How Much Do I Need to Retire? 5 Numbers to Help You Decide.
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- čas přidán 28. 06. 2024
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Can you afford to retire? Will I have enough retirement income?
In this video, I unveil the essential 5-numbers you need to confidently plan your golden years.
From understanding your retirement expenses to calculating the potential shortfall, discover the simple yet crucial ingredients to retire without financial worries.
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ABOUT ME
I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission - pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money - so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!
📅 THE BASICS OF RETIREMENT PLANNING
Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.
Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.
Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.
Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund - especially if you have an employer retirement plan that matches any portion of your contributions.
Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.
Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.
❣ SPONSORED No, this video was not sponsored.
⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome
Do you know your five numbers?
Amazing to me most people do not know what they spend. I tell people to figure on spending 1.2-1.5x in retirement vs. while working if they want to travel. I tell them to multiply by 20x for nest egg if they are 55 or younger.
@@askme78232 you tell people to expect to spend more in retirement, not less? That's not what the data suggests. What are you basing that on? Might be an interesting video.
@@foundryfinancialwe are spending 7000 a month but we are likely to spend a lot more than that in retirement based on your software. Btw thanks for letting us to use it. One thing I noticed is that my top expense is taxes. 😂
@@askme78232That’s what I thought too. You’re bored in retirement, so you spend more.
@@sandm7788 mine too.
I retired at 54. Very happy to do what I want. Life is short.
Congratulations. Government job?
Different for everyone......time is precious and the more you have the richer you are.
When people asked me what are you going to do in retirement. I have always said ANYTHING I want. Still works seven years later.
Lots of people who have asked me that same question have work as their life and no real hobbies. A miserable existence I would say.
"I can't work another day" That was pretty much the shape I was in a couple months ago. I wasn't quite that fed up, but the job had lost it's luster. I've been in software development for ~30 years but it's changing fast and it's not the career it has been. I called up the broker and the CPA, figured out we were in a good shape to retire - and I'm calling it a career in a month. Can't say I'll miss it. But there are people I'll miss.
Congratulations!
The main one retie dept free.
We own our home outrite.
Our bare bone expenses are between 35 to 40° of our fixed income. But I still run my construction business.
I love doing it. It also forces my brain and body to exercise.
I retired at 63 with no debt...including mortgage. This is one of the keys to retirement security because it gives you a sense of peace that is hard to describe. As a military retiree, that gives me a comfortable cushion and I don't plan to take SS until age 70 to protect my spouse should I die first. The formula is simple...spend less that you make (blinding flash of the obvious).
Bad move. You lose a lot of $$$ not taking SS now. Over 200k+ that you won’t be able to make it up in the back end for 12+ years
Glad for you & wish I could do the same…not so simple a formula when you’ve been a single mother for the past 20 years, w/negligible help from former husband & from your family. You’re left w/a small pension & social security just as soon as you’re able to take it & praying you’ll be able to sell your home when/if the market will allow for it. Not what I had in mind for myself at this stage in life.
Thanks. 5 Steps to follow, ease and clear. Blessings.
Kevin, you did a great job explaining this! I just started listening to your videos! Thank you!
Thank you!
A very nice summary Kevin!
We are retired, and agree with your approach, and suggestions.
It took us some hard work to get our “expected” expenses correct, but it is key. The other methods based on pre-retirement income is just not accurate, and way over estimated our needs.
We are actually increasing our spending 2 and 4 years in, and also realize a dollar goes way further than when working.
No debt, and an accurate budget are the most important for us, in terms of our confidence. We also are realizing that we can draw down our portfolio faster than 4% despite a conservative allocation, since it will only “need” to last about 20 years since we will have plenty of guaranteed income in our 80’s to meet expenses.
Thank you! Often my job is to convince clients to spend more…not less.
Very good advice. Thanks
Well, when talking about retirement plans , I never seen anyone mentioning the costs of Nursing homes. Those places are Expensive.
👏👏👏
The care is very poor as well.
Just found you here. I am enjoying your videos. I filled out your questionnaire. 😊
Excellent! Thank for your kind words. Fair warning, I’m really behind on those,but trying to catch up this month.
No worries. Thank you for the reply!
Love your videos, informative and about the right length, and your voice/delivery is perfect. I've also found many "financial advisors" to really just be salespeople. Still learning here but I can see through the sales talk. Thanks for your offer, that is very generous. Everyones situation is unique, I do think a personalized assessment is of benefit to future retirees and is probably a high returning investment on the fee charged.
Thanks, Ken! I’m terrible at sales, so I decided to lead with generosity. I believe if you live with an open hand - everything else will work itself out! I saw your submission and will get to it early next week.
You could always, do the math and draw down on your accounts, based on what your expected life expectancy would be. Why people worry about living off what they have saved their entire life and never tapping into that equity is foolish. You cannot spend it when you are gone. I’m not advocating spending everything in 5 years after retirement. But you can draw down on your investment without going broke.
It happened to me. It was not worth the paycheck for me to go back to that job every day (I was miserable), and I didn't want to start over at 54.
Fortunately, I was able to make it work vis-à-vis these 5 numbers.
PS - Don't forget about healthcare $$ if you're pre-Medicare.
I like Ally as a high rate savings account.
Correcton on your part - most people don’t get a pension, but - I have a NY State Pension, am working on a Federal pension and I spent 20 yrs on the National Guard so I have a military pension as well 😊
Figure out a way to get your veteran status and you could be eligible for VA disability as well. Never thought someone could get 4 pensions
Nice video. I would add to the fixed income interest from savings accounts and dividends from taxable investment accouts. For instance, if my savings account pays $100 per month and my taxable account dividends is paying approximately $400 per month, then that is $500 per month in fixed income. Not a lot in this example, but it can become a lot in some cases.
I really appreciate the clarity you bring finances. I just recently became aware that I might be better off more heavily invested in a brokerage. I feel I’m late in life to achieving financial success, late 30s, and I’ve been investing for the past two years. After finding your content I finally feel like I’m beginning to understand how to use the different financial vehicles. My plan is growth and dividend growth in a brokerage and Roth account. I’ve put away a good amount in a 401k and want to pivot to allow access to funds in a brokerage. I’ll be looking for a good time to roll my 401k into my Roth to avoid paying so much taxes from earned income overall. I might try to get a match in my 401k but it’s no guarantee so I’ll be looking to increase my income even if that means switching departments or finding new employment. I plan to max my Roth and HSA accounts maybe put some in a 401k for a match but otherwise keep the rest in a brokerage and savings.
Really good video! Easy to understand and follow 😊
Thank you!
One thing that rarely gets in these types of videos is that we may need to work a little bit longer than we thought at our regular job or, when we retire from that job, work part-time or a small gig or two each week to supplement. Or maybe move somewhere less expensive.
Yep. Part-time job and something.You actually Like.. just to get insurance and a little income..
Yes- keeps on young!
How much money.... The ultimate question in all these videos. Healthcare/world issues.... Impossible to know fully. Bidinamics happens, Companies take advantage On the situation et cetera. But it's fun to run or talk about the scenarios and possibilities. Always over estimate and still will be wrong sometimes.
If I leave work at 60 the Social Security tool does not calculate from the day you leave work before eligibility at 62 - 70. The tool assumes you are working until 62 - 70. This makes getting a real number possible. I had to call social security and they didn't seem to understand my question the lady kept giving me numbers that assume I'm working up til 68. I had to explain multiple times I'm leaving work at age 60. She finally understood, said she would have to call back and never did
Go to the social security calculator on the site and put zero dollars as your future income.
I have a pension! Two of them, actually. They won't pay me a huge amount, as they represent less than half of my working years, but they'll certainly provide extra financial security. And I work for a public pension, educating our members on why they are lucky to have it. Many people in your field think they know better and want our retiring members to forfeit that lifetime benefit and instead withdraw their contributions and invest them. For a fee, of course. I appreciate that you know the value of a DB pension. I could retire anytime, but I like my job. It's a good problem to have, I guess.
Yeah, pensions are often a gift. Not every plan and they often aren’t inflation protected - but overall they’re great.
Thank you for saying people with a pension are lucky. Feels like gold plated handcuffs sometimes 😂
Yeah, it’s nice to have - hit hard to walk away from!
I have a pension through my union and I would take a 401k any day over a pension. Pension mismanaged, in red and I have no control over it. The retirement is not like assets invested in the market that growth to beat inflation. That is why we have our own plan just in case the pension doesn't work. I plan as if we will not have social security or pension. If we do great.
@@ForwardThinkingIncome Right! It took me longer than I care to admit to realize that but I’m in agreement with you, 100%. I would really like to move out of state at my 20yrs of service mark but I don’t think I’ll be able to take a lump sum since I started so young, I won’t hit the age requirement. So it seems my only options will be to stay til I have 30yrs to get the lump sum option- or go live my life and be stuck with the monthly payments in 20 or 30 years-if it’s still funded.😭 It is what it is but I’m definitely going to focus on an account outside of it. Thinking I’ll start a Roth account until I hit the max allowed limit and eventually start also saving in a pre-tax investment account.
I am getting a pension at retirement, work for the Fed's :)
My wifes monthly medical insurance premium is 1000/mo.
Life is short!
You are assuming that social security will continue as it is. They are most likely going to cut it or reduce it because of all the corruption in the government redirecting funds for the social security account to other agendas. How do you plan for that
Yes but it won't be drastic.... Otherwise the country would fail hugely because so many rely on it. I'm going to rely on it to cover medical costs at least.. That's our plan, and any extra will be a plus
Does anyone have near the amount this guy is talking about? Even if you are 65 years old?
Yes
I have way more. I’ve been putting away 15% in my 401k for 34 years. When they say pay yourself first , that’s what it means.
@@deanrotering879 Have u retired?
Yes
@@RobertBrown-hr9ti Good at least someone replied. Most do not . I am into rental property wich is an investment I don't want to give up.
In your example…if ur short 2k per month and you have 500k in retirement accounts that gives u 20 years even if it doesn’t grow. With it growing u might get 25-30 years. No?
Well even a cd pays 5% now. So if you take 4% your money will last longer than you
Most comments here are how wonderful things are because they paid off their houses retired and do nothing but wait for a maxed out SS check..... oh what a wonderful life... good grief.
I earn about 3500 a month
( With overtime )
1200 goes st8 into my work pension and work pays 300 a month in
I usually take home about £1800 a month
800 goes st8 into my vanguard isa stocks and shares isa
That leaves £1000
I pay £500 into a joint account and my wife also pays in £500
Every bill and food and insurances ect are covered easily from that £1000
That leaves me £500 a month spending money
Most months i spend about £300 ,thats gym ,takeaway once a week ,grabbing a coffee at work ,and a meal out once a week or so
Usually have a couple of hundred left at end of the month but sometimes i dont. If ive bougtb gardening stuff or diy stuff like paint or a new toilet seat or a new rug or a pair kf trainwrs or a pair of jeans etc
If your sensible and thrifty yiu can live well on very little
Thats if your also sensible enough to have your mortage paid off by time ya middle aged ,mine was paid off by aged 45
Well done u 👏🏻👏🏻
Interesting how you never mention RMDs. It appears to me at least with traditional IRAs/401ks NOT Roths, the government decides the rate of withdrawal. I've been retired now since 2021 haven't touched my assets but market volatility can absoulutly destroy the most focused investor. Very difficult seas to navigate and lets face it nothing is getting better in the nightmare called USA.
Biggest problem I see is Taxes, save money your whole life while paying taxes. Then retire and pay more Taxes awesome place Americka.
I cut medical - because naturally, I will die - none of that medication or trips to the doctor.
God, just take me out as I have come in. That alone will cut a lot of my budget being insurance free -
just have insurance for medical on your vehicle to cover injuries. I now, save that $$ monthly medical payment and put it in a stock account.
Then, if I have a broken bone, dental or whatever that is not life threatening - I go to the hospital and negotiate the price in cash.
Also, if you need medical that is long term and want that - go to Thailand - $850 round trip ticket and the hospitals/doctors/nurses are top notch.
Just get a recommendation first.
Pulling 4 percent out ya pension pot is crazy and it should be growing bwtween 5 and 10 percent a year
Love Planned expenses.. What about insurances, medical, food, gas etc Going up 30%?. It's been a great 3 years plus... Hey, Why don't we continue this? Think before you vote this year.Think before you vote this year.. Although not The only reason, but Come on..
Everything is temporary. Market goes up and down, but do we want to be controlled by o e person? You know that will be permanent, because he wants to rule like his failed business, but go ahead , do what’s best for you and your children’s future.
@@penelopesee7361ostrich woman. Anybody that has owned businesses know some go good and some fail, just like the stop market. You will have a 50 year politician that has made so many errors in 50 years that he wouldn't have one good business. Wrong Way Joe Hoe has always been wrong. Just worry about the abortion and your killing. I don't condone or like alot of what Trump says or does, but i would vote for rabbit droppings before Wrong Way or any Democrat.
@@penelopesee7361that is total BS. How is that even possible? Think for yourself. Break out of your bubble.
@@deanrotering879 I follow facts not fiction ,unlike the cult who will follow their leader to abyss 😂😂😂
@@penelopesee7361you are trapped in the far left hive mind. Zero independent thought. I do not like Trump. So please explain how he is going to rule. Can you? Is he never going to leave? Is he going to cancel the constitution? How is he going to accomplish that? Do you think the Federal Judiciary and the military are just going to go along with that? What flavor is the koolaid?
I got these points from my friend capt obvious
Who's got £500000 in investments way to much you need to retire.
I agree! Who has that much?
Looks like 70% of us are screwed …. Looks like I’m moving overseas to 3X my nest egg. Sad that most people can’t afford to retire here
Ughhh. Pension holders and teachers. That would be cool... But choices we make.
Kevin: You say "no body has a pension anymore"...not true. Fewer people do but still many do.
It’s not the norm, but yes it was an exaggeration.
Most don’t … if they do - many are losing them.
@@martywilliardTrue, if the pension is private. Otherwise you have many people with Government pensions. Which can change the way you prepare for retirement.
Employers are very Mean and Nasty to Older workers,, Some people will be forced to Go On Social Security at age 62 with little to no savings, many will learn to Live on Social Security Alone or will Semi Retire
Weary of young faces that claim expertise in retirement.
Thanks for thinking I look young.
New to your channel, love the content but dislike the overdone "whoosing" special effects sounds, detracts from the overall quality of the video and made me stop watching.
I hate I’m just seeing this video
Hi Tom 🖐️:)