you are an incredible educator. all your videos are so clear and concise. you’ve answered so many questions that i didn’t even know i should have asked.
Thank you James!! I’ve been relying on your excellent content for the past two years to help me prepare for retirement. I’m proud to say that I retired on July 2nd and my plan is as close to Air Tight as possible, thanks to your excellent strategies and guidance. Very much appreciated!! 🙏🏻 🎉
My primary home is worth 1M and is paid off. But I dont include this as my net worth unless I wanted to sell. Its a liability because of the property taxes, insurance & etc. I use my investment portfolio as a more accurate measure of cash flow because I receive dividends regularly.
You explain so well and simply to understand the money facts. Thank you. For those of us that don't understand as well as others maybe I really appreciate listening to you and glad you are here.
Very timely. My last day of full time work in Aug 4th. I'm working my plan building an income plan bridge to get me from age 58 to 65, to start medicare, begin an income annuity and possibly social security at that time.
I’d like to hear your take on annuities and bonds, especially treasuries. Bonds for income (coupon) or hold to maturity ladders. Plus more on guardrails; maybe start with a link to the research? Or the authors’ names in writing.
I’m a dividend growth investor. Many dividend payers are slower growth, but Microsoft, Apple, Visa and Mastercard are all dividend growth companies. 4 of the better growth companies in the world.
Hello James, love your videos. Great advice. What do you do about avoiding more taxes on your income? Is there a way to take the gains from options, which I already paid taxes on, and deposit them into a ROTH for future compound interest? Can options trading be considered earned income?
Thank you James! In literally 2 sentances you answered the question that I'd had lingering in the back of my mind regarding generating income from real estate in retirement. I will not do it because I never did it in the past, have no experience with it, and don't want to risk my money and give up my time now that I'm retiring. Not to mention that you shared how many retirees you have worked with begin to divest their real estate holdings at retirement. That ship has sailed for me. Thanks so much!
You could invest in a REIT, or real estate ETF, so they do the management and you get dividends. I haven't researched any specific ones yet, but I believe they have to return 90% of profits to shareholders, so the dividends should be higher. However right now I am not sure if I would want to invest in an office, or retail space REIT, but a residential one seems better right now.
Remember that REITs have special tax paperwork that has to be filed that will cost more money for the tax professional to fill out and the tax form can take awhile to arrive to you@@kenmcclow8963
Those other holdings to bump up your dividend yield in your portfolio are called REITs & BDCs. So, S&P500 + REITs & BDCs + Social Security = you don't even touch your principle unless you need or want more than dividends plus SS.
I never understood the fetish of investing for dividends alone. What you really care about is total return. What do I care about selling some equity shares in my portfolio if the remaining smaller number of shares is worth more than the larger number of shares at a lower price? Additionally, capital gains has preferrential tax treatment relative to ordinary income. The problem with a dividend-oriented equity prtfolio is that it typically lags in share value growth relative to a more diversified portfolio and in total return as well. If one keeps 2 - 3 years worth of living expenses in cash and liquid short-term investments like t-bills and CD's - the typical length of a bear market - you are unlikely to be a forced seller in a down market. If one has a large enough networth to make this strategy work this seems like a good "set-and-forget" retirement plan. What am I missing?
Hi James, can you cover annuity. What is the benefit and con and what is the process. I wonder if annuity is the other option I could consider. Thank you.
How can you have a retirement income planning discussion without even mentioning FIA's with GLWB's? Not saying you have to push people one way or the other, but it is well worth mentioning the pros and cons
With a moderate pension, SS and a generous income annuity we have more disposable income than ever. I have a balanced portfolio, but don't much worry about it.
You forgot another problem with spending down your IRA's to get a bigger social security check. If you desire money for legacy, it is mostly spent by such a big drawdown. When if you die at 71? Compromise may be in store in such a situation, such as taking social security at 67 instead of 70.
VYM, a dividend growth fund, only had a dividend reduction of 20% during 2008, while the fund price fell 50% So it is not typically a one to one correlation between stock price and dividends.
Dividends take all the fun out of worrying about stocks when the market takes a big drop. Instead of having something to fret about at night and horror stories to share with other unhappy folks, you are faced with the problem of what to do with all the excess dividends when the market is down. Your only option is to buy a bunch of stocks at a discount during the downturn. Terrible.
I have asked this on other retirement videos without getting an answer. When you have to take out $10,000 of your retirement portfolio for what ever reason, how do you know where to take it from? 1 stock alone, a percentage of each?
Tough to give a direct answer since it depends on several variables. Ideally your money is spread out across many types of investments specific to you. Then the goal, very generally speaking, should be only to draw money from assets that are up in value (or at least haven’t dropped in value) when you take your annual distribution.
If you are taking from a 401k plan, then the plan administer might sell a percentage of every fund to get your withdrawal. That's what mine does. I wish I had more control over that, but that is what my other accounts are for.
Doubtful. US is $34 trillion in debt and continues to spend close to $2 trillion MORE than it takes in per year. Still young, so Maximize savings and investing.
Why would you portray social security benefits as unstable even though they have always been there and has never gone down. In fact, it only goes up during to being tied to Cost of living increases. On the contrary, you promote dividends even though they are no guarantee and DO vary down.
Well, if Congress does not increase funding to avoid the projected Social Security shortfall in the coming decades, benefits are likely to not keep pace with inflation and may decrease.
You left out one of the most important things that you need to consider when structuring your retirement income. That is tax planning. That is very important, particularly if you are drawing funds from tax sheltered accounts (401K, IRA, 403b, etc.). Tax planning is essential except if your sole income stream is social security..
Most videos are wrong on that. It all depends on your expenses. If someone has only 25K worth of annual expenses, they will need a total amount different than someone who has 50K of annual expenses. The 1 million dollar retirement is not a “fit all” goal. You need to know your expenses, and any other income that you may have in forms of social security, pension, annuities, dividends, IRAs, 401K etc.. Also having no debit is a great plus. Having 1 million but lots of debit is far different from having 1 million and no debt.
Definitely not true. Some people live very comfortably on well less than $1m and for others $1m isn’t nearly enough. It depends on timing of retirement, other income sources, your cost of living, and more.
A million is a ball park number for a couple to be have some better options, but many variables must still be considered, and you likely won’t feel wealthy. Social security and pensions will be an important part of your picture.
you are an incredible educator. all your videos are so clear and concise. you’ve answered so many questions that i didn’t even know i should have asked.
Thank you James!! I’ve been relying on your excellent content for the past two years to help me prepare for retirement. I’m proud to say that I retired on July 2nd and my plan is as close to Air Tight as possible, thanks to your excellent strategies and guidance. Very much appreciated!! 🙏🏻 🎉
Amazing! Thanks for sharing.
My primary home is worth 1M and is paid off. But I dont include this as my net worth unless I wanted to sell. Its a liability because of the property taxes, insurance & etc. I use my investment portfolio as a more accurate measure of cash flow because I receive dividends regularly.
Good way of thinking about it
I might add a fifth one as a right kind of annuity.
It is a part of your net worth, just not your liquid net worth. I also only focus on liquid net worth.
You explain so well and simply to understand the money facts. Thank you. For those of us that don't understand as well as others maybe I really appreciate listening to you and glad you are here.
You are so welcome!
James.. This was a great video. Thank you! Gave me a lot of confidence in my retirement plan.
Very timely. My last day of full time work in Aug 4th. I'm working my plan building an income plan bridge to get me from age 58 to 65, to start medicare, begin an income annuity and possibly social security at that time.
Congratulations. Make sure you have medical insurance during those years until you hit 65. It can be costly.
Congratulations on your upcoming retirement!
Great advice! Thank you for sharing.
All excellent points! Great for us as we start thinking through how to structure the next few years.
Yes! Thank you!
Thank you!
You're welcome!
I’d like to hear your take on annuities and bonds, especially treasuries. Bonds for income (coupon) or hold to maturity ladders. Plus more on guardrails; maybe start with a link to the research? Or the authors’ names in writing.
Amen!!!
Great video as usual! Does annuity payouts fall into the 1st category?
Great content and im learning a lot from you.
Awesome, thank you!
I’m a dividend growth investor. Many dividend payers are slower growth, but Microsoft, Apple, Visa and Mastercard are all dividend growth companies. 4 of the better growth companies in the world.
Great content, thx
Glad you enjoyed it
I will have dividends, rental, social security and pension income and add some 401k and ira distribution
Hello James, love your videos. Great advice. What do you do about avoiding more taxes on your income? Is there a way to take the gains from options, which I already paid taxes on, and deposit them into a ROTH for future compound interest? Can options trading be considered earned income?
Thank you James! In literally 2 sentances you answered the question that I'd had lingering in the back of my mind regarding generating income from real estate in retirement.
I will not do it because I never did it in the past, have no experience with it, and don't want to risk my money and give up my time now that I'm retiring.
Not to mention that you shared how many retirees you have worked with begin to divest their real estate holdings at retirement.
That ship has sailed for me.
Thanks so much!
You could invest in a REIT, or real estate ETF, so they do the management and you get dividends. I haven't researched any specific ones yet, but I believe they have to return 90% of profits to shareholders, so the dividends should be higher. However right now I am not sure if I would want to invest in an office, or retail space REIT, but a residential one seems better right now.
I’m glad that was helpful. Thanks for watching!
Remember that REITs have special tax paperwork that has to be filed that will cost more money for the tax professional to fill out and the tax form can take awhile to arrive to you@@kenmcclow8963
Many of the REITs have a diversified portfolio. I started investing in them recently. Yes, they have to pay 90% of their earnings.
Those other holdings to bump up your dividend yield in your portfolio are called REITs & BDCs.
So, S&P500 + REITs & BDCs + Social Security = you don't even touch your principle unless you need or want more than dividends plus SS.
Hi James. Is it a good idea to use fund from Heloc and let the investment works when the market down after retirement
I never understood the fetish of investing for dividends alone. What you really care about is total return. What do I care about selling some equity shares in my portfolio if the remaining smaller number of shares is worth more than the larger number of shares at a lower price? Additionally, capital gains has preferrential tax treatment relative to ordinary income. The problem with a dividend-oriented equity prtfolio is that it typically lags in share value growth relative to a more diversified portfolio and in total return as well. If one keeps 2 - 3 years worth of living expenses in cash and liquid short-term investments like t-bills and CD's - the typical length of a bear market - you are unlikely to be a forced seller in a down market. If one has a large enough networth to make this strategy work this seems like a good "set-and-forget" retirement plan. What am I missing?
As you get older you are more interested in safety and income. Stock gains become less important.
You are fine as long as you aren't human.
Hi James, can you cover annuity. What is the benefit and con and what is the process. I wonder if annuity is the other option I could consider. Thank you.
Surprised you didn’t mention bond and treasury income. Especially at today’s rates.
Good video except how can you discuss maximizing guaranteed income and not mention annuities? Oh yeah, don't want to lose the aum fees maybe?
How can you have a retirement income planning discussion without even mentioning FIA's with GLWB's?
Not saying you have to push people one way or the other, but it is well worth mentioning the pros and cons
With a moderate pension, SS and a generous income annuity we have more disposable income than ever.
I have a balanced portfolio, but don't much worry about it.
Sounds like a great position to be in
You forgot another problem with spending down your IRA's to get a bigger social security check.
If you desire money for legacy, it is mostly spent by such a big drawdown. When if you die at 71? Compromise may be in store in such a situation, such as taking social security at 67 instead of 70.
@RootFP if dividends remain the same during a downturn, but stocks fall by 50%, isn't your total dividend payment cut by 50% ?
VYM, a dividend growth fund, only had a dividend reduction of 20% during 2008, while the fund price fell 50% So it is not typically a one to one correlation between stock price and dividends.
Dividends take all the fun out of worrying about stocks when the market takes a big drop. Instead of having something to fret about at night and horror stories to share with other unhappy folks, you are faced with the problem of what to do with all the excess dividends when the market is down. Your only option is to buy a bunch of stocks at a discount during the downturn. Terrible.
😂😂
I have asked this on other retirement videos without getting an answer. When you have to take out $10,000 of your retirement portfolio for what ever reason, how do you know where to take it from? 1 stock alone, a percentage of each?
Tough to give a direct answer since it depends on several variables. Ideally your money is spread out across many types of investments specific to you. Then the goal, very generally speaking, should be only to draw money from assets that are up in value (or at least haven’t dropped in value) when you take your annual distribution.
If you are taking from a 401k plan, then the plan administer might sell a percentage of every fund to get your withdrawal. That's what mine does. I wish I had more control over that, but that is what my other accounts are for.
I would sell the growth stocks and leave the dividend focused investments untouched. You do not want to kill the goose that lays the golden eggs.
Why use a low $3700/month as the example? Could you do one with $10,000/month after tax as the target?
i’m 29 now. will social security be something i can count on in 30 years?
Doubtful. US is $34 trillion in debt and continues to spend close to $2 trillion
MORE than it takes in per year. Still young, so Maximize savings and investing.
Why would you portray social security benefits as unstable even though they have always been there and has never gone down. In fact, it only goes up during to being tied to Cost of living increases.
On the contrary, you promote dividends even though they are no guarantee and DO vary down.
Well, if Congress does not increase funding to avoid the projected Social Security shortfall in the coming decades, benefits are likely to not keep pace with inflation and may decrease.
You left out one of the most important things that you need to consider when structuring your retirement income. That is tax planning. That is very important, particularly if you are drawing funds from tax sheltered accounts (401K, IRA, 403b, etc.). Tax planning is essential except if your sole income stream is social security..
Taxes are important.
Curious.... why no mention of annuities?
Annuity is bad investment
★★★★★ I finally got it. I got what makes your presentations so good. How to get the most out of life (with your money). Right on!
Most videos say you have to have a million dollars to retire
Most videos are wrong on that. It all depends on your expenses. If someone has only 25K worth of annual expenses, they will need a total amount different than someone who has 50K of annual expenses. The 1 million dollar retirement is not a “fit all” goal. You need to know your expenses, and any other income that you may have in forms of social security, pension, annuities, dividends, IRAs, 401K etc.. Also having no debit is a great plus. Having 1 million but lots of debit is far different from having 1 million and no debt.
Definitely not true. Some people live very comfortably on well less than $1m and for others $1m isn’t nearly enough. It depends on timing of retirement, other income sources, your cost of living, and more.
I’m glad I found your channel. Valuable information in every video!
A million is a ball park number for a couple to be have some better options, but many variables must still be considered, and you likely won’t feel wealthy. Social security and pensions will be an important part of your picture.
I don't trust that Social Security will be there in 10 years, definitely not the full amount.
Disagree 100%.