Flexible Spending Rules for Early Retiree's With Michael Kitces
Vložit
- čas přidán 22. 03. 2020
- Saving and investing are incredibly important if you want to retire early, but the flip side of that is how you choose to spend your hard earned money too.
How and what you spend on will determine your entire retirement trajectory, so let's jump into the numbers and uncomplicate things.
Michael Kitces:
kitces.com
169 A purple life:
choosefi.com/169
Enjoy the video? Consider subscribing to our channel, it really helps us out! And it’ll make sure you never miss another video ;)
SUBSCRIBE: bit.ly/2Vdo6K8
WATCH NEXT
► Popular Videos: bit.ly/3bjaTWY
FAVORITE VIDEOS ON CHOOSEFI TV:
The Financial Resilience Toolkit:
►Earn $600 on Cashback: bit.ly/2VoKJM4
Save On Existing Loans
►Slash Your Student Loan APR: bit.ly/34ARIWj
►Refinance Your Mortgage: bit.ly/2yemLee
►Consolidate Your Debt: bit.ly/2wBBnnE
Save on Living Expenses
►Lower Your Cell Phone Bill: bit.ly/2yeX8tO
►Save on Home Insurance: bit.ly/3b73nib
►Save on Auto Insurance: bit.ly/3ceo4c0
Save & Invest
►Open a High Yield Account with CIT: bit.ly/3a1MbZW
►Dollar Cost Average with M1 Finance: bit.ly/34wtAUP
►Open an HSA Account: bit.ly/2RA3ScG
Financial Emergency Prep
►Open an Emergency Fund: bit.ly/3a1MbZW
►Get Your Documents Ready For Emergencies:
►Get More for Less on Term Life Insurance: bit.ly/2XxFJHv
Free Financial Learning Center
►Financial Resilience Digital Download: bit.ly/2RxUMNK
►Financial Independence Made Simple Digital Download: bit.ly/2Xy9Tuk
►Financial Independence 101 Course: bit.ly/2V5mMKt
►Downloadable Resource for Accidental Homeschoolers: bit.ly/3baCVEm
►K-12 Financial Literacy Curriculum for Educators: bit.ly/2yeogJo
►Free FI Audiobook trial with Audiobook.com: bit.ly/3bbSJXi
More resources:
►Our Podcast: bit.ly/2K37hN0
►Financial Resilience Daily Show: bit.ly/34xvvIw
►Blog: bit.ly/2RyC1te
About us:
Everything we do, we do to help you slash your expenses, crush debt, and build ways to earn a living remotely by starting online businesses. Then we help you invest in the safest way we know how, despite the ups and downs of the stock market.
Every video is packed with content and actionable tips, and we get you from how to wow in 3 minutes. That's right - give us 3 minutes, and you'll get the step-by-step inside scoop on how to make and save more money, then make that new money go to work for you.
We take the hits, so you don't have to, because ultimately, we want you to become financially resilient during these trying times, and get you started on the path towards Financial Independence.
CONNECT:
►OUR WEBSITE: choosefi.com
►BUSINESS EMAIL: feedback@choosefi.com
JOIN THE COMMUNITY:
►FACEBOOK: bit.ly/3eh42PP
FOLLOW US:
►FACEBOOK: bit.ly/2XxEcRR
►TWITTER: bit.ly/2XznOQU
►INSTAGRAM: bit.ly/3a7mt68
►PINTEREST: bit.ly/3enOQAK
One of my favorite episodes ever. This guy knows his stuff. Super helpful and articulate.
This was so useful I feel like I will have to rewatch to fully understand
Such good info and very encouraging.
Great episode! Kitces is one of the best.
I actually like listening to the Podcast on CZcams more so than my iPhone. Good content guys!
Once again: good stuff!
Michael is my superhero.
What an excellent episode! For folks who are interested in this topic, I also recommend the research paper published by Vanguard in June 2021 where they explain that 4% still holds for early retirees, even based on their low expected returns and a 50/50 portfolio, provided that you diversify internationally, have a low expense ratio and implement a flexible spending system.
Yes a
"Low Expense Ratio!!"
Fees are NOT factored into the 4% Rule.
We need to be aware of this before sitting back and wondering what's going on with our dwindling accounts....
Brilliant episode!
Aww, thanks! I read his blog all the time. ~Jen, Community Manager
Wow, thanks for the episode. Impressive interview! Appreciate the discussion on safe withdrawal rates under different portfolio return scenarios.
Great info.
Kitces for president!
thanks
Just one possible "fly-in-the-ointment" to maintaining a withdrawal rate of approx. four pct, adjusting for inflation annually: R.M.D.s will eventually FORCE you into taking a larger withdrawal percentage.
You reinvest beyond the 4% is all
Please bring A Purple Life back for an update on her retirement 😎
She's pretty cool. If you have a Twitter account, Purple is totally active on Twitter.
Concur with the interviewee here: case study subject should strive to get the blog etc. income (and pay the 15.3% FICA on it) at the very least to the 1st bend point for another 25 years to flesh out her 35 years of indexed earnings.
Wow!
Michael Kitces is my FI binky.
How does Michael's withdrawal adjustment strategy differ from the guardrails under the Guyton Klinger rule?
Great video. One question regarding the guardrails. If you start at 5% and the market stays within guardrails, do you give yourself an inflation adjustment during those years? Thanks
Investing in yourself is not often echoed in the FI community when it comes to formal education as a trade off to investing.
Patrick o’shaughnessy
Whoa whoa whoa, time hack 1:02:00, bonds go up when the market crashes? Asterisk that for March 2020. When was this episode recorded?
Interesting call out. As it turns out having a percentage of bonds in your portfolio, not going up and earning nothing would still be a blessing. You could live off the bonds if you had to and avoid selling stocks in a 40% decline. Also the option to put a little back in to stocks because you could sell a small percentage of the bonds and try to catch a discount on stocks. Since market timing is impossible, you can set a buy in point for any market crash ahead of time. For example say 20% decline before you buy with a small percentage of your bonds that you sold. As it turns out the market had a V recovery since the RONA crash. Since there was no way of knowing that you simply have to commit to going LONG with your new buy in. Have an actionable plan with the bond bucket AHEAD of time for the inevitable crash that's coming.
@@vanguardvaluist2614 “bonds...not going up and earning nothing...” we call that “cash” in these here parts. Concur on stock market crash rebalancing (buy). It works at the other extreme, too (stock market bubble rebalancing). I prefer limit orders as well.
Thank God for a NON- COVID19 podcast. I am a healthcare worker and need a break from its 100% bad news!!!!
Boy did II come to the party late!
When I read your "Covid" remark, I glanced up at the date.....Lol!
Hope all is well?!
Very good brothers. No corona scenario?
Probably recorded prior to the corona madness!
Sorry Purple
1:19:33 like now!!!
Adaptive spending = Spending slack.
1:00:17 the 4% might work, but the actual amount you can withdraw with 4% when your portfolio dropped with 80% is gonna be very, very small tho?
True but that's why you have at least a years worth liquid so you don't need to touch anything in the market.
That's why you have bonds to draw from, preventing you from touching the stocks during bad times
@@SynThenergy The bonds can also provide a buying opportunity by using a small percentage of them to buy back in while stocks are tanking. Just know ahead of time what you will do. EX: At 20% down I put 10% of the bond allocation into an all market index. You just have to commit to a LONG holding strategy.
Oh boy. That's not how the 4% rule works guys. The yearly withdrawal is not 4% of your current retirement investments. The yearly withdrawal is 4% of your year one retirement portfolio adjusted got inflation every year after that. So if the market drops 50% your withdrawal does not also drop 50%
😀
54:05 not gonna happen!!!
Kitces seems to be ignoring the fact that one is much more likely to hit their number when the market is high, increasing failure risk.
9x the money? Well, anyone that had enough money to retire in 2002 had like 1.5x their FIRE number in 1999 and 2000.
And having to work 8 years down the road for 4 years at $20/hr for 500-1000 hours per year sounds a lot worse to me than working one more year at $80/hr etc.
Good topic though I just am not as optimistic. I do think that getting 75% there and then cutting down to half time in the same high earning field is the way to go as you start shaping your retired life.