Calculate Your Retirement Numbers (5 Different Ways)
ฝัง
- เผยแพร่เมื่อ 24 ก.ค. 2024
- See how to calculate retirement income, withdrawals, saving need, and more. You can get answers to essential retirement planning questions with a variety of tools and calculators.
📁 Get the spreadsheet shown in the video (and use at your own risk, being sure to account for inflation and taxes, which is not fully demonstrated in the video): bit.ly/CalculateRetirementApp... (Direct Download of Excel Spreadsheet)
We’ll look at 5 ways you can calculate your retirement numbers, including:
- Formulas
- Spreadsheet yearly cashflows
- Withdrawal rates
- Monte Carlo
- Dynamic spending, such as guardrails
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Each approach has pros and cons, and you can learn about your retirement by using a variety of tools.
Get free retirement planning resources: approachfp.com/2-downloads/
🔑 9 Keys to Retirement Planning
🐢 6 Safest Investments
With these tools, you can figure out things like:
- When can I retire?
- How much money do I need to stop working?
- How much do I need to save for retirement each month?
- What if there’s a market crash (“sequence of returns” risk)?
- How important are inflation and the rates of return I get on my investments?
- And more
All of this information helps you make educated decisions. You can’t predict the future perfectly, and every tool has shortcomings. But making an effort to calculate some numbers is often better than going into a situation without information.
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CHAPTERS:
00:00 Calculate Retirement Withdrawals After Income Sources
01:14 Spreadsheet Formulas That Calculate Retirement Numbers
03:38 Calculate Retirement Taxes and Inflation
08:41 Spreadsheet Cash Flows
11:51 Withdrawal Rates
15:34 Monte Carlo Analysis
20:35 Dynamic Spending
Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.
IMPORTANT:
Any referenced returns are merely assumptions for educational or informational purposes and should not be construed as actual or hypothetical performance figures in connection with the firm’s investment advisory services. Use any calculators at your own risk, and triple-check results from other sources. It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. “Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
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Note: I do not discuss offerings, pricing, etc. in these comments. Please proceed to the website, where you can find a substantial amount of detail.
This spreadsheet is wonderful!! Thank you!
Nonsense. 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.
You and I are going to have waaay different retirements. 😅
There is a big difference between surviving and thriving. You make the bed you sleep in, I just hope it give you purpose and joy.
Great information here. Definitely can be a difficult piece to fully understand (for us non math magicians. Thanks for breaking it down barney style for me as I’ve been looking at my wife drawing her lower benefit at 62 and holding off mine until age 67.
Great content as always.
Thanks for your kind words and for watching!
This is awesome! u are the best
Great to hear this, thanks!
Love your channel. Can you tell me why some spreadsheets and software use inflated numbers for spending and some don't. I am very confused when numbers that are not inflated tell me i have plenty of money. Especially for how long the money lasts. It seems that if we inflated the numbers we would get a more realistic number. Any thoughts?
Thank you! Good question, and I don't have a good answer. I guess it just depends on what the assumptions are and who built the model. In some cases, everything is assumed to inflate at the same rate, which might be fine. But sometimes you need to explicitly adjust for inflation, and ignoring inflation is not going to end well. This highlights the need to read and evaluate the assumptions behind any calculators you use.
@@ApproachFinancial Thanks for the reply.
I think some use a generic percentage of pre retirement income. That doesn’t always come out right. For example we save 20% of our gross. We will not need that when we stop saving for retirement. So automatically it’s only % for us. Since I have an envelope budget I am able to do a really good assessment of percentage replacement needed. That is what we use not the generic values
To be honest, I not exactly sure what you mean but I am assuming you are speaking about your living expenses in retirement. If so, these models are just taking a swag. I'd suggest taking some time to build a detailed living expense listing. There are many example online. This should be detailed and categorized as essentials and discretionary. Maybe start with what you looking at your current bank and credit card statements to just build a list what you are spending your money on. As shown in this video these will differ in amounts in your 3-phases of retirement (Go-go, Slow-go, No-go). I'd also suggest using a tool like New Retirement ($120/yr). It allows you to list all your investments (401ks, Roths, Brokerages, Banks, etc), income sources (social security, pensions, etc), your living expenses, etc and then model your retirement. It does the Monte Carlo simulations and shows you tax impacts, etc. The biggest challenge I find is determining all the rates (inflation, healthcare inflation, investment returns, etc). This required a little more research but I really learned so much and now extremely confident in my retirement plan and my ability to adjust when things get tough without major sacrifices to my retirement joy. There are a few other TH-camrs I would recommend looking into for retirement learning. For Retirement Planning = Joe Kuhn and Rob Berger, For Social Security & Medicare = Dr Ed Weir and Medicare School, For Investing = Paul Merriman