This is exactly why I watch you guys. This is solid advice coupled with examples thank you once again for another good video truly looking forward to joining the Root Financial partners family.
I've watched several videos and it's a little weird listening to retirement advice from such a young looking guy but everything is spot on! Another great video that's very informative.
I'm 55 and have been employed in the financial services industry for 27 years. I've been an investment manager/financial planner for 20 of those years and manage $300+ million for clients. Ari knows his stuff (better than I) and is an eloquent speaker. Needs to work on his jokes though.😁
@@Matthew-ym2bb I agree, I've been at this for 34 years, managing my own investments and self educating all the way through...although with a slightly more modest portfolio than you're managing, lol. It's disheartening how many professionals don't know their stuff and give bad advice so awful it sticks out like a sore thumb. Worse, ones that put their own sales commissions so obviously above their client's interests. I recognize that at some point I'll probably have to turn to a financial advisor as I age but I'm also trying to arrange our finances so they're simple and automated. Ari's clients are fortunate indeed and I'd be lucky to find someone like him. Cheers!
Wow. Your example is spot on for us. 100% equities looking to retire next spring at 55. Decent pension that will cover 75% of our DESIRED spending and well past needs. I also want to guard against things like inflation and realize that although we are on the edge of retirement, our money still has, we hope, decades in the market to grow. I feel like people retire and want to sit in cash and bonds for decades which is the real risk in our opinion. If you have 3M and you "only" want about 1-2% from it per year to augment things like pension and ultimately SSA, in a decade or so in our case, then why not maintain a similar plan as when you amassed it?
Love the clear, concise information you share. Can you talk about HSAs with regards to order of withdrawal in early retirement? No one seems to address this. Thank you Ari.
When you have guaranteed income like SS, think of it as part of your conservative piece of your portfolio (or bucket 1, if you use the 3 bucket strategy)
Great video, new listener. One question, do you recommend bonds in a taxable brokerage account or a Roth IRA? I’m in almost retired but have no pre-tax Ira accounts. Only taxable and Roth.
It’s a little harder to plan asset allocation when you’ll have no other income sources in retirement until Social Security. I’m almost 60 still working and am 68% equities, 32% bonds/cash right now. Probably 8 years fixed income for what I plan to spend. I was considering early retirement but holding off depending on economy/markets. These past and present of uncertain times always keeps me in 1 more year mode. When I retire I don’t ever want to be put in the position of having to work again.
Very informative. Currently, I've got 6 years of cash with Treasury Direct laddered in 26 week T-bills with 10-20k maturing weekly. So I do have quick access if need be. My traditional 401k was 100% equities with 60% company stock. Yes, I know, a no-no. Sold out in October. Now, in conservative positions as I will Roth convert into 100% equities. At this point, I only need to keep up with inflation, so returns of 4-6% is fine with me.
Excellent idea!!! But do you really need 6 years of cash reserves? Ari just mentioned the market usually corrects itself in 2.5 years. Either way I love your strategy
This makes perfect sense for planning for guaranteed income and not selling during down times. But the bonds don’t fit into this as a goal since they can decrease in value. So how do I determine what my bond allocation percentage should be? What are the factors in that decision?
Hi Ari, Nice way to think about this. My concern with say the 4 year Cash/ Fixed income pot to cover the 4 years of expenses is how do you keep that at 4 years worth of funds. Say you start at $100k and spend 25k in year 1 as per plan. How and when do you replenish the 4 year pot of cash?
Ari - do you have any episodes that include rental income in the portfolio? If not can you make a video to speak on that and how to factor in rentals in the portfolio?
Ari, this was brilliant!! I’m a 53y/o RN working 24hrs/wk, making $105,000. Possible retirement at 55. I’ve been thinking about this recently. Currently have $1,800,000 in 401k & Roth. I’m 100% equities. I think I’ll stay there for the duration.
Hi Ari, great video. Very interesting. My problem is I’m 49. I plan to retire at 62 1/2 on 12-31-2037. I plan to have my wife (she is also 49) take her SS at age 65 and I’ll start taking mine at 67. The problem is we have no idea what Social Security is going to look like that far into the future which makes it difficult to plan for. Will it be 20% less? Will it be 40% less? Will it be the same as it is currently? It’s because of this that I have to plan to be able to live solely on my retirement investment income. We don’t have any pension or rental income. I would love to invest more aggressively but I just can’t do it because of the unknown future Social Security situation.
I am only 75 and I have had my investments 100% in index finds my entire investing life. Yes, I had money invested prior to retirement. Like S&P 500 index funds, my investments returned over 10% annualized over 30 year periods. Looking at the S&P 500 from 1/1//2019 until the market low around 1/1/2023. That index returned over 13% annually. It is hard to argue that a "conservative" portfolio would have left one in a better economic position. Financial advisors as well as retirees need to accept the fact that the short term - 5 or 10 years, market changes do not affect investors. They all reach a reasonable goal of 10% annualized return with long term holdings in index funds. Financial advisors should not turn investors into traders by emphasizing short term time frames.
This is a subject you rarely hear about since pensions are rare except for government employees. I plan to keep a 90/10 balance in retirement with a pension covering all household bills.
Ari, I want to stay in Cali in retirement but am likely to move to a no income tax state like Nevada from age 62-72 to convert as much pre tax dollars to Roth as possible. Sound strategy, yes?
Thank you Ari. I don't, just an address for state tax purposes, will just travel most of the time. California taxes brokerage and HSA capital gains as ordinary income is too much!
Asset allocation is a joke. Both sides can fall at the same time. If youre 50/50 in a down market you still loae and it will take forever to recover. Bonds may go down less but also come up less. Smoke and mirrors. Best to simply diversify.
This is exactly why I watch you guys. This is solid advice coupled with examples thank you once again for another good video truly looking forward to joining the Root Financial partners family.
Thank you Earskin. We’re excited to help you begin optimizing.
I've watched several videos and it's a little weird listening to retirement advice from such a young looking guy but everything is spot on! Another great video that's very informative.
Glad you find it helpful!
I'm 55 and have been employed in the financial services industry for 27 years. I've been an investment manager/financial planner for 20 of those years and manage $300+ million for clients. Ari knows his stuff (better than I) and is an eloquent speaker. Needs to work on his jokes though.😁
@@Matthew-ym2bb I agree, I've been at this for 34 years, managing my own investments and self educating all the way through...although with a slightly more modest portfolio than you're managing, lol. It's disheartening how many professionals don't know their stuff and give bad advice so awful it sticks out like a sore thumb. Worse, ones that put their own sales commissions so obviously above their client's interests. I recognize that at some point I'll probably have to turn to a financial advisor as I age but I'm also trying to arrange our finances so they're simple and automated. Ari's clients are fortunate indeed and I'd be lucky to find someone like him.
Cheers!
Wow. Thank you. So many things to take into consideration. Really enjoying your channel🤗
Wow. Your example is spot on for us. 100% equities looking to retire next spring at 55. Decent pension that will cover 75% of our DESIRED spending and well past needs. I also want to guard against things like inflation and realize that although we are on the edge of retirement, our money still has, we hope, decades in the market to grow. I feel like people retire and want to sit in cash and bonds for decades which is the real risk in our opinion. If you have 3M and you "only" want about 1-2% from it per year to augment things like pension and ultimately SSA, in a decade or so in our case, then why not maintain a similar plan as when you amassed it?
Love the clear, concise information you share. Can you talk about HSAs with regards to order of withdrawal in early retirement? No one seems to address this. Thank you Ari.
Yes! I like to use cash if possible and let my HSA grow tax free so it’s right before my Roth :) in terms of order of operations!
When you have guaranteed income like SS, think of it as part of your conservative piece of your portfolio (or bucket 1, if you use the 3 bucket strategy)
Yes, That's the right way!
100%!
Thanks for another great video! The video was very inforamtive and you broke down your points in a very easy to understand way.
Glad you enjoyed it!
This sheds a lot of light on how to allocate.
Great video, new listener. One question, do you recommend bonds in a taxable brokerage account or a Roth IRA? I’m in almost retired but have no pre-tax Ira accounts. Only taxable and Roth.
It’s a little harder to plan asset allocation when you’ll have no other income sources in retirement until Social Security. I’m almost 60 still working and am 68% equities, 32% bonds/cash right now. Probably 8 years fixed income for what I plan to spend. I was considering early retirement but holding off depending on economy/markets. These past and present of uncertain times always keeps me in 1 more year mode. When I retire I don’t ever want to be put in the position of having to work again.
Health care insurance cost and sequence of returns risks are my biggest fears.
Very informative. Currently, I've got 6 years of cash with Treasury Direct laddered in 26 week T-bills with 10-20k maturing weekly. So I do have quick access if need be. My traditional 401k was 100% equities with 60% company stock. Yes, I know, a no-no. Sold out in October. Now, in conservative positions as I will Roth convert into 100% equities. At this point, I only need to keep up with inflation, so returns of 4-6% is fine with me.
Excellent idea!!! But do you really need 6 years of cash reserves? Ari just mentioned the market usually corrects itself in 2.5 years. Either way I love your strategy
Nice work!
This makes perfect sense for planning for guaranteed income and not selling during down times. But the bonds don’t fit into this as a goal since they can decrease in value. So how do I determine what my bond allocation percentage should be? What are the factors in that decision?
Check this out: th-cam.com/video/5KLErHOpgUU/w-d-xo.htmlsi=t8drRT0go0M9I2Ok
Hi Ari, Nice way to think about this. My concern with say the 4 year Cash/ Fixed income pot to cover the 4 years of expenses is how do you keep that at 4 years worth of funds. Say you start at $100k and spend 25k in year 1 as per plan. How and when do you replenish the 4 year pot of cash?
Ari - do you have any episodes that include rental income in the portfolio? If not can you make a video to speak on that and how to factor in rentals in the portfolio?
Ari, this was brilliant!! I’m a 53y/o RN working 24hrs/wk, making $105,000. Possible retirement at 55. I’ve been thinking about this recently. Currently have $1,800,000 in 401k & Roth. I’m 100% equities. I think I’ll stay there for the duration.
Thanks James! Sounds like a good plan to me.
Good job getting to $1.8m.
Niiice
Just working 24 hours for 6 figures? Why quit!?!? 😊
@@kenskaer4311 believe it or not the job is wearing me down. I feel like I don’t even need the money.
Hi Ari, great video. Very interesting. My problem is I’m 49. I plan to retire at 62 1/2 on 12-31-2037. I plan to have my wife (she is also 49) take her SS at age 65 and I’ll start taking mine at 67. The problem is we have no idea what Social Security is going to look like that far into the future which makes it difficult to plan for. Will it be 20% less? Will it be 40% less? Will it be the same as it is currently? It’s because of this that I have to plan to be able to live solely on my retirement investment income. We don’t have any pension or rental income.
I would love to invest more aggressively but I just can’t do it because of the unknown future Social Security situation.
Which is exactly why you need to invest aggressively. 😊
I am only 75 and I have had my investments 100% in index finds my entire investing life. Yes, I had money invested prior to retirement. Like S&P 500 index funds, my investments returned over 10% annualized over 30 year periods.
Looking at the S&P 500 from 1/1//2019 until the market low around 1/1/2023. That index returned over 13% annually. It is hard to argue that a "conservative" portfolio would have left one in a better economic position.
Financial advisors as well as retirees need to accept the fact that the short term - 5 or 10 years, market changes do not affect investors. They all reach a reasonable goal of 10% annualized return with long term holdings in index funds. Financial advisors should not turn investors into traders by emphasizing short term time frames.
There are many factors that affect the end result but I like your take on it!
This is a subject you rarely hear about since pensions are rare except for government employees. I plan to keep a 90/10 balance in retirement with a pension covering all household bills.
Thank you! Glad it was helpful
Fixed income is bunk, stonks for life!!!
Ari, I want to stay in Cali in retirement but am likely to move to a no income tax state like Nevada from age 62-72 to convert as much pre tax dollars to Roth as possible. Sound strategy, yes?
1. Do you want to live there?
2. Do you need to live there to accomplish other goals?
Those are the questions I’d ask!
Thank you Ari. I don't, just an address for state tax purposes, will just travel most of the time.
California taxes brokerage and HSA capital gains as ordinary income is too much!
🤘🏻
Thanks for subscribing and being a supporter 🤘🏻
Asset allocation is a joke. Both sides can fall at the same time. If youre 50/50 in a down market you still loae and it will take forever to recover. Bonds may go down less but also come up less. Smoke and mirrors. Best to simply diversify.
Just pick the most aggressive growth and never look at.