends. Taxes, utilities, fun stuff is all I will have and still room for home and car repairs.
I retired at age 61, with much more than Fidelity recommends. If you are good saver, you can get to 15, 20, or 25 times your salary by age 60. Compounding is very powerful, and many people have retired at even younger ages.
I don’t understand. The fidelity chart says “starting salary”. What starting salary are they talking about? My salary is 20 times what I started at and will increase over the next 7 years til mandatory retirement at 65. I think I am on track with 10% average growth in my investments but my income is non-traditional and non linear.
starting salary for the x multiplier age group. So, when your salary changes at the start of each age group, then that is what you use with the multiplier for that age group.
Just to confirm, the "x" is starting salary, not the current salary, correct? I get a 3% raise every year, so over time that salary can change significantly and effects the calculations.
x starting salary is the starting salary for the age group. If you make $50k at 30yo, then 1x$50k if you are 30-34yo. As your pay increase say to $60k at 35yo, then 2x $60k if you are 35-39yo, and so on.
I got retired at 59, because I was born in 1950, I was able to collect 50% of my wife's SS when she started to collect at 63. I waited until 70 to take my SS. We use SS for 80% of our spending needs. We now live in Florida, so no state taxes on SS.
@@timdeneau5552 I understand what you were talking about. But your tagline was about the state income tax situation on social security in Florida. My post was directly to that and to that only. There are about two dozen states, maybe three dozen, that do not tax social security income. There may be differences in sales taxes and property taxes. So if a person is letting taxes influence the decision on where to retire the total picture needs to be considered. In spite of its reputation I was surprised the New York state is relatively friendly to retirees.
I'd love to retire early, but in my head I'm looking forward to retiring at 65. Then maybe wait till I'm 67 for the full social security amount if it even exists when I retire lol. If SS doesn't exist I'd consider working till 67 as long as I enjoy my job which I currently do.
I think the target retirement savings number should be based off what you are living on and not your gross or even net salary. If your making for example a 100k but after taxes and savings contributions your living on 50k then that is the number to compute from.
I would factor in some extra money for each year in retirement for paying taxes. You still pay taxes in retirement, it just may be a lower tax burden, but still a burden nonetheless. You won’t have 50K to spend in retirement if you don’t account for covering taxes.
@@benmccarty4598 well in my case I intend on living on SS only so I won’t be paying taxes. And what taxes I’ll end up paying on my IRA will come from the IRA at RMD time. In my case SS will actually be money than I’ve lived on due to my high rate of savings.
The VERY FIRST thing you need to do is to STOP saying "with an income of X" because what they will need in retirement may be COMPLETELY DIFFERENT than when they were working. Saying that X made $150K when he was working means that he/she will need Y in retirement whereas someone else making A making $60K needing B... NO! Both A & X can retire on the EXACT SAME amount in retirement because neither will have ANY debt nor any loans nor any car payments nor.... The REAL question should be "What do you project you will need in retirement" and then model to that!
I retired at63, I was totally burned out as a nurse...I needed to for my health...within 1 year I lost 25 pounds of stress weight...7 years later I have been practicing yoga 3-5 times a week for 19 months and I am in the best health ever, and no stress...I am happy, I laugh, and enjoy life
Congratulations. Just left ER nursing myself after 30 years. I agree with the burnout you feel. Did you have 8-9X your income when you retired? Did you feel comfortable with your decision? If yes, are you still comfortable. I’m soon to be 58 and seriously considering retiring. I’m doing nurse advice line currently but wonder if I have enough already. Love to know your thoughts.
I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than a million dollars by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like *Layan Talia Chokr* who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
Fidelity is assuming you've gauged your expenses based on your income, which a growing number have not with record debt.
I've had a Fidelity 401K with past companies for over 30 years, now IRA. I followed their guidelines when I retired at 64 and after 6 years haven't needed any of it because of like you said, rental, pension and SS. Glad your bringing this up to get people to save, but also look for alternate income streams in retirement, not on the (Dave Ramsey) "roller coaster". Great video.
Great information and additional detail on these guidelines! These numbers can definitely be used for ballpark information prior to hitting the retirement red zone - but once you are within 10 or so years of retirement it is best to start using more robust calculators and more specific numbers to you (as you indicated).
Love the bloopers!!
Thank you for this video Erin! I guess I'm doing good then, I have 20 time my salary and going to retire at 60 the end of this year! Also, love the bloopers at the end!!
Totally retiring at 55. Still have to figure out what I’m retiring too, but I think I can develop a plan.
I left at 55, get a hobby it is boring at first.
Thanks for your often overlooked perspective on this. As a 50 year old I would need :
60,000 salary = 360,000
200k salary = 1.2 m
That’s a very large swing and doesn’t take into account just how stingy I plan to be in retirement and my willingness to subsist on ramen noodles if it means I can retire early :)
Uhhhh you’re gonna withdraw 16%..? I wish you good luck but you’re gonna have to shoot the moon to not be broke in 10 years
@@jhammons2310 no. In those numbers I was noting that based on the multiplier rules by age someone on a 60K salary would need to have 360K saved while someone with a current 200k salary at age 50 would need to have 1.2 million saved and noting just how large of a gap that is between the needs to two different people who MAY have the same expenses in retirement. It’s more of a critique of the assertion that one formula (multiplier) works for everyone.
You are one smart lady...love how you do your homework!
Erin I like how you provide different aspects in your conversations about retirement options. I for one will be retiring as soon as I can. After a career in the military, 24 years, too many injuries to discuss, and the inability to believe or continue to work in a society driven off of selfish ambitions. Currently working for the DoD and will retire shortly after reaching my MRA +10 which I will reach in the next couple of years. Very fortunate to also be building a fun money nest egg from my TSP. Keep up the good work.
Thank you so much for your service! 24 years in the military isn’t incredible stretch, and certainly required a great deal of sacrifice!
This is great video because it shows you how much you need to live the same way in retirement as you did with a paycheck.
Like most planning websites they use withdrawal rates that are off course and usually upside down. Using firsthand experience from our retirement group, normal you start out on the higher withdraw rate and drop off as you get older. Key is don't go into retirement with debt or bare minimum at least and educate yourself on the subject and get a flexible plan, crap happens. If you can't do that hire a CFP, but interview at least 3 or 4 and see how their plans are different. Great Insite on all your videos.
Go Go years until. 70, after that folk generally slow down hence expenses fall. I retired early at 55 to enjoy this precious phase in life.
People that think that at 70 they are going to travel around the world and do all of these kind of things, I think they're kidding themselves. First they have no idea how their health is going to be when they reach that age and what kind of limitations that might put on them. To me it really makes more sense to retire at 55 and enjoy those next 15 years and then come up with some kind of a side hustle or part-time job at 70 if you need it.
What was your retirement savings vs. Life style. This is the question
Love the outtakes at the end!😂
Thanks for the reasonable info. I just subscribed-
Welcome to the channel!!
Erin, great video! It’s interesting because then you have to factor in a couple vs being single. It may make a difference when each collect ss. I’m actually thinking of retiring at 58 and my husband will work a few more years and is five years older than I. My 401k doesn’t have any where near amounts here but hope to hold off from touch it for 5 years since we will have my husband’s salary and pension to carry us over that time. Need to be careful with budget but hope should work and then add in ss.
My goal is 59.5. Or at least switch careers by then and do something else with more life flexibility. I doubt we will hit those earning / age milestones by Fidelity. We might come close if you take what we make and subtract the investment contributions for retirement and our mortgage. The amount left over multiplied by the Fidelity guidelines is closer, but still a little short.
Your income at retirement really means nothing if you don't need that income. I paid off my home prior to retirement and had an excess of disposable income. What I needed after retirement was far lower than what I made during my working years. It's all about the expenses. Nothing else really.
Good point
Came here to say pretty much this. The income multiple is the dumbest thing ever; it should be based on expenses.
The basic premise here is that you will need to generate income in retirement to cover your expenses, since you are no longer working to generate that income. You need a nestegg of $x in order to generate enough income to pay for those expenses. It's dumbfounding that people don't understand this. Based on SSA's current data from July 2024, the average ss check rounded up is $21,400/yr at 65yo (which equates to last salary of $57k/yr). If your retirement expense need is $45,600k/yr (80% of $57k/yr income) based of of Fidelity's guide, you need $24,200/yr income from your investments, which equates to at least $605k in investable assets for a 4% safe withdrawal rate. Fidelity's guide at 65yo 8x of $57k/yr is $456k savings. A 4% safe withdrawal rate investment income plus social security combined equals $39,640/yr or 69.5% of $57k/yr active work salary. So, even though Fidelity assumes 80% salary in retirement, it actually comes out to be 69.5% when you use actual, current SSA data on ss checks if you use Fidelity's x-factor.
Agree… there’s no way we’re going to have anything close to this. But, we’re saving roughly 20 percent of income now in retirement accounts, will have house hopefully paid off, and kids through college. So, I’m thinking I’ll need 1/2 of what fidelity estimates. Plus, they don’t factor in other income sources like pension. It’s in fidelity’s best interest to overstate what someone needs for retirement as that’s how they generate income.
I completely agree. Projected expenses is what matters, not current income.
I would like to retire from at 55 and hopefully find a job I really enjoy! It is nice to know a few more years can really make a difference though! Please don’t run out of air on us Erin😂
Simple, easy to understand, and informs educated decisions. Thank you!!
Thank you so much!
Thank you. I appreciate these types of conversations. Hope 2025 is a great year for you
Thanks for this great video.
Expenses matter people. Way more than a multiple of an income.
@silentnot4812 well if you look at what you can spend, I could bankrupt myself in 6 months.
Pay down debt before you retire. If you're planning on future large purchases, you better reconsider retirement
@@craigschray4486 It's a balance of both. Future large expenses happen, whether you plan on them or not. Cars die, houses need major repair, health concerns arise. Multiples of income seem to exaggerate what's needed, but calculating from present expenses means you'll have no buffer space in the future. Shoot for the middle, give yourself some breathing room.
Absolutely. However, most people don't know what their expenses are, let alone will be in the future, so that is VERY difficult to plan for.
Most people do, however, understand their income, and what they can spend - or allow their expenses to be - relative to that income, which is why income is used as the base metric. We just understand it better intuitively.
@@VernonJettlundsure you can. My credit union has my regular withdrawals like utilities... etc.
I've studied my expenses for many years and have a pretty good understanding of my 'unplanned ' expenses like family entertainment... eating out.... etc.
True, you can never know down to the last dollar. But you can get pretty close
@@craigschray4486 oh, you absolutely *can*, my point is that few people *do*. Most people spend up to their income (or beyond), and their spending grows with their income - just look at the statistics for how many people who are living paycheck to paycheck.
As such, it makes more sense - assuming your goal is to communicate with and have the most impact with the most people - to address it from the income side, because for the people who don't know what they spend, they are far more likely to understand what they can afford based on what they make.
I see posts from a lot of people that feel that social security is trying to cheat them out of their benefit, that they want you to wait until 70 because you'll likely die before you collect your benefit. The real answer is that social security is giving you a choice, realizing that everyone's circumstances are different. You get to choose which is best for you.
Always always so informative. And you look amazing by the way.
Thank you so much!
My wife and I retired at 55, no regrets. Now 16 years later, it has just gotten better. P.S. your info would have shown (I think- no info for 55) we were ok with our nest egg.
This one was awesome thanks Erin!
You're so welcome!
What's kind of weird about these benchmarks is that once you hit one, the rest are pretty close to being inevitable unless you have large jumps in income. For the example case where the person makes the same salary adjusted for inflation their whole career, as long as they have 1x at 30, then *even without saving another dime* at an annualized, inflation-adjusted 7.2% rate of return, they will have 8x at 60. Even if, once you hit 1x at 30, you only contribute enough to max out an employer match, you'll still blow way past the later benchmarks.
So these things are handy to have early in your financial journey, but later on it makes way more sense to focus on expenses. And even then you can't often can't use your current expenses to estimate unless you're very close to retirement! For example my wife and I are in our early 40s with 4 kids (and all of their food, clothing, school, and activities) in our house with a mortgage. By age 55 we will likely have zero kids in a fully paid-for house. Our expenses in retirement are going to bear very little resemblance to how they look now!
At age of 35, we got similar advice from our investment adviser, a large West Coast Bank. It didn't work. At 42, we had to start all over again. Just be careful if somebody bases your financial future on unrealistic interest rate. Thank you
If you have rental properties take the net income divided by the value and work that number into the 4% rule. Gives you an easy way to line it up with the numbers everyone uses with the stock market.
Somewhere between 47 and 54 months, but who is counting. 47 months keeps my medical school student on my insurance until he graduates. 54 months gets me to another pension, albeit small. The oldest I will be is 61. Living debt free and continuing to contribute to investments has been the key to confidence in early retirement.
I retired at 57 and an intake of just 40% of my pre-retirement income is plenty for me. I am definitely middle-class, not high income by any stretch of the imagination. The 80% replacement rule probably scares people unnecessarily.
Studies show most seniors don't spend anywhere near 80% of what they used to make, and what's needed is actually closer to 50%! Obviously that number will vary depending on your desired lifestyle and situation, so you have to actually add up your expenses to find out....
For me when I retire I’m going to immediately stop paying 7.62% of my income into Social Security and Medicare and another 5.5% of my income into my Roth IRA. That is slightly over 13% of my income that I won’t be “spending” in retirement. I also won’t be investing in my 401k plan which is another 25% of my income. I might need to replace 62% of my income when I retire at the most, which is much less than the 80% rule.
Fact! For those who lived on a budget, meaning far less than they earned, the 80% rule is nonsense. I'd have to almost double my spending to use 80% of current income.
For those that have been living below their means (with the goal of retiring early) certainly don't need those income multiplier numbers. Knowing your current spending is far more important than knowing your current income.
My wife and I are both 68. We both retired at 62. Currently both drawing SS, and my wife receives a monthly pension from being a banker for 25 years. The house is owned F/C. It’s not necessary for either of us to draw from our retirement accounts, our monthly income far exceeds our expenses. Life is good.😊
Retiring at 65. Not looking to "preserve" my portfolio. Both of my kids are doing better than me, so they don't need or want any money from us. I plan on spending the money. Not all of it. Current calculations, not accounting for growth, I will have several hundred thousand dollars left when I start taking SS at age 70. My SS and my wife taking half of mine will net us more income than what we have lived on to date. Plus, no mortgage, lower utility costs and a simple lifestyle will still let us leave something for the kids. Good video, Erin. There really is a lot to unpack and number's presented have to be applied to each person's situation. After all, 10x someone making $60k is much different than 10x someone making $160k, right?
Life is good ! They say making and accumulating money is the easy part..Holding onto $$ is harder.
Excellent video. The thing I worry about is inflation. I don’t think we ever get accurate data from the goverment about the real rate of inflation. Saying it’s 2 to 3 percent is a joke.
The bloopers are back!
Great content, and yes please continue to breath!
😂
Loved the dramatic zoom at 6:18 too
It Does depend...in retirement are you planning to travel, have season tickets, get your pilots license...OR...sit on your frontporch drink lemonade and watch the birds? I'm Not saying one is better than the other just different and needing different amounts of $$$.
Also, geography plays a huge role. San Fran is different than Omaha.
Which is better.... VANGUARD or FIDELITY ? Thanks for any infos.
Metrics: love 'em. I've recently been looking at the 'Buffett Indicator'. Subject for a future video, Erin?
It's about time someone went into detail on this. The basic fidelity model that is routinely referenced by many of the TH-cam financial content creators is over-simplified and misses what you've explained. You are the first one I've seen that actually points out the longer you wait to retire the less you need because you have fewer years in retirement. Excellent job, well done.
Thank you so much!! 🙏
@@ErinTalksMoney a well-deserved compliment for a very useful way of understanding the moving targets of your portfolio in retirement.
Adding education support for you kids in college is an added challenging variable. We are leaning on 529 plans.
Once I have done that... the I will look where I am to decide when I can retire.
Yeah, the "it depends" is tricky... These general rules are interesting and great to see as a general guide...
But like us for instance, we have pensions in play which as you mention will totally change these type of things...
But it is still interesting to see the median type of guides. We just have to remember that it doesn't totally apply to us.
Well said!
I'm 55 and shooting for 60. That calculator would be more helpful if it had more options, but it's a starting point...
I'm aiming for 51. It all comes down to whether I have enough money to generate a passive income I can live on. I don't plan on reducing my principle during retirement. I plan to keep growing it, then passing it on to my daughter when I die.
I think I'll technically be able to retire by then, but I doubt I'll want to. I think the mere change from "working because I have to" to "working because I want to" will be enough to keep me going another decade or so. If I can keep my will power going through 67, I'll have me a country club retirement 🧐
@@bvoyelr I hope it works out for you. I’m only retiring from working for other people. I still plan to make custom knives until I’m physically unable.
51... nice and early! How many times the 70K example figure would one need for that....? And keeping principal intact implies a withdraw rate equal to or lower than your locked in yields.... sound right?
Can you do a story on the importance of having a summer job in high school? Back in the 1970s, you needed a B average to work in a fast food restaurant. You coveted that type of job. Now a HS by me has summer football workouts in the morning and lifting in the evening just about all summer long. Atheltes cannot work summer jobs.
Interesting! I don’t know if I could do this subject justice. I held summer jobs and jobs throughout the school year when I was a high school student, but none of mine had a GPA requirement. I certainly don’t like the idea of high school sports saying that athletes are unable to have jobs in the summer. I think having a job as a teen and still a lot of really great work ethic and responsibility. (I also think team sports build a great deal of character.) so, I find this really interesting.
in the 70s and 80s seems to me most people working had lower than B averages, because they were working to offset lower family household income. Hogwash that athletes cannot work summer jobs. I had a full time job throughout high school as well as summer and I was training year round at an elite level. It's a matter of choice, not a matter of ability to work. There's plenty of time in the day.
@@ErinTalksMoney Erin, With you living in Rhode Island, I believe lacrosse is the most popular sport up their with ice hockey. Lacrosse is easy to play year round with indoor facilities. Stop by the local high school and chat with boys and girls' lacrosse players and see how they balance having a job and playing lacrosse.
Thanks, Erin! Looks like I should be able to retire at age 300. 👍
😂😂
Do these numbers assume you own your home? What about those of us who have always rented?
These numbers only consider investable assets. Fidelity does not count equity in one’s home when it comes to the multiple of income rule.
What are their guidelines for early retirement? I just turned 44 and am looking at a 55 retirement.
Eons ago I noticed several of my dads co workers died 5 years after retirement. Then the same thing happened to my dad. I retired over 15 years ago. And D* glad that I did.
I've saved way more than I need based on those multiples. We live on a budget of 84k a year, and I've saved enough to retire at 120k a year. It is good to know if things don't go well, there will be a way to budget and make it on less.
Interesting that I need less saved if I wait longer to retire. I’ve never thought of it that way before.
Depending on government is just crazy
Does Vanguard have a similar table? Would be curious if/how it differs.
Vanguard certainly does offer guidelines, they don’t seem to display it in a table format that has been so widely popular as Fidelity’s. But they certainly do give similar information, just in written format.
It depends 80% on your expenses where you live etc. What state you live in, plus urban, vs. suburbs vs. countryside.
A significant category (perhaps the largest) not specifically covered here is for married couples with elderly parents needing care. A couple can also be different ages with one retired and the other not; one on Medicare and the other not, etc. and all permutations between. How to manage withdrawals while one person is still working but not making enough to support the family on their own, then increase the withdrawals when both are retired? Complicates SS taxes filing jointly too. Another common scenario is taking care of elderly parents who are living off SS income and do not have funds to pay for assisted living or a nursing home? This seems like a common scenario that can significantly affect couples in the first decade of retirement. I would though assume a combined retirement nestegg for a couple, and a modest increase in expenses (two mouths, two medicare, two cars, etc.), but lower taxes.
The bloopers at the end are my favorite part of every video!
Now in my early 60's, I retired last year. My goal is to never touch any of my retirement accounts (a Rollover IRA and 457 plan), until the year of mandatory withdraws at age 75. Currently, my monthly expenses are fully coved using both my private sector and public sector pensions. In December 2024, my monthly social security will start and be deposited into a high yield savings account (smile ... smile).
You should probably check out the windfall elimination provision. It very well could wipe out your Social Security. Worth looking into so you don’t get blindsided.
I would love to see you do a video on how a military pension and or VA disability would and can affect the expect magic investment retirement numbers. Thanks!
Fidelity's guide is based on someone expecting to only life off of investable assets and social security. Now, you can replace your investable asset requirement with your military retirement income and VA disability if you want, but that is not the basic premise of Fidelity's guide.
@@hanwagu9967 I understand the difference, but since she is a military spouse, I thought it would make for some good, deep detailed content.
I think that the Fidelity tool is useful. I would change one element from salary to expected expenses (spend) in retirement. I realize not everyone knows what their expenses will be once retired, but you could potentially estimate it based your current expenses minus some items you wont continue to spend on and maybe new items you will spend on (e.g. travel) once retired.
I think that’s a great addition!
You nailed it, I have been retired for 2 years now and my plan had me spending over 108K a year, after two years I have not hit 90K a year. The best thing we did was get a Gym membership with a pool, we spend time there six days a week and with all our other activities we find it's just better to come home make dinner, and crash by 10 each day.
@@kirklandphil Great call on the gym membership! I’m fortunate that my former employer allows retirees to use the company gym at no cost. That is my continued investment in my health. I just retired in June of this year and I spent a good deal of time looking at our spend about 2 years prior to the actual retirement date. So far, we are actually spending a little under my estimates.
Those targets drive me a little nuts. They are particularly hard for those of us who were low income for the first decade and a half of working. If your income rises significantly, the saving targets quickly become much higher. So instead of a 20% savings rate, I’m now closer to 40% and still behind.
yes, the amount u need to retire answer is ALWAYS “it depends”… every person and income/budget is different… hard to generalize...
Love the bloopers ❤😂
"It Depends". Absolutely! Say if you make 1 Million dollars per year and decide to retire at age 62, (as per Fidelity's calculation) you should have saved 14 Million dollars! Wow! Your chances of running out of money would be slim I guess. Fidelity should have made specific brackets of different ranges of income, so that their study/analysis would make sense at most levels.
Fist comment!! Love the video
61 now. Retiring at 62. Not taking SS until 67. As many have stated, the key is....very little to no debt.
4:38 I'm thinking this has more to do with having less time to live than getting more compounding years. Additional compounding is just a bonus.
Fidelity's suggested withdrawal rates are WAY too conservative. They just want to keep more of your money for longer, at the expense of your retirement lifestyle, because holding your money makes them money. You need to go far beyond Fidelity's cookie-cutter recommendations when building your own retirement plan. As Erin says, a market dependent flexible withdrawal strategy will allow for more spending in retirement, overall, while reducing your risk of depleting your funds too quickly. I will definitely utilize a dynamic spending strategy when I retire.
Good rule of thumb, but dosn't take into account pensions. My wife and I will have both a military and Fed civil service pension, in addition to our TSP portfolios. Good thing is, even without our pensions calculated in, we meet the retirement savings base. Well set for retirement!
It's not intended as a rule of thumb for those with pensions or other sources of retirement income.
You can’t cover it all Erin, but building generational wealth can also be a factor. Those of us baby boomers who believe we had it easier, want to ensure our offspring have added financial stability, by preserving all our principal (even adjusted for inflation). And this legacy can build a brighter future indefinitely. So aiming for 7-8% rates of return on an investments, while withdrawing 4% or less for retirement income, ensures at least 3% growth to offset inflation. Thus protecting ‘all’ principal going forward. Peace John
I plan to retire as late as possible like 70. But at the same time, I would like to have investments that would help me pay basic expenses as maintaining my home and food.
No, there is no formula....it's very personal. I'm not counting on collecting ss.
Some people never want to retire, my mom is 73 and has shown no interest in retiring yet
Savings 20% would give you 1X every 5 years.
I started at 26, but this past year I had to give up about $20K for a medical bill, since I had a "health sharing" company, not actual health insurance. I have an HSA now, so I'm maxing out my HSA and 5th year maxing out my Roth IRA now. (I'm 30 years old).
Hey Erin, nice video, thanks ! Just curios, when you say x times ones income, do you refer to savings in roth or traditional account?
I just retired. At 67. At first I felt guilty but now I am glad. I have almost 18 times my income . An investment property almost paid off and same w home.
I think I will be ok.
So, in a household of two(husband & wife) you need 1400000 at 67… correct?
Outstanding video! I love love love the way you get straight to the subject.
Thanks so much!
I hit 65 a few months ago. I'm shooting for 67 & 10 months (I see that my social security gets bumped up at the 10 month interval each year)
Actually, penalties and delaying credits are both figured up on a monthly basis. However, the delaying credits are only added to your benefit in January each year. The exception to this is waiting until 70 to collect. Your first check after you turn 70 has all of your accumulated credits added to it.
I really enjoy your videos Erin. Very clear and well explained! Do you use/subscribe to any online financial planning software you would recommend?
Hi Erin. Totally off topic but if you could make a video on Long Term Care Insurance, that would be most appreciated. Thank you.
I actually had a discussion with an estate planning attorney recently about long-term care insurance and whether it was worth it nowadays. Perhaps this could become a video. I know it’s a question a lot of people consider. Thank you so much for the suggestion!
@@ErinTalksMoney I think that the cap on total benefits that most policies have has become quite low, relative to costs of LTC, and this make me wonder what the actual value of these policies is? I would enjoy getting your take.
@@ErinTalksMoneyI would be very interested in that video topic!
I knew a woman approaching 65 and had nothing saved. The only asset she had was a decent condo in western Massachusetts, but I think that was only worth about $300-350K. And with it having an HOA, I imagine it would be harder to sell these days
Any suggestions for the allocation recommended for the nest eggs mentioned here
You are always spot on and love the bloopers at the end. :)
Do you support having 10k savings _minimum_ emergency fund goal or just 3-6 months of expenses. Both make sense.
I like the idea of having an emergency fund that suits the needs of you or your family. Making it specific to your household. so I think something more in the idea of basing it off your expenses is better than an arbitrary number. And whether that looks like three months or six months or even longer, depends on your family dynamics, and your career field.
Nobody said you had to work full-time until 70. Work 24 to 32 hours and enjoy life a little bit more. While still getting something out of work.
Great video, Erin, but I have a question. If the savings factor at 62 is 14x, what is that savings factor at 55, or at 60? Some of your fans may want to retire before 62. Thank you!
look at the video @ 0:15. Keep in mind that the chart is based off of retiring at 67yo, so the multipliers are progressive leading to retiring at 67yo. If you are planning on retiring earlier than 67yo, then the chart isn't for you. The chart doesn't mean you need $x at 62yo to retire at 62yo.
I’m 60 and was hoping to retire at 62 but going by fidelity numbers it looks like I need to work till 64
Good for you.
Im 59. My plan right now is to retire at 67 but I can go at 65 so who knows.
Ill evaluate at 65 and go from thrre
The bloopers are so funny. It is back😅😂..running out of air..lmao
Nice video.
Thanks for watching!! 😊
Hi Erin. Most potential retirees have the bulk of their assets in the value of their home. How does value affect the Fidelity calculation?
The Fidelity numbers are based off total investable assets. So they do not look at equity within the home.
I aim to retire at 55 years old. My wife and I are 41. Our only child, my daughter, will be 18 and moving on to do something bigger and better with life.
Thanks for putting real numbers in your example!
Disagree with Fidelity, though I’ve not read the “nitty gritty”. Everyone’s situation is different and these blanket 10x, 14x, etc. recommendations mislead individuals.
Agree with you Erin that the required amount needed is based on EXPENSES. That’s the first question that needs to be answered, yet the vast majority of financial advisors don’t ask it.
If one has annual expenses of say, $40k, and the plan is to withdraw 4% (too low in my estimation for 25-30 year retirement) then the required amount needed would be $1M (25 x $40k). This may or may not be anywhere near the 10x income of the retiree at 67yo. The amount needed is driven by the individual’s annual expenses, not a general “x-income” factor. The latter could be way off, either in a good or bad way.
I'm done at 60 with THIS job.
I’m 58 and I’m done with my crappy job
@@scottH18370 haha, I hear ya brother!
I hope you are close to stepping away from a job that you do not seem to enjoy
You need to retire asap !!
You sound sad and depressed 😢☹️🙁😕
My formula : Annual salary minus savings. Adjust for any debt, that should be paid off by then. Realistic guess for what age you will live to, Add 5 years. You need that amount of money, for that amount of years. Hit the charts and do the math.
If you own your home and have no other debt, I feel I can retire at 62 with my current savings which is not at what Fidelity recommends. Taxes, utilities, fun stuff is all I will have and still room for home and car repairs.
I retired at age 61, with much more than Fidelity recommends. If you are good saver, you can get to 15, 20, or 25 times your salary by age 60. Compounding is very powerful, and many people have retired at even younger ages.
I don’t understand. The fidelity chart says “starting salary”. What starting salary are they talking about? My salary is 20 times what I started at and will increase over the next 7 years til mandatory retirement at 65.
I think I am on track with 10% average growth in my investments but my income is non-traditional and non linear.
starting salary for the x multiplier age group. So, when your salary changes at the start of each age group, then that is what you use with the multiplier for that age group.
Just to confirm, the "x" is starting salary, not the current salary, correct? I get a 3% raise every year, so over time that salary can change significantly and effects the calculations.
x starting salary is the starting salary for the age group. If you make $50k at 30yo, then 1x$50k if you are 30-34yo. As your pay increase say to $60k at 35yo, then 2x $60k if you are 35-39yo, and so on.
@@hanwagu9967 Thank you, friend!
I got retired at 59, because I was born in 1950, I was able to collect 50% of my wife's SS when she started to collect at 63. I waited until 70 to take my SS. We use SS for 80% of our spending needs. We now live in Florida, so no state taxes on SS.
Life is Good !
They took that avenue away during the Obama administration
A lot of states have that provision. There is no state tax on social security in New York state.
@@tim71pos I’m talking about collecting on your spouses SS and allowing yours to grow till a later date. You can’t do that anymore
@@timdeneau5552 I understand what you were talking about. But your tagline was about the state income tax situation on social security in Florida. My post was directly to that and to that only. There are about two dozen states, maybe three dozen, that do not tax social security income. There may be differences in sales taxes and property taxes. So if a person is letting taxes influence the decision on where to retire the total picture needs to be considered. In spite of its reputation I was surprised the New York state is relatively friendly to retirees.
I'd love to retire early, but in my head I'm looking forward to retiring at 65. Then maybe wait till I'm 67 for the full social security amount if it even exists when I retire lol. If SS doesn't exist I'd consider working till 67 as long as I enjoy my job which I currently do.
I think the target retirement savings number should be based off what you are living on and not your gross or even net salary. If your making for example a 100k but after taxes and savings contributions your living on 50k then that is the number to compute from.
I would factor in some extra money for each year in retirement for paying taxes. You still pay taxes in retirement, it just may be a lower tax burden, but still a burden nonetheless. You won’t have 50K to spend in retirement if you don’t account for covering taxes.
@@benmccarty4598 well in my case I intend on living on SS only so I won’t be paying taxes. And what taxes I’ll end up paying on my IRA will come from the IRA at RMD time. In my case SS will actually be money than I’ve lived on due to my high rate of savings.
Does 3:18 mean for retiring early you keep adding 4x every 5 years backwards? So if you want to retire at 45 you need 28x income?
Hi Erin!
Hi! 😊
The VERY FIRST thing you need to do is to STOP saying "with an income of X" because what they will need in retirement may be COMPLETELY DIFFERENT than when they were working. Saying that X made $150K when he was working means that he/she will need Y in retirement whereas someone else making A making $60K needing B... NO! Both A & X can retire on the EXACT SAME amount in retirement because neither will have ANY debt nor any loans nor any car payments nor.... The REAL question should be "What do you project you will need in retirement" and then model to that!