I've driven a Toyota Prius for 11 years and I think I can make it to 20 with no problem. It still drives like the day I bought it. Nothing wrong with driving an old car.
We retired at 50 and moved onto our 35 ft sailboat. We didn’t have much money but our expenses were low and we picked up odd jobs for a decade. Now we are 69 and still living on the boat. It’s not for the feint of heart. But we’ve seen the world, met some fantastic people, survived 4 hurricanes, and been able to build an ok nest egg without too much strain. No plans to stop sailing until we can’t physically do it anymore.
People who have "grinded" for years to save almost always have a hard time transitioning to spending when they retire. You might be in "abundance" on paper but you still don't feel like it.
I guess I would be in level 3 according to your metric. I spend about 3% of my investable per year pre SS. Debt free and live at the same lifestyle I had while working. I don’t have to freak out about occasional big expenses like a new roof or replacing an aging car. I tracked my spending to the dollar from 5 years before my retirement. I still do. I honestly mean no offense but I don’t understand the logic in paying someone else to manage my money or spending. That would be less I have to spend. I don’t understand how some don’t take the effort to learn about personal finance. You are right. Planning for taxes is very important.
My wife and I are retired in our upper ‘60’s. We have $2MM in investments and $2.5MM net worth. Our take home “pay” from investment income and SS is more now than when we were working. No SS tax withheld, no 401k/403b or HSA contributions. Only 85% of SS is subject to FIT and SS is not taxed in our state. We have not withdrawn any investment principle; balances continue to increase. We pretty much do/spend what we want within our income limits. It all good.
I don't have anywhere near what all the experts say I need to have saved for retirement. I have 5 years to full retirement and have about $60,000 in retirement income. I have already worked out my plan and can live very comfortably with my SS and Pension!
All retiree's should be debt free. I been debt free since I was 36. I didn't buy my first home until I was 56. But I paid that first home in cash. I never put a number on my retirement. I been semi-retired most my life. On and off again at work. I quit a job and don't look for another job. I go on my adventures. I wasn't going to wait for a full retirement. A old frail man, wouldn't be able to do what I wanted to do on my life list bucket list. So I just started my adventures while I was young. There really isn't a full retirement plan for me. I don't think I'm going to stop, just slow down and that's all. But I still can do everything I want to do, in my old-time period. So I don't need to retired. I just enjoy life as I was enjoying life when I was younger. I'm 60 and really living the dream. That retirement plan isn't for me. What I'm doing is working out great for me and I don't see any cons of what I'm doing. I enjoy life and will continue doing the same things I been doing on day one of living it up. Death is waiting for me, but I'm not in a rush to get there.
I am confused about the comment regarding keeping a car for 10+ years. I have a 12 year old Honda Civic in great condition. It has never had problems that needed repairs. I have had it serviced regularly and haven't had a car payment in 10 years. I don't see the financial harm in this.
In case you don’t hear it enough, your videos are beautifully done. The bouncing icons, the classy backgrounds and reveal of the statements when you aren’t on camera are great.
I haven’t retired yet but it’s only a few years away. It’s looking like we will be somewhere between Stability and Abundance depending on how things play out. Already have a solid military pension that covers basic expenses and retirement savings that are well above average. Tricare is very reasonable and covers most of healthcare with the exception of copays. For us, Social Security will be icing on the cake.
Driving a 2008 Toyota Tacoma...still runs like a top, has been low maintenance. Purposely living off a small 401k draw. Home is paid off, and I have a condo that pays for itself with rental income. My wife is collecting max SS, and I'm almost 67 waiting till I'm 70 to collect.
At 82, we decided that mom should have a more safe car for her(Subaru Impreza vs chevy impalla). In 2021, the impreza was her first new car since the mid 70s. She thinks that it will be her last new car. Maybe, because they don't make impreza sedans anymore. Lets see how it goes. The AWD plus snow tires for winter have made her car much more safe to drive. And we taught her to use iPhone navigation to get to where she needs to go.
Thanks for sharing. My mother open becoming a widow bought a Hyundai. It has a great warranty and it’s one of the only times I’ve recommended paying for an additional warranty to make the full ten years completely covered.
I came across qualified charitable distributions earlier this year. It changed my thinking about doing a Roth conversion. My 401k/457 money is not essential to the funding of my budget once I retire, which will be covered by a substantial pension and max social security that I'll be drawing starting at 70. As I planned on leaving a substantial amount of my financial residue at death to 501(c)(3) organizations, the combination of RMDs starting at 73 and QCDs allows me to accomplish this without paying tax on the deferred compensation---in other words the tax deferral becomes permanent. If I did the Roth conversion, of course, I would pay the taxes upfront. I don't itemize so this is a significant boon. The future is murky. There's always the possibility that the pension and ss go down or are eliminated if the economy crashes. But by doling out my charitable contributions over time allows me to change course if necessary because the money is needed to make up for other income loss or to properly account for my set aside for self-funded long term care.
I am in stage 4. I am driven by purpose and continue to pursue activities that provide opportunities for impact such as part time executive coaching. The 6-8 hours of work I do each week provides the same monthly income that I received in my 30s however I am working primarily for the fulfillment I gain from having a positive impact on centers of influence. Even though the monthly income combined with my RMDs and social security provides way more than what it is I used to take home when working 40 plus hours per week I shall continue to work for the joy it brings to others and the fulfillment I derive in the process.
Retiring at 62 may be challenging for someone without a 401(k),, pension, or significant savings, even if they're earning a high income in their later working years. By retiring early, they risk leaving substantial earnings behind for a relatively small Social Security benefit.
Oof. Having to choose between an upgraded car and doing things like traveling, adding a screened porch to sit in shade without bugs or helping my family, I'll happily hang on to a reliable old car. Even when I a very big dalary I could not justify, either monetary wise or environmentally, the need to replace a car that ran just fine and kept them fifteen years or more. If your dream is to impress strangers who don't care, then knock yourself out, but not my definition of fulfillment.
Through frugality, prudent saving and investing, my wife and I now have more income in retirement than we ever did in our earning years. It's kind of a shock! Social Security is actually enough for us to live on. With rental income, an annuity and now our RMDs we definitely feel like we are in the abundance stage, though as the presenter says, abundance is sort of in the eye of the beholder. Others would find our income to be barely enough. I will admit, however, that I don't have much sympathy for millionaires who feel they are in the 'survival' stage of retirement!
Why would you call these ‘stages’. That doesn’t seem like the correct use of the word ‘stage’. Stages implies you would pass through each of these, one after the next. These are situations , in which you would find yourself in one of them.
Looks like I’ve reached the abundance phase. I’m working my plans to retire next year and planning shows me more than doubling my monthly spending, but my retirement savings will continue to grow. Even before factoring in social security in the future. Very glad I have a good financial advisor to work advantageous tax strategies, which we’ve already been doing the last couple years. Keep Uncle Sam at bay!
Im a 60 yr old blue collar self employed guy who never had any 401k or retirement plan. The only time in my life I invested was back in 2007/2008 when I invested $60k in a 529 college plan for my son and daughter Just to see it vanish in 2009 due to the market collapse since then I’ve been scared to dead to invest , I do own some real estate which is paid for and have about $1 mil in a high yield bank acc I know that is very dumb but I just so scared to loose again and at this stage of my life , I couldn’t recover Always looking for answers. Having a difficult time trusting any investing. I know I could be worst off but afraid. My nest is going to vanish with depreciation.
My husband has a pension that more than covers our expenses we also have a 457b that we dont need and both are collecting SS that we are using strictly for our camping trips.
Rental properties are a pain, BUT the approx. $22K I net annually from a small rental house in the next town, is pure (taxable) income, somewhat reduced by depreciation. The good thing is that net income goes up with inflation and the deferred capital gain / payout is available if/when we want to sell.
Here is the deal: I don't have a car. I don't have cable or any streaming services or subscriptions. I never eat out -- breakfast, lunch, or dinner. I don't drink anything but water --- ever. I don't gamble, smoke, or do any drugs. I don't go on vacations. No coffee or booze, as noted earlier. I don't use the internet to buy anything -- ever. Practice this and you can easily live off of about 20k a year. Practice this, and truly retire early or retire stress free. What I do: Library, outdoor exploring/hiking, Reading, Exercise, Cook, Love, and Tennis.
I'd say we're in the stable category. We're getting by drawing a bit less than 4% from our investments and in a few years social security will kick in and drop that number even lower. We're certainly not in the abundance category. But on a clear day maybe I could catch a glimpse of it on the far horizon. I doubt we'll ever get there - it's never been a goal.
How should a single person plan for retirement? There no second pension, 401K or SS check in the future. How do you plan on possible SS cuts or means testing for benefits? What happens if Medicare is curtailed and we don’t qualify for Medicaid? How to avoid IRMA penalty?
I’m 45 and my current assets are as follows £2M commercial retail property £1M residential property (flats) £1M FTSE All World ETF £1M company value £25K Bitcoin £10K spot gold £100K cash I don’t feel wealthy. My goal is 5m without having to sell the company to feel more relaxed.
I’ve worked hard to save about $1,000,000 for retirement, and now I’m ready to turn my savings into a paycheck. But how much can I afford to withdraw from savings and spend is what I don’t know. If I spend too much, I risk being left with a shortfall later in retirement. But if I spend too little, I may not enjoy the retirement I envisioned. What’s your advice on this please?
I'm so thankful I don't have the desire to live large and shout with my money. I'm traveling to various countries overseas now. But only to have dates with my girlfriend who is from eastern europe. She will eventually move to the US (reluctantly on her part - she's afraid of it here!) and we will travel to state and national parks. This will be true happiness for me. Some of us are content with a simple life and not venturing so far from home 😉
Appreciate your perspective and benchmarking. If we're objective about the 401K though, it allowed private companies to pretty much eliminate pensions or at most offer a defined contribution pension. This hasn't been a good thing for the average person. Wall street and government are the only real winners in the 401K world. The 401k was not supposed to replace pensions.
Too much stuff = excessive cost and excessive maintenance, causing loss of wealth. Is it worth it? A pool? A boat? A timeshare? A camper? Hmmmm, stocks, cash flow, airbnb and average life for me. I think I am in #3.
Very clearly stated and explained. It definitely gives me more to think about and also some additional confidence in knowing that my sacrifices and management of my lifestyle all these decades has me to a more stable path going into my retirement years.
I am a bit of a retirement & savings video junkie and this is by far the most impactful video I've watched. You opened my eyes to several things I hadn't considered. I find myself straddling stage 2 & 3 and now want to strategize on how to solidify my place in stage 3! Can you help someone in PA?
Focusing on 70% of your pre-retirement income is ridiculous. In retirement, your expenses naturally reduce as you no longer drive to work, no longer pay SS taxes, no longer contribute to your retirement programs and much of you income tax is greatly reduced. Between retirement contributions, SS tax, income tax, I pay 50% of my income. Focus on what you want in retirement, establish a conservatives budget and retire. Remember, at 65, you have fewer years ahead of you than behind. If you live 20 years in retirement, but delay for for 4 years until you turn 69, you just threw away 20% of your retirement years.
Thanks for setting clear definitions. We are at level two - stretching. We have zero debt and a fully paid off house. We are collecting two pensions and our combined SS is projected to be about $7k a month. We are earning at least $80k a year of interest and dividends from our multimillion dollar portfolio. In theory, we could have about $15k a month to spend without touching the investments. We are still working because we do worry about running of $. I.e. the stretching phase. I think we could move to the stable phase once we have Medicare and see decent interest and/ or bond rate.
Just retired 7 weeks ago at 67.5. Have pensions of 5k and rents about 3.2k. Am trying to hold out for social security until 70 which will be $3,700. It still is not enough. I have never raised my rents for 10 years but I could. Health care ok...tricare.
The conundrum of your strategy is that 4% of retirement savings does not even come close to replacing 70% of income. I would think that is typical for most people.
Broke. I foolishly spent my career working in education. I should have instead robbed banks by becoming a banker. The word "job" is actually an acronym which stands for 'journey of the broke".
My wife and I have kept our head down and built decent wealth. We are mid 50’s and starting to think more about what it will really look like when we walk away from w-2 income as we know it today. With income in the low 7 figures for several years you’d think there would be no issues but lots of unknowns. We own multiple privately held businesses and some rental properties along with approx 3mm in 401ks. Prob too much net worth in real estate that is not income producing. Just multiple vacation homes. Which comes with lots of taxes and insurance and upkeep. But selling triggers capital gains tax that is also painful. This may sound like a flex to some but I’m confident none of us know each other. Any input from someone in similar situation is welcome.
The 4% rule is outdated and may be detrimental to retirement: an alternative is a floor and ceiling brackets that changes with the market conditions and inflation. Plus healthcare is not reliable and the cost will continue to escalate, best is to retire outside the US by selecting the best country to give better quality of life and cost for it. I would give up Medicare and be a self pay or buy some international health insurance. For people who can’t do that, make sure you retirement savings can last and wait for domestic robots helpers so you can buy one to have a 24/7 assistant/ nurse/shopper/ massager/ even sexual partner, you’ll die happy and totally independent and most of all, you’ll have your peace!
My experience with 401k is just the opposite, been very poor vehicle for retirement due to economic downturns & divorce (QUADRO - giving up 1/2 to ex who did not contribute a dime).
Thank you, for sharing this useful information. In the future, please do another video like this but, this time highlight for a person with a pension the 4-levels of wealth. Since, I have a traditional private sector pension, a public sector pension, a Rollover IRA, 457 plan, personal savings, and if needed also able to apply for social security. However, since my monthly bills are being covered using only my two pensions. Do not plan to make any withdraws from my retirement accounts until, I reach the mandatory age of 75. So guess that, I am around level 3.5, on your wealth scale (smile ... smile).
What is the difference between being rich, or being wealthy? In my opinion, rich person has a high net worth, but a wealthy person has multiple sources of passive income.
hah.. going from a survival mindset to abundant spending is not so easy.. Especially if you don't have any (deserving) heirs..:). RMDs are going to be painful!
Why do so many of these videos speak to achieving 70% or equality with their salary during retirement? I find that interesting. Between investing and saving and giving, we've lived off far lower % of my salary for years. During retirement I'll be just fine with 33% (or lower of my gross compensation). True, I make into 6 figures, but with zero debt and 2016/2017 Hondas we don't have high expenses (although taxes in WA are high). It's a blessing to not have a lifestyle that enslaves.
Talking about wealth in a depreciating currency is pointless. With our Government spending and printing currency non stop you need to own assets the Government can’t print.
Good discussion. My fear is what investments work in our currnt environment. Don't trust the banks or stock market. Goverment run amuck in debt spending. It has to crash, soon. Precios metals seem important.
Pay off all debt before retiring. It makes such a difference.
I've driven a Toyota Prius for 11 years and I think I can make it to 20 with no problem. It still drives like the day I bought it. Nothing wrong with driving an old car.
We retired at 50 and moved onto our 35 ft sailboat. We didn’t have much money but our expenses were low and we picked up odd jobs for a decade. Now we are 69 and still living on the boat. It’s not for the feint of heart. But we’ve seen the world, met some fantastic people, survived 4 hurricanes, and been able to build an ok nest egg without too much strain. No plans to stop sailing until we can’t physically do it anymore.
People who have "grinded" for years to save almost always have a hard time transitioning to spending when they retire. You might be in "abundance" on paper but you still don't feel like it.
Very true
I’ve owned my GMC Yukon XL for 25 years. 365,000 miles, original engine & transmission.
Saving as much as I can, but I will probably be able to retire at noon on the day of my funeral if I have enough pto to cover the rest of the day
4 stages for review
#1 0:52
#2. 3:46
#3 8:00
#4 13:09
We're retired and Social Security covers 90% of living expenses. So we're growing retirement assets.
The Joker in the deck is dementia. It can totally ruin a retirement plan.
I guess I would be in level 3 according to your metric. I spend about 3% of my investable per year pre SS. Debt free and live at the same lifestyle I had while working. I don’t have to freak out about occasional big expenses like a new roof or replacing an aging car. I tracked my spending to the dollar from 5 years before my retirement. I still do. I honestly mean no offense but I don’t understand the logic in paying someone else to manage my money or spending. That would be less I have to spend. I don’t understand how some don’t take the effort to learn about personal finance. You are right. Planning for taxes is very important.
My wife and I are retired in our upper ‘60’s. We have $2MM in investments and $2.5MM net worth. Our take home “pay” from investment income and SS is more now than when we were working. No SS tax withheld, no 401k/403b or HSA contributions. Only 85% of SS is subject to FIT and SS is not taxed in our state. We have not withdrawn any investment principle; balances continue to increase. We pretty much do/spend what we want within our income limits. It all good.
I don't have anywhere near what all the experts say I need to have saved for retirement. I have 5 years to full retirement and have about $60,000 in retirement income. I have already worked out my plan and can live very comfortably with my SS and Pension!
My advise for those in late 50s early 60s is to trickle in Roth conversions to at least fill up the bracket up to 24%
All retiree's should be debt free. I been debt free since I was 36. I didn't buy my first home until I was 56. But I paid that first home in cash. I never put a number on my retirement. I been semi-retired most my life. On and off again at work. I quit a job and don't look for another job. I go on my adventures. I wasn't going to wait for a full retirement. A old frail man, wouldn't be able to do what I wanted to do on my life list bucket list. So I just started my adventures while I was young. There really isn't a full retirement plan for me. I don't think I'm going to stop, just slow down and that's all. But I still can do everything I want to do, in my old-time period. So I don't need to retired. I just enjoy life as I was enjoying life when I was younger. I'm 60 and really living the dream. That retirement plan isn't for me. What I'm doing is working out great for me and I don't see any cons of what I'm doing. I enjoy life and will continue doing the same things I been doing on day one of living it up. Death is waiting for me, but I'm not in a rush to get there.
It doesn't matter what your income was. It is based on your expenses.
I am confused about the comment regarding keeping a car for 10+ years. I have a 12 year old Honda Civic in great condition. It has never had problems that needed repairs. I have had it serviced regularly and haven't had a car payment in 10 years. I don't see the financial harm in this.
In case you don’t hear it enough, your videos are beautifully done. The bouncing icons, the classy backgrounds and reveal of the statements when you aren’t on camera are great.
Thank you! I’ll pass it along to the editors!
I haven’t retired yet but it’s only a few years away. It’s looking like we will be somewhere between Stability and Abundance depending on how things play out. Already have a solid military pension that covers basic expenses and retirement savings that are well above average. Tricare is very reasonable and covers most of healthcare with the exception of copays. For us, Social Security will be icing on the cake.
Generous gifting and legacy planning is where I want to be, even it means working until I'm 82. This was a very good video.
Driving a 2008 Toyota Tacoma...still runs like a top, has been low maintenance. Purposely living off a small 401k draw. Home is paid off, and I have a condo that pays for itself with rental income. My wife is collecting max SS, and I'm almost 67 waiting till I'm 70 to collect.
At 82, we decided that mom should have a more safe car for her(Subaru Impreza vs chevy impalla). In 2021, the impreza was her first new car since the mid 70s. She thinks that it will be her last new car. Maybe, because they don't make impreza sedans anymore. Lets see how it goes. The AWD plus snow tires for winter have made her car much more safe to drive. And we taught her to use iPhone navigation to get to where she needs to go.
Thanks for sharing. My mother open becoming a widow bought a Hyundai. It has a great warranty and it’s one of the only times I’ve recommended paying for an additional warranty to make the full ten years completely covered.
I came across qualified charitable distributions earlier this year. It changed my thinking about doing a Roth conversion. My 401k/457 money is not essential to the funding of my budget once I retire, which will be covered by a substantial pension and max social security that I'll be drawing starting at 70. As I planned on leaving a substantial amount of my financial residue at death to 501(c)(3) organizations, the combination of RMDs starting at 73 and QCDs allows me to accomplish this without paying tax on the deferred compensation---in other words the tax deferral becomes permanent. If I did the Roth conversion, of course, I would pay the taxes upfront. I don't itemize so this is a significant boon. The future is murky. There's always the possibility that the pension and ss go down or are eliminated if the economy crashes. But by doling out my charitable contributions over time allows me to change course if necessary because the money is needed to make up for other income loss or to properly account for my set aside for self-funded long term care.
Maintaining a certain percentage of your pre retirement income is irrelevant, the important thing is to be able to maintain your pre retirment budget.
I am in stage 4. I am driven by purpose and continue to pursue activities that provide opportunities for impact such as part time executive coaching. The 6-8 hours of work I do each week provides the same monthly income that I received in my 30s however I am working primarily for the fulfillment I gain from having a positive impact on centers of influence. Even though the monthly income combined with my RMDs and social security provides way more than what it is I used to take home when working 40 plus hours per week I shall continue to work for the joy it brings to others and the fulfillment I derive in the process.
Retiring at 62 may be challenging for someone without a 401(k),, pension, or significant savings, even if they're earning a high income in their later working years. By retiring early, they risk leaving substantial earnings behind for a relatively small Social Security benefit.
Oof. Having to choose between an upgraded car and doing things like traveling, adding a screened porch to sit in shade without bugs or helping my family, I'll happily hang on to a reliable old car. Even when I a very big dalary I could not justify, either monetary wise or environmentally, the need to replace a car that ran just fine and kept them fifteen years or more. If your dream is to impress strangers who don't care, then knock yourself out, but not my definition of fulfillment.
I went from stage 1 to stage 3 in about 10 years. A lot of hard work, a lot...
Through frugality, prudent saving and investing, my wife and I now have more income in retirement than we ever did in our earning years. It's kind of a shock! Social Security is actually enough for us to live on. With rental income, an annuity and now our RMDs we definitely feel like we are in the abundance stage, though as the presenter says, abundance is sort of in the eye of the beholder. Others would find our income to be barely enough. I will admit, however, that I don't have much sympathy for millionaires who feel they are in the 'survival' stage of retirement!
I am probably in the abundance group. But the high level of variance for 85% of my retirement income has me living in the stability group.
Still have my
2006 Volvo V70R
160K shooting for 250k
Why would you call these ‘stages’. That doesn’t seem like the correct use of the word ‘stage’. Stages implies you would pass through each of these, one after the next. These are situations , in which you would find yourself in one of them.
Good point. You’re right.
Looks like I’ve reached the abundance phase. I’m working my plans to retire next year and planning shows me more than doubling my monthly spending, but my retirement savings will continue to grow. Even before factoring in social security in the future. Very glad I have a good financial advisor to work advantageous tax strategies, which we’ve already been doing the last couple years. Keep Uncle Sam at bay!
Glad to hear!
Im a 60 yr old blue collar self employed guy who never had any 401k or retirement plan. The only time in my life I invested was back in 2007/2008 when I invested $60k in a 529 college plan for my son and daughter Just to see it vanish in 2009 due to the market collapse since then I’ve been scared to dead to invest , I do own some real estate which is paid for and have about $1 mil in a high yield bank acc I know that is very dumb but I just so scared to loose again and at this stage of my life , I couldn’t recover Always looking for answers. Having a difficult time trusting any investing. I know I could be worst off but afraid. My nest is going to vanish with depreciation.
It would seem the key to being a good saver is basically not keeping up with the Jones’s.
My husband has a pension that more than covers our expenses we also have a 457b that we dont need and both are collecting SS that we are using strictly for our camping trips.
Rental properties are a pain, BUT the approx. $22K I net annually from a small rental house in the next town, is pure (taxable) income, somewhat reduced by depreciation. The good thing is that net income goes up with inflation and the deferred capital gain / payout is available if/when we want to sell.
Here is the deal: I don't have a car. I don't have cable or any streaming services or subscriptions. I never eat out -- breakfast, lunch, or dinner. I don't drink anything but water --- ever. I don't gamble, smoke, or do any drugs. I don't go on vacations. No coffee or booze, as noted earlier. I don't use the internet to buy anything -- ever. Practice this and you can easily live off of about 20k a year. Practice this, and truly retire early or retire stress free. What I do: Library, outdoor exploring/hiking, Reading, Exercise, Cook, Love, and Tennis.
Median should almost always be used opposed to average when comparing one to another.
I'd say we're in the stable category. We're getting by drawing a bit less than 4% from our investments and in a few years social security will kick in and drop that number even lower. We're certainly not in the abundance category. But on a clear day maybe I could catch a glimpse of it on the far horizon. I doubt we'll ever get there - it's never been a goal.
4% rule is based on 30 years of retirement. If you end up living longer than 30 years, or have expensive long term healthcare needs….
How should a single person plan for retirement? There no second pension, 401K or SS check in the future. How do you plan on possible SS cuts or means testing for benefits? What happens if Medicare is curtailed and we don’t qualify for Medicaid? How to avoid IRMA penalty?
I’m 45 and my current assets are as follows
£2M commercial retail property
£1M residential property (flats)
£1M FTSE All World ETF
£1M company value
£25K Bitcoin
£10K spot gold
£100K cash
I don’t feel wealthy. My goal is 5m without having to sell the company to feel more relaxed.
From survival to abundance-sounds like a dream! 🌈 How realistic is it for most people to reach the abundance stage?
I’ve worked hard to save about $1,000,000 for retirement, and now I’m ready to turn my savings into a paycheck. But how much can I afford to withdraw from savings and spend is what I don’t know. If I spend too much, I risk being left with a shortfall later in retirement. But if I spend too little, I may not enjoy the retirement I envisioned. What’s your advice on this please?
I'm so thankful I don't have the desire to live large and shout with my money. I'm traveling to various countries overseas now. But only to have dates with my girlfriend who is from eastern europe.
She will eventually move to the US (reluctantly on her part - she's afraid of it here!) and we will travel to state and national parks. This will be true happiness for me. Some of us are content with a simple life and not venturing so far from home 😉
I like the names given to the levels, they emphasize the emotional perspective
Thank you. Good point.
This reminds me I gotta focus on tax planning🎉
True.
Appreciate your perspective and benchmarking. If we're objective about the 401K though, it allowed private companies to pretty much eliminate pensions or at most offer a defined contribution pension. This hasn't been a good thing for the average person. Wall street and government are the only real winners in the 401K world. The 401k was not supposed to replace pensions.
Too much stuff = excessive cost and excessive maintenance, causing loss of wealth. Is it worth it? A pool? A boat? A timeshare? A camper? Hmmmm, stocks, cash flow, airbnb and average life for me. I think I am in #3.
Agreed!
Very clearly stated and explained. It definitely gives me more to think about and also some additional confidence in knowing that my sacrifices and management of my lifestyle all these decades has me to a more stable path going into my retirement years.
Glad it was helpful!
Thank you for sharing your thoughts.
You were so informative. Thank you.
Glad it was helpful!
I am a bit of a retirement & savings video junkie and this is by far the most impactful video I've watched. You opened my eyes to several things I hadn't considered. I find myself straddling stage 2 & 3 and now want to strategize on how to solidify my place in stage 3! Can you help someone in PA?
Thank you! Yes.
Seems like the stages are not just related to money, but also age.
Good information in assessing financial stability for retirement.
It’s the mindset! 😂
Just discovered u by accident. Excellent video!
Thank you !
Just Subscribed!
Focusing on 70% of your pre-retirement income is ridiculous. In retirement, your expenses naturally reduce as you no longer drive to work, no longer pay SS taxes, no longer contribute to your retirement programs and much of you income tax is greatly reduced. Between retirement contributions, SS tax, income tax, I pay 50% of my income. Focus on what you want in retirement, establish a conservatives budget and retire. Remember, at 65, you have fewer years ahead of you than behind. If you live 20 years in retirement, but delay for for 4 years until you turn 69, you just threw away 20% of your retirement years.
People in the stable level need to have contingencies for possible SS means testing/cuts. This likely won't affect lower income groups.
keeping my 2005 scion xb FOREVER because it is a fantastic, reliable and simple vehicle
new cars are stupid gadgety garbage
It's a shame that today's society tries to tie our happiness with how we compare wealth-wise to others.
Excellent......very credible stages.....
Thanks for setting clear definitions. We are at level two - stretching. We have zero debt and a fully paid off house. We are collecting two pensions and our combined SS is projected to be about $7k a month. We are earning at least $80k a year of interest and dividends from our multimillion dollar portfolio. In theory, we could have about $15k a month to spend without touching the investments. We are still working because we do worry about running of $. I.e. the stretching phase. I think we could move to the stable phase once we have Medicare and see decent interest and/ or bond rate.
Just retired 7 weeks ago at 67.5. Have pensions of 5k and rents about 3.2k. Am trying to hold out for social security until 70 which will be $3,700. It still is not enough. I have never raised my rents for 10 years but I could. Health care ok...tricare.
problem is your social security only pays based on how much you earned and even if you earn a lot social security has a cap.
The conundrum of your strategy is that 4% of retirement savings does not even come close to replacing 70% of income. I would think that is typical for most people.
Broke. I foolishly spent my career working in education. I should have instead robbed banks by becoming a banker. The word "job" is actually an acronym which stands for 'journey of the broke".
Excellent video
If I had a choice between a newer car with an outlay or land with an outlay, I would choose the boring land.
That would be wise :)
THANK YOU
My wife and I have kept our head down and built decent wealth. We are mid 50’s and starting to think more about what it will really look like when we walk away from w-2 income as we know it today. With income in the low 7 figures for several years you’d think there would be no issues but lots of unknowns. We own multiple privately held businesses and some rental properties along with approx 3mm in 401ks. Prob too much net worth in real estate that is not income producing. Just multiple vacation homes. Which comes with lots of taxes and insurance and upkeep. But selling triggers capital gains tax that is also painful. This may sound like a flex to some but I’m confident none of us know each other. Any input from someone in similar situation is welcome.
Excellent video
Stability overseas? Yes. Stability in the US? No.
Comparison is the thief of joy.
The 4% rule is outdated and may be detrimental to retirement: an alternative is a floor and ceiling brackets that changes with the market conditions and inflation. Plus healthcare is not reliable and the cost will continue to escalate, best is to retire outside the US by selecting the best country to give better quality of life and cost for it. I would give up Medicare and be a self pay or buy some international health insurance. For people who can’t do that, make sure you retirement savings can last and wait for domestic robots helpers so you can buy one to have a 24/7 assistant/ nurse/shopper/ massager/ even sexual partner, you’ll die happy and totally independent and most of all, you’ll have your peace!
Outstanding video very well done
Thank you very much!
My experience with 401k is just the opposite, been very poor vehicle for retirement due to economic downturns & divorce (QUADRO - giving up 1/2 to ex who did not contribute a dime).
Excellent video, Nick, thank you very much!
Thanks again David !
Thank you, for sharing this useful information. In the future, please do another video like this but, this time highlight for a person with a pension the 4-levels of wealth. Since, I have a traditional private sector pension, a public sector pension, a Rollover IRA, 457 plan, personal savings, and if needed also able to apply for social security. However, since my monthly bills are being covered using only my two pensions. Do not plan to make any withdraws from my retirement accounts until, I reach the mandatory age of 75. So guess that, I am around level 3.5, on your wealth scale (smile ... smile).
Noted! Thanks for sharing.
What is the difference between being rich, or being wealthy? In my opinion, rich person has a high net worth, but a wealthy person has multiple sources of passive income.
Good distinction
hah.. going from a survival mindset to abundant spending is not so easy.. Especially if you don't have any (deserving) heirs..:). RMDs are going to be painful!
Very true .
4 per cent will not be able to handle 10 per cent inflation.
And not address future tax increases.
We are screwed.
Withdraw and put into municipal bonds
Why do so many of these videos speak to achieving 70% or equality with their salary during retirement? I find that interesting. Between investing and saving and giving, we've lived off far lower % of my salary for years. During retirement I'll be just fine with 33% (or lower of my gross compensation). True, I make into 6 figures, but with zero debt and 2016/2017 Hondas we don't have high expenses (although taxes in WA are high). It's a blessing to not have a lifestyle that enslaves.
Hit 200k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in last month 2024?
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Talking about wealth in a depreciating currency is pointless. With our Government spending and printing currency non stop you need to own assets the Government can’t print.
Not correct!!!! Dosen’t account for someone single with no family!!!
“Audit spending and reduce debt” - my advice - stay single - no wife - no kids ..
Good discussion. My fear is what investments work in our currnt environment. Don't trust the banks or stock market. Goverment run amuck in debt spending. It has to crash, soon. Precios metals seem important.
Buy and own one income property other than your home. You can thank me later.
Be happy work more and spend less..?…?
Pay your family bills directly that you want to give money to
better start normalizing yourself to now to ramen, peanut butter, and intermittent fasting 🤙
I'm favoured $30k every 8 weeks! I now have a good house and can afford anything and also support my family
Awesome
Way to repackage/relabel Maslov’s hierarchy of Needs wrapped in the standard financial/retirement planning.. nothing new or enlightening
$3m is nowhere near abundance.