Tag: Financial planning
The Truth About When You Can (AND SHOULD) Stop Saving for Retirement
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
when should you stop saving for retirement today
we're going to talk about when you should call it quit and start spending your hard-earned money
hey there it's Anthony and Matt from one degree advisors and we help you gain confidence in
your retirement so Matt if you Google the term retirement I mean you're sure to find millions
of articles on saving as much as you can for retirement but there's not a lot about when to
stop saving for retirement yeah and the biggest fear that most folks have out there is actually
running out of money and we know that saving is the best way to combat that risk but it comes
at a cost right and really where people run into trouble is skewing too far in either direction and
I want to share a surprising study that shows that big Savers are actually not spending enough in
retirement and this study looks at the spending habits of retirees during their first two decades
of retirement and the results aren't what you'd expect from retirees they're not actually blowing
through their nest egg they're doing the opposite so I'll just share three highlights here the
average retiree with 500k or more at retirement spent less than 12 percent of their nest egg
Within first 20 years of retirement people with a pension spent the lease on their portfolio without
assets down an average of just four percent and the meeting household in the study simply
spent from the income and dividends and didn't touch principal in their portfolio you know they
say the best Savers are the worst Spenders and the data does show that and I'll add one more
point of the study but on the contrary basically individuals with less than two hundred thousand
dollars in assets immediately before retirement had spent down about one quarter of their
non-housing Assets Now many people would think hey this is a good problem to have but you do have
to ask the question you know are you depriving yourself if you save up this money and then don't
don't spend it so how does a retiree shift their mindset from saving to spending yeah and it's
scary you worked your entire life you know building up to this moment and now you're shifting
to a point where you need to start using some of your life savings that cover most of your expenses
and here's the most common sign we often see for people and why they don't stop working and saving
even though they financially can number one you don't know what you're saving for anymore right
so if you're at the point where one step forward keeps moving the goals the goal post two steps
ahead it's it's a never-ending cycle in other words if you're stuck in the accumulation mindset
it's really hard for people to to shift to that decumulation mindset yeah and this is commonly
commonly a result of just not having a plan not knowing really where you're going the other part
of it too is you know we work for such a long time frame our identities can really get wrapped up in
our work you know and you go from not being Dan the lawyer or Susan the engineer you know to now
being a retiree that maybe moves on to the next phase of life and that could include spending
that hard-earned Nest Egg exactly and here and here's really where you can start thinking about
pursuing those passions outside when you can stop saving here number one is when you have a plan
in place right having a plan in place is great because then you know you can have a reasonable
level of confidence going into retirement and having a plan you've taken a critical look look
at your numbers and things check out you know like look at 2020 did did people have that pandemic in
their in their financial plan most people didn't it's a lot of things that you just can't control
and this is where you know good financial advisor good financial plan can come in and and help so
many people you know left to their own accord aren't going to necessarily have that same sort
of confidence going into retirement these are not easy things to figure out we posted a video
previously just addressing that question how much money is enough we'll go ahead and post
that and people can link to it again this is Anthony safer with one degree advisors if you'd
like to learn more how we can help you plan for retirement and gain confidence visit our website
at onedegreeadvisors.com forward slash get started
6 Retirement Essentials (Most people only prepared 2 or 3)
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
I'm planning for retirement most people focus
mostly on marshaling together enough money you know Financial Resources so that they can last
the distance and then maybe at the back of their heads they have some vague plan right perhaps
two or three things to fill the time with a lot of the times this is stuff like travel family
well unfortunately I'm gonna say that's not quite nearly enough for Preparation we ourselves
have been retired for two years and going looking back on the past two years I kind of see like
six essential things that if you prep for it beforehand before your retirement starts I think
this can really make such a positive difference to your retirement so that's what I wanted
to bring up and discuss with you guys today number one first and foremost of course we have
to talk about money most people's concern is the amount of money that they have in retirement
whether it will last them till the end come comfortably and allow them to afford the Hobbies
like travel good food Etc but I actually think after going through the last two years building up
our financial Acumen is just as important if not more so what do I mean by Financial Acumen I mean
stuff like budgeting tracking projecting investing I mean if you think about it the money in your
bank account can always be squandered we all know that story I think more importantly what's
going to make your retirement more fireproof is having an ability to generate more money where
it came from in the first place so the second essential thing that you can prepare for so that
you have a wonderful retirement it's definitely the ability to be self-directing and disciplined
self-direction definitely helps so much with spending your retirement days meaningfully right
after all there are no more like work schedules or like demands from colleagues or bosses to help
shape your days anymore you have to be the person to take charge in retirement there's a study out
there actually that shows that for happily retired folks most of them actually have about 3.6 core
Pursuits that's what they say and the unheably retired folks tend to have less than 3.6 corporate
suits coming in at about 1.9 call Pursuits that's what the study reflected I guess it kind of just
shows in retirement you really need to fill your life to the brim and keep busy with activities
you love and that is a really great formula for happiness and self-direction will help you
to achieve that state as well as discipline because if you think about it like discipline
directly affects the state of your finances right it affects whether you stick with your retirement
planning whether you keep fit and active and you get to maintain your health in retirement even
whilst you're left up to your own devices even to find your cover suits if you don't have any
when you're starting or in your retirement so discipline and self-direction will be like
the building blocks for enjoying your life in retirement the third essential thing you might
want to work on and cultivate or happy retirement is people skills right so studies and research
have reflected very consistently that the main determining factor for happiness and Longevity
for most of us is actually relationships Human Relationships friendships relationship with
your spouse and with your family I guess if you look at most of us you know we all have
a little need of work on some social skills in some aspect I mean some of us are a bit shy
paper hats or graph or maybe socially anxious working on our people skills really will help us
to get along and live happily with our spouse and family members and also importantly to make
new friendships at whatever age we all know that making new friends gets a lot more difficult
as we get older I mean I haven't heard anyone say otherwise for me personally making new friends
as I get older is the biggest challenge there's this huge feeling that nothing can replace
friendships with people who have known you all your life but it is also a challenge as I
have chosen to exercise through Arbitrage in our retirement and we've moved away from home
so those friends aren't with us in our present I find that it takes a lot of intention I have
to consciously push myself to broaden my Social Circles and make the effort to get to know people
on a more intimate basis I am also very happy to be able to say that it has paid off in that for
the last two years in Bali I have actually made two or three new friends that I'm happy to say are
kindred spirits and not just social acquaintances so that's very nice and it's a huge Comfort to our
daily life here in a foreign land away from home now before we move on a big thank you to
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MooMoo ad using my link in the description below now back to the video the fourth essential
thing that you can definitely work on and that will benefit your retirement tremendously it's
actually courage you're definitely gonna need lots of courage in retirement and I guess this isn't
a skill exactly it's kind of more of a quality but in retirement you need a lot of courage
to even plunge into retirement you need the courage to you know take that leap of faith to
stop putting it off due to fear of the unknown feel or financial insecurities so then it's all
about courage at that stage not let fear and insecurity rule your life and your decisions it
is also the courage to recognize that in life at the start at the end in the middle the Domino's
you need are never all nicely lined up you know at some point you just got to jump into it and
then learn to cross the obstacles as they come so for retirement long term I guess the
biggest issue most commonly is always money but my perspective on this is that hey budgets
can always be reduced money can always be earned or recouped or whatever happens so I still
think that you know it is actually beneficial to Advocate an approach whereby you get to
a point where you feel that you have most of your Ducks lined up you've planned well you've
prepped for it grab hold of your courage with both hands and then take the plunge people tend
to think of retirement as the end but it's not it's the start of a new phase where you should be
trying so many new things new Pursuits new ways to live and for each of these new adventures
you're gonna need courage to take action and once you have taken the plunge you'll find the
next fifth thing very very useful and that would be a mentality of resilience especially in early
retirement there are a lot more decades ahead of you you know and therefore a lot more chances that
they things can go wrong whether it be down to bad financial planning or perhaps an unexpected Health
catastrophe or even sometimes natural disasters whatever comes I guess you will always need that
strength of Will and the resilience so that you can roll with the punches and then get back up
you want to know that you have the mental strength that even if things go pear-shaped you won't just
give up and lose hope and certain Corner you've got to Marshall what you've got inside you go out
there find Solutions perhaps if necessary you've got to go back to work but know that later on
you can return to retirement and try again so the sex essential thing that I believe will benefit
everyone in retirement is to cultivate an attitude of gratitude we all know life is a very long
journey hopefully at least and so much of what we Chase using most of our years actually doesn't
really matter in the big picture once you have taken a step back and then at that point is when
you start realizing the earlier you cultivate and attitude of gratitude and that appreciation for
the simple little things that are probably around you everywhere every day the happier you probably
will be and it sounds silly but it's not really automatic I mean we all live and grow up and
work and go to school in a society that kind of innovates us with messages that we need to reach
for more have more ambition gives us you know that High definitions of success in life that we
have to try to jump to reach and nobody sings the Praises of the pleasures of a simple cup of
tea you know the importance of family time with your loved ones or or just the pleasure of being
able to take an evening walk on the beach with your dog so I think that it's very important that
somebody reminds you that you know you can not overload what you already have what you're already
surrounded by growing that muscle of appreciation so that in each and every moment you are present
in your own life you see all the little Joys that you're surrounded with every day and if you
live life like that I think that will help you achieve contentment with just the small stuff
around you and that's what majority of your life in retirement may be about is just a small stuff
every day but in my own retirement here in Bali it is what makes me so grateful and so happy every
day that I am surrounded by my loving husband and very interesting and independent little dog
that's very very cute you know that we have very comfortable a bit simple house we have the ability
to enjoy good food even if it's simple stuff from the war rooms locally we have a garden and
beautiful things are growing around us every day the weather is great you know stuff is good yeah
I think this is one of the most essential simple things that's often overlooked simply because it's
a matter of mentality but I believe this essential quality or characteristic could make all the
difference for you so these are the six essential things that I believe are very very important for
you to cultivate and prepare for in the leader to actually taking the plunge into a return then I
think that if you have these six strong skills and qualities going for you you will be in a position
much more well placed to make the best out of your retirement however long that period may be let me
know what you think of my suggestions whether you agree or if you think they suck let me know why
but in any event I really appreciate you tuning in and sharing my thoughts for this week and
wherever you are in the world I'm wishing you a happy Saturday evening and let's speak again
next week till then you take care and bye for now
60 Years Old and Nothing Saved for Retirement – Top 12 Recommendations
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
moshi journal of the war about version 5 and her dick or nothing save time and in this video i will give you my top 12 recommendations from to gather épisode and the phoneshop s line my name is lynn mines and today we're talking about how you so I you're getting only star junior with over fifty with that over fifty5 maybe you our die in your sixties and now I have little or no 10 series time it i'm going to give you 2 tbsp specifics you can your original is concern there's no de jorna loon and it's never too late many people a coaching time lady finance even in the situation where we have the timing so stupid now arjan yourself in the beginning inge you where you were young just can't get by make and smeet more history family of chipper tells us times is a medium and helps and must collins take the pan yourself fit the sun tremor sixty thumping when in more detail with your juice at lower netting seyfried time and of course start in early there is a storing late but you can make up 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surprising the size ball to the ponies alice ivory terms and they financial planner eyes i head in the spectrum and him force me to the moon and more the natural tennessee is to spend more the global fund yogis and there you have to use your browser necessary expansions we already bread igor inputs and leslie protest you the cancer your channel effectively protest with old plans in moscow color go recommendation numbers 3 is 10 million numbers in economies way glowing you don't want your card in flow and url flow the income and expenses the calving budget through budget is to work parking were many people feel like folding budget is even though he has the you a bit suggest that you change through you want a lot budget of this chickens the the learns that helps keep it simple in a simple traces this is t still a nice way going nb controlling nice way glowing knowing you manage there you have to do a major a bit of the beak you often in thatcher fray recommendation number for completing journey they spend in arnhem with commitment to check all here tension quarter idea for what of the next perfect and min truck every penny you can simple idea what the pc' pepper donor come together or if you like i can download spending a dead spreadsheet the week savior it is very simple harpel toe an excel spreadsheet designed with purpose it free download and there is a link in the description below then I had a garden but my deesje number five is nipping the bud back online now I have to have color that is a bucket of income Camille and wedges Gillingham someone who will be empowered to make some changes the girl with me for middle what would be like if you were able to all your income or in other words i had no expenses there already fine and zeros the snowfall wants is thing you sent with your kids and corn oil in best oil that can be put in there someone for the nex-5t and 14 hours how much of nfc can you use your kimeli i would be a significant amount of money you should just think brain recommendation number sex this is the great and pink outside the box' the monsieur with your personal story but wait after bad guys mother pork royce duns with the laitman i did not prevent from being married and wooden awww man by professor locking must contain you won't you make and slammed and my new be challenging to be white and were determined to face life's challenge is what have they may be together have us leather yes we quiet small the finish my schooling and and there was also a full-time mother in singapore my and who weatherman etc to buy pearls you have to nemaattori in which comics people's saving 1 hour marie are to us in possible this is where we share the great if my biggest expence was rather fmri buddy we start to think boys republic loses when we get older and someone moving in with parents with the waif into small children and this point was after the bible option borsato time but we were determined to find a way to fool cycles likes people's so had to 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Read More7 Biggest Retirement Planning Mistakes People Regret
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
we all look forward to retirement it's the time to sit back relax and enjoy the fruits of our labor unfortunately whatever aspirations we may have for our golden years can quickly turn into a nightmare if we make certain mistakes when planning for this phase of life these mistakes are surprisingly common and tend to lead to financial stress and regret with a big impact on quality of life some of these mistakes are 1. not planning for retirement two retiring too soon three relying too heavily on Social Security 4. underestimating health care costs 5. failing to save enough for retirement six taking on too much debt seven not maintaining strong relationships if you want to learn more about these mistakes and how to avoid them subscribe to the channel a new video is coming soon and you won't want to miss it.
Read MoreF.I.R.E – 6 Uncomfortable Truths we discovered about Early Retirement & how to mitigate them
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
foreign hey what are the ugly sides to
retiring early um aren't you bored every day just lying around doing nothing don't
you guys worry about running out of money hey guys welcome back to another beautiful
day here in Paradise Bali many of you have been asking me so many questions like the
above so today I'm gonna run through six uncomfortable truths about early retirement
as well as my suggestions for mitigating them based on our own experiences reaching fire and
being retired here in Bali Indonesia for the past two years so uncomfortable truth number
one retirement is a journey not a destination for the record lying around all day doing nothing
in retirement is a myth it's always nice to have a few days of that here and there but in reality
you do that for long stretches of time and you're probably going to be hit very very hard with
feelings of boredom lack of self-worth and you're gonna be missing a sense of fulfillment retirement
isn't a destination like Bali or Boracay it really is the start of a New Journey in your life it's
that stretch of time where you finally do those things you wanted to do but always couldn't
because you were so busy making money to survive it can be anything traveling the world
finally writing that book or studying that say cross stitch side hustle if you never get past the
myth you'll probably end up getting bored and then end up going back to work and missing out on this
Amazing Life Adventure so like every other journey start planning what is this epic adventure you
want to spend your retirement time and money on number two if you got bored during your
retirement stuff maybe you're doing it wrong so for a lot of people their retirement Jam
is about traveling the world right that's a super common one and it's amazing fun you never
feel more alive and it's such a great challenge because actually you need so many different skills
to travel properly right you need Street smarts to navigate the towns and scams and other issues
on the road you need to be able to plan your itinerary book the best travel deals know how
to haggle your prices not to mention stuff like riding a motorbike and scuba diving and at the
start it's always epic it's so incredible but on excitement and sense of achievement starts to
plateau and then you're gonna hit that point of diminishing returns and it wasn't just
in travel either it was also my painting my businesses my surviving The Nomad life thingy I
find that when love to remain largely undirected most Pursuits actually tend to lose their flavor
with time another way of putting this is perhaps you feel yourself falling into stagnation or
mediocrity thing is if you're early retired on your own efforts then you're probably more of
the go-getter and achiever type of person and the aspect of your personality doesn't
change just because you're tired you'll still be looking around and judging if you're
spending your time meaningfully and productively to this fix personally I found two solutions
that worked really well for me one either I start drilling deep down into the details of
what I'm doing or two I make it into a business take my dad baking is his great love in retirement
but he's not just begging anyhow for the fun of it the last few years he's in pursuit of baking
a tastier sourdough bread anyone has ever come across out of 365 days in a year he is probably
baked about I'm guessing maybe 400 sourdough loaves two loaves each bake he tweaks the recipes
the starter the technique the ingredients he does some reverse engineering of sourdough bread that's
commercially sold outside it's been maybe three years and he's still going strong so he set his
own special sourdough bread goal and Target and standards instead of just serving and yogurting
for fun I became qualified instructors in both and eventually started both a yoga business and
a surf school and you know I learned so much more about both in the whole process whatever
Pursuit out there if you start really drilling down there's always more Improvement to be had
more personal growth to pursue please say you love Pottery don't just do it aimlessly to pass time
polish up your skills enter competitions become a professional Potter do commissions as your
retirement side hustle or teach pottery classes when you keep pushing yourself to those higher
standards because you're either really drilling down into the craft of it or you're running it
as an Enterprise you'll find new measures of productivity therein and you will be bored not to
mention if you're actually like us on lean fire whatever site income you generate will help defray
the cost of your interests and hobbies so you don't need to tap on your long-term Investments
isn't that a really good deal so two years ago at the age of 38 I retired with my husband here
in Bali it's pretty early by most standards and it's been a completely amazing journey we've
learned a lot and I hope the insights we are sharing with you guys are useful if you're on
your own fire Journey or already neck deep in retirement smack that like button share with us in
the comments below what your retirement looks like so far how you're keeping busy and whether you
agree or disagree with the points we made here now on to the third uncomfortable truth it's
hard that you must defend your time you probably retired so you can spend your time doing however
you please whenever you please most of us will have spent the vast majority of Our Lives
thus far making a living which means usually someone else is directing your time either your
boss or your clients and we get really used to that so then in retirement self-directing your
time becomes something new and kind of foreign and if you look at retired folks in Singapore
after working jobs that entire lives most of them graduate on in retirement working as free
child care services for their grandchildren if that's their ultimate dream and for some
traditional older folks it definitely is then it's wonderful I'm really happy for them but
for some it may not really be that but they find themselves doing it anyway kind of like by
default because they're just so used to allowing someone else to direct their time for them there's
always going to be people around who will try to take advantage of your free time asking you to
run errands for them perhaps or like for us here in Bali we get so many requests from both people
we know personally and complete strangers of the internet asking us to do stuff like plan their
holidays show them around Bali Etc of course we love hosting close friends and family and we
enjoy helping people generally but sensibly speaking our own private lives would just vanish
if we were to entertain all the requests we get you'll need to learn how to say no to people and
how to strike balance retirement is as much about sharing your time with the people who matter
to you as it is about having time for your own personal growth and development just be aware
uncomfortable truth number four it's probably gonna be just you and your significant other from
now on out so upon retirement your social scene is going to change drastically everyone else is at
work or busy with their own stuff you're either gonna have to learn to enjoy your own company
a lot or if you're lucky enough to have retired with your significant other that's who you'll
probably be spending majority of your retirement with so best learn to get along companionably good
communication is key as it's just generally being a considerate and respectful human being through
the pandemic and on the road this past decade I've seen so many people who seem really surprised
by the person the other half truly is when they start retirement and start traveling together
24 7 a day but building that Comfort to do stuff by yourself and building that wonderful
relationship with your other half can also possibly be the most rewarding part of your
retirement journey and your personal growth before I share with you the fifth uncomfortable
truth just the quick word from our sponsor of today's video MooMoo Singapore the stock
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uncomfortable truth number five your money plans are never as foolproof as you think all retirement
whether it's the regular kind or fire really all boils down to the financial planning behind it
right and the most uncomfortable truth of all may be that your retirement funds are never
as foolproof as you plan for especially if your plans are supposed to spend 30 40 even 50
years in the case of early retirement expert predictions and assumptions go wrong you made a
mistake in your portfolio planning because of all the buyers that we all carry Bear markets happen
blacks on events gray Rhino events so many things no matter the plan no matter how much stress
testing you did before you dove into it the unexpected often happens and the sooner you come
to terms with this uncomfortable truth the sooner you can move on to hatching against the risks
You can predict most retirees they're working their financial planning and less Aid around
the four percent drawdown rule right so the U.S stock market has had a phenomenal Run for the
last 10 12 years or so now of course things are looking a little different for the foreseeable
future so those who have been conservative and who have refrained from tapping their long-term
investments will have more breeding space now to ride out this bear Market however long it may
last friends who have been following our journey for a while now know that a dominant portion of
our retirement here in Bali consists of rental income from a number of real estate Investments
and unfortunately in the last two years since we started retirement Europe is a game at War
soaring Energy prices have driven up the cost of living across the world and everywhere massive
inflation is now a huge issue thankfully we have so far managed to resolve whatever disruptions
we've experienced but basically yet another uncomfortable truth in retirement is that managing
your money to make it last till the end takes up more time than you think don't just go to sleep on
it continually look to diversify the eggs in your basket and be open to adjusting your money plans
like rebalancing your portfolio or changing how you invest your retirement Arsenal as different
opportunities present themselves for time you may not need to work for money any longer but doing
stuff that fuels your personal growth and that generates some extra side income as a bonus is
never a Bad Thing uncomfortable truth number six no point sweating the small stuff y'all know I'm
a big fan of simple frugal living and no pretenses whereas happy dining in a fancy restaurant
as we are eating at the local War rooms here sometimes more happy actually but many of us
can also easily get carried away diving into with the itsy bitsy details of frugal living you
know spending two hours here looking up deals and coupons that end up saving you 10 bucks three
hours there figuring out how to maximize your air miles should you lock in that 3.5 fixed
deposit rate now or wait till next week where maybe it might be 3.7 I mean it can be fun
and then it can also be a lousy use of your time you can do it if you enjoy the challenge
just know that so long as you get the big stuff right your retirement is probably going to work
out just fine so don't sweat the small stuff big things include stuff like keeping on top
of your overall General expenses you know doing your taxes right maintaining a balance then
Diversified portfolio so as long as you keep on top of all of that I think that's about 95 of
the big picture really conversely what I'm also saying is that if you blow up your retirement
finances by for example trying to go big or go home on crypto no amount of coupon cutting is
gonna save you from having to go back to a job so yeah that's my take on not sweating the small
stuff we're all retire at some point of Our Lives whether early or late voluntarily or unwillingly
it all boils down to choice and advanced planning just what I've personally observed is that if
you cut out all the noise and distraction in life what do you think are the real currencies we
truly traded the way I see it is four things it's money time Youth and health just think about it
everything we do throughout our entire lives is really us trading one of these for the other an
early retirement is that one anomaly where you are in a position to spend all four currencies at once
simultaneously and that maximizes your experience of life a really clear illustration of this is
traveling you can travel in your 60s and 70s sure that's what most people will end up doing and it's
great you know you see these folks really enjoying seeing new things being very happy but it's often
in the form of like lots of cruise trips around the world and that's cool too but they'll never
experience what it's like to try learning to surf or sail and getting all salty and burned and
muscle achy but happily exhausted oh they'll never try anything more vigorous and adventurous
like say backpacking your way through Europe you know crushing in new hostels meeting crazy people
from Iceland or wherever and doing silly things together we all have two lives the life that we
currently live and the life we could possibly live so then which life would you choose tell me in
the comments below and don't tell me you wouldn't retire early because you just wouldn't really know
what to do that's just a cop-out answer because yeah well you're too lazy to do the legwork
and try new stuff and understand yourself thanks for watching as always speak
again next Saturday bye foreign
6 Retirement Essentials (Most people only prepared 2 or 3)
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
I'm planning for retirement most people focus
mostly on marshaling together enough money you know Financial Resources so that they can last
the distance and then maybe at the back of their heads they have some vague plan right perhaps
two or three things to fill the time with a lot of the times this is stuff like travel family
well unfortunately I'm gonna say that's not quite nearly enough for Preparation we ourselves
have been retired for two years and going looking back on the past two years I kind of see like
six essential things that if you prep for it beforehand before your retirement starts I think
this can really make such a positive difference to your retirement so that's what I wanted
to bring up and discuss with you guys today number one first and foremost of course we have
to talk about money most people's concern is the amount of money that they have in retirement
whether it will last them till the end come comfortably and allow them to afford the Hobbies
like travel good food Etc but I actually think after going through the last two years building up
our financial Acumen is just as important if not more so what do I mean by Financial Acumen I mean
stuff like budgeting tracking projecting investing I mean if you think about it the money in your
bank account can always be squandered we all know that story I think more importantly what's
going to make your retirement more fireproof is having an ability to generate more money where
it came from in the first place so the second essential thing that you can prepare for so that
you have a wonderful retirement it's definitely the ability to be self-directing and disciplined
self-direction definitely helps so much with spending your retirement days meaningfully right
after all there are no more like work schedules or like demands from colleagues or bosses to help
shape your days anymore you have to be the person to take charge in retirement there's a study out
there actually that shows that for happily retired folks most of them actually have about 3.6 core
Pursuits that's what they say and the unheably retired folks tend to have less than 3.6 corporate
suits coming in at about 1.9 call Pursuits that's what the study reflected I guess it kind of just
shows in retirement you really need to fill your life to the brim and keep busy with activities
you love and that is a really great formula for happiness and self-direction will help you
to achieve that state as well as discipline because if you think about it like discipline
directly affects the state of your finances right it affects whether you stick with your retirement
planning whether you keep fit and active and you get to maintain your health in retirement even
whilst you're left up to your own devices even to find your cover suits if you don't have any
when you're starting or in your retirement so discipline and self-direction will be like
the building blocks for enjoying your life in retirement the third essential thing you might
want to work on and cultivate or happy retirement is people skills right so studies and research
have reflected very consistently that the main determining factor for happiness and Longevity
for most of us is actually relationships Human Relationships friendships relationship with
your spouse and with your family I guess if you look at most of us you know we all have
a little need of work on some social skills in some aspect I mean some of us are a bit shy
paper hats or graph or maybe socially anxious working on our people skills really will help us
to get along and live happily with our spouse and family members and also importantly to make
new friendships at whatever age we all know that making new friends gets a lot more difficult
as we get older I mean I haven't heard anyone say otherwise for me personally making new friends
as I get older is the biggest challenge there's this huge feeling that nothing can replace
friendships with people who have known you all your life but it is also a challenge as I
have chosen to exercise through Arbitrage in our retirement and we've moved away from home
so those friends aren't with us in our present I find that it takes a lot of intention I have
to consciously push myself to broaden my Social Circles and make the effort to get to know people
on a more intimate basis I am also very happy to be able to say that it has paid off in that for
the last two years in Bali I have actually made two or three new friends that I'm happy to say are
kindred spirits and not just social acquaintances so that's very nice and it's a huge Comfort to our
daily life here in a foreign land away from home now before we move on a big thank you to
Mumu Singapore for sponsoring this video Singapore is an online trading platform for
stocks ETFs and options I've been using the MooMoo mobile trading app myself for almost
a year now and I think it's awesome it's fast intuitive trading US Stocks is commission
free plus they give free level to data and many more perks now for a limited time when you open a
Mumu Singapore Universal account they'll give you a year of commission free trading of Singapore
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just for using the Momo app so if you're actively investing anyhow I recommend checking out the
MooMoo ad using my link in the description below now back to the video the fourth essential
thing that you can definitely work on and that will benefit your retirement tremendously it's
actually courage you're definitely gonna need lots of courage in retirement and I guess this isn't
a skill exactly it's kind of more of a quality but in retirement you need a lot of courage
to even plunge into retirement you need the courage to you know take that leap of faith to
stop putting it off due to fear of the unknown feel or financial insecurities so then it's all
about courage at that stage not let fear and insecurity rule your life and your decisions it
is also the courage to recognize that in life at the start at the end in the middle the Domino's
you need are never all nicely lined up you know at some point you just got to jump into it and
then learn to cross the obstacles as they come so for retirement long term I guess the
biggest issue most commonly is always money but my perspective on this is that hey budgets
can always be reduced money can always be earned or recouped or whatever happens so I still
think that you know it is actually beneficial to Advocate an approach whereby you get to
a point where you feel that you have most of your Ducks lined up you've planned well you've
prepped for it grab hold of your courage with both hands and then take the plunge people tend
to think of retirement as the end but it's not it's the start of a new phase where you should be
trying so many new things new Pursuits new ways to live and for each of these new adventures
you're gonna need courage to take action and once you have taken the plunge you'll find the
next fifth thing very very useful and that would be a mentality of resilience especially in early
retirement there are a lot more decades ahead of you you know and therefore a lot more chances that
they things can go wrong whether it be down to bad financial planning or perhaps an unexpected Health
catastrophe or even sometimes natural disasters whatever comes I guess you will always need that
strength of Will and the resilience so that you can roll with the punches and then get back up
you want to know that you have the mental strength that even if things go pear-shaped you won't just
give up and lose hope and certain Corner you've got to Marshall what you've got inside you go out
there find Solutions perhaps if necessary you've got to go back to work but know that later on
you can return to retirement and try again so the sex essential thing that I believe will benefit
everyone in retirement is to cultivate an attitude of gratitude we all know life is a very long
journey hopefully at least and so much of what we Chase using most of our years actually doesn't
really matter in the big picture once you have taken a step back and then at that point is when
you start realizing the earlier you cultivate and attitude of gratitude and that appreciation for
the simple little things that are probably around you everywhere every day the happier you probably
will be and it sounds silly but it's not really automatic I mean we all live and grow up and
work and go to school in a society that kind of innovates us with messages that we need to reach
for more have more ambition gives us you know that High definitions of success in life that we
have to try to jump to reach and nobody sings the Praises of the pleasures of a simple cup of
tea you know the importance of family time with your loved ones or or just the pleasure of being
able to take an evening walk on the beach with your dog so I think that it's very important that
somebody reminds you that you know you can not overload what you already have what you're already
surrounded by growing that muscle of appreciation so that in each and every moment you are present
in your own life you see all the little Joys that you're surrounded with every day and if you
live life like that I think that will help you achieve contentment with just the small stuff
around you and that's what majority of your life in retirement may be about is just a small stuff
every day but in my own retirement here in Bali it is what makes me so grateful and so happy every
day that I am surrounded by my loving husband and very interesting and independent little dog
that's very very cute you know that we have very comfortable a bit simple house we have the ability
to enjoy good food even if it's simple stuff from the war rooms locally we have a garden and
beautiful things are growing around us every day the weather is great you know stuff is good yeah
I think this is one of the most essential simple things that's often overlooked simply because it's
a matter of mentality but I believe this essential quality or characteristic could make all the
difference for you so these are the six essential things that I believe are very very important for
you to cultivate and prepare for in the leader to actually taking the plunge into a return then I
think that if you have these six strong skills and qualities going for you you will be in a position
much more well placed to make the best out of your retirement however long that period may be let me
know what you think of my suggestions whether you agree or if you think they suck let me know why
but in any event I really appreciate you tuning in and sharing my thoughts for this week and
wherever you are in the world I'm wishing you a happy Saturday evening and let's speak again
next week till then you take care and bye for now
Retired at 38: 5 strong reasons to retire as soon as you can (Retirement Planning)
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
so early retirement has actually improved our
health so much that I actually think we'll be avoiding higher health care costs down the line
that may actually lead into our retirement funds and then early retirement has also allowed us
to achieve a state of intuitive living which has been absolutely awesome financially the
conventional wisdom is that early retirement could potentially be disastrous but frankly
I think so far two years into retirement that our early retirement has been great for us
financially these plus two or three more are just some of the very strong reasons why I would
Advocate that anyone considering retirement should do so as early as possible let me explain why
down below hey I'm Jean and for the past two years I've been retired in Bali Indonesia
with my husband today I wanted to discuss about all these reasons why I think retiring
as early as you can is a brilliant idea [Music] so Health basically don't wait till it's too late
I think that when most people think about health and retirement planning they just kind of hope
and assume that they will be in good health when they enter retirement and then that they pray it
remains status quo until the end but I guess most of us pre-retirement might be involved in jobs
that might be high stress with long hours at the desk and then naturally Fitness just isn't
what ideally it should be so all my life I've been struggling with skin rashes and allergies and
these issues tend to pop up every time my immunity gets low because I'm stressed I'm tired I'm taxed
but truly in the two years since we have been retired the manifestation of all these problems
have just gone down so much in retirement mode I'm happily keeping very fit doing all the things
that I know of like surfing walking the dog with the hubby eating better overall probably further
down the line maybe I might be avoiding higher healthcare costs having this health is actually
so much wealth it allows you to live life to the fullest because frankly all the stuff that you
want to do in your enjoyment of Life probably involves a lot of Health you want to travel
you want to scale that mountain at Sunrise to see that incredible view you need your help even
just to enjoy good food if you like us you like to eat you need your health I mean I know so many
people who have dietary restrictions because of high cholesterol or diabetes improving health is
actually one of the biggest and strongest reasons why you should retire early so the second big
reason for wanting to retire ASAP is actually intuitive living basically intuitive living is
really connecting with yourself and listening to your garden stings and your feelings as to stuff
like eating and rest and meditation relationships even your spending habits perhaps I don't know
how it is for you guys but I was generally living my life governed by a lot of shirts right I
mean I should be at the office by 9am so that I won't piss off the bosses I should stay in
the office stay late and postpone my workout postpone dinner so I can meet the deadline set by
my clients I should carry branded Handbags and of course I should be a corporate lawyer I mean why
would I want to be anything else right finally in retirement we are free from the demands of the
pursuit of money to listen to ourselves to truly tune in and understand what is the optimum cause
in life you can chart you really want to wake up every day without an alarm clock naturally because
you've had enough sleep you want to eat only enough and not too much I mean you want to make
better choices food wise intuitive exercise you know you're doing what really only appeals to you
maybe you don't like sweating in the afternoons so then you know get a gym membership or play
indoor record Sports whatever works for you I only wish that more people have the opportunity
to experience living life this way intuitively away from the entanglements and distractions
from regular running the hands the real life the third reason why you might want to retire
as soon as possibly is just that the earlier you retire the more time you gain in life I
mean if you think about it most of us live life as though we are invincible as if life
itself will never run out and therefore we do things like squander our time or sell it away too
cheaply in exchange for material things we each only have so long to live right and the money you
make in your lifetime you can't bring that with you when you go home so well might as well you'll
be the one to spend it when you can right Society feeds us like so many different narratives
about success and what it should look like but actually I think success is really not
about the achievements per se but it's just really a Feeling and I like to think that at
the end of our Lives when we're there in our last dying moments what we'll be thinking
about probably wouldn't be like stuff like oh I closed that three billion dollar deal I
think it would more be along the lines of like I had good friends and I loved my family I had
a good life you know I ate good food I laughed Lots I took care of my kids and my dog stuff like
that so don't squander the time that we each have maybe you have personal goals that you really
want to achieve stuff like learning Spanish or scaling the Great Wall of China or just
watching your kids grow up that's just a million places that are better to spend your
time at then at a job which you don't really particularly care for and which maybe you're just
doing just cause that's what everyone else is before we move on a big thank you to
skillshare for sponsoring this video so skillshare is an online learning community with
thousands of classes for anyone who loves learning if 2023 is the year you promised yourself
you're gonna finally explore new career or side hustle options or work on personal growth
then skillshare is the perfect place to start for me one of the ways we have fun in our
retirement is making YouTube videos when we first started skillshare was instrumental
in teaching us so many of the basics like videography storytelling and more till today
one of the best classes I ever sat through online anywhere is still the class by Sorel Amore
YouTube success build an authentic Channel that's worth the follow so her advice about finding my
Niche valuing authenticity over Beauty creating meaningful messages and providing value to the
audience really changed our perspectives on what we were creating back then for the better of
course we've gone from like 40 Subs to the 143 000 Subs of today and from time to time I still
pull up sorel's worksheet when I'm creating my videos just to check that I'm on track for
making something good for our people our audience it's always super easy to take whatever you learn
on skillshare and apply it directly to your life Pursuits whatever those may be I highly recommend
checking out skillshare and if you want to do that you can use my link in the description below the
first 1000 people will get one month of skillshare absolutely free you can try it out learn something
new move a step closer to your 2023 goals reason number four the earlier you start your retirement
the better you'll get at it with every other change in life we expect that we all need time to
learn how to do it well so things like becoming apparent for the first time even if like us it's
just a fur kid or transitioning from being a student to being a working adult and then there's
the transition from being and actively working adult to retirement mode it seems ridiculous and
silly even at first I mean it's like saying who doesn't know how to spend their free time right
but if you actually truly observe things around you retirement Falls really differently for
different people we all know the people who have retired and in their retirement seem a
little lost lonely left behind and uninspired and then there's the other kind of retired people
right the ones who go like when we're talking that I'm gonna grab Life by the balls and Max things
out a big part of that may actually be the point in life at which you retire whether at that point
where you retire you still have your zest your Zeal your energy your health your Fitness to help
you max out the happiness potential of that free time and freedom in retirement and then there's
the thought that retirement supposed to stretch out for a few good years at least right if not
for a few decades and doing that requires skills you know you need so many different skills to
have a successful retirement I think that's a topic for another day but basically you need time
to learn those skills whether it's Financial money management or social skills you know building
relationships and stuff but basically you need time to get all that down pat in order to have
a successful retirement so then the earlier you retire the better usually you will probably
turn out for you so the last and possibly the most controversial point I think that early
retirement could possibly be great for you financially and this is controversial because it's
directly opposite to what a lot of the experts say right you retire too early there's so much risk
that you miscalculate your finances or that world events take an unexpected turn and then you know
things go belly up and then you're destitute in your last years but I mean underlying all that
seems to be this assumption that in retirement we're all just going to be like one dead lazy log
and I think that these days especially if you're an early retiree that is just so not true maybe
like us with YouTube in our retirement in your own retirement maybe you'll learn new skills pick
up new side hustles and stay busy doing something that you're doing for the love of it for the fun
not for the money but having the money come in as a result of your side hustle is a nice bonus and
you know what it becomes an additional buffer for your later years so retiring early also allows you
to take advantage of things like dual Arbitrage Right Moving overseas to improve your financial
situation and yeah so like us I'm from Singapore but I'm now retired here in Bali Indonesia we're
not just here because life is more affordable but the fact is that our retirement sums in fact our
whole entire retirement is only possible because living here is so much more affordable as compared
to back home you know this wouldn't be possible at all if we retiredly and ended up having health
concerns right mobility issues for example retiring early and then using the time to keep up
with current affairs learning hedging strategies to minimize risk learning how to diversify our
Investment Portfolio I feel that the time in our retirement has been well spent to actually make
us more resilient and the fact that we retired so early also means that if anything goes badly up
time and youth are on our side if our financial planning for retirement had just sucked or you
know things unexpectedly go failure so prepare you know if we have to U-turn and go back to work or
maybe start another business it's not a big deal and then we'll go off Marshall the resources
that we lack and then we'll come back again and second time around third time around will
definitely be better each time at doing this so in terms of confidence and the feeling of
resilience that we will be able to make this last all the way I think that starting
early doing it early diving into it and understanding the parameters the potential
the boundaries of what we face in retirement actually really really helps well guys so
these are the few takeaways from our last two years living in retirement here in Bali and
I mean if you have any thoughts or objections or contributions to the points that I've made in
this video I'll love to hear them let's start a little discussion in the comments below you
guys have a good week ahead wherever you are and let's chat again next Saturday thank you
for watching and bye-bye have a good weekend
Retire With $500,000: How it Works, Examples
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
When you hear about retirement planning some
pretty big numbers get thrown around. But the reality is that most people don't have one or two
million dollars set aside. So let's look at what it's like to retire with $500,000 and what we'll
do is start with some calculations and give you tips on how you can run these numbers for yourself
with your own details. Then we'll go through some strategies that can help you make that money last.
Five hundred thousand dollars is sufficient to retire on for a lot of people and a lot of people
do it with less.
Now, more is certainly better but it ultimately comes down to your individual
circumstances for example the amount you spend is a big factor and that's going to depend on a
couple of different things it might just be your lifestyle but where you live also has an impact
on your expenses any income sources that come into your household are also important so if you
have a pension plus Social Security (full Social Security benefits) then that's certainly helpful
if you have multiple sources of income coming into the household that doesn't hurt and luck also
plays a role in all of this so it might have to do with what do the markets do right after you retire
are they strong or do they crash? Or what type of health care events come up what conditions do you
have now and what might arise during retirement? All of these things together are going to affect
what your spending looks like to keep things simple we're going to use some averages from the
BLS the latest data available is roughly $48,000 per year that a household over age 65 spends
but ultimately this needs to be useful for you, so you can take the concepts that we talk about
in this video and then overlay your own numbers into the calculators that you're going to have
access to, and that way you can get a decent idea of what your retirement might look like.
It's also
helpful to know that your spending can change over time during retirement for example some people
talk about the go-go the slow-go and the no-go years. So your go-go years are right after you
stop working you're young and healthy and you're eager to go out and do all of those things you've
dreamed about doing but you might start slowing down some and eventually you get to a point where
you don't want to sit on an airplane for eight hours and your health care costs start to rise
as you spend less on leisure and entertainment. Another big piece of all this is any retirement
income that you get so that's Social Security or pensions and Social Security is a big piece of
retirement income for a lot of people in the u.s so we're going to lean on that as we go through
this if you have roughly $500,000 saved for retirement then we're going to assume that you get
a bit more than the average here because you've had the earnings and the work history to help you
save some money your age also affects how much you get from Social Security, so that can impact
your plan you really want to do some analysis and make some decisions keeping in mind that you
may have beneficiaries who might take over your Social Security benefit.
By the way, I'm Justin
Pritchard, I help people plan for retirement and invest for the future. So, in the description
below, you're going to find some resources on this topic, and I'll include some links to calculators
that you can use to run your own numbers. So we'll start with a single person example
and then get into a couple, and these are over simplified examples but the important thing is to
paint the picture of how things might unfold and show you how you can run some of these numbers
yourself. We looked at some of those statistics on spending and if you're going to retire with
$500,000 in assets unless you have some really great retirement income you're probably not going
to be on the high end of those statistics so we'll assume somebody here spending about 45 thousand
dollars per year going to get 2 000 a month of Social Security income so we'll put those
numbers into our handy calculator here 45 000 of spending or income we're going to ignore
taxes for right now but we'll get to that later and she gets 2 000 a month in Social Security that
leaves 21 000 that she's going to need to withdraw from savings each year now you can play with an
inflation rate and of course inflation is higher right now the question is will it remain high
for the rest of your life for the next 30 years or something that would be interesting if it did
so I'm just going to go with this for right now and one year away from retirement let's
say five and a half percent returns both before and during retirement and 25 years
of life maybe 30 years of life if we look at the calculations there this person needs about
457 000 so depending on how much she has if you already had 500,000 you might be all set however
again this is an oversimplification so we have ignored taxes let's assume that all of that money
is in a pre-tax retirement account you're going to have to pay some income taxes when you take
withdrawals so one way to look at that is just to increase again this is an oversimplification but
you might say let's call it 50 000 and assume roughly 5 000 in taxes each year and what might
that mean well that might mean you need an extra 65 000 above the 500 000 you're thinking of
another issue is that this assumes flat returns each year and the fact is that you're never going
to get exactly five and a half percent some years you'll get five, some years you'll get six, some
years you'll lose money, some years you'll earn more, but they typically don't go in a straight
line so we have to wonder what would happen if you have bad timing for example if there's a
big market crash right at the beginning of your retirement.
To help paint a richer picture
of that let's look at a financial planning program that's a little bit more robust so this
is saying that she might have roughly a 50-50 chance of success and I've got some tricks to
improve that but just for starters that's more or less a coin toss so what does that mean
if there's a 50% chance of success this is a Monte Carlo analysis and so what happens is
we might say that you get a thousand different hands of cards.
Some of those are really good
those might be the ones up here that leave you with a lot of money at the end of your retirement
or the end of your life some of them are really bad and you would run out of money early and in
roughly 50% of these cases you end up just making it you're probably not going to get the best luck
as you go into retirement and hopefully you don't get the worst luck but we want to be able to
account for a number of different ranges here so that if things are kind of bad or pretty bad that
you have a decent chance of making it so what can we do to improve those chances of success one way
is to adjust spending so if you're flexible then you can reduce what you spend in years when things
are really bad or you might even look at something like the retirement spending smile which is based
on some research from David Blanchett which says that retirees might spend it roughly inflation
minus one percent now this has her with a 100% chance of success which i don't like nothing
is 100% certain i wish it would stop at 99% but just by making that little adjustment this
has dramatically improved the chances but it's not something you can do on one of those basic
online calculators just to look at a little bit more detail on how this might unfold by the way
this doesn't perfectly match what we looked at in the basic online calculator but
it's close enough for our purposes so they have about five hundred thousand dollars
here she's going to work for one more year then that income stops she's going to wait until age
70 to take Social Security so there are a couple years there with zero income and then a partial
year then that full Social Security benefit kicks in of course it's inflation adjusted so
it's actually higher out in the year 2029 those expenses are right around 45 000 when she stops
working and there's that five thousand dollars of taxes due so in these first couple of years
when she has no income she's going to be taking pretty big withdrawals to support her spending
but once that Social Security income kicks in then she can take much smaller distributions and
that tax bill is going to come down and we can take a look at that if we look at what her tax
rate might be this is an effective tax rate so this takes into account any deductions that you've
taken, uh, typically people pay surprisingly low taxes especially if you're at this asset level
in retirement roughly $500,000 in savings if you have a couple of million you're going to be
in higher tax brackets especially later in life once you start taking those required minimum
distributions but at this stage and with this asset level the tax rates can be surprisingly low
for some people so that was our single example and now we can look at a couple but I'm not going
to go through all of those steps again they've got two sources of income coming in so that makes
it a lot easier to support higher spending levels so let's jump over to the quick calculator just to
see how that looks so they wanted 50 000 of income or spending they've got 35 000 of Social Security
coming into the household so that's only 15 000 they need to generate out of their assets let's
throw on a little bit extra just for some taxes and other things so we'll keep all of the other
assumptions the same and it's a 30-year retirement here they can also make do with less than 500 000
again ignoring some taxes and bad timing and other things that might pop up as surprises but with
a really simplified calculation they're at least kind of in the ballpark with about 500 000
in assets of course it's important to plan for one person's death and that might happen
sooner or later so you want to look at how that might affect the household as you're doing
these ballpark calculations another thing you can do is look at a withdrawal rate again it's an
oversimplification but it's a way to kind of take your temperature and just see if things look way
out of whack or if they look more or less okay so in this case we've got them pulling 20 700 out
of their assets and that's based on let's call it $500,000 of assets so if we divide that we get
4.14 percent is the withdrawal rate that these people are taking the great debate is always
going to be what is the right withdrawal rate so the anchor point for a lot of people
has been a four percent withdrawal rate otherwise known as the four percent rule which
is a bad name for it it's really more of a four percent research finding and that's based on some
research done long ago to try and figure out what is the maximum amount that people could withdraw
in really bad situations with historical data and pretty simplified portfolios that happened to be
four percent now if you look at that and you use a more diverse portfolio it could potentially
be higher however a lot of people will say that given today's environment with low interest rates
and wherever the market is a lot of people think that four percent is too high this is something
that people can quibble about for hours on end so I'm not going to try and tell you what is your
correct withdrawal rate i actually prefer to do more detailed calculations like with the financial
planning program i tend to find that that's more helpful but it is often useful to figure out if
you're looking at a six percent withdrawal rate you might want to make sure that you have a
backup in place or you have a good reason for withdrawing a lot versus a one or two percent
withdrawal rate you have to wonder if you are selling yourself short once again any flexibility
you have in retirement is extremely valuable so if you're able to change your spending in response to
how the markets do if you are running out of money more quickly than anticipated then that is super
helpful and maybe you can retire sooner or maybe you can start with a higher withdrawal rate versus
if everything is rigid and you're running pretty thin then you want to go with a lower withdrawal
rate because you don't have a lot of cushion to adjust to life surprises so just for reference
here we're looking at some data from JP Morgan, their research on withdrawal rates and different
portfolios and when might you have a relatively high level of confidence when should you be more
concerned and they give you a rough idea what I like about this is it doesn't just point at one
number it gives you some ranges and you can say well I'm comfortable with certain ranges I'm good
with green i don't like anything less than dark green or you can say I'm willing to dip into some
yellow because i want to retire sooner and I'm willing to take chances and especially maybe i can
make adjustments if things aren't going well so what about taxes we said we talked more about that
and taxes are important this is going to reduce the amount of money you have for spending you need
to budget if you're going to be taking withdrawals from pre-tax retirement accounts because some
of that money needs to go to the IRS the amount you actually pay is going to depend on a number of
different things and again if it's all in pre-tax accounts you're going to have a relatively higher
tax burden versus if that money is in Roth IRAs and you satisfy all the requirements to get
tax-free income so there could even be some opportunities to do planning before you retire or
before you start taking social security benefits and there might be ways to reduce the amount
you pay in taxes Roth conversions are an obvious example of that now since we're talking about
taxes it's time for a friendly reminder that this is just a short video it's not individualized
advice it's not enough for you to make some really big detailed decisions on the rest of your life
so please check with some experts work with a tax advisor financial planner and triple check those
calculations if you're doing all of this yourself because we don't want you to run out of money
early now this is just an oversimplified example of what things might look like to help you
visualize what the tax impact is so at this point the person is taking social security
we've got that single person example again she gets 24 000 a year in social security so
that means she only needs to pull out 21 000 from those pre-tax retirement accounts for
ignoring state income tax and other factors her tax burden is relatively small however it
still takes a bite out of things and so if she was thinking she has 45 000 of income that
social security plus the withdrawals what ends up happening is she has slightly less
so she needs to either make up the difference or pull out additional funds a lot of people ask
about living off the interest or just not dipping into the savings but spending the earnings and
the dividends that come off of their investments i get where that comes from perhaps you want to keep
some money around for a health care event or maybe you want to give assets to the next generation
or to your favorite charity certainly makes sense the reality unfortunately is that for people who
have about 500 000 saved for retirement is that those people are typically going to have to spend
from their assets so what's important is that you make sure you don't run out of money before you
run out of life that goes back to some of those planning questions and looking at a withdrawal
rate that is going to make it likely at least that you don't run out of money and remember that
if you do run out of money you might still have some social security income and other resources
available but we really want you to be comfortable and have assets to draw on for the rest of your
life a couple of ways you can improve your chances are you can explore different products i don't
sell annuities and they can certainly be misused but an immediate annuity for example can pay you
income for the rest of your life and it's pretty simple and inexpensive you certainly don't want
to put all of your money into something like that but it could help if you are driven by a need
for security other techniques like buckets or time segmentation could also help you improve
your chances there are a lot of different ways to go about this it just depends what feels right
for you and if you're fortunate enough to own a home and have some equity in it then that may
be available for you down the road to help cover some needs if some surprises come up so as
you're figuring all of this out what can you do to improve your chances of success there are a
lot of moving parts but that means there are a lot of opportunities to make little adjustments that
can improve your chances remember those retirement spending strategies so that's the go go slow
go and no go years where you might reduce your spending by a certain amount as you go through
each phase or that retirement spending smile which goes slightly slower than inflation but you
might want to have certain categories of spending that go faster than general inflation like health
care expenses and in the category of least popular solutions there is working longer now this could
be something that helps you continue to save money and if you're able to maybe spend more on the
things you love then maybe you can keep working not a lot of people want to do this but it is
really powerful that's because it shortens the number of years that you take withdrawals plus
it can help your social security or your pension benefit or both because you've got more years of
earning possibly higher earnings and you tend to claim at a later age which typically helps your
benefit the drawback of that one I don't need to tell you is that you have to keep working longer
but even one year or a partial year can make a big difference and take your time as you evaluate
social security and other decisions like that because when you claim can have a big impact
on what your income looks like and it can also open up opportunities like leaving some of those
lower income years to make Roth conversions and you certainly want to remember inflation and
health care surprises as you go through all of this because those can have surprising impact
on things and health care is something that it's kind of crazy we go into retirement we don't know
how long it'll last we don't know what health care issues will come up so it's really difficult to
predict but those costs can really add up if you get into let's say an Alzheimer's and memory care
type situations so just think about those things even though it's not fun think about what might
happen if those situations were to arise.
So I hope you found this helpful. If you did, please
leave a quick thumbs up, thank you, and take care.
Retirement Social Security: Should I Withdraw Social Security at 62 or 67 with $1 Million?
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
so you're getting close to retirement and the question is when should you take Social Security should you take it at 62 should you take it at 67. it's kind of like the old Chicken and the Egg discussion which came first well in this video I'm going to show you some circumstances where it might make sense for you to take it at 62 but I'm also going to show you why it might make sense to wait until 67.
[Music] hi I'm Troy sharp CEO of Oak Harvest Financial Group certified financial planner professional host of the retirement income show and also a certified tax specialist when it comes to Social Security there's usually two types of people we come across the first one says Troy when I retire no matter what I'm taking social security and the other truly has questions when does it make sense should I defer Social Security longer because I've heard that that makes a lot of sense well the truth of the matter is your circumstances your individual circumstances dictate when you should take Social Security and those circumstances today may very well be different when you get to be Social Security age so I want to cover some of those situations that may change your timing for when you elect Social Security and I also want you to know how that impacts you long term as far as your financial security how much money you have how much income you have before we continue if you'd like to support the channel just hit that subscribe button share this video with a friend or family member or comment down below so let's take a look at John and Jane they're both 61 they come in they say Troy you know what we're tired of working we really are thinking about retiring and we know we can take Social Security next year at 62.
Does that make sense should we do that so this is a case study but John and Jane right now both making about seventy five thousand dollars per year so the first thing we're going to do is look at can John and Jane retire at age 62. now we have to pick a mortality date here so we start in this example at age 90. now one spouse could pass away before another spouse so we can always move these sliders back and forth and that would impact the probabilities and the right choice for taking social security but for now we're going to plug these in both spouses live into age 90 can they retire at age 62. we have to look at some goals here too because the the decision of when to take Social Security should not be made in a vacuum just because you get more from Social Security if you defer it longer does not mean that you should always simply defer Social Security longer there are some big things we need to understand first when do you want to retire how long are you going to live how many assets have you accumulated how much money do you have how much do you want to spend in retirement because that is a big determinant of how long your money will last and also when you should take Social Security so we have to first and foremost realize that the decision of when we elect Social Security each spouse has to be made within the context of the other parameters within retirement now for John and Jane here they want to spend a baseline income of about fifty thousand dollars per year but they're healthy and they're active they're retiring young the target date here is 62.
They want to spend an additional 60 000 in what we call the Go-Go years so a total of a hundred and ten thousand dollars for the first 10 years of retirement so from 62 to 72. after that 10th year they want to reduce the spending but they're still planning on being a little bit active going out to eat spending time with friends probably kids kids grandkids Etc they're going to reduce the total spending to from from the go go of 60 to 25 so 50 plus 25 is 75 000 all adjusted for inflation for another eight years here I'm just kind of randomly putting some numbers in of what we usually see when we sit with clients when we go through the income planning discussion and what retirement success looks like to you and this is something common to what we may see in this situation so 110 000 for the first 10 years of retirement then 75 000 for years 12 through 20 and then all of that goes away except the Baseline spending of about fifty thousand dollars a year and of course that's adjusted upwards for inflation 20 years from now that's going to be close to about a hundred thousand in today's dollars as far as purchasing power of that 50.
Now I like to start the analysis at age 67 so full retirement age so when we start to look at these parameters of when it makes sense that the Baseline I like to start at is 67. so in this scenario John has thirty six thousand dollars or three thousand a month at full retirement age of 67 if he waits that long Jane will have thirty thousand dollars in retirement benefits at full retirement age we call it fra for short if she waits until age 67. okay I told you there were four big things there we've already covered two of them how long they expect to live age 90 how much they want to spend we went through that go go spending plan now how much have they saved because these are the things that we have to look at in context of making the decision of what makes the most sense regarding the age to start social security for both spouses so in this example we have 250 000 inside James 4 1K John has about 700 000 inside his 401k and they've managed to save about fifty thousand dollars outside of retirement accounts for a total investable asset level of 1 million bucks now I'd like to point this out as well they have a five hundred thousand dollar home no mortgage so that's kind of always in our back pocket if we need to tap that home equity line possibly a reverse mortgage or if we want to sell and downsize generate a little additional cash for the Investment Portfolio or to spend it's always nice to know that we have that option okay so remember I said I like to start the Social Security analysis when deciding between taking it a 62 or 67 or anytime in between or even later I like to start the Baseline at 67 to kind of see where we are and how everything plays out so I'm going to hit the magic button and based on the Go-Go spending period retiring at 61 taking social security at 67 having one million dollars in assets by the way not assuming that the home is sold we just know that's in our back pocket but it's not used to fund any goals a couple things I want to point out here first 81 probability of success that means out of a thousand different simulations assuming all these different market returns across all these years and I want to also point out this is not using uh back tested data this is using assumptions and forecast moving forward for the current economic environment that's very important to understand so 81 is not a hundred percent but is it good enough to retire yeah absolutely as long as we stayed connected to what was going on in our plan as far as how our portfolio is doing how much income we're spending the economic environment all of these various factors we would just want to monitor it a bit more closely to make sure that we weren't going down from 81 but the second thing I want to point out here is look at the kind of the trajectory so these are a thousand different simulations here and the thing that sticks out to me is taking social security at 67 and spending that amount of money we see in in literally all of these simulations that the the portfolio balance this is what this represents so we're starting at a million on the y-axis here you see it's 2 million three million and then on the x-axis it's going out years 2025 2030 2035 but in almost all of these simulations the account balances are depreciating so that tells me immediately that I want to have a conversation with you that that if we defer Social Security until 67 would you be comfortable seeing your account balances spend down because from my experience When people's account balances are spending down in retirement even though they know they have a much higher guaranteed income from Social Security people get nervous and when you get nervous in retirement especially during a recession you can make bad decisions and bad decisions are typically the one thing that can really throw your retirement off track if we allow our emotions to dictate our actions we can blow an entire plan up in the best plan out there will get blown up from bad decisions typically driven from emotional feelings behaviors Etc okay now we're going to take a look at Social Security at 62 versus age 67 and we're also we're going to look at age 70.
So what we have up here is is full retirement age both taking it 62 both taking it at 70 and then one spouse at 70 one spouse at 67. we're going to look at the probability nothing's changed except when we take Social Security okay so the the what we just looked at the current 82 percent the reason this is one percent higher than the 81 is another simulation has run but we're right in that range I want to point this out here so this is interesting the age 62 of both spouses take it at 62. it's very very close to the full retirement age probability so when we're doing a statistical analysis of all these different variables to me there's not a ton of difference between 79 and 82 81 somewhere in that range these are very very similar now when we look over here at age 70 this is the one I want you to kind of really let soak in and understand why so we have a couple that wants to retire early but they also have a pretty big spending goal in mind because they want to enjoy retirement they want to spend it together they want to travel spend time with the kids that 110 I think was the goal 110 000 during that first 10 years of retirement in the Go-Go years this means we do have to draw down the assets we need to be comfortable with that but we also need a plan on where that income is coming from how we're going to protect some of the assets but also we want to make sure that these other decisions are being made correctly as well so 62 and 67 very similar but if if they were to just follow the the most recent article they read on CNBC that says you should defer your Social Security as long as possible and they waited until age 70 yes they would have significantly higher annual income but they will have spent down the portfolio to such an extent that that might be all they have so big difference here between taking it at 70 versus 62 or 67.
Now your situation is completely different I'm not telling you to not take it at 70 because for a whole lot of our clients that is the right thing to do mathematically the other side of that coin is mathematically is not always the right answer working with clients for many years I know that emotionally if we put a plan together and this is a conversation we'd have with you if we put a plan together that had you deferring Social Security longer but your account balances were declining in value not because the market was going down just because you were spending from my experience that would be very difficult for a lot of people to continue to spend the amount of money that they have been spending and still feel comfortable that they're going to be okay for the long run so this is why staying connected to the plan and having ongoing conversations and making sure you're attending your reviews and and and make sure that you understand where you're at I also want to to briefly just talk about the dynamic spending concept things change in retirement things change in the markets things change in the economy so when we're having these types of discussions if we're not comfortable you have to communicate that because we can pivot we can go in a different direction for some of you it may make sense to take it at age 62.
for some of you it may make sense to take it at age 67 and others age 70. but make sure you understand that this plan of yours it is a living breathing organism it needs water it needs sunlight it needs to be paid attention to and things are going to change pay attention to your your emotions how you're really feeling about your account balances is that impacting your spending decisions are you having trouble sleeping at night if so that's a conversation that that you need to have with your advisor but all of these different pieces working together from my experience that's how you have a higher probability of success in retirement and also sleep better at night [Music] foreign [Music].
Read MoreHow to Withdraw Retirement Funds: Traditional IRA
Harvey 0 Comments Retire Wealthy & Wise Silver IRA
So, you want to know about IRA withdrawals, huh? Hey there welcome back to my channel! Today we're gonna be talking about IRA withdrawals. When's the optimal time? What are some considerations for the taxes? And how does that actually work? But before we get into that.. have you subscribed to this channel? If not, do so… with bells on! There's a little bell icon and every time I put out a new video you will get a notification. So people often want to know when they can tap into their IRA that individual retirement account that they have saved up. Maybe there was a nice little nest egg there and they have a particular purchase that they are hoping to make. The optimal time for you to be taking money out of your IRA is after age 59 1/2. So some things to keep in mind as you take money from your IRA two things in particular. First of all when you take money out of your IRA, let's say you took out ten thousand dollars, it's as if you had worked at a job that paid you $10,000 in that given year.
That money that you've taken out is going to look like ordinary income, so that's the type of taxes you have to pay on it. Now you don't have to pay payroll taxes but you still owe federal, state, and probably local income. In addition to that if you are under the age fifty nine and a half and you take out that money you're probably going to owe a ten percent penalty. Now there are some ways that you can avoid that ten percent penalty so long as you are using that money for some particular reasons –off the top of my head three reasons that come to mind are first time home purchase, medical expenses, paying for higher education.
There are some other exceptions I will put a link in the description below. There are some people that realize that there's some taxation that happens when they take money out of their IRA and so they decide not to take money from their IRA as long as possible. Gotta avoid Uncle Sam right? Here's the deal, the IRS has given certain tax incentives for you to put money into this individual retirement account. If you don't start to draw that down before age 70 and a half then they start mandating that you start taking money from that account. This is called a required minimum distribution and this topic deserves its own video – so stay tuned for that one.
So how exactly do you take money from your IRA? It could take two things: first a phone call to your advisor they might be able to make that distribution on the phone. The other option is that you can sign a form. Just make sure you're leaving enough time for your financial adviser so that you're not both under stress on taking money out of your IRA. One nice thing about your IRA withdrawals is when you go to take that distribution you will be eligible to withhold for taxes.
So what that means is, if you already know that let's say you're in the 20% tax bracket and you're below age 59 and a half and you know you're gonna have that 10% penalty. You can assume about a 30% federal tax. So when you go to take that IRA distribution, you can tell the financial institution that you want to withhold 30% for federal taxes. That way you don't get a major sticker shock for that tax bill owed at the end of the year.
You really want to balance two things you don't want to take money too early from your investments you want to avoid that 10% penalty. And let's face it, this is going to help you fund your retirement so you want to keep your hands off of it. But on the other hand some of us in retirement live at a lower cost of living… eventually you will have to start taking money from that and it's going to look like taxable income.
There is some strategy that can be put into place especially between your ages 60 and 70. Alright friends, that's all I have for today. Thank you so much for tuning in, I appreciate it as always! Is anybody talking to you about your strategy for IRA distributions in retirement between ages 60 and 70 in particular? particular? Because if not I would love to have that conversation and let's connect. You can visit my website www.pleasantwealth.com and find a way to have a phone call with me. So with all of that good IRA distribution information I will leave you. And you take care..
Silver and other precious metals IRA
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