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$50,000 RMD? Why are all these videos aimed at the wealthy? We all have RMDs if we have an IRA. I guess the wealthy is how these guys make their living. I’ll keep searching for help for the rest of us.😢

I understand from a health perspective I would be more active at 35 on a trip to Europe but I know that at my current age (61) I would appreciate and probably actually enjoy it more now.

What do you do when your IRA balance is higher each year after you take your RMD?

The second strategy "endowment'' spending chart for the bad trial 1966 case at around the 16 minute mark, seems to show the annual spending floor is only ~$30K instead of the $34K mentioned in the video and as shown in the other charts ? Is there a chart error, or am I misunderstanding this strategy ? Otherwise, thanks for the great video !

🎯 Key points for quick navigation: Retirement drawdown strategies determine how you withdraw funds from investments during retirement. Pro rata method involves withdrawing income in a balanced manner from different investment sources. Bucket method divides investments into short, medium, and long-term buckets for withdrawal. Time segmentation matches investments to specific income needs each year, providing personalized strategy. Safety first method focuses on guaranteeing income through annuities and maximizing Social Security. Glide path method involves adjusting asset allocation as you age, with reverse glide path showing potential benefits. Behavioral factors play a significant role in choosing and sticking to a retirement drawdown strategy. Made with HARPA AI

Great report....but... Premise: Your using the gov measure of inflation. Real inflation is higher. I.e. If you ate steak in prior years and now can only afford ground beef, the gov measure sees no inflation in that. They figure you are still eating beef...So that lifestyle change is not in the gov inflation rate. People below the Maginot Line are suffering real inflation

Jesus is the answer…and you won’t pay taxes in Heaven.

I notice NY is worst in every category. Man, this state stinks.

Two years later, still waiting ...

I totally agree with most of what you said. I am spending a lot more money now than in the future for sure. The travel budget alone is over 50K per year now, but in a couple of years that will be less than half. Since I don't have any debt, the wife and I will be very hard-pressed to also spend on many other things as we do now (health insurance since we are not under Medicare yet comes to mind, dinners, I am beginning to enjoy cooking at home and cars. Got my dream car so I am good to go). People need to realize the most important things in life are, health, family, friends, and time to enjoy it all.

You don't need more time, you need a better plan.

This is nonsense. You always have a minimum of a 15% discount on taxes for the Social Security benefit you receive.

My eyes glazed over, I slapped myself, two minutes later my eyes glazed over again

If your “forced income” in retirement is already above the cap for 85% tax rate on SS, does the tax torpedo impact the discussion?

The 4% rule is outdated and irrelevant. Everyone has a different needs analysis on how much your annual expenses are. And annual expenses can change year to year. Especially with inflation. You first need to know how much you spend each year and how you can cover your expenses from your savings and social security. Your Expenses is the most important number you need to know during retirement.

I think ROTH IRAs should just be gotten rid of, they were supposed to be for modest amounts of money of modest income people to avoid some cap gains taxes, but clearly the entitled rich people abuse them to avoid paying their taxes and to get subsidized health care. This just pushes more of the tax burden onto people who are working. If an old person has more money than they can spend in their lifetime (the RMD schedule is designed to not use up the account until age 120), why not pay taxes like everyone else. It seems very unpatriotic.

People are retiring and moving to...New Jersey???

Best advice to give right now is stay away from liberal/democratic counties and states. I think we have realized over the last few years that taxes are okay if you don’t have to deal with representatives who try to “apparently equalize” an already extremely fair system just to appease those that blame society for their problems.

Excellent Video. I think the dynamic strategy you choose to be a very personal decision. I agree a more complex approach is best but hard to implement on your own.

Way too detailed . Keep it simple . Save more spend less so that 4 % will always work. If you can’t spend 4 % then the financial markets and advisors are FOS.

The graph looks like the government is giving the middle finger to retirees.

What about CEFs, BDC, etc

Given the bucket strategy is one of the most popular, have you fixed the bug? We would still like to see that scenario since the chart you showed was ending balances, but that could be due to the statistical time sequence?

1st and 2nd dynamic strategy are using $34k which is 3.4% of original balance. How was this calculated? Why not 3% or 3.6% ?

I kind of like the idea of using guaranteed income like Social Security and pension for my needs and then taking a fixed percentage from my portfolio for wants. Not a big deal if my income fluctuates a bit from year to year.

Great video!!! Very informative. Thank you.

Thanks for this video. Interesting. Chart #1 appears about a 60/40 portfolio? Bengan's 4% study, used a 50/50 portfolio. What about increasing diversification of sub asset classes, would that increase the SWR? What about the effect of 1% + fees? Good point about Fire.

Good video. What do you think of Kitces' ratcheting (up only) withdrawal strategy?

Love the dynamic spending model. Andy and Tony at SG do a great job keeping me inline, but I’m always pushing to spend more! Not taking it with me!

Dynamic spending is a game changer and aligns with life whether that is unexpected or special expenses as well as the volatility of the market riding out the noise. It’s more adaptable and in the end with spending guardrails gives on more confidence in spending.

Great video. It has been my experience that the problem with Monte Carlo analysis is that people will look at the high-end outlier results and say “that’s nonsense, will never happen“ but then look at the worst case outlier results and are scared and believe very well could happen.

Sounds complicated, all these strategies. I'm going to look at what I need, then add buffer each year for misc and fun spending, then add it up and put it through the Montecarlo tests. If in the 90s, I'm not going to worry much about things. SS will be icing if it's there.

Great discussion of varying approaches to this important topic for people's consideraton. As usual, great content and easy to follow discussion. Thanks Eric. Have a great week. Larry, Central Valley, Ca.

Great discussion of opportunity costs starting around 6:00.

I don’t spend $8k per month now. I guess I won’t mind not spending it in retirement.

Nice graph showing how marginal tax rates stack at various income levels. If you know the rules, the math is pretty simple.

Regarding 60-day Rollover rules. Suppose I realize late in year my quarterly estimated tax payments will be insufficient. I arrange a 40k IRA distribution with 75% tax withholding. I assume I may rollover just the 10k I received back into an IRA. Can I deposit the $10,000 into the same IRA it came from? Will my 1095 show a 30k distribution, or 40k and additional forms will need to be filled out at tax time? Thanks for any help. I'll may to check the max % withholding Vanguard accommodates. 100%?

still pulling my hair out looking for clarity...this speaks to the 10% penalty, what about regular taxes? Do the earnings still have to cook 5 years? Example: at age 50 I started a Roth with $1 and added no more. At 60 yrs old I convert 10K, over the course of 2 years it earns $1400. At age 62 I have penalty free access to the 10K plus anything that dollar earned, but what access do I have to the $1400? At what point is that tax free?

I live in Tennessee and there is definitely a sales tax on food. Food is taxed at 4% rather than the statewide 7% rate.

What about high yield savings accounts?

With the current health of most young Americans, many will pass over the golden arches before they ever draw any SS.

7:42 This comment will probably never get seen, but the problem with the example at 7:42, and that I never see discussed with this loophole, is inflation. The real value of a $10K tax deduction in Jan 2007 was not the same as a $10K tax deduction in March 2011. CPI has a total inflation over that period of about 10%, that you would need about $11K in Mar 2011 to have the same purchasing power as in Jan 2007. Although not dealing with buying something directly, the tax brackets, and therefore the tax impact of the same face-value deduction was bigger in 2007 than 2011. This is the same as what happens with the bracket creep of all non-inflation-adjusted thresholds in the tax code like the SS provisional income, the $3K capital loss deduction against income, AMT before it was indexed to inflation, etc. I'm not saying this invalidates the whole strategy or anything, but to get an equivalent tax deduction by waiting, the HSA really has to have grown at least by as much as the Chained CPI-U, not just back to par if it had dropped.

Would have like to see how quarterly conversions faired.

I think that social security is easily fixed by taking away the cap on the amount of earned income is taxed. I also think that the tweaking that has already been done has made it too hard on lower income surviving spouses. While they might have the larger of the two benefits, they are making less and paying more taxes leaving many survivors worse off than when their spouse was alive.

Retired and sold our Connecticut house in 2021 traveled the US full time for 2 years, hands down the cheapest place to live is Wyoming. Bought a 48 acre ranch the lowest price for property we could find in the continental United States property taxes are 1/10 what I was paying on the east coast, no state income tax, I have a haying business so all the farm credits go against my IRA withdrawals. I save about 20k in taxes alone while I start ROTH conversions next year at 59 1/2.

I'm turning 70 this year and my best advice to all young folks is to NOT have any kind of IRA, just put your savings it in a savings account or a CD or invest it as you see fit. Pay the tax up front so you are not victimized in old age with the intentionally convoluted tax code MEANT TO GET AS MUCH OF YOUR MONEY AS POSSIBLE and be aware that there are income thresholds when you retire and are collecting Social Security benefits that, should you cross those income thresholds, your Social Security will be taxed and you'll be hit with a huge tax bill on either 50% or 86% of your Social Security as well as all of your other taxable income at tax time. My husband and I are not rich by any means, but we are having to be careful about investment gains and CD interest earnings on our non-IRA savings money because we DO NOT want to cross either of the IRS's income WAY TOO LOW thresholds and have to pay federal income tax on 50% or 86% of our Social Security.

NH doesn't have general income taxes. It currently taxes interest and dividends at 3% and is phasing the tax out complete in 2025. So the number for New Hampshire should be 0% next year. Property taxes are higher here but you can control what you pay based on where you live and how much house you buy.

Doesn’t the best strategy just move your gains from the traditional to the Roth IRA? If you move $100k on Jan 1 and make 10% then you have $110k in Roth at the end of the year. But if you have $100k in Traditional on Jan 1 and make 10% and move $100k on Dec 31 then you will leave $10k in your Traditional IRA. It doesn’t seem to make a lot of difference to me. Am I missing something?

Many people are unsure about the exact amount for a Roth conversion, which complicates making quarterly estimated tax payments as per the IRS default assumptions. Most will determine the amount and timing at the actual conversion. I also don’t know how much I can convert while staying within my desired tax bracket. Therefore, why not just talk about Schedule AI and the Annualized Installment method at the outset, instead of explaining why everyone will face tax penalties?

Useless to me. I don't have an IRA; I have a 401k, and I believe a large majority of your viewing audience does also?