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.
I’ve been working and paying into Social Security for over 40 years, and there’s no way I’m waiting any longer to take it. I’m grabbing it early-might as well take the sure thing. At this point, I’m all about investing in myself and putting money into the market. Over the years, I’ve learned that building real wealth comes from making smart investments.
I agree completely. I’m 60 years old, recently retired, with about $1.95 million in non-retirement investments. I have no debt, but not much in my retirement accounts compared to the rest of my portfolio from the past few years. Honestly, you can’t ignore financial advisors, just take the time to find a good one you can trust.
My husband and i just had a relative conversation this morning. This is exactly how we wish to get our finances coordinated ahead of retirement. Can I get access to your advisor?
My advisor is Rebecca Noblett Roberts. She's highly qualified and experienced in the financial market, with extensive knowledge of portfolio diversity. She's considered an expert in the field. I recommend researching her credentials further.
My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
I’m 77 and still working full time. I do enjoy my work, it provides me with purpose and has secured my financial future. Most people are too eager to retire as early as possible. Even if you do retire early, best to get a part time job for the reasons cited above, as well as following many if not all of the suggestions in this video.
Accurate asset allocation is crucial. Some use hedging or defensive assets in their portfolio for market downturns. Seeking financial advice is vital. This approach has kept me financially secure for over five years, with a return on investment of nearly $1 million.
Sonya lee Mitchell is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I think the retirement crisis will get even worse. A lot of people can’t save because of low paying jobs, inflation, and insane rental rates. And now that home ownership is out of reach for middle class Americans, they won’t have a house to retire with either.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Big Credits to ''Melissa Terri Swayne'' she has a web presence, so you can simply search for, there are some others but it might be difficult to get them, but Carol has been a good guide through the year.
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
Agreed the role of advisors can only be overlooked, but not denied. I remember in early 2020, during covid-outbreak, my portfolio worth around $300k took a slight fall, apparently due to the pandemic crash, at once I consulted an advisor in order to avoid panic-selling. As of today, my account has yielded big fat yields, and leverages on 7-figure, only cos I delegate my excesses right.
this is huge! mind if I look up the consultant that guides you please? only invest in my 401k through my employer for now, but enthused about diversifying my investments for a prosperous financial future
Impressive, i’ll most definitely check her out. I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.
Having a pension is great. Began receiving my mine at 55, when I retired from my RN job of which I had 30 years credited service. Claimed Social Security at 62,not rich but comfortable.
Pensions are back loaded as company contributions increase the longer you work for the company. Unfortunately, companies like some large banks are laying off people due to low turnover (i.e., they don't want people to work there too long). It is better to have a 401k plan with a company match throughout your working life to benefit from decades of cumulative growth of your investments.
@@williamrogers1219 or a government pension. Quit that private sector job with your 401K get a government job, get vested in 5 years, collect pension on top of private 401K, Ta da.
I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!
That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Remember, if the company offers an employer match and you don't sign up, you're just giving away free money. Get attention of an expert like Bianca Harley Doran to let you understand the theory behind proper financial planning.
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market
I am going to look her up, I have about $81k i want to start with, might be small but it's better than nothing though. Since the 08 crash is playing out again.
Azul just a small point, you may run out of savings but you still receive your pension and social security. So a little distinction in wording, money will continue to arrive in your bank account from two sources one with cost of living adjustments. Got it, you will have to adjust your living but just like all advisors say GO-GO, Slow Go and No Go years will change your spending anyway.
I retired last year at age 56. Pension covers 70% and dividends cover about 20%. So our passive income almost covers our monthly costs. Wife still working from home for a few years. Our budget is about 6,500 per month after taxes. Also have a decent 401K that I won’t touch for a few years, and substantial amount in Vanguard index funds. No mortgage, no debt. Probably get a stress free very part time job while the wife is still working. Also, I did “pension optimization” with a 30 year term life insurance to age 84 that would cover 50% of the pension. This also gained us almost $300 per month as I was able to choose the higher pension payout. You just need to plan and budget (Make your lunches, skip coffee shops, invest and stay out of debt!)
I genuinely mean it when I express my stress and concern regarding the market crash and high inflation, particularly in relation to my retirement. I have been experiencing losses for quite some time, and while some may argue that crises can present opportunities, I am feeling overwhelmed. However, I understand that investing is a long-term endeavor, and it is crucial to maintain focus on the bigger picture and the long run.
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 $760k 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.
It's not inflation it's price gouging! These corporations are bringing in billions but aren't giving back to the working class they're giving it back to the rich
Thanks for creating a video including a scenario with a defined benefit pension. Almost all of the financial planning discussions online focus only on protecting a pool of money.
@@mrrey8937But even that scenario would not affect the pension. The question would be, is there enough money from the pension benefits to cover one’s life expenses.
My retirement account has gone down by 13.7% in the past year due to rebalancing I did out of fear uncertainty and doubt. What are best alternatives to take in other to secure a financially free retirement and achieve ultimate peace? I don’t want to fail after 42 years of working hard.
If you want to rebuild your retirement by yourself, without the help of a partner, I will tell you it is near impossible. Even NewRetirement and co can’t do the job of an FA with expertise, a large following/client base and experience. Vet and hire one and begin to develop a rapport.
This is useful information, I copied his full name pasted it into my browser, his website popped up top search and his qualifications are excellent. I just messaged him
My pension was small but my insurance for life of retirement backs up Medicare was great reward. Both my husband & I separately planned back ups accordingly years ago knowing Medicare may not be enough. We both have required basic Medicare with our retirement pension insurances as secondary. My TSP was wonderful advantage also. Living simple life with no debts helps. We relocated to lower property taxes for small paid off cottage. We aren’t fancy people & never had high incomes ever but…well, “it’s a great life rich in everything after our diligence & frugality.”
My state uses Empower as its employee contribution custodian, so I've played quite a bit with their retirement planner. I have to question the 'running out of money' scenario when a retiree has SS and a pension. Unless I incur some sort of debt that can garnish those bits of income, I should never really reach zero. I'm not saying that's a wise strategy element, but with a pension / SS, I should never be hand-to-mouth.
I was thinking the same thing, but maybe what it really means is you fall below the income requirement? Or you run out of your own cash and only have the pension and SS?
The pension sure does help stretch it out longer. I wonder if "broke" at ~80 something with a pension and SSA still coming in with a paid off house doesn't look like to terrible of an ending? I don't want to run out of money but better to have enjoyed it all those "go-go" years and still have two good sources of money coming in during the "no-go" years. -Just my 2 cents.
As long as the pension/SSA cover expenses with a small reserve for emergencies it would work out ok. You can always reverse mortgage the paid off house for long term care expenses (if needed)
My wife and I were blessed enough to work for companies that still had pension plans. When we hit 62, we were able to access this fund. They give us two choices: take an eye-opening lump sum or take monthly payments for the rest of our lives. When I did the math, the lump sums equated to about 15 years of monthly payments. We don't have any healthy issues and longevity runs in the family so we decided we would live way over 15 more years. That was 7 years ago and still think we made a good choice. We also delayed our SS until 70 to get the maximum check too.
Yes, because it's annuitized. Similar to those who win the Lotto You can take it in 31 annual payments or get half today. If you take the lumpsum option, the idea is that you'll do better by investing it and living off of the returns
A benchmark to help decide whether to take a pension or lump sum. Multiply monthly payments by 12 to get an annual pension. then divide that number by the lump sum. THen divide that result by 100 and the result is the percentage of the pension against the lump sum. Some use 6% or over then keep tthe pension. Some use a long term bond fund dividend as the benchmark.
@@NorthStarPNW My calculations was the age of 77 (15 years from where we started). We are more than halfway there so I think it was a good choice to take the monthly checks.
When I was young I was lucky to have old people around me and they all told me to get goverment retirement so I joined milatary did 27.5 years got retirement went to work for DoD got another retirement. And got social security to thank God for old people
Azul thanks for this video but sometimes things don't work as easy is been said. First, you can't have a plan without a professional assist. secondly, without proper and good management no plan will work out fine. thirdly, getting updated always, without these 3 steps nothing will change.
Most people don't realize it, but the secret to retiring comfortably is finding a way to make returns while your money works for you. My dad, as I remember, started saving for retirement quite late, but I know he was making more than 10k returns from his investment monthly and it was completely passive.
I also got introduced to a financial advisor about five years before my retirement and that was a big change in my life. We went for seminar on life after retirement and that was where we got introduced to Linda Sue Baier, she is a professional financial advisor.
Our family got introduced to a financial advisor about two years before my dad retired. That was what changed things. I've been using the same now and I think my retirement income would be on the right track.
If you have a pension, then your biggest obstacle is going to be the provisional income calculation and the tax torpedo. A simple way to sort of gauge if this will affect you is as follows. If you put all other income in one bucket and total SS in a second bucket and then ratio the two, then a 25/75 split will likely not result in a tax liability. This ratio means you have 25 other income and 75 SS, and whereas some of your SS will be taxable, it is unlikely to exceed the standard deduction and so zero tax liability. If it is 50/50 or greater in favor of other income, then 85% of your SS will be taxable and that’s that. If your other income comes in at 25% to 50% then you MAY have an issue and you will need to learn about the provisional income calculation and actually run it to see how you are affected and determine a plan of action. Ultimately, you have two options. One is get rich and power through the tax torpedo to come out the other side and keep right on going. This one says I am going to pay 85% on my SS but I don’t care because it’s not that significant to my total wealth. Option two is to look as poor as possible and divest yourself of taxable income. The godo news is there are not a million strategies for doing this. There are six. One is wait to 70 to take SS and improve your ratio. Two is get rid of all pre-tax money by converting to roths and/or living off it until you go on SS. And there are four others. Having a pension is a nice problem to have. This is true of all other income, but if you have this wealth, then you have to get smart or you’ll pay a lot of taxes in your golden years.
Just ran my numbers with $300K IRA, $6000 each month between Military pension , VA disability and SS and taking $6000 each month for expenses it said I would run out of money at 71 y/o??? How would I run out of money if I never have to touch the IRA since between the SS, and pensions I bring home $6000 that I calculated for expenses???? I'm I missing something??What I'm I doing wrong ?
Same here. I went back in and removed my pensions and said I would be needing to withdraw $500, $1000, etc a month from my $300k to see how long it would last.
I have mil and Va money also I’m planning to stop working at 65. I will not take my SS until 70. I will supplement my mil and Va money by taking money out of my 401k. Account. I plan on taking money from 65 to 70. I plan to make monthly withdrawals from the 401k. Now if I find I don’t need that much money I will reduce my 401k withdrawals to what I need. I think the key to this is to start living on only your military and VA pension at least 5 years before you retire. Then you will be used to that amount and the 401k could be just a nice extra for a trip or emergency funds. Then when you finally add SS you will be doing ok.
Great example. I'm planning on doing the same but retire in a year @ 63 and wait to start SS. So that gives me only a year to get use to the lower income.... will see !!!@@reno1851
Understanding you're not a tax specialist, I'd love to see a similar video that adds the following to your discussion/considerations: looking at the long-term tax and Monto Carlo simulation differences between taking SS earlier, e.g., 62, to put off dipping into more of your retirement portfolio (e.g., traditional IRAs/401K) to cover your early retirement cash flow needs vs. waiting to take SS until full retirement and therefore needing to tap into more of your retirement portfolio earlier to meet your cash flow needs. I get that our SSI will increase each year we put off taking it, but what's the comparison consequence of doing so for tax purposes and Monto Carlo portfolio longevity simulation purposes? Assume you're in a state that taxes SS and retirement income. ... Love your channel. TIA.
I would like to see that type of scenario also. I am thinking, possibly take SS at 62 to hold investments for later use or possibly leave to spouse/kids. After all, we can’t gift SS. I want to make sure I am not a financial burden to my kids, but I also want to use funds in such an order that I get the most use of them. 1. Pension. 2. SS at 62. 3. IRA/401k/403b. 4. Real estate/whatever folks have. I appreciate these videos, very valuable to so many. Thank you for your time.
*Well explained. Thank you for bringing up this video. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject! Thanks to Mylah Evander the lady you recommended*
It changes it my reducing the amount of money you need to have invested yourself. So youncan either retire earlier, or have more money in retirement. Just make sure the pension provider is stable.
I would like to see a video on converting $ in traditional 401K to Roth in retirement. Let’s assume you have a good pension as well as both spouses getting a good amount from social security. Person has large amount in traditional 401k but has enough to live on with SS and pension. Would it be a mistake to take distributions and move money into Roth at that point? Worried about required distributions at 73 and taking larger penalties.
People are facing a tough retirement. and it's even harder for workers to save due to low-paying jobs, inflation, and high rents. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire in.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I work with Jessica Lee Horst as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
*Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Instead of trying to predict and prognosticate the stability of the market and precisely when the change is going to happen, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every week*
Love your videos! We retired 7 years ago with the help of a licensed financial advisor that specializes in retirement planning. I have been very pleased with their service, advice, and outcome. Each year I review the long-term financial model which I believe is basically the Monte Carlo model. What I primarily look at is the assets the model predicts I will have at age 85, 90, and up to 99. What I would love to hear you address in a video is how to determine what that number at 99 needs to be. I would love to spend more of my assets early in my retirement, and so I am not opposed to increasing my spending rate to do so. But I don't want that number at age 99 to drop below X. I just don't know what X is!
Thanks Azul, i signed up for your newsletter and look forward to learning some stuff. I turn 59 this Month and plan on retiring at 62. Trying to get all my numbers together now with my pension/401k/ssi and savings account to see what i will have to work with. Right now im all in on high risk in my 401k which feels a bit uneasy honestly. 1/3 in S&P 1/3 in International stocks and 1/3 Large cap stocks. Should i leave 1/3 in high risk and move the rest in bonds? Maybe a target fund? Again, thanks for your knowledge sir!
The problem with Monte Carlo simulations whether normal or flat distribution or drawing from historical distributions is that they assume that each draw is random and independent of the previous draw. This is not valid. My observation is that they tend to predict greater volatility than is observed in the historical data. This generally translates into predicting a lower probability of success than the historical data predicts. The difference can be enough to affect one’s retirement plan.
Well they don't run out of income. They still get $4000+ income with SS+ cola and pension. and by 80 how much are they spending? I'm sure it will be alot less.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family...
I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
@@FreuleinBey Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* ...
I work for the MD gov't and will be getting a pension when I retire and also contributed to pre-tax supplemental accounts - I'm retiring at 60 at the end of 2025. MD gov't pensions get an annual COLA and FICA was taken out of our paychecks so we'll get SS without worrying about WEP. I look at the pension and SS as an income floor. The pension allows me to have options that I wouldn't have otherwise so trust me, I'm very thankful. Azul - can you do a video on strategies to avoid IRMAA?
I am also a MD state employee and will be retiring around 2030. I am a disabled vet as well. The money I have in my supplemental and brokerage accounts will be the icing on the 🎂. Congrats on retiring next year.
Just check when you can start getting the COLA. A friend of mine in New York just retired and told me he has to wait 5 years until his pension's COLA will kick in. Best of luck in your retirement!!
Start. Doing those Roth conversions, unless you are already adding up to too much. Someone said on some message board, if IRMAA is your problem count yourself lucky.
@@tomy.1846 Thanks for your response. You have to be retired for a minimum of 1 year to get the COLA for the MD pension. It gets applied every July 1st so I wouldn't get my first COLA until 7/1/27. Many people retire on July 1st so they only have to wait 1 year.
@@leisure057blank3 It's too late for me as they would put us into a higher bracket. I have a small ROTH IRA that I will use as a secondary emergency fund. I imagine IRMAA's human form as a elderly gold digger who has an unholy alliance with the gov't and tries to confiscate part of your SS check.
S&P has performed very well over the last decade and a high yield ETF would have substantial exposure to the S&P (good thing). 50-70% in equities is safe for most people if you can handle the down years like '22.
When you say “run out of money” I assume you only mean the 500k. Pensions and (hopefully) social security don’t run out. In the example, the retiree will always have at least 4K a month till he dies.
The answer is YES" on the $500 K. Unfortunately, with this person's pension, without an inflation adjustment their purchasing power on their pension dollars every year inflation rises will decrease. Social Security will be around, as Azul mentioned, but there will more than likely be and adjustment, probably not for the better, that will decrease around 2032-2034 without government help.
@@user-ok2fu5is5xI get all that. 4K is not a lot, and will be worth less in ten years. But it’s better than zero. My pension is 5k a month and hopefully I will add 2k in ss in ten years. I wish it was more but I will take that guaranteed monthly amount any day over market returns (which I also have).
My mother had my dad’s army pension, which wasn’t huge but was security, she had social security which was the same. Her savings was around 500k. She also had her house which was 500k. She lived very well, was in a very nice assisted living which the pension and SS covered. Until she needed nursing care. The house funds more than covered that for her life. She was more than fine!
The Monte Carlo simulation does not really make a whole lot of sense to me. How do you run completely run out of money when you have a defined pension (guaranteed monthly income), social security (also guaranteed monthly income) and income from investments (such as high yield savings, bond income, dividend income or rental income - variable depending in interest rates or vacancy from rental). With a defined pension income and social security income covers a majority of monthly expenses. Income from investments would cover any remainder and should have surplus left over for reinvestment and growth. The principle would never be touch and would allow for covering increase expenses and then passed on to any future heirs.
I'm 67 and a half and retired in 2020 when covid kicked off. have been doing fine on just SS and about 70 G when retirement started. about 25 G of that went to help the kids refurbish Grandpa's house so they would have a decent dwelling. In the country with low income and living in our means. Retirement means NO extravagant spending, all toys paid off years ago, NO big vacations. And DEFINITELY no TIMESHARES!!!
In 19 years I’ll be 65, at the moment my cash pension is estimating $1,100 a month… we’ll see as it gets closer, currently proceeding with my savings with it excluded.
At the rate things are moving up you’ll need at least 7x that, so drawing about $70,000 a year ($5,800 a month) from the pension and probably another $100,000-$150,000 in liquid investments to keep pace with inflation. My point is, plan big.
I like that Azul recommends fee only advisors. You shouldn't give someone a lifetime income for giving you a little bit of advice. If you are paying a percent of assets each year you are funding your advisor's retirement, at the expense of your own.
A pension is a nice part of a retirement plan...another piece of the puzzle along with 401K's, etc. But you still have to save and be money smart. A pension and SS might not quite be enough.
Azul, curious if you have any clients or know anyone who’s actually run out of money. I know plenty who never had much to begin with, but never any who spent it all before they expired.
I think we control some of the factors in retirement….but the unkowns of inflation, return are so unkown we have no idea.. the most important part of the calculation is inflation and return… wich is VERY UNKOWN over 30 years...
I may have misunderstood you, but my understanding is that you lose about 6% of your SS benefits for each year you decide to start collecting before your FRA (up to age 62) and you get an extra 8% for each year you decide to delay collecting after FRA (up to age 70).
I have my 401(k) invested in a stable value fund with an average return of 3%. How should I categorize this in my asset allocation? Trying to be conservative on my 401k with very little risk.
My pension has enabled me to retire at 56 (my last day is Friday) but I’ve also been aggressively investing since I was 19 and invest in my company’s 401k so my portfolio is 7 figures. I live relatively modestly (despite the thumbnail pic) so my Monte Carlo 100% at age 95of I love that long.
@@Retired_Life_1 Congrats thats great! I have a couple pensions and a modest 401k account..53 and I am retiring at 58. I might have 600k-700k when I go. 6k a month in pensions and a ss suppliment until 62 at 2.2k.
I'm getting a $3000 a month pension $2000 social security,and my part time job at a well known home improvement store $1,500 a month, home paid off on 80 acres 😁 can't relate to struggling past 65 should have been grinding earlier in life🤷
If you have pension, does 'windfal elimination provision' in social security rules takes all or most of your social security that you have earned from your second job?
Azul, thanks for the video. I have a government pension and benefits that covers our expenses, but we are still contributing 25% to our traditional 401K and maxing our Roth IRA. Should we be saving at that rate if the pension covers all our expenses?
If you are in a position, damn straight! Healthcare is the biggest roadblock for most, myself included. Medicare eligibility is 2 1/2 years away for me, so that will be time to pull the ripcord for me!😀
@@bigjohnson7415 if you're trying to avoid the costs of paying for your healthcare (thus not retiring early) - I get it... For some, getting insurance on open market before 65 isnt easy because of pre-existing conditions (or super expensive). If my money is where I need it in a few years,. may retire 18 months prior to 65 and COBRA
My gauge as far as longevity are celebrities, some actor just died at age 75. In other words he only lasted 750 weeks after age 60 not a thousand, others live longer but it seems that the 1000 week gauge is pretty accurate.
Great presentation. You said you would give a link to the free on-line retirement too. I didn’t hear you identify it and I didn’t find a link in the video presentation. How can we get the link? I’ve used the Fidelity Retirement Income Planner. What is your assessment of the accuracy of that retirement planning tool?
Since a pension is really just an annuity, you can use this same process to analyze reducing your nest egg and buying an annuity ("pension") vs. keeping the nest egg. Every time I run the math it doesn't make sense for me. It seems like it might make more sense if you need to take more from your savings than maybe 5% to meet your basic needs.
The benefit of my pension was the ability to start taking it at 45 years old. I am getting paid to work a second career. Using a 4% withdrawal rate, my pension equates to a 1.35 million investment portfolio. My total contributions were less than 200k and those were back loaded in my last 5 years of employment. If I live to age 72, my pension payments will exceed my total earnings while employed.
@@diggernash1I wouldn’t really equate a $54k pension per year to the equivalent of having $1.35M portfolio. Most attorneys(for things like divorce purposes) would use the rule of each $100/month of pension income being the equivalent of $18,000. So your $54k/year is actually like having $810k. Not bagging on pensions. My wife’s is over $200k per year. Just though you would want to speak factually.
@@edhcb9359 That equates to a 6.66% withdrawal rate. That is higher than most financial planners would advise, but I can see the number appealing to lawyers. :) I was blessed to keep my full pension through two divorces. This should be the case for most retirement accounts in the case of no fault divorces....but now I am headed down a rabbit hole...lol From the point of view of my estate, the pension adds zero value. I have already exhausted my contributions to the plan, so nothing remains for my heirs to inherit.
That's probably a good rule of thumb. You can do a present value calculation that estimates based on your age, life expectancy, and expected return, net of inflation.
Perhaps this would all turn out better for this individual if his/her social security was increased. If 'he' saved $500k before retiring, he probably had an income that was fairly high for some/all of his career. Higher income would mean higher social security benefit. Higher social security benefit would mean taking out less of his 'savings' account funds for normal day-to-day expenses which means his account will last longer.
My pension was frozen in 2012, but at least I had 22 years vested. I'll get close to $2k a month, no adjustments, but it'll make retirement a bit easier.
Every little bit helps. But nobody I know is living on $500 a week today. Not counting what most pay monthly for housing, insurances and bills. Just food, gas, clothing and of course the unexpected costs in life we all endure, house and auto repairs for example. - $500 wouldn’t quite be enough.
another example of “FEE ONLY” advisory.. if I have 1 million dollars my 1.5% fee would be 15k… If i only invested a smaller amount with that advisor and then just folllowed the advise with the rest of my money I’d pay WAY LESS fees… I look at the FEE ONLY advisor a rip off… I’d prefer an HOURLY advisor… make the person u deal with PAY BY THE HOUR becasue they spend VERY FEW hours on ur specific account each year… VERY FEW .. some even almost none.. as much of it is automated...
just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
Hey Azul I have a question for you. My company has a pension (private company) but it does not have a cost of living rider to it for inflation, like you said is very common except for some jobs like government. If my company offers a lump sum payment (minus the taxes - ouch) is it generally a good idea to take it? I could invest it in a S&P 500 Index fund and at least make up for inflation with returns. But of course it would take me time to recover from the taxes taken out. Thanks! greg
I had the same question. I think the answer is "it depends on how well the S&P 500 does" - typically 9% per year average. I'm going to vary how much I pull out based on upon how the market is doing. If it's doing well, I'll take out the maximum I'm comfortable with (4%), if it's not doing well, I'll lay low for a little while (~2%). A lot of this depends on how much you have and what you can live on so you'll need to chat with a fee only financial advisor.
What? Am I missing something here. You don't run out of money with SS and pension. They are for the rest of your life. Running out of money part only applies to 401K/IRA.
In practice of course you adapt your lifestyle, up or down, all the time so that you wouldn’t actually run out of money at eighty because you would have started to cut down expenses long before.
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Michelle Stewart.
Stewart's expertise in customizing investment portfolios based on changing market conditions and personal risk profiles is exceptional. It's not a one-size-fits-all approach, which is crucial in crypto investing.
I have been seeing so many recommendations about Michelle Stewart, Her strategy must be good for people to talk about her. Does she work for companies as well, I might be able to get her a deal with my board here in Canada .
I have a police pension, I got hurt at work and have a tax free pension at 6500 a month plus health benefits for free.. At 50 still working new job putting away 20% into my a 401k… I hope that’s enough
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.
I’ve been working and paying into Social Security for over 40 years, and there’s no way I’m waiting any longer to take it. I’m grabbing it early-might as well take the sure thing. At this point, I’m all about investing in myself and putting money into the market. Over the years, I’ve learned that building real wealth comes from making smart investments.
I agree completely. I’m 60 years old, recently retired, with about $1.95 million in non-retirement investments. I have no debt, but not much in my retirement accounts compared to the rest of my portfolio from the past few years. Honestly, you can’t ignore financial advisors, just take the time to find a good one you can trust.
My husband and i just had a relative conversation this morning. This is exactly how we wish to get our finances coordinated ahead of retirement. Can I get access to your advisor?
My advisor is Rebecca Noblett Roberts. She's highly qualified and experienced in the financial market, with extensive knowledge of portfolio diversity. She's considered an expert in the field. I recommend researching her credentials further.
Thank you so much, this is exactly what I needed right now. I wrote her an email and am waiting for her reply. Hopefully, she responds soon.
My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
I’m 77 and still working full time. I do enjoy my work, it provides me with purpose and has secured my financial future. Most people are too eager to retire as early as possible. Even if you do retire early, best to get a part time job for the reasons cited above, as well as following many if not all of the suggestions in this video.
Accurate asset allocation is crucial. Some use hedging or defensive assets in their portfolio for market downturns. Seeking financial advice is vital. This approach has kept me financially secure for over five years, with a return on investment of nearly $1 million.
Mind if I ask you to recommend this particular coach you using their service?
Sonya lee Mitchell is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I think the retirement crisis will get even worse. A lot of people can’t save because of low paying jobs, inflation, and insane rental rates. And now that home ownership is out of reach for middle class Americans, they won’t have a house to retire with either.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Mind if I ask you to recommend this particular coach you using their service?
Big Credits to ''Melissa Terri Swayne'' she has a web presence, so you can simply search for, there are some others but it might be difficult to get them, but Carol has been a good guide through the year.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
pls how can I reach this expert, I need someone to help me manage my portfolio
Melissa Terri Swayne is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
As most investing-related questions, the answer is, it depends.. my best suggestion is to consider advisory management
Agreed the role of advisors can only be overlooked, but not denied. I remember in early 2020, during covid-outbreak, my portfolio worth around $300k took a slight fall, apparently due to the pandemic crash, at once I consulted an advisor in order to avoid panic-selling. As of today, my account has yielded big fat yields, and leverages on 7-figure, only cos I delegate my excesses right.
this is huge! mind if I look up the consultant that guides you please? only invest in my 401k through my employer for now, but enthused about diversifying my investments for a prosperous financial future
Google Rebecca Noblett Roberts and do your own research. She has portfolio management down to a science
Impressive, i’ll most definitely check her out. I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.
Having a pension is great. Began receiving my mine at 55, when I retired from my RN job of which I had 30 years credited service. Claimed Social Security at 62,not rich but comfortable.
Praise Jesus Christ! HALLELUJAH AND!!!
Pensions are back loaded as company contributions increase the longer you work for the company. Unfortunately, companies like some large banks are laying off people due to low turnover (i.e., they don't want people to work there too long). It is better to have a 401k plan with a company match throughout your working life to benefit from decades of cumulative growth of your investments.
@@williamrogers1219 or a government pension. Quit that private sector job with your 401K get a government job, get vested in 5 years, collect pension on top of private 401K, Ta da.
I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!
That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!
Mind if I ask you to recommend this particular coach you using their service?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
Regardless of where you are in life, there are several key steps that apply to almost everyone during their retirement planning.
Check on your investments from time to time and make periodic adjustments.
Deciding when you want to start saving when you want to retire, and how much you'd like to save for your ultimate goal.
Choose the right accounts for you. Take the chance to invest in a 401(k) or similar account if your employer offers that option.
Remember, if the company offers an employer match and you don't sign up, you're just giving away free money. Get attention of an expert like Bianca Harley Doran to let you understand the theory behind proper financial planning.
Thats the right thing to do, she will come up with a plan.
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market
Jenny Pamogas Canaya, that's whom i work with
I am going to look her up, I have about $81k i want to start with, might be small but it's better than nothing though. Since the 08 crash is playing out again.
Scam
Azul just a small point, you may run out of savings but you still receive your pension and social security. So a little distinction in wording, money will continue to arrive in your bank account from two sources one with cost of living adjustments. Got it, you will have to adjust your living but just like all advisors say GO-GO, Slow Go and No Go years will change your spending anyway.
I retired last year at age 56. Pension covers 70% and dividends cover about 20%. So our passive income almost covers our monthly costs. Wife still working from home for a few years. Our budget is about 6,500 per month after taxes. Also have a decent 401K that I won’t touch for a few years, and substantial amount in Vanguard index funds. No mortgage, no debt. Probably get a stress free very part time job while the wife is still working. Also, I did “pension optimization” with a 30 year term life insurance to age 84 that would cover 50% of the pension. This also gained us almost $300 per month as I was able to choose the higher pension payout. You just need to plan and budget (Make your lunches, skip coffee shops, invest and stay out of debt!)
Federal pensions such as civil service and military pensions are adjusted for inflation each year.
I genuinely mean it when I express my stress and concern regarding the market crash and high inflation, particularly in relation to my retirement. I have been experiencing losses for quite some time, and while some may argue that crises can present opportunities, I am feeling overwhelmed. However, I understand that investing is a long-term endeavor, and it is crucial to maintain focus on the bigger picture and the long run.
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 $760k 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.
how do I get in touch with this consultant that assist?...
STEPHANIE KOPP MEEKS, that's whom i work with look her up and thank me later
Thanks for the info . Found her website and it really impressive
It's not inflation it's price gouging! These corporations are bringing in billions but aren't giving back to the working class they're giving it back to the rich
Thanks for creating a video including a scenario with a defined benefit pension. Almost all of the financial planning discussions online focus only on protecting a pool of money.
@@mrrey8937But even that scenario would not affect the pension. The question would be, is there enough money from the pension benefits to cover one’s life expenses.
My retirement account has gone down by 13.7% in the past year due to rebalancing I did out of fear uncertainty and doubt. What are best alternatives to take in other to secure a financially free retirement and achieve ultimate peace? I don’t want to fail after 42 years of working hard.
If you want to rebuild your retirement by yourself, without the help of a partner, I will tell you it is near impossible. Even NewRetirement and co can’t do the job of an FA with expertise, a large following/client base and experience. Vet and hire one and begin to develop a rapport.
How can one get to interview advisors? And what questions should you ask?
People downplay planner’s role, until they are burnt by their mistakes. That’s why I’ve been working with expert planners like CHRIS RYAN STEWART
CHRIS RYAN STEWART
GOOGLE the name
This is useful information, I copied his full name pasted it into my browser, his website popped up top search and his qualifications are excellent. I just messaged him
My pension was small but my insurance for life of retirement backs up Medicare was great reward. Both my husband & I separately planned back ups accordingly years ago knowing Medicare may not be enough. We both have required basic Medicare with our retirement pension insurances as secondary. My TSP was wonderful advantage also. Living simple life with no debts helps. We relocated to lower property taxes for small paid off cottage. We aren’t fancy people & never had high incomes ever but…well, “it’s a great life rich in everything after our diligence & frugality.”
My state uses Empower as its employee contribution custodian, so I've played quite a bit with their retirement planner. I have to question the 'running out of money' scenario when a retiree has SS and a pension. Unless I incur some sort of debt that can garnish those bits of income, I should never really reach zero. I'm not saying that's a wise strategy element, but with a pension / SS, I should never be hand-to-mouth.
I was thinking the same thing, but maybe what it really means is you fall below the income requirement? Or you run out of your own cash and only have the pension and SS?
Agreed. I'll never go to zero
The pension sure does help stretch it out longer. I wonder if "broke" at ~80 something with a pension and SSA still coming in with a paid off house doesn't look like to terrible of an ending? I don't want to run out of money but better to have enjoyed it all those "go-go" years and still have two good sources of money coming in during the "no-go" years. -Just my 2 cents.
As long as the pension/SSA cover expenses with a small reserve for emergencies it would work out ok. You can always reverse mortgage the paid off house for long term care expenses (if needed)
@SpookyEng1 Agreed. That's the true value of a paid off house.
My dad in 1978 told me to get a CALPERS pension w COLA-average annual police officer pension is over $100 K USD w cola in California for life
My wife and I were blessed enough to work for companies that still had pension plans. When we hit 62, we were able to access this fund. They give us two choices: take an eye-opening lump sum or take monthly payments for the rest of our lives. When I did the math, the lump sums equated to about 15 years of monthly payments. We don't have any healthy issues and longevity runs in the family so we decided we would live way over 15 more years. That was 7 years ago and still think we made a good choice. We also delayed our SS until 70 to get the maximum check too.
Yes, because it's annuitized.
Similar to those who win the Lotto
You can take it in 31 annual payments or get half today.
If you take the lumpsum option, the idea is that you'll do better by investing it and living off of the returns
A benchmark to help decide whether to take a pension or lump sum. Multiply monthly payments by 12 to get an annual pension. then divide that number by the lump sum. THen divide that result by 100 and the result is the percentage of the pension against the lump sum. Some use 6% or over then keep tthe pension. Some use a long term bond fund dividend as the benchmark.
Social Security is actuarily neutral - it doesn't matter when you start, you get the same total unless you live longer than your early 80s.
@@NorthStarPNW My calculations was the age of 77 (15 years from where we started). We are more than halfway there so I think it was a good choice to take the monthly checks.
When I was young I was lucky to have old people around me and they all told me to get goverment retirement so I joined milatary did 27.5 years got retirement went to work for DoD got another retirement. And got social security to thank God for old people
Azul .. thanks for the pension video… I’m going to be a pension guy when I retire so great to hear your thoughts and experiences…. Great job
Me too, about 45k a year. So greatful to have it as sort of a base/safety net.
Azul thanks for this video but sometimes things don't work as easy is been said. First, you can't have a plan without a professional assist. secondly, without proper and good management no plan will work out fine. thirdly, getting updated always, without these 3 steps nothing will change.
Most people don't realize it, but the secret to retiring comfortably is finding a way to make returns while your money works for you. My dad, as I remember, started saving for retirement quite late, but I know he was making more than 10k returns from his investment monthly and it was completely passive.
This is really amazing though. I'm curious as to how he did it. Was it real estate? Or he was a market enthusiast?
I'm also a retiree and i get's a pay of 30 k monthly in return from my plan.
I also got introduced to a financial advisor about five years before my retirement and that was a big change in my life. We went for seminar on life after retirement and that was where we got introduced to Linda Sue Baier, she is a professional financial advisor.
Our family got introduced to a financial advisor about two years before my dad retired. That was what changed things. I've been using the same now and I think my retirement income would be on the right track.
If you have a pension, then your biggest obstacle is going to be the provisional income calculation and the tax torpedo. A simple way to sort of gauge if this will affect you is as follows. If you put all other income in one bucket and total SS in a second bucket and then ratio the two, then a 25/75 split will likely not result in a tax liability. This ratio means you have 25 other income and 75 SS, and whereas some of your SS will be taxable, it is unlikely to exceed the standard deduction and so zero tax liability. If it is 50/50 or greater in favor of other income, then 85% of your SS will be taxable and that’s that. If your other income comes in at 25% to 50% then you MAY have an issue and you will need to learn about the provisional income calculation and actually run it to see how you are affected and determine a plan of action. Ultimately, you have two options. One is get rich and power through the tax torpedo to come out the other side and keep right on going. This one says I am going to pay 85% on my SS but I don’t care because it’s not that significant to my total wealth. Option two is to look as poor as possible and divest yourself of taxable income. The godo news is there are not a million strategies for doing this. There are six. One is wait to 70 to take SS and improve your ratio. Two is get rid of all pre-tax money by converting to roths and/or living off it until you go on SS. And there are four others. Having a pension is a nice problem to have. This is true of all other income, but if you have this wealth, then you have to get smart or you’ll pay a lot of taxes in your golden years.
Just ran my numbers with $300K IRA, $6000 each month between Military pension , VA disability and SS and taking $6000 each month for expenses it said I would run out of money at 71 y/o??? How would I run out of money if I never have to touch the IRA since between the SS, and pensions I bring home $6000 that I calculated for expenses???? I'm I missing something??What I'm I doing wrong ?
Same here. I went back in and removed my pensions and said I would be needing to withdraw $500, $1000, etc a month from my $300k to see how long it would last.
I have mil and Va money also I’m planning to stop working at 65. I will not take my SS until 70. I will supplement my mil and Va money by taking money out of my 401k. Account. I plan on taking money from 65 to 70. I plan to make monthly withdrawals from the 401k. Now if I find I don’t need that much money I will reduce my 401k withdrawals to what I need. I think the key to this is to start living on only your military and VA pension at least 5 years before you retire. Then you will be used to that amount and the 401k could be just a nice extra for a trip or emergency funds. Then when you finally add SS you will be doing ok.
Great example. I'm planning on doing the same but retire in a year @ 63 and wait to start SS. So that gives me only a year to get use to the lower income.... will see !!!@@reno1851
Retiring end of 2024, will have pension, SS, not taking that till 67, also have small savings (around 300k) sizable HSA, see what happens I guess.
I thought this video was supposed to be about pensions?
I am almost 62 iam close to these numbers ? You don't really run out of money? You still have the monthly Soc Sec and pensions checks coming in.
"run out" means "run out of savings/investments"
Understanding you're not a tax specialist, I'd love to see a similar video that adds the following to your discussion/considerations: looking at the long-term tax and Monto Carlo simulation differences between taking SS earlier, e.g., 62, to put off dipping into more of your retirement portfolio (e.g., traditional IRAs/401K) to cover your early retirement cash flow needs vs. waiting to take SS until full retirement and therefore needing to tap into more of your retirement portfolio earlier to meet your cash flow needs. I get that our SSI will increase each year we put off taking it, but what's the comparison consequence of doing so for tax purposes and Monto Carlo portfolio longevity simulation purposes? Assume you're in a state that taxes SS and retirement income. ... Love your channel. TIA.
I would like to see that type of scenario also. I am thinking, possibly take SS at 62 to hold investments for later use or possibly leave to spouse/kids. After all, we can’t gift SS. I want to make sure I am not a financial burden to my kids, but I also want to use funds in such an order that I get the most use of them. 1. Pension. 2. SS at 62. 3. IRA/401k/403b. 4. Real estate/whatever folks have. I appreciate these videos, very valuable to so many. Thank you for your time.
Not sure why you’d need a 60-40 portfolio with a pension. The pension is the bond. Just put everything else in dividend paying stocks.
*Well explained. Thank you for bringing up this video. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject! Thanks to Mylah Evander the lady you recommended*
That woman totally changed my life for good. I have come across individuals but none is as honest as Mylah. So surprised you know her too.
SHE'S MOSTLY ON TELEGAMS WITH THE BELOW NAME!!!
MS MYLAH1
It changes it my reducing the amount of money you need to have invested yourself. So youncan either retire earlier, or have more money in retirement.
Just make sure the pension provider is stable.
I would like to see a video on converting $ in traditional 401K to Roth in retirement. Let’s assume you have a good pension as well as both spouses getting a good amount from social security. Person has large amount in traditional 401k but has enough to live on with SS and pension. Would it be a mistake to take distributions and move money into Roth at that point? Worried about required distributions at 73 and taking larger penalties.
Those with a retirement account will adjust spending way before running out of money.
People are facing a tough retirement. and it's even harder for workers to save due to low-paying jobs, inflation, and high rents. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire in.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
That's an intriguing outcome. How can I contact your Asset manager?
I work with Jessica Lee Horst as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
*Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Instead of trying to predict and prognosticate the stability of the market and precisely when the change is going to happen, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every week*
one of your better videos here, Azul. thanks for the Honest Math examples - helpful.
Love your videos! We retired 7 years ago with the help of a licensed financial advisor that specializes in retirement planning. I have been very pleased with their service, advice, and outcome. Each year I review the long-term financial model which I believe is basically the Monte Carlo model. What I primarily look at is the assets the model predicts I will have at age 85, 90, and up to 99. What I would love to hear you address in a video is how to determine what that number at 99 needs to be. I would love to spend more of my assets early in my retirement, and so I am not opposed to increasing my spending rate to do so. But I don't want that number at age 99 to drop below X. I just don't know what X is!
Thanks Azul, i signed up for your newsletter and look forward to learning some stuff. I turn 59 this Month and plan on retiring at 62. Trying to get all my numbers together now with my pension/401k/ssi and savings account to see what i will have to work with. Right now im all in on high risk in my 401k which feels a bit uneasy honestly. 1/3 in S&P 1/3 in International stocks and 1/3 Large cap stocks. Should i leave 1/3 in high risk and move the rest in bonds? Maybe a target fund? Again, thanks for your knowledge sir!
Talk about Windfall Elimination Provision, how that will affect your earned social security
I'm lucky enough to have a defined benefits pension in the uk they are like gold .
Nice tool but it doesn't include anywhere to include your spouses income, pension, savings. Am I missing a setting somewhere?
Why wouldn't you invest in an index fund that averages 10+% and pays dividends?
The problem with Monte Carlo simulations whether normal or flat distribution or drawing from historical distributions is that they assume that each draw is random and independent of the previous draw. This is not valid. My observation is that they tend to predict greater volatility than is observed in the historical data. This generally translates into predicting a lower probability of success than the historical data predicts. The difference can be enough to affect one’s retirement plan.
Good!
Better to err on the side of caution, No?
How does someone know what their monthly pension payout is going to be?
I'm glad I found Azul, he knows what he is talking about.
Well they don't run out of income. They still get $4000+ income with SS+ cola and pension. and by 80 how much are they spending? I'm sure it will be alot less.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family...
I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
@@FreuleinBey Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* ...
@@IfranReinfeld Oh please I’d love that. Thanks!
*MARGARET MOLLI ALVEY*
Lookup with her name on the webpage.
I work for the MD gov't and will be getting a pension when I retire and also contributed to pre-tax supplemental accounts - I'm retiring at 60 at the end of 2025. MD gov't pensions get an annual COLA and FICA was taken out of our paychecks so we'll get SS without worrying about WEP. I look at the pension and SS as an income floor. The pension allows me to have options that I wouldn't have otherwise so trust me, I'm very thankful. Azul - can you do a video on strategies to avoid IRMAA?
I am also a MD state employee and will be retiring around 2030. I am a disabled vet as well. The money I have in my supplemental and brokerage accounts will be the icing on the 🎂. Congrats on retiring next year.
Just check when you can start getting the COLA. A friend of mine in New York just retired and told me he has to wait 5 years until his pension's COLA will kick in. Best of luck in your retirement!!
Start. Doing those Roth conversions, unless you are already adding up to too much. Someone said on some message board, if IRMAA is your problem count yourself lucky.
@@tomy.1846 Thanks for your response. You have to be retired for a minimum of 1 year to get the COLA for the MD pension. It gets applied every July 1st so I wouldn't get my first COLA until 7/1/27. Many people retire on July 1st so they only have to wait 1 year.
@@leisure057blank3 It's too late for me as they would put us into a higher bracket. I have a small ROTH IRA that I will use as a secondary emergency fund. I imagine IRMAA's human form as a elderly gold digger who has an unholy alliance with the gov't and tries to confiscate part of your SS check.
buy a high dividend yield etf, forget bonds or the s&p500
S&P has performed very well over the last decade and a high yield ETF would have substantial exposure to the S&P (good thing). 50-70% in equities is safe for most people if you can handle the down years like '22.
When you say “run out of money” I assume you only mean the 500k. Pensions and (hopefully) social security don’t run out. In the example, the retiree will always have at least 4K a month till he dies.
Important point. Azul does not mention this.
The answer is YES" on the $500 K. Unfortunately, with this person's pension, without an inflation adjustment their purchasing power on their pension dollars every year inflation rises will decrease. Social Security will be around, as Azul mentioned, but there will more than likely be and adjustment, probably not for the better, that will decrease around 2032-2034 without government help.
The only way the pension runs out is if you are dumb enough to let a financial advisor convince you to take a lump sum for them to manage. 😂
@@user-ok2fu5is5xI get all that. 4K is not a lot, and will be worth less in ten years. But it’s better than zero. My pension is 5k a month and hopefully I will add 2k in ss in ten years. I wish it was more but I will take that guaranteed monthly amount any day over market returns (which I also have).
My mother had my dad’s army pension, which wasn’t huge but was security, she had social security which was the same. Her savings was around 500k. She also had her house which was 500k. She lived very well, was in a very nice assisted living which the pension and SS covered. Until she needed nursing care. The house funds more than covered that for her life. She was more than fine!
The Monte Carlo simulation does not really make a whole lot of sense to me. How do you run completely run out of money when you have a defined pension (guaranteed monthly income), social security (also guaranteed monthly income) and income from investments (such as high yield savings, bond income, dividend income or rental income - variable depending in interest rates or vacancy from rental). With a defined pension income and social security income covers a majority of monthly expenses. Income from investments would cover any remainder and should have surplus left over for reinvestment and growth. The principle would never be touch and would allow for covering increase expenses and then passed on to any future heirs.
Agree
I'm 67 and a half and retired in 2020 when covid kicked off. have been doing fine on just SS and about 70 G when retirement started. about 25 G of that went to help the kids refurbish Grandpa's house so they would have a decent dwelling. In the country with low income and living in our means. Retirement means NO extravagant spending, all toys paid off years ago, NO big vacations. And DEFINITELY no TIMESHARES!!!
In 19 years I’ll be 65, at the moment my cash pension is estimating $1,100 a month… we’ll see as it gets closer, currently proceeding with my savings with it excluded.
At the rate things are moving up you’ll need at least 7x that, so drawing about $70,000 a year ($5,800 a month) from the pension and probably another $100,000-$150,000 in liquid investments to keep pace with inflation. My point is, plan big.
Add as much as you can to a 401k account now. If you just invest in the vanguard sp 500 you will have a good amount of money.
Azul, I watched your video to the end and didn't see or hear you give us the link to the free planning tool. I also checked your video description.
On the screen at 9:56
Thank You!@@youngtimer964
I like that Azul recommends fee only advisors. You shouldn't give someone a lifetime income for giving you a little bit of advice. If you are paying a percent of assets each year you are funding your advisor's retirement, at the expense of your own.
A pension is a nice part of a retirement plan...another piece of the puzzle along with 401K's, etc. But you still have to save and be money smart. A pension and SS might not quite be enough.
Azul, curious if you have any clients or know anyone who’s actually run out of money. I know plenty who never had much to begin with, but never any who spent it all before they expired.
I think we control some of the factors in retirement….but the unkowns of inflation, return are so unkown we have no idea.. the most important part of the calculation is inflation and return… wich is VERY UNKOWN over 30 years...
Azul , may i please ask … Where do i find the planning tool .
It appeared on screen close to the end of the video.
I may have misunderstood you, but my understanding is that you lose about 6% of your SS benefits for each year you decide to start collecting before your FRA (up to age 62) and you get an extra 8% for each year you decide to delay collecting after FRA (up to age 70).
I have my 401(k) invested in a stable value fund with an average return of 3%. How should I categorize this in my asset allocation? Trying to be conservative on my 401k with very little risk.
How about the 5 year rule on Roth conversions? It sounds like each chunk of taxable you convert to Roth gets a separate 5 year countdown. Ouch.
i love your videos, where is this link for the retirement calculator with pension?
I was waiting fo rthis one, I have two great pensions and other stuff so never see one on this..Thank you.
My pension has enabled me to retire at 56 (my last day is Friday) but I’ve also been aggressively investing since I was 19 and invest in my company’s 401k so my portfolio is 7 figures. I live relatively modestly (despite the thumbnail pic) so my Monte Carlo 100% at age 95of I love that long.
@@Retired_Life_1 Congrats thats great! I have a couple pensions and a modest 401k account..53 and I am retiring at 58. I might have 600k-700k when I go. 6k a month in pensions and a ss suppliment until 62 at 2.2k.
I'm getting a $3000 a month pension $2000 social security,and my part time job at a well known home improvement store $1,500 a month, home paid off on 80 acres 😁 can't relate to struggling past 65 should have been grinding earlier in life🤷
If you have pension, does 'windfal elimination provision' in social security rules takes all or most of your social security that you have earned from your second job?
What are the best options to pull the 401k if you move out of state to avoid extra taxes?
Azul, thanks for the video. I have a government pension and benefits that covers our expenses, but we are still contributing 25% to our traditional 401K and maxing our Roth IRA. Should we be saving at that rate if the pension covers all our expenses?
Thanks! A fun tool (well, for a quasi data nerd). Lots of fun to play with, adjust assumptions.
Very very few scenarios where it makes any sense to not take SS at 62.....
If you are in a position, damn straight! Healthcare is the biggest roadblock for most, myself included. Medicare eligibility is 2 1/2 years away for me, so that will be time to pull the ripcord for me!😀
@@bigjohnson7415 if you're trying to avoid the costs of paying for your healthcare (thus not retiring early) - I get it... For some, getting insurance on open market before 65 isnt easy because of pre-existing conditions (or super expensive). If my money is where I need it in a few years,. may retire 18 months prior to 65 and COBRA
That I totally agree with and that's exactly what I did and to this day I never regret it.
Consider moving to a cheaper location. Its an option, not for all. Overseas move?
Hi there, forgive me if I missed it, but what it this free tool? Where is it?
Thank you for the information ! Great advice.
My gauge as far as longevity are celebrities, some actor just died at age 75. In other words he only lasted 750 weeks after age 60 not a thousand, others live longer but it seems that the 1000 week gauge is pretty accurate.
Great presentation. You said you would give a link to the free on-line retirement too. I didn’t hear you identify it and I didn’t find a link in the video presentation. How can we get the link?
I’ve used the Fidelity Retirement Income Planner. What is your assessment of the accuracy of that retirement planning tool?
On the screen at 9:56
@@youngtimer964 THANK YOU!!! Found it. Used it. GREAT easy to use website.
Do ‘cups’ or catch ups at 61 years old make sense?
I did not get where a pension changes your retirement plan
Love the video; I missed the link to the free Marte Carlo simulation software. Google is your friend, though...
On the screen at 9:56
Can you share the on line tool?
I thought i must have missed the link but maybe he forgot EDIT - found it 9:56
Since a pension is really just an annuity, you can use this same process to analyze reducing your nest egg and buying an annuity ("pension") vs. keeping the nest egg. Every time I run the math it doesn't make sense for me. It seems like it might make more sense if you need to take more from your savings than maybe 5% to meet your basic needs.
The benefit of my pension was the ability to start taking it at 45 years old. I am getting paid to work a second career. Using a 4% withdrawal rate, my pension equates to a 1.35 million investment portfolio. My total contributions were less than 200k and those were back loaded in my last 5 years of employment. If I live to age 72, my pension payments will exceed my total earnings while employed.
@@diggernash1I wouldn’t really equate a $54k pension per year to the equivalent of having $1.35M portfolio. Most attorneys(for things like divorce purposes) would use the rule of each $100/month of pension income being the equivalent of $18,000. So your $54k/year is actually like having $810k. Not bagging on pensions. My wife’s is over $200k per year. Just though you would want to speak factually.
@@edhcb9359 That equates to a 6.66% withdrawal rate. That is higher than most financial planners would advise, but I can see the number appealing to lawyers. :) I was blessed to keep my full pension through two divorces. This should be the case for most retirement accounts in the case of no fault divorces....but now I am headed down a rabbit hole...lol
From the point of view of my estate, the pension adds zero value. I have already exhausted my contributions to the plan, so nothing remains for my heirs to inherit.
That's probably a good rule of thumb. You can do a present value calculation that estimates based on your age, life expectancy, and expected return, net of inflation.
Perhaps this would all turn out better for this individual if his/her social security was increased. If 'he' saved $500k before retiring, he probably had an income that was fairly high for some/all of his career. Higher income would mean higher social security benefit. Higher social security benefit would mean taking out less of his 'savings' account funds for normal day-to-day expenses which means his account will last longer.
My pension was frozen in 2012, but at least I had 22 years vested. I'll get close to $2k a month, no adjustments, but it'll make retirement a bit easier.
Every little bit helps. But nobody I know is living on $500 a week today. Not counting what most pay monthly for housing, insurances and bills. Just food, gas, clothing and of course the unexpected costs in life we all endure, house and auto repairs for example. - $500 wouldn’t quite be enough.
@@rjo8500 Indeed! 👍👍👍 Back when you could, incomes were commensurate with those wages.
Thank you.
another example of “FEE ONLY” advisory.. if I have 1 million dollars my 1.5% fee would be 15k… If i only invested a smaller amount with that advisor and then just folllowed the advise with the rest of my money I’d pay WAY LESS fees… I look at the FEE ONLY advisor a rip off… I’d prefer an HOURLY advisor… make the person u deal with PAY BY THE HOUR becasue they spend VERY FEW hours on ur specific account each year… VERY FEW .. some even almost none.. as much of it is automated...
just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.
For me Bitcoin ETF’s especially with the halving coming up in April 18,2023 yes volatile but ready to ride it out-I have other assets just in case
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@AlilatTiamiyu That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
You can look her up online
Same old predictable spam
Unless I missed it, do you have a link to the calculator you used in this video?
There are still pensions out there, you just have to work for a covered trade.
Hey Azul I have a question for you. My company has a pension (private company) but it does not have a cost of living rider to it for inflation, like you said is very common except for some jobs like government. If my company offers a lump sum payment (minus the taxes - ouch) is it generally a good idea to take it? I could invest it in a S&P 500 Index fund and at least make up for inflation with returns. But of course it would take me time to recover from the taxes taken out. Thanks! greg
I had the same question. I think the answer is "it depends on how well the S&P 500 does" - typically 9% per year average. I'm going to vary how much I pull out based on upon how the market is doing. If it's doing well, I'll take out the maximum I'm comfortable with (4%), if it's not doing well, I'll lay low for a little while (~2%). A lot of this depends on how much you have and what you can live on so you'll need to chat with a fee only financial advisor.
Ssn does have a inflation adjustment
I am doing an index fund. We will have Soc security but not what we paid in to it. Gen x
My husband has pension and I have SS! We also invested and saved!
We are retiring soon…, worked our entire life and we are ready!!!
Right now over 20 million retired Americans receive some sort of pension.
Not including SS.
What? Am I missing something here. You don't run out of money with SS and pension. They are for the rest of your life. Running out of money part only applies to 401K/IRA.
Excellent education.
In practice of course you adapt your lifestyle, up or down, all the time so that you wouldn’t actually run out of money at eighty because you would have started to cut down expenses long before.
Thank you!!!
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Michelle Stewart.
Stewart's expertise in customizing investment portfolios based on changing market conditions and personal risk profiles is exceptional. It's not a one-size-fits-all approach, which is crucial in crypto investing.
Isn't that the same Mrs Michelle Stewart that my neighbours are talking about, she has to be a perfect expert for people to talk about her so well
I have been seeing so many recommendations about Michelle Stewart, Her strategy must be good for people to talk about her. Does she work for companies as well, I might be able to get her a deal with my board here in Canada .
I'm new at this, please how can I reach her?
she's mostly on Telegrams, using the user name
I have a police pension, I got hurt at work and have a tax free pension at 6500 a month plus health benefits for free.. At 50 still working new job putting away 20% into my a 401k… I hope that’s enough
Yes-Disability pensions are tax free-regular CALPERS -30 years at 50 -PO over $100 K USD w cola/benefits-Sam units-close to $150 K USD
I have inflation adjustment for mine. Pension that is.
Not all pensions are created equal. We have SIX pensions between us. But all together just over $50k a year. Partially COLA protected.