Retiring on Social Security only? Not a good idea. Here's why.
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- čas přidán 13. 09. 2024
- You're in your planning phase of retirement. Don't overcomplicate it but don't ignore important financial impacts. I'm not a financial advisor and what I do is how I see my situation. Everyone's situation will be different.
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I'd overshoot your projected amount of expenses at retirement. I would never have thought my utility costs would have doubled in 4 or 5 years. Property taxes up by 29 % over 4 years. Insurance costs sky rocketing on renewals. Stuff like that, then all the inflation that happened in the last 5 years...those are game changers.
yep... i met my retirement goal in my late 50s so i retired without social security in 2019 ( just before the plague) ... well, things radically changed for everyone .... but, luckily for me, i hedged a buffer for myself of about 20% above my "basic needs" when i retired ... but costs continue to go up and my buffer is getting pretty lean... just like Buzz, i hate to dip into saving or go beyond my budget ... so, my advice to everyone getting ready to retire is this : when you're working your numbers, then use the high side of your costs and the low side for your income and have a really big buffer... you'll thank yourself when you get there...
I put LED light bulbs in all my lights, cut my electric bill by half. in 2019 put in high efficiency heating and air conditioning. Saving 40% on my utility bills. Switched to State Farm for my insurance needs and saving $1900 a year. Medica supplement to Medicare costs my $85 a month, but has saved me several thousand on prescriptions. I review my expenses monthly to see what I can cut.
Exactly Unbelievable how much Inflation has taken off That's why we need more than we think we do
@@raykrv6a hard to belive my pge has double since last year with energy efficient every thing
It’s NOT inflation, it’s greed of corporations. We can stop that, enforce monopoly laws. Stop greedy corporations.
At my age 83, single, 20th year of my retirement, I am going to have to dip into my savings for the first time over property taxes! Eveything has increased substantially. Actually, scary.
We have to learn to live below our means.
Just saying...
I am so sorry to hear that. We are in our early 70s and haven’t had to do that yet.
Hopefully you have enough to cover the next decade? Buzz
your're 83 you did good. move a different property. think.
Use the money. You can’t take it with you.
Buzz always gives solid advice... sometimes painful but always the truth. Thank you Buzz.
75! Come on Buzz, you're at least going to make 85! Looking good brother and thanks for another great video.
Thanks but I read the expiration date.
@@BuzzRetirementGarageis it stamped on the bottom of your foot? I can’t find mine.
😂@@joycef8443
@@joycef8443 All I can say is they couldn't spell out the month. Not enough room. Lol
You are keeping your brain active just by your CZcams Channel, and you are eating well and staying active. Well more than 75 can be in your future. We've similar paths with parents passing early (I had a brother pass at 50 as well), but I also have one kicking along at 72. I plan to live to 95- and that's what my plan is based on. But it really does depend on us staying healthy long into that path. That's the card you may be dealt, but hope to stay away from.
I put a new roof on my house, replaced my heating system before drawing SSI. I'm single and get just $2,000 a month. I still work part time only because I have projects around the house that I want to do. I can make ends meet with just social security, but I also have IRAs that I can draw off from. I'm hoping that I can use up all of my assets before I croak. My kids are all self sufficient so they really don't need what I have. The bible tells us, Therefore don't worry about tomorrow, because tomorrow will worry about itself. Each day has enough trouble of its own.
Yep , a new house where the possibility of problems might be forestalled for a few years but after a while it's one thing after another that's failing , and then there's the new next door neighbors that bought the house from the McGillicutties . Who own a loud motorcycle they fire up every morning at 5AM and play there stereo loudly into the night... IF you are renting...you can break the lease and step away from crazy neighbors and if lucky find a better set of neighbors. Selling a house sometimes takes a long long time.
@@markbajek2541 I'm a builder so I can fix 95% of anything that needs repair. Neighbors can be a problem anywhere, thankfully mine are pretty decent.
Very good discussion Buzz. More food for thought. The biggest problem I saw over the years regarding financial planning for retirement is your are shooting at moving targets, and there are several issues that you have no control over.
One concept to consider in life, no matter your age, is "adapt, improvise, overcome".
Exactly. We went over budget in January due to attorney fees that we never thought we would have. Long story. Yep, the surprises can be interesting. Thanks for the comment! Buzz
I think you're the first YT-ber that talks about living on SS alone. I like that! Keep 'em coming!
I don't know. Could that be true? I'll have to search around.
there are definitely others living on SS alone on YT but many of those are struggling, some living in their vehicles
@@BuzzRetirementGarage Actually, there are many YTer's who discuss living on SS alone. Josh Scandlen, Azul, Holy Schmidt, Dr. Weir have all address the idea.
@@penelope5500 I'm subscribed to some of those. I guess I've missed those particular topics. Thanks!
@@penelope5500they talk about it, but Buzz is the only one living it.
It seems to me 75 is still pretty young. I'm planning for my wife and I to live into our 90s. It may not happen but I don't want to run out of money.
That's a good plan. I have $200,000 policy for her when I go. That will help. Thanks for the input! Buzz
We live on our Social Security only and have no problem saving money and enjoying life. We made sure our home and cars were paid for. We are able to pay cash for home or car repairs. The key is not to spend beyond your means!
Great advice. You're doing well! Buzz
Even with zero debt, many will not be able to live on just social security if they want to enjoy their golden years. You likely have a lot of savings. The average social security check is only $1300 at age of 62, and $1700 at age 66. The math isn't adding up unless your SS check is well above the average or you have savings. Maybe you have rental. The math doesn't fit.
Great video! Exactly the way I went about it. Figure your comfort level subtract your so called "guaranteed income"(SS,pension,annuity etc.) then figure a way to fill the gap. Some need more, some less just depends on our individual comfort levels. Thanks. Steve
Thank you, Master. I'm still laughing about your MC comment. 'Now listen to this"
I love your yard, it's so pretty and peaceful. Love the birds flitting by the bird feeder!
Thanks! My first summer off in 47 years and I'm enjoying the nature.
I have no wife,no kids,no debt including mortgage,I have lived off my Social Security for 8 years and have not touched my savings..so you can do it if you are in my situation and I have some expensive hobby too.😊
Yup. We're 72 and have been living on SS only. We have no debts and are able to pay cash for any repairs and can take vacations. We've always lived a frugal lifestyle, so it's not difficult for us.
You have to be super intentional with your money and you can’t have high housing costs. And you aren’t going to be taking expensive vacations.
When I started working (in the mid 70’s) boss said you need to save retirement which was 45 years away. I did, and at the time you could only put $2000 in an IRA. I bought a small house and lived below my income and paid off the house in 5 years. Now my mortgage Payless going into my savings and not as a payment to the bank. The company worked for eventually got a 401K in 1999. That helped because if all i was allowed to save was a $2000 in an IRA, retirement would have been tough..
Right? Funny how things have changed. Glad it worked out for you! Buzz
Buzz, well said. I think most financial advisors lean towards their clients having a balance when they pass. This is probably due to not being able to predict when our final day here will be. I am hoping your CZcams channel takes off, because I think you will fly by 75.
I hope so too but the Magic 8 ball said, it is decidedly so.
Love your information and willingness to share your financial information. So much more relatable than the financial people who discuss how much you can spend with 2 million saved! I worked part time most of my life to spend time raising our 3 children, we are a late Boomer and early gen X so we just didn't think about putting away for retirement until our 40's. Not much information out there prior to the internet about how to save. We did go to a financial advisor in our late 20's but he told us not to come back until we had a six month emergency fund saved. With 3 kids that took us until early 40's.
I hear you. It's not easy. You just do the best you can. If it means working longer than planned, so be it. Buzz
Buzz, Love your topic today, I really like to read all the comments that people leave. I learn so much from both of them. Keep up the good content and I’ll keep watching your videos!
I learn from the comments too! Great to read what others are doing.
.Great explanation Buzz, short and sweet but to the point. I too will turn 65 in January, also live in the greater Cleveland area. For better or worse, I am one of those single people you mentioned. Since joining your channel I have begun tracking my expenses to get a better understanding of my needs. I am still working full time but am seriously considering retiring before I reach my full retirement age of 67 due to some health concerns. Really enjoy your channel, it gives me inspiration. Best regards, Bob Ratliff.
Two Capricorns in the same city!
Hey Buzz, another great video. I'm sure a lot of people will benefit from this one. I like how simple you made it. Great job!!!
Glad you enjoyed it. Buzz
I looked at our expenses in May 2016, and it was an unsustainable, to retire at that level. The harsh reality set in. So we made drastic changes. We sold our house and moved to our cabin. We added a pole barn and garage. Then we made the changes to the cabin to allow us to age in place. We could get by at $2400 monthly, but no more investing, no more saving, and no more traveling. So what we do is live at or below that amount. I watch Frugal Queen in France, Jane an Mike explain budgeting great. 😊😊
It’s a good state of mind you chose….
Good moves. Tough moves but good ones. I've caught a few episodes of Frugal Queen but probably need to spend more time with them. Buzz
This is the best advice. What’s your comfort level? That’s a great question.
For younger people: Save your money!
Yes, younger people need to save as much as they can.
Good stuff. Real world experience is always appreciated. I had been charting and running spreadsheets (i’m weird like that) for nearly 3 years before I retired at 62. Even then, its taken 2 years AFTER retirement to finally settle into our “normal” retirement spending. Its way different than the forecasts I did and forecasts of my “financial” planners.
I maintain its always good to have supplemental income. I like that you’re stepping up and doing CZcams. I could never do it. 😂😂 Because, even though expectations changed somewhat, many forget Social Security was originally meant to keep elderly just out of poverty level. Its mathematically structured that way. It would be near impossible to overhaul considering how we cant agree on if the sky is blue. Yikes!
Thank you. Right, SS was not intended to be the only this we have to rely on. Why were forecasts different from reality? I'd love to learn. Thanks, Buzz
@@BuzzRetirementGarage i sincerely over estimated what I would spend! turns out the dream retirement of cruises and partying with Kardashians aren’t really all that fulfulling. kidding. but financial planning industry seduces by playing up what you can have/do if you only paid them to tell you how. i still check off some of the bucket list, but frankly i missed the routine of daily responsibilities. its channeled into charity work which costs less. who knew?
@@Fjjfuffnr244 I'm glad you overestimated and not underestimated. The charity work keeps you engaged and serves a higher purpose. Great job!
Single with SS & a small pension. No house or car payments, relocated to a much less expensive area about 10 years after I retired. I have yet to touch any of my savings and have actually managed to save more, while taking nice vacations each year. I do live frugally, but I always have. You don’t need a million dollars to retire, unless you want to live like a millionaire.
True. I was talking to a wealthy friend the other day and told him he's going to die with tons of money in the bank. He laughed and said him and his wife are spending down by taking expensive vacations. But, on the other hand, I wouldn't mind being in that position! Lol Buzz
Hi Buzz, your numbers are spot on for my situation. Sad to say, in these time a new roof, a HVAC replacement or a car repair are just a few things that can be financial game changers if you are not prepared. I’m hoping to get to that 5K/month sweet spot next year. Keep the video’s coming.
Thanks for stopping by!
I enjoy your openness and honesty buzz. You are so right, no ones budget is the same, but its nice to see how others such as yourself are doing it. I am 64, spouse is 63, I work for myself a few days a week until end of the year when spouse retires. We are heading south for 3 months just to get away from the cold. We are fortunate that we will have no money issues. We plan on taking our SS when we turn 67 because we do not need it now. Oh and I need to go back to Costco and get some more of those breakfast sandwiches.
Good job! Going south is a good idea. Appreciate the comment. Buzz
Thanks for sharing! It takes a lot to put yourself out there. Hope your channel grows!! I think it will because your videos are informative. I will say we had to replace our HVAC system back in 2021. Cost $13000 heat and AC. We financed it with 0%, at $213/mo. For 5 years. Not bad if you don’t want to put the money upfront. Of all the updates we have done to our house over the years that is the one that we have found worth it. And it lowered our electric and gas bill since it is a new and efficient system.
Thanks for the kind comment. I do worry about the furnace and air units. They were installed in 1997 so I know they're on borrowed time. I do baby the furnace meaning I clean it and always change the filter every 3 months. Next would be the refrigerator. What do you think, $2,500 or more? hopefully they don't hit at the same time! Buzz
I have Soc Sec, small Pension, farm rental property, part time job wages, and massive monthly dividends. My 21 monthly dividend income funds increased my post-retirement income by 37%. That made a huge difference in my long term solvency. So, I'm actually making a 42% profit above my costs. My financial advisor says I'm not spending enough. I need to do some traveling or whatever. Everyone should understand the power of income funds and dividends.
I'm into them as well. SCHD, JEPQ, SPYI to name a few. All but two of my stock pay a dividend. It's been a decent year. Buzz
Good info Buzz. Everyone just needs to remember "You're results may vary."
Absolutely. Not everyone wears a size 13 shoe like I do. Lol
Five years before I retired I practiced living on my best estimate for Social Security. Found out I could make that work. when I applied for Social Security wound up getting more than I had estimated, so it’s been pretty nice. still live below my means. It wasn’t rocket science, I just tracked all my spending and knew exactly what it would take.
Tracking and building a small cushion is a good way.
With SS and YT you should be above your comfort level. Thanks for the content.
Getting there but not yet. Thanks for stopping by my friend. Buzz
I more or less did what you have done, when I decided to retire in 12/19, and finally left my job in Jan 2020. I knew what my expenses were, and I can't imagine anyone not knowing, and added 400 to 600 dollars per month over that, and I have had absolutely no problems whatso ever.
I don't know why financial gurus make it so hard and scary. They literally are scaring people to death and I saw this where I previously worked and, it is sad how their fear mongering has destroyed peoples goals and dreams.
Well said, We have a substantial monthly cushion on all our planned expenses to cover inflation and a solid emergency fund. If you are running the numbers and are right at the razor’s edge you are not ready to retire unless you plan on working part time to make up the difference.
The planners look towards longevity. So, for every year you're staying on the earth you need X amount more. But in my case, I project 75 years and with my wife having a $200,000 policy on me I feel she'll be ok.
Good for you! "...I can't imagine anyone not knowing..." I CAN! The average person has blinders on and SPENDS THEIR WHOLE PAYCHECK AND THEN SOME!
We had a guy at work and his father before him that would get "loans" from the company. The dad bought a pool table, the son went to Myrtle Beach. Four months later they needed "loans" again. Unbelievable.
Hubby and I THOUGHT we had figured for everything possible. Boy, were we wrong. WE're doing ok, but not great, like I thought we would be.
So folks, listen to Buzz and even if you think you've got enough----add more if you can. You will never be sorry you did that.
Me too Suemar. We did the retirement budget, thought it would be great and two years later we are not where we thought we would be. We didn't expect the crazy inflation, and we should have updated things like the furnace before we retired. We are fine, but we watch every penny.
Well said.
Costs aren't going down. We just have to do our best to save as much as possible before we retire.
You are correct, Buzz. You need to know what your expenses will be in retirement before you can know how much savings you will need. It is also a good idea to see how accurate your estimates are by living on your projected income for two years or so before retiring, if possible.
+1 to that advice. 🤩
It may not be 100% accurate but you should be in the ballpark. It really helps you understand where every dollar goes and how you can get the same thing but cheaper.
Love your honesty. It’s very helpful to many of us. Thank you.
So nice of you.
Once again you nailed it! I have a current/real-life budget that I have forecasted out through my estimated retirement age. PLUS I keep an IN-retirement budget with my estimated SS income and noting how much I would need to withdraw from 401k or savings over the years till my estimated last day here on earth ~ and I estimated way far out....just to have the amount needed to be as realistic as possible (safer than underestimating and running out of $$). I trust that everyone who watches understands that you are sharing YOUR experience, YOUR reality, YOUR budget/comfort level with us, just as a guide for consideration as we make OUR plans. That said . . . if I didn't have SS to live on (when the time comes), I would never be able to retire. Sure hope it doesn't go away. 🙏 Keep 'em comin' Buzz! I appreciate you. 😎
I do the same, every year I update our planned retirement budget with the updated expenses, retirement savings and SS estimates.
Thank you. As always, I appreciate your comment! Correct on the "my experience". Everyone will have a different outcome. Buzz
I wish that retirement expenses were so smooth…a 20% increase in costs over the last 3.6 years isn’t smooth.
Big retirement expenses are episode driven, major car breakdowns, roof failures, car accidents, insurance costs, health issues, mental issues, drug costs (part d, is hitting major roadblocks), property taxes, longevity risk, and the list goes on. You can quantify these expenses, and maybe your estimates roll out to your comfort level, maybe not. Take some time, and plan it out. Retirement is definitely a heads up game, I started out with a 4,000 per month estimate 7 years ago, boy was I low…
I budget 2% of home value a year for major home expenses(roof, water heater, HVAC etc) and bought a new car with an 8 year 125K factory extended warranty that covers everything including key fob. Retiring in the next two years, house has a 5 year old roof, new windows and I just put in HVAC last month. You will always have variable expenses but preparation, insurance and planning can help mitigate risk.
Along the way we replaced a lot of things. Hoping for no major problems for at least 5 years. Some of our expenses have increased but so has our savings with 12% increases on our accounts. (for now). It's going to be an interesting ride! Buzz
Very good points!
@@BuzzRetirementGarage absolutely! My better half gave me a list of what needed to be done, she didn’t seem to have any problem identifying things I screwed up or postponed. Appliances, carpeting, gutter covers, window replacements, painting, landscaping, weedwacking, lawnmower, and most importantly taking the dog out at night…social security thinks I’ll make it to 85 to finally rest in peace.
Love those honeydo lists!
Your financial videos are spot on. One needs to determine what they need to live day to day. My suggestion is then to double that amount. That should give you a goal to shoot for. SS does have raises for inflation; however, they are not sufficient to keep up with inflation due to the structure of the raises. Accounting for increases in insurance costs and taxes needs consideration. That car? Will it last you the rest of your life? Probably not. If you own a home constant upkeep costs and the occasional major purchase need accounted for. The better you plan the more likely you'll get the outcome you desire.
Good points. Thank you for commenting! Buzz
I just lost a family member and now the spouse has to figure out life without the SS. I think it has been eye opening. There is enough money, but they didn’t seem to have much of a plan. I, on the other hand, have been saving like crazy because life keeps happening to me. I always hope for the best, but the worst happens. Lost my spouse and had to raise my son. Lost my job while son was in college. Now working for a company that is trying to lay everyone off (while hiring in India).
I get criticized for keeping insurance policies but if I pass my wife will get $200,000 which will help her. I hope things work out for you my friend. Buzz
Before I actually retired at 56, I started creating a yearly budget at 50, along with monitoring expenses by expense type on a monthly basis. I thought that when I eventually retired that my expenses would decline. In actuality they didn't. Now at 70, there's absolutely no way we could live on just Social Security. Once retired, our overall expenses stayed about the same, but primarily changed to other expense types, such as for vacations, eating out, hobbies, entertainment, doing things with our children and grand children, and increases in health insurance expense, real estate tax and income tax. In addition, we pride ourselves on our home and I try to keep it well maintained. With all of this said, fortunately for us, I did a good job of investing and, even with the greater expenses, our portfolio has grown substantially in not only a nominal way, but has also beat inflation by 27% or so since retirement. Now at 70, as we start to slow down, due primarily to my wife's health issues, our expenses are leveling off.
You definitely did it right. Good job! Thanks for sharing your thoughts. Buzz
Good video. Great to see a video on planning rather than just some "magic" number. Having a clear idea of our expenses, both the necessary and the fun ones, and having a plan on how we meet them has given us much peace of mind in retirement. I think I skew your stats a little. I'm 63 and retired. Greetings from across the sea.
It's just rough math and as we know, there are so many "ways" to look at it. When people talk about Monte Carlo and 4% and base numbers on long longevity it can get confusing to the everyday Joe. Thanks for your comment! Buzz
Very nice simple general presentation. This is a very good starting point for those considering retirement and relying on social security. Thank you for all you do.
Love your garden area with the bird feeders. Great colors.
Glad you enjoyed it!
Another great video! My situation is different from yours but I always get something out of your videos. I especially like the way you break things down.
Thank you. Everyone's situation is different, but it doesn't have to be complicated.
@@BuzzRetirementGarageI couldn’t agree more. You have a way with explaining complicated things in easy to understand terms. CZcams suits you.
Thanks!
$250k in a 4.99 money market IRA earns $12k or $1,000 a month without touching principal
That's more than we make on our rental property.
I'll get there. Never give up!
Yep. I have 200k in my IRA holding 'PRFRX' getting 8.5% interest. I've been in it for 2yrs. I take the monthly dividend. Also have JEPQ getting 9.5% also take that monthly dividend. 😀 All in my Fidelity account. Idle $ gets 4.97 right now
If I live long enough to my late 80s, I'll have to sell my house for money and rent an apartment. I assume we won't be able to maintain a home and yard anyway. I don't trust the reverse mortgages.
We have an over 55 mobile home parks near us which is where all the old people go to live. Problem is lot rents are $750/month so it's not cheap!
I quit working in May of 2020 at the age of 66 no job pension just living on Social Security I did manage to put a small amount in a 401k and Roth IRA and some CDs. My social security is $1,272 a month out of that money I pay my bills and put $450 into savings that leaves me about $430 to live on the month. I pay my utilities house and car insurance monthly the only thing I pay yearly is real estate taxes with a paid for mortgage and a paid for 2020 vehicle no debt I do just fine. I made sure I had a newer roof my furnace and central air is 6 years old these were paid with cash. I guess it depends on where you live and your lifestyle but I have no problem living on my income. I forgot to mention I get no government assistance
Here's how I have you: $175 Medicare, $40 electric, $40 gas, $300 food/grocery, $50 car insurance. $20 water, No Cable, Internet $50, Home insurance $40. Close? You're doing really well! Buzz
@@BuzzRetirementGarage ,
You were close but here is the breakdown of my bills with the income of 1272 a month Social Security after Medicare is taken out
$129 House and car insurance
$111 Ameren gas and electricity
Level payment plan
$80 Water/flush tax / garbage pick-up
$32 (my half ) total wireless cell phone ( my daughter & I split cost
$10 senior internet
$362 total monthly Bill's
$450 monthly savings
$460 car gas / food / dining out /misc
-------------
$1,272
My mortgage and 2020 Buick Encore are paid for so I am able to live on a small amount and still save money each month
@@BuzzRetirementGarage ,
You were close but a little off
Social security income $1,272 a month after Medicare taken out pay $0 supplemental insurance .Below are monthly bills.
$129 house & car insurance 2020 Buick Encore
$111 Ameren gas & electric level payment plan
$80 water, flush tax & garage
$32 total wireless my half split bill with daughter
$10 senior internet
- $362
$450 monthly savings
$460 balance food/ dining out vichele gas / misc
Good stuff, Buzz! I'll have to sit and work out some of this math. Thanks!
Hopefully the numbers are favorable!
I retired two years ago. We are debt free and paid off the house. Ran the retirement budget, thought we were doing great. We bring home $6000 in pensions and live on $4500. We save $1500 because in retrospect, we should have replaced our furnace, got solar, replaced a slider and a few windows before retiring. There are other big expenses that will probably come up. I can't believe we didnt think about this. Another thing is that I find it hard to spend after saving for so long. I'm always waiting for the other shoe to drop. So i dont enjoy retirement. I'm looking for a part time job. My husband thinks we're fine. He's never been poor.
We retired in 2017. It took me until last year to relax, blow the dough. I still do look at prices but I can loosen up.
If you're $1,500 ahead every month or $18,000/year. In two short years you'd have enough saved for a roof, washer and dryer and refrigerator. Relax! You're doing great!! Buzz
House maintenance rule of thumb is 1% of value. RE taxes 2% of value. That's 3% of value per year...
Loved this video Buzz, thank you so much for sharing with us.
Thanks for being here for me! Buzz
Great video Buzz, we need to make you a bona fide CZcams star, so you don't have to worry about it
Wouldn't that be nice. Or maybe someone puts me in their will. Lol
As you know, I retired on SS only with no other financial resources. I would tell anyone who asks, please do NOT do this! I am making it work and I’m grateful that I’m able to do it. I am far below what I would have considered my comfort level. But that’s where I’m at and it’s not a financial place anyone should choose to be. I know some people have no choice. Even if you have no debt, it’s super hard to do. I have to be VERY intentional with every penny I have.
A good lesson for others. Thank you for sharing. Buzz
I am so blessed that I CAN live on my SS with some teensy weensy wiggle room and not touch my retirement fund. And I am finding ways to cut my expenses further on a regular basis. For the next four months, I have a settlement continue to pay out $2k/month which is going to savings ($15k total) as well as funding some planned/needed maintenance expenditures. After a final trip in November, I'll be selling my tiny teardrop trailer for ~$15K also, to the dealer who sold it to me a few years ago (we've already negotiated it). That will all be tossed into a cash fund for emergencies/etc. I am doing everything I can at present to NOT have to go back to work FT. If I need/want extra spending money, I am totally fine with doing some PT stuff either locally or in my career field remotely.
As always, I appreciate your clarity and candor and keeping it real! And as Duane says, "We got this!".
We just need to stay smart, stay healthy, have no major surprises and we'll be fine! Lol Buzz
@@BuzzRetirementGarage Hmm, I think I already missed the boat on smart!
@@RetiringToFranceOnAShoestring I seriously doubt that!
Will catch next live stream. It seems you are living well on social security. You definitely have your budget down patt. I know people who make sure figures and don't budget and have no idea how much they spend. Keep up great videos.
I'd rather be a millionaire, but I do the best with what I have.
Great information Mr. Buzz!!! As always!! Keep them coming Mr. Buzz!!!
Thanks!
We need 5k a month for essential expenses, pension + SS is 7k, I’m feeling pretty comfortable 😊
Excellent! Good job!
I like how you tracked SS and budget for some time now to see if it is viable in your case. A test retirement budget is a great idea. With inflation last 2-3 years costs have soared so I would want to account for that possibility and any sinking funds for repairs, vehicles, etc. I especially appreciate you comment for singles as some of us have to be totally self reliant on income and housing and it is a much bigger hurdle without another contributor.
Thank you for watching and commenting. You know I appreciate you. Buzz
Good video. Short and to the point. I call your basic math "napkin math." It's where many people start when they're planning for retirement. To build confidence in your numbers, you need a second opinion of sorts. An online modeling tool. A financial advisor. Something. This video is good because it gives people hope. Some retirees have told me, "money is important, but you can make it work."
Yes. That's why I stressed taking your numbers to a trusted financial person. Just to get that second option. Thanks for the comment! Buzz
Buzz, we’re with you if you feel more comfortable with life insurance that alone makes it worth it.
Love your simple format. So many people over complicate the process. It literally IS simple math. But....remember a couple of things. In your example of what your comfort level number would be, you state it works out to $146k over ten yrs ($219k over15yrs) and I think you said "so I need to have $146K in savings. No you don't. While it would be nice, you don't need that all on day one of retirement. You need some amount in savings that will generate that amount over the 10 yr timeframe. Maybe that's a distinction without a difference, but I think it's worth pointing out. The second thing to keep in mind is that if you are married and relying on both spouses S.S. checks to cover household D.O.E., without some savings, the surviving spouse is gonna be in a tough spot when the first spouse passes away. One of those monthly S.S. checks is gonna stop coming in the mail, but the D.O.E will likely not change that much. Phone bill, utilities, property taxes, car insurance, cable......all those will not change. There are a lot of ways to address this eventual contingency....you mentioned a side gig, or perhaps a traditional retirement or taxable savings that would/could be tapped when one of the S.S. checks stops coming it. In your case I assume that is why you both have universal or whole life insurance policy and the premiums for those policies are baked into your monthly D.O.E. Anyway, just my two cents worth.
That is something that we experienced with my parents. After Dad passed, we sold her home, and she rented a nice townhome for 5 years till she passed. It freed up money for her and she lived very comfortable in a new updated place. Some said the rent was high at 1500.00 a month, but she loved it.
I hear what you're saying and this year, without really touching savings, I've watched the accounts grow fairly nicely. The youtube income helps as well but will stop when I stop. You're correct on the life insurance which is baked in the DOE. $200,000 for her will help. Thanks for the comment! Buzz
Sorry to be morbid, but you should probably do that same method for how your wife will survive when you pass. I'm a widow. Surviving as single person changes everything. Women statistically live many years beyond the death of the man.
Amen. I have a friend in her 50s with a husband in his 60s. They don't have any significant retirement savings. They would get by on two Social Security checks, but dropping down to one SS check would be brutal. I've been gently trying to get them to think about that possibility without being too morbid. He's retiring soon, but her remaining working years need to be very focused on amassing enough savings to not wind up a widow living in poverty.
He’s carrying life insurance on himself to protect his wife.
As I lay in hospital, after a major heart attack a few years go, I was very concerned I had not organized all of our financial info for my wife. Did that 3 days after I got out (for the second time) from the hospital - a live document that is now constantly updated. And I prepared what I called a revenue budget. A big relief. Nothing fancy but complete. Kind of important for the significant other....good luck.
Right. That's why she has a $200,000 life policy on me.
Life Insurance
That's exactly how I did mine before I retired. I have the rest in savings and IRA. I was laid off before I got to the number I needed but I'm hoping not to go back to work so I'm hoping it to last. My number is 80.
Thanks for sharing my friend! Buzz
I like the way you look at the needed budget. I have a number out there based on our average monthly spending. So many people see the you gotta have a million in savings junk and just throw up their hands and say why bother I'll never have that and never be able to retire according to all the "experts". I look at it just like you are presenting it. I feel good about 5k a month, I'll get X Y and Z amounts of money a month ,so I need this much in savings to cover the gap if there is more it's just gravy. Good one man, Much appreciated.
Finding an attainable goal is important. Like you said, so many people throw up their hands and say, "why bother". A couple well-meaning people said use the 4% rule. Well in my case I would need $350,000 instead of the $219,000 I illustrated. Why? Because that rule takes me to age 95. 95 and $350,000 is unrealistic. My math works for me and gives me an attainable target. Buzz
Great video. Never retire if you have a mortgage, any debt and can not live well on a budget while still putting $500 to $1000 into the bank each month.
I would agree to that!
Thanks Buzz, great FYI! A $5000 per month retirement here in Los Angeles is not a good comfort threshold.
Not there! I agree!
It can be done. I live on the San Francisco Peninsula and get by way less than $5000 a month. Just have to have no debts and be aware of your expenses. I am fortunate to have low property taxes due to Proposition 13. If it were not for that, my property taxes would be over $12,000 a year!
@@ChristopherEvans-650
I retired from Caltrans at 56
2017. I was living in a tiny studio in
Santa Cruz. 3 weeks later my landlord
Said she was gonna double my rent.
I said no hard feelings but I think I can buy cheaper in TX. So I went online and bought a small 400sqft home in TX for
$23K cash. No more rent. No mortgage. Life is so good.
Yes Tx sucks compared to Santa Cruz
But it’s cheap
@@ChristopherEvans-650 Yes it can be done, Just depends on what you are willing to do without, and Prop 13 is a God send. With age piling on, I want to be comfortable, and not looking at if I dine on hamburger and no steak.
@@PInk77W1 We do what we have to do right?
Pretty much what I've been doing!! You right on Buzz!!👍
Most financial advisors use Monte Carlo analysis to predict the probability that you won't run out of money. I don't like to gamble. I'm planning on living to 100 and my costs doubling every 10 to 20 years.
When I did the planning for us I planned for 105. I tell others to do the same.
SS is a good base for retirement, but there are always extra expenses whether by choice or by necessity. And it depends a lot on your expenses -- especially if you have debt. A part-time job helps for as long as you can do it.
Luckily no debt but I am afraid of the car, furnace refridge issues which could drain some money. Everything else we replaced shortly before retirement so hopefully our exposure is limited. Buzz
i got all that i wanted. still working past 65 .no debt and i want to live a simpler life as a single person. downsize is my goal even when i could afford it
Like I mentioned, everyone is different and has a different style. You're doing what you want and that's great! Buzz
Good video !! A couple points... It's hard to get a correct number of what we'll need over the next 10, 15, 20 years, because no one knows how BAD inflation will be. I did a rough calculation of our expected expenses over the next couple years, AND added 20% to everything, hoping to account for inflation. And even that may not be close!! The real kicker is that if you UNDER estimate what you need by to much, if you make it to age 80, and find out you're broke, you might not be able to get a job then.
The key is to have money in market, as a respectful thought/comment.....that more than handles inflation and growth - but I certainly have no crystal ball. But 20% seems good to me as an assumption. One almost always needs/wants more (to a certain level), not less, money.
Very true advice. We don't know how the future will unfold. Worse comes to worse I'd do a reverse mortgage. Last resort type of thing but we'll see! Buzz
@@BuzzRetirementGarageBuzz Google search Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement book by Wade Pfau.
Very respected retirement guy. He also has some to CZcams videos on the subject of reverse mortgages.
Also check to see if your area allows any allowances for seniors on property tax increase discounts or freezing .
We do have the Homestead exemption but I don't qualify until they see my latest tax return next year. It will reduce home value by $25,000. Did I tell you our latest assessment raised my value by $50,000. Geez.
@@BuzzRetirementGarageBig ripoff
First comment - wahoo! Loving the content here.
Is there a prize for first comment? There should be!
@@BuzzRetirementGarage - The content is the prize!
@@burtking4270 lol
As usual, Buzz is keeping it simple! Great video
Thanks, my friend.
I like that you give the real number!! I believe budgeting require honesty for sure!!!
Creative accounting is for crooks. Lol
I really like the way you thought this out on paper. I am keep everything you said in mind. I am on a senior FB group and there is a lot of suffering going on out there. (Lots of members). Two things I have learned specifically from this group: life can go along fairly swimmingly financially until one out of a couple dies and then the other one may be in a world of hurt. A lot of seniors rented happily for years and years but are now about to be homeless or are because rent has now outpaced their income. So I am not sure renting is ever a good option on a fixed income. If not a house or condo etc. you need a piece of land, RV or something you can call your own. My situation is not great but better than many. I also went back to work last year part time because everything was so expensive. I felt scared going to a grocery store. I have never kidded myself I don’t have a perilous situation but I try to take it a day at a time and am always scheming to figure out the money (honestly of course). I am actually glad it’s just me, I don’t have to worry about anyone else and know it’s all up to me.
Hi there! Yes, renting used to be a good deal years ago for some but now it could bring problems. We have a senior's mobile home park near me and the "trailers" now are so nice! But I was looking at rent prices and some were $750-$800/month. Almost $10,000 a year is crazy. I guess if you sold a house for $300,000 and downsized to a brand-new trailer at $1250,000 to $150,000 you could pay the rent for 15 years but then you'd have to dip into savings. I don't know. We just keep hoping for no major issues and like you said, day by day. Buzz
Good points here Buzz!!
I started my forward thinking on retirement in the early 90's, should have started earlier than that except I worked for a bunch of tight wads in the 80's and wasn't able to start saving until then. :)
That's still good. Wish I would have done a bit better, but I'll keep hustling. Never give up. Buzz
Good job Buzz. And by the way beautiful yard. Keep up the good work 😎👍
Thanks. Flowers came out good this year. Maybe they always have and I never noticed because I was working!
Good info, Buzz, as usual. Are you sure you'll just live to 75 though? You look in pretty good shape. I'd bump that out to at least 85 if it were me. I'd rather have too much than not enough :)
Possibly. Plan for the worst and hope for the best right?
Great concepts and sharing it with the rest of us. Greatly appreciated.
Thanks for watching my friend. Buzz
I agree it’s better to have a cushion. Who knows what’s going to happen to SS in the future
It would be nice if the next administration does away with taxing our SS, they both have said they would do that, it would put more money in all of our pockets. Why should we be taxed twice?
I don't think it's going anywhere. They'll raise the age first. Buzz
Most people don't get federally taxed on they're social security unless they have accounts that increase their income.
@@BuzzRetirementGarageThis is true. That being said, I think given the state of inflationary effects on the cost of living, it's probably encumbent on us to petition our state and federal congressional senators and reps for an increase in the amount of earnings we can make after we claim social security. It actually would seed more money into the system.
@@pawpawstew I like that idea.
So funny, we (husband and wife) are at your identical your level…thank you!
Thanks for sharing! Buzz
Buzz, I am a 61 year old Banker in Central Illinois and have been with the same Company for 39 years. I truly enjoy your video’s and find you to be right on on most things. I admire the fact that you are trying to educate people on a very important aspect of their life. unfortunately I believe our education system has failed tremendously when it comes to financial literacy. Keep up the good work and best wishes to you and your family!
Thank you for your comment! I agree. If I had just half the knowledge then that I do now I think I'd be better off. With on line trading and banking and CZcams everyone now has valuable information at their fingertips.
I really appreciate your videos buzz! You make me put my thinking hat on 😃
All my free time has me thinking too much!
Smarter not Harder. I retired at 55 and significantly reduced my fixed costs by moving to SE Asia, and no not the Philippines 😅. Key is having your savings work hard for you...
@@AG-so4gl Thailand
And Malaysia @@DonRicky.
SocSec has three brackets. Income in the first bracket is replaced 85% by your full retirement benefit. Income in the second bracket has a lower replacement. Income in the third bracket is only 15% replaced and income above the limit is not replaced at all. The demarcation between the three brackets is commonly known as "bend points" but the numbers are used in the benefit formula based on average income over your lifetime adjusted to a national index.
You can find a little bit more useful information by looking for social security replacement rate, where in summary social security replaces about 40% income on average, again based on the adjusted index. Most of the time a general rule of thumb is people need 70% to 80% of their income immediately pre-retirement but this doesn't take into account retirement savings right before retirement or the adjusted index so it cannot be compared apples to apples. Directionally though, it does indicate that most people will want and may need more than just social security alone.
I agree. Some can do ok but it's definitely better to have a nest egg. Fortunately for me, our average spend over the last 9 months has been within the SS income so I haven't touched savings and it's been nice watching it grow. Buzz
Who gets the third bend point? Thanks!
@@marianrosin6486 there are only two bend points, and a hard limit (income above the limit does not increase the benefit, and it is not taxed). The SocSec site has a chart if you sesrch bend points, but basicly it is benefit amount increasing sharply as your earnings increase, then that line bends to be less steep at the first "bend point" - benefit is still increasing with earnings but more slowly. Then it hits the second bend point and goes almost flat - benefit increases only 15 cents for each dollar of earnings. Then after a bit it stops going up - the benefit is maxed out, no matter how much more you earn.
Good explanation.
Nice Buzz, thanks.
Thanks for stopping by.
The biggest issue with living on SS alone as a couple would be when one dies the other is short $1500 a month. It’s going to happen eventually it’s only a matter of when.
Correct. For us we carry Universal Life insurance and she will get $200,000 when I croak. Buzz
@@BuzzRetirementGarage It’s funny you wrote this because I was just thinking of the same strategy for my wife.
@@jeffreyblanton9877 We only pay $40/month for her $100,000 policy. Mine is $160/month for $200,000. We've had the policies for many years.
I’m living fairly comfortably on $1370 a month social security and the $850 interest earned from $214,000 I’ve put into CDs. I’m lucky having no mortgage payments and my 2-year-old SUV is paid off. However, it’s getting tighter lately because home and auto insurance rates as well as property taxes have risen dramatically the last couple years. The price of groceries has also risen sharply.
That's the scary part. Everything going up. Right now, I can work and that may be what I need to do to pad my bankroll. We'll see. Buzz
@@BuzzRetirementGarage I wish work was an option for me, but with lumbar spine narrowing, I don’t think an employer could accommodate my frequent need to change positions because of the pain, even with taking medication for it. Frustrating to say the least.
Probably nothing safe they can do to help it?
@@BuzzRetirementGaragespinal stenosis gets worse with time, but walking helps delay the progression. That’s why I walk at least 30 minutes 5 or more days a week despite the pain.
@@blatevola01 Well, I'm pulling for you!
Using the 4% rule as a reference when you start to plan for retirement is helpful, but it is not a hard and fast rule. For one, the analysis behind the paper that produced the 4% rule is based on a portfolio with 50/50 allocation (which may be too high or low for some people depending on their situation and risk tolerance level). It also assumes you need your money to last 30 years. If you and/or your spouse plan to live off of that money for shorter or longer periods, you may want to adjust your estimates accordingly.
Right. I'd need $350,000 to follow the 4% rule because like you said, it covers 30 years. My $219,000 goal is my 4% at an earlier death date. Thanks for commenting! Buzz
A clear simple explanation. Thanks for the video.
Thanks for watching my friend. Buzz
I am like minded with you.
I think you are doing well.
We plan on living on our social security but with a good amount of savings.
I’m waiting until I’m 65 God willing 3 more years. Medicare and higher monthly benefit as well as those 3 years to save and invest more.
I enjoy your videos and I think you are doing great.
I highly doubt you will have to go back to work.
I think a lot depends on CZcams income. If I grow, no, I may not go back. If I stop for some reason or I don't grow, then a PT job for a few years won't be bad. $20/hour x 20 hours week should keep me below the $22,000 I can make under SS rules. we shall see! Buzz
Actually think you’re doing good. Only withdrawing whatever amount you’re short. Sure you may not be going on vacations but…many people would love to be in your position
I do feel grateful every day for what I have.
SS by itself and very modest savings might not help when the big tax hits start coming. Thats what I'm afraid of as our property taxes jumped $1k last year and now another $700 this year on top of that. When can they be happy with what they are getting?
We can keep budgeting and sticking to a budget but the government thinks we are made of money.
Our county just went through an assessment. My property tax got raised $400/year. Hopefully they won't come back with another for a few years. Buzz
Elections are coming soon, remember to ask yourself if you were better off four years ago before you vote.
The real question is...what are you willing to do to live only on Social Security benefits? My solution was to start my own work-from-home business. I have complete control over my schedule and income. I earn just enough to avoid having my benefits reduced, and can take off weeks or months whenever I want. My SS benefits cover my living expenses and everything over that goes into a high yield savings account in case I need more money later on.
Having that side gig definitely helps. Keeps us engaged. That's why I like doing the CZcams videos. Keeps me engaged with people and helps the income stream.
I’m a month shy of 62. Not planning on SS till 67. However SS will be the most money we’ve ever had to live on. It will be a pay raise.
Thanks for sharing. Won't be long. You'll get there! Buzz
Great Video Buzz!
Thank you, my friend. Buzz
Excellent presentation.
Thanks! I appreciate you. Buzz
Good advice as always. Totally agree with not assuming expenses will be lower, by the time we're in our 60's we should have figured out that even if one expense is lower the total monthly bill for living won't be ;) For me my comfortable number was the same as the amount we've been living on for the past 5 years or so, and we're fortunate that we have the investments to make that work. I just turned 64 and we're not drawing SS yet. I don't know how long I'll wait on that, we're still crunching numbers with the broker and the CPA. Assuming we both wait until full retirement age that would be around $3K for me and $1.5K for my wife. Assuming the SS benefit adjusts more or less with inflation that'll get us a good chunk of the way to our monthly needed income.
Glad you're reviewing with broker and CPA. That always helps. Sounds like you're doing great! Buzz
Thanks Buzz. Another great video.
Thanks for watching!
Yes you need to know your expenses (not always easy) to plan for retirement. A good rule of thumb is the 4% rule. Look it up if unfamiliar with it. You take your annual expenses and subtract any SS and pension type incomes then multiply by 25. That's what you should aim for in additional retirement savings investments.
Example 60k annual expenses minus 40k SS = 20k additional needed × 25 = 500,000.
500k × 4% annual withdrawal = 20k.
Just a good starting point. Everyones situation is different and it's impossible to know the future and how long you will get to be part of it.
May you live long and prosper ❤
The math on the 4% rule takes you out 30 years. That would be $350,000. Using Buzz math and end of life at 80, $219,000 seems more reasonable and doable. The 4% rule can be daunting and unachievable for many. Buzz
@@BuzzRetirementGarage what happens if you make it past 80? Which you hopefully will.
www.ssa.gov/oact/STATS/table4c6.html
Check there for life expectancy by your current age.
Search Wade Pfau reverse mortgage for good info on reverse mortgages. He has a book out and several videos. He is one of those retirement guru's.
In 2015 I invested $27,000 in grid-tied solar. I pay nothing for power and the remaining credits covers most of my gas heating bills. I also did several upgrades to the house before I retired. I retired at 62. I live comfortably on less than $2,000 a month. But my income is twice that. I don't know what to spend it on lol
I saw your set up. Nice!
Great basic common sense advice from a down to earth guy who is practicing what he preaches. I see people here saying how they have cut their expenses down to nothing and are proud how they are getting by cheap. I guess that is OK but I am a frugal person and I don't spend a lot of money however I still want to enjoy life which includes at times buying new things. Example now would be I am wanting to buy an Ebike for myself and my wife. I am enjoying the research and the process of choosing which one to purchase. My point being I am retired but I still want to live and enjoy new experiences which means spending money in many cases. I work a part time job not because I need to to pay my bills but doing so gives me the freedom to buy things from time to time which is fun and exciting. Just because you're retired doesn't mean you are done living.
Great point. I marvel at the comments I get about my spending. You eat out too much. You buy too much food. (Do these pants make me look fat?) Look, I'm enjoying the hell out of this retirement and sure, I could be a miser and eat sticks and weeds and save a ton of money but ai choose to LIVE! Buzz
Nice stuff- thanks. I am not sure why (so many) people, seemingly, have low income in retirement, unless a disability or medical/major bad life event. We all knew this was coming. There are many reasons to put us/one in this position and life is hard - yup. I had a mid-level plus job/60% travel, did have a degree, and worked for 12 years a second weekend job (delivered pizza, then bartended), so seven days a week, out of necessity, because of a 'life-event', so to speak. Started contributing 3% to 401k when boss told me to in 1993 - so a good lesson. I am not looking down on those that struggle (I am with you) or have less financially because I was there. Budget and spend carefully. Work side hustle if you can. And do joga/exercise. And learn how to save something and invest. Plenty online to get you started. Good luck to all.
I do have savings including mutual funds, ETF's and stocks. I'm just short to the goal that I projected. I retired early (shown in other videos) but had intentions of working local full time. But I saw I could live off SS alone and let my savings continue to grow. I'll decide this winter what to do. Thanks for watching! Buzz
I got divorced, lost my long-term career to a surgery-gone-bad and had to go on disability and had a builder swindle me out of my equity I was using to build a down-sized home. Life happens. Don’t judge those who struggle. Consider yourself on the minority if you don’t
@@BuzzRetirementGarage And, while I am not there yet, a part time job, if the right one, probably a better retirement makes, separating out the additional money....the journey continues. GL and thank you.
@@kristenmerrill-nl2dh A builder was my referenced 'life' event too....cost me literally 5 years of my life/heart attack, I guess, in part anyway - yes, cancer - yup, celebellar ataxia - yup. Keep the faith and sorry for your builder and disability. An honest person usually/(I couldn't) cannot win against the skilled thief that is perfected the craft of cheating.
Love the message. As you know from my burn rate living on SS only ain’t going to happen LOL. But yes it is necessary to plan for an additional 20% extra over basic routine expenses.
20% or more if you can. Hope you're doing well my friend.