Retire at 55 đ || How Much You Need To Retire Early at 55!
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- Äas pĆidĂĄn 4. 07. 2024
- Retire at 55 đ || How Much You Need To Retire Early at 55!
In this video I want to look at a scenario for someone who wants to retire at 55 and asking the question, how much in retirement savings and retirement investments do I need to retire early?
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We are going to look at different retirement rules and retirement scenarios that will help you determine your retirement readiness, especially if you are doing retirement planning at 50.
Retirement income strategies and retirement income planning are two big pieces to anyones retirement planning calculator. Whether you are wanting to know strategies for "retirement planning at 30", "retirement planning at 40", "retirement planning at 50", or even "retirement planning at 60" understanding how much retirement income that you want versus how much you need gives you a roadmap to follow to and through retirement.
Here at Pearl Wealth Group, we run a trademarked retirement investment and retirement income plan for individuals and families who are wanting to retire called "Your Financial EKGâą." What we are trying to visualize is how long a persons retirement savings are going to last throughout retirement. If you are looking for early retirement planning tips or trying to saving for retirement in your 50's, You Financial EKGâą is a great tool to help you understand where you are retirement planning. Retirement planning and retirement income strategies shouldn't be complicated. They should just be done right.
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â *Please make sure you talk with your CPA, Financial Advisor, Retirement Planner, or Investment Advisor Representative, before implementing any content from this channel. All videos are for informational and educational purposes only. None of the content, comments, responses, information, or any other item on this channel constitutes financial advice or recommendations. Please call Pearl Wealth Group at 813-807-5060 to go through your Retirement Income, Retirement Investments, or Retirement Plan in more detail.* â
Pearl Wealth Group
Drew Blackston, CRCÂź & RFCÂź
Office: 813-807-5060
Info@pearlwealthgroup.com
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The Mexican fisherman and American businessman story shows how we in the west get way too entrenched in what's not important in life.
Was able to retire at 50 due to injuries earlier in military service. Full medical plus receiving SS. Very, very thankful and blessed.
Thank you so much for your service! đșđž
Just lucky enough that I have a good pension .I did retire at 55. Claimed Social Security benefits at 62.
Thats great!
@@yourfinancialekg EKG, I grabbed my FULL pension at 55.
@@christopherhennessey8991 Chris thatâs awesome! What did you retire from?
@@yourfinancialekg Iâm an RN. Former employer is a country teaching hospital in Florida,affiliated with a major university. My pension is from the Florida Retirement System ( FRS). Pension guidelines at the time,were 30 years credited svc regardless of age or 62 and at least 6 yrs credited svc.
If you had your 30 yrs of credited svc ,there were no penalties for retiring before age 62.
The FRS offered a DROP ( deferred retirement option program) ,457 B program , to those who retired
and were considered â young retirees â. I legally retired at 53 and entered the â DROP â which allowed me to be
retired and continue to work in the system up to 5 years .One then has to mandatorily separate from employer or they have to reapply for retirement. Rule of 55 applies here as well. So you can cash out the 457 B money without the 10 % penalty for not being 59 1/2 yrs of age. Youâre simply responsible for paying 20% Federal Tax ,which is automatically deducted prior to receiving your 457 B money. I enjoy talking about stuff like this.
@@christopherhennessey8991 Chris that is awesome! I have many clients who have retired with FRS and participated in the DROP. It is a good system here in the state. Thank you so much for watching and talking. Have a great day!
Rule of thumb is when your calculated retirement income equals 80% of your take home pay, assuming that your take home pay was enough to cover your living expense. It worked for me and I have been retired comfortably for 22 years.
Awesome!
Sir, I like your 'Freedom Bucket" term and idea. I'm enjoying being a new viewer. Thanks!
Thank you for watching!
Great, thanks!
Your welcome!
Great video. Very clear and concise. Please consider doing an example for someone who retired in the mid 1960s. That is where the 4% rule came from.
Thanks for watching!
The rule of 55 is not all 401ks. It has to be part of the plan so you need to check first and not just assume
Yes!
some 401k plans allow you to move outside IRA/401k funds into your current company 401k. doing this before retiring/leaving gives you access to a greater amount without the 10% penalty.
Great comment Ronald!
The average return from the S&P 500 for the last hundred years after inflation was just over 7% so you would never run out of money pulling 4% for the last year after inflation it was just under 15%. Then again if you retired in 2000 well you where screwed.
My plan is to have everything in a S&P 500 low fee index fund with the exception of 24 months of expenses which will be in cash. Each month I will deduct each months expenses out of the S&P 500 index fund. If that month the market is down significantly then I will drop my expenses to the bare minimum which is 2/3s of my allowable monthly budget and deduct it from cash and this will continue until the market recovers. The moment the market recovers I will fully refund my cash fund to the full 24 months of expenses. As I plan on operating on a 3% rule and not a 4% rule and taking SS at 62 the likelihood of me running out of money is extremely unlikely. A perfect storm like the 2000 and 2008 crash would have to happen and that is not all that likely as it has only happened only a few times in the last 100 years. The odds are far more likely for me to under spend my retirement savings than to over spend it also I am from a very short lived family and I am not sure I will see my 70th birthday let alone my 80th.
Great plan!
Curious why you used the 100 year inflation average but not 100 year average stock market return which, according to the google machine, is around 10% if reinvesting dividends.
I watched a lot of your videos, I am not sure if it is a mistake but social security has COLA, you donât account for that. He is suppose to get $2800 dollars at full retirement age in 12 years, by then it will be higher, just this year social security had a 5.9% increase. Am I missing something?
You arenât missing a thing! I donât account for Social Security COLA on the board. When I use the software, then the Social Security cola is accounted for. Thank you so much for watching!
Is average retirement expenses a good measure? Wouldnât median be better, then adjusted for location?
Great idea!
In all seriousness, great information. I have one question. Does the 25X rule, multiplying your expenses by 25 to figure out how much you need to have saved, factor in SS into that number? For example, in this example, $50,000 x 25 is $1,250,000. So do you need that amount in addition to your social security or should you subtract your expected social security payment from your expenses and then multiply that amount by 25? In this case 25x($50,000-social security)=Amount needed for retirement!
I always try to exclude Social Security. Not that Iâm trying to be nitpicky, but Iâm always a little bit more conservative in my analysis. I like to use the 25X rule as a good baseline for retirement savings. Obviously, Social Security, pensions, or any other guaranteed income would offset the need for higher retirement savings. Great question!
Good vid...other than, i want to see taking SS at 62.. And plan on living till about 80.
Thank you!
in looking at my social security statement it's my understanding that the figures they give are predicated on me working and maintaining my current wage up to that age (62/FRA/70). If I bail at age 55 then those numbers are grossly overstated?
Great question. Not grossly overstated. I'm actually working on a video right now to show what happens to SS if you retire at 55. There are some good videos already on CZcams (Holy Schmitt) that shows exactly what happens too.
@@yourfinancialekg I've got two thoughts on that: 1) I started my first W2 job at age 16 so I didn't reach the minimum 35 years of AIME until age 51, so by retiring at age 55 I'm only excluding the first 4 years of low wages from the AIME calculation, but then: 2) once I go past the first bend point there isn't much gain in trying to increase the AIME because that second bend point yields about 30 cents on the dollar (and that last bend point is something like 15 cents on the dollar) so what's the point working those additional years trying to inflate the AIME when you just can't get any real traction to increase your monthly benefit?
@@jessefletcher9116 I agree 100%. Your retirement should be based on more than just SS. Thanks for the comment!
Going at 57. Because the longest market downturn was 3 years over the life of the market, we have 4 years living expenses in cash and another 3 years in non retirement sitting there earning 4 to 5 % most years that we can tap anytime. IRAs and 401K have around 25 years expenses in them assuming a 4% inflation rate over the rest of our life. So we have 9 to 10 years to cover from all that until I turn on my SS. When I do, it will cover all our household expenses. So the need to pull off investments becomes very small. Then once my wife turns on her pension and SS, well we will have more money coming in than we spend, even with some world travel in there. If we even had all our investments in very conservative funds like all bonds and they earned 1 to 2 % a year, we would never run out of money. The peace of mind that comes from that is awesome !
Bob, great plan and comment! Thank you for contributing to this thread.
Well that's good, but what happens if either of you get sick or what happens when either of you can no longer live on your own? Have you made plans to address that when it occurs?
@@TheDopalgangr great thing to consider
Good stuff but I'm surprised you didn't use 2.66% of expenses that you brought up in previous video.
I just used average expenses for a retiree currently in America. Two. 6% is what the new recommendation is but thatâs not what is always withdrawn. Thanks for the comment!
Does the rule of 55 apply to 403b and 457 plans?
403b Yes. 457 you can take withdrawals out under age 59.5 if you are no longer employed.
My 401k doesn't allow any withdrawals less than 100% of the account.
Sylvan, thank you for the comment! Not every 401k allows for the rule of 55. A different approach would be needed to retire before 59.5.
Take SS at 62. Tomorrow is not guaranteed.
"If tomorrow never comes..." -Garth Brooks
Yep. Waiting is assenine. I work in healthcare donât wait. All these BS ideas on when to take it.đ. At the latest 63-64. Unless you have great genetics itâs roulette time past 65. Thatâs what the government wants.You work till 65 then drop dead 6 months later.
Thereâs another $2,800 social security paymentâŠ..itâs a miracleâŠ.LOL
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I'm targeting retirement at 55.
I got 15 years. Trying to max out my investing.
I'm assuming bad returns and higher inflation due to government stupidity.
I'm targeting 6 million invested to retire.
Awesome!
Wrong. Some employers will not allow you to withdraw from your 401k at 55 in a way that works for you. My employer makes me take the whole amount when I leave the company in or after the year you turn 55. That simply doesnât work. I could take one years worth of funds but taking everything out simply wouldnât work.
Good take. Thank you. Does taking SSA at 62 drastically improve the 6% plan? It seems that waiting until 70 might stretch the dollars in their 80's further. Would or do you like annuities to keep a pension like income forever?
Great question! Each situation is different. I prefer delaying SS as long as possible but it depends on the amount of retirement assets, married, single, or partner, and other income sources. We use annuities to help guarantee income if someone desires that guarantee.
@@yourfinancialekg The timing of taking SS has turned out to be a much bigger issue then I ever thought it would be. Even if you don't need it and just take and invest it I still wonder which method is better. I got 10-15 more years to figure it out. I hope that after 7 years in retirement the choice will be clearer. Thanks Drew.
@@rayanderson3164 Try to think of Social Security like adding another income stream. Itâs not about maximizing return. Itâs more about planning another stream of income to help benefit your retirement. Thatâs why you want to think about your spouse, where your income is coming from, and your investments. Let me know if you need any help. Thanks for the comment!
If you have enough money in your 401k/IRA to delay your social security until 70, it is a better option, you will have RMDs at 72 and they will tax you hard, if you take social security early in order to grow your investments.
@@davila1978 True enough. I plan heavily on Roth conversions before ss kicks in. After that's done then SS is in play. I expect to not deal with RMDS.
If you retire at 55 how long does it take to get your money
I'm not sure I understand your question.
Not knocking your strategy but for me I will have two buckets one for a Social Security ladder and the other at a safe withdrawal rate (3-5% depending on how close I am to my goal)
The money to replace Social Security will all be in fixed income and will just be a ladder replacing social security until 70. Of course then at 70 I will collect Social Security.
Great strategy John!
Inflation at 3%? Lol. The world will never be the same again. Historicals need to be thrown out.
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@@yourfinancialekg Not sure what your little emoji is trying to say but when 40% or more of the M2 is printed in 2 years. Same amount as the last 40-50 years. We have a problem. One like we have never encountered in history. Hyperinflation, stagflation, potential total collapse is upon us. So lets all cry laughing, because if we don't we will just cry. right?
@@ragoff I agree 100% with everything you just said.
All this content is nonsense. The simple answer is: It's not what you need -- it's how much do you spend?
Nonsense is a bit harsh BUT thanks for watching!
That drawl though. đđđ
Yes sir!