7 Common Financial Mistakes Made the First Year of Retirement
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- Опубликовано: 11 дек 2023
- This video discusses seven of the most common financial mistakes first year retirees make.
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Disclaimer: this video is for educational and entertainment purposes only and is not meant to be a substitute for legal, accounting, tax, or professional advice. If you have any specific questions about any legal, accounting, tax or other professional service matter you should consult the appropriate professional services provider.
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My father had an expression about not buying things you don’t need when they are on sale. He’d say; “l can’t afford to save that much”.
I always say “I save even more by not buying the thing on sale”. But, if I do need something, I always try to get it on sale.
1. (.14) - Quick rich schemes/stories
2. (1.40) - Forgetting to plan for taxes
3. (2.36) - Having a basic retirement budget
4. (3.30) - Living large your first few years of retirement
5. (4.35) - Putting off important financial decisions (having a will)
6. ( 6.27) - Not having a plan B
7. (7:55) - Entering retirement with credit card debt
Thanks for the summary - always appreciate these!
I counted 8 - you missed #6 - Taking SS at the wrong time. Or was that supposed to be part of #5 - putting off basic important decisions? Doesn’t seem to fit there 🤔
@@brendadavis7322 The title was 7 Common Financial... so I only marked 7.
He is so smooth in transitioning that sometimes it is difficult to tell exactly where one ends and another begins.
I was 30 years old and a 50 year old coworker was borrowing $5,000 from his parents to buy a used car for his daughter because he had no savings. Even at 30 I was shocked that he had to borrow $5,000 since old people are suppose to have more money than young folks (I was debt free with savings). This same coworker at age 57 bought a house on a golf course with a new 30 year mortgage and admitted he knew he couldn’t afford this house but his wife was nagging him about wanting a different house and just wanted to make her happy. At the time I was thinking he was going to be in his 80s and still having a house payment. It wasn’t until recently watching Dave Ramsey that I realized older Americans who are very smart or good in their careers can be TERRIBLE with money and debt. I guess it was a blessing for me to be raised poor where you knew you needed a rainy day fund. I now see the power of compounding interest with my investments….and I guess the same holds true but the opposite effect with debt, especially credit card debt.
Amen! I was also raised poor and as a result I have always lived on a budget and stayed away from debt.
Hope part of the deal was that you got to cut up the credit card. 12-15% is really bad, 32% is obscene. How they get away with this completely baffles me.
Excellent advice, as always. I am now in my 9th year of retirement and I guess that I fared pretty well in the first year.
I did some traveling, but mostly worked on my house (which was paid off, but needed some upgrades.) I installed new insulation and siding, and replaced the roof. I also upgraded the old furnace to a new high efficiency model. Lately I have done more traveling to more distant destinations and have helped my daughter fix up the house that she bought.
I feel that now I have reached the "slow go" years and have promised not to do any more high ladder or roof work. Knee replacements work pretty well, but hands and knees work is something that I avoid. My one hope is that by the time that I have to hang up my car keys, self driving vehicles will be on the market.
I attribute my success to good planning with a healthy helping of good luck.
Holy Smokes, 32%! Thank goodness Dad Bank has great lending criteria.
Super video. CCard debt is dangerous. No doubt about it. We should require all high school students to take courses in personal finance to include it.
Yes I wish they did too !
I have been saying this for years, make it a requirement to have Financial classes/how to manage money classes in schools as early as 5th grade, also they should bring back home economics, teaching young kids basics of cooking & so on!
Credit card debt is a killer. I've always used credit cards for convenience, have never had credit card debt.
I used to be a loan officer at a credit union. I always told my clients when it came to CC debt the best way to pay it down was to first, don't charge anything until you have it paid off. Second, the minimum you must pay is the minimum payment on the statement plus the amount of interest charged and a little more if you have it. Don't pay interest on the interest charged.
I’ve been retired now for 11 months. The one item on this list I have struggled with is the tax one. Unlike filling out a normal W4, figuring out the right withholding on SS , 401K and pension is tricky. This is especially true for state income tax as I was forced to estimate an absolute dollar amount rather than a percentage. I think I estimated conservatively but time will tell.
Btw your videos are always of great value, look forward to more.
I just figured 35% first year - 4% city, 8% state, 23% Fed, and adjust thereon. I love Manhattan and hate Texas, and would like to retire upstate, but the numbers don't work.
That CC with 31.99% APR is shocking to hear. I would like to take that from a bank in the form of a dividend. But all joking aside, I wish they would not do this to people for a profit.
Thank you for reminding us of these issues.
Love your excel spreadsheet. I'm taking my social security at my FRA.
Excellent video especially on the CC debt portion.
Hi Geoff,
Excellent video I went through a similar situation with my dad and he paid it off and then I paid him back … it was a valuable lesson learned and I’m so glad you made this video. It will help millions of teenagers and young adults and they’re 20s and 30s with the same situation…. Peace be with you and have a wonderful Christmas Hanukkah and New Year’s 2024!🇺🇸🎄⭐️🙏💜☮️
Great video. Appreciate your well reasoned advice.
Love your content Goeffrey - it’s one of the best channels out there. So many life lessons some we learn early done we learn late. Either way I enjoy the learning aspect weekly - keep them coming!
Why doesn't our education system teach students about the credit card trap (and then test on it)? In other words, IMO this simple financial concept - in addition to other financial fundamentals - should be a prerequisite for high school graduation. (Fans of George Carlin will know what he thinks, and the older I get the more I agree with GC).
You are a kind dad.
My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
It's recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 20% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of investing in the stock market and potentially grow your retirement savings over time.
I agree, having a portfolio-advisor for investing is genius! Not long ago amidst the pandemic crash in March 2020, I was really having investing nightmare prior touching base with a license portfolio-advisor. In a nutshell, i've accrued over $550k with the help of my advisor from an initial $120k investment thus far.
@@maryHenokNftKudos on the effective execution of innovative ideas and tactics that lead to significant advancement. As I seek guidance from a trustworthy advisor, would you be willing to share details about the individual assisting you?
The decision on when to pick an Adviser is a very personal one. I take guidance from *Gertrude Margaret Quinto* to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing.
Well said.
I try to assist family and friends with the basics even though I know more.
If they can get through the basics then we talk about other things.
They buy what they want to buy and I do not interfere.
I knew there was a reason you gave reasonable advice
I think back to college, I ran up my credit card debt to $1,500, but holy s***, um, chmit, I paid it off in the first few years of my real job at a rate of something like 20%. Life lesson learned.
Glad I listened to you an others before I retired, I know I made the right decision for myself, but thats just me, an the wife of course, lol. Great story about your daughter, wow, 31.99 %, now we know how they hook college kids into debt. Thx for the vid Geoff
In the aviation industry there are VOR VHF Omni-Directional Range. Aircraft take headings and get their direction from this piece of equipment. Geoff is a VOR Voice of Reason. Thanks for the sound information.
In aviation and life - attitude determines altitude. :)
Thank you so much for telling us the story about YOUR daughter and that credit card! I have no doubt that was not the first conversation you had with her about finances yet our children will do what they want sometimes! I appreciate your transparency.
I remember my freshman year in college the credit card companies set up tables in the student union. Fortunately I knew to avoid them, but there were lots of people lined up to talk to them!
I recall this too. Back then there was even an annual membership of $75.00.
I stayed away because I was always told interest was always charged. When other college classmates and even a mentor convinced me that there is no interest so long as you pay the balance in full next month.
I said you’re joking. Then why would credit card companies do this. They said you would be surprised as to how many cannot pay the balance in full and stay making minimum payments.
I always paid the balance in full. Unfortunately, even one of the friends who said this ended up with 30k of credit card debt and this was in the early 90’s. It took him around 5 years to not be on this position.
I warned my wife who I married later in life. Also warned my step daughter. They both fell into credit card debt despite the warning. I had to help get them out but they learned their lesson.
I smacked that like button hard !
Love " Holy Schmidt"
Excellent information, as always. Many thanks.
Thanks Mr S
My pleasure
Jeff, when that happened with your daughter, did you ask yourself "How could MY daughter make this mistake considering what I do?" I only ask that because it happened to me, albeit in another area. I was shocked that my daughter could make do something that I would have expected her to learn from me, considering my career.
Once again, you never mention the interest-free cards or the offer to balance transfer high interest rates to low or 0 interest cards.
For over a decade, I have used interest-free credit cards. The interest free can range from 1 year, to 2 years.yes Sometimes you have a balance transfer fee but it is well worth it as to get out high interest cards
I have not paid a dime of interest in the last decade.I have made sure to pay them off in the time allocated. To me there a ,free loan!
@user-rv8lg5oc6w you're gonna break your arm, patting your own back so hard. be careful
@@user-rv8lg5oc6w The reason is that overwhelmingly interest free credit cards result in people carrying the same or larger balance on the new card past the interest free date.
They carried a balance before and they do it again - because they didn’t have the money to pay it off in either case, which is why they have a balance.
Some cards even have a retroactive rate on the entire amount even if you pay down most but not all of the balance. They is no magic money otherwise banks wouldn’t offer them.
Don’t misunderstand, if you have the fortitude to pay off the new card during the introductory period then it makes sense, but most people would need to completely change their credit card behavior.
I couldn't agree with you more if your audience were people under 40.since your audience is well over that it would make sense in many cases like mine to take advantage of interest free cards.
Your right again about retroactive interest as I am carefully not take any of those offers.
I find the services of a good tax preparer to be well worth the minimal cost. This person can help you to navigate the tax issues and avoid nasty surprises. Enrolled agents are also authorized to represent you should you have any problems with IRS or state taxes.
Best dad ever. 🙌🙌🙌
A great reminder & refresher on basic issues…that everyone should pay attention to
Very useful video, must keep these things in mind for my upcoming retirement. How many movies have you watched? And how do you remember them all? I suggest you consider making a second youtube channel on movies for Gen X and Boomers!
My 401k does take out taxes at 20%, so if I withdraw $10k they send me $8k and the IRS gets $2k. Since I’m aiming at the 22% bracket this year I’m either getting a small refund or, or paying a small amount, but not enough to have penalties for missing the quarterly pre-payments.
If you transfer your funds to an IRA - you eliminate the mandatory 20% federal withholding.
For me, I'm grateful I can pick when I what to retire and I know I going to work until FRA, as most of your followers, but then what is the exit strategy. I think most of your followers are north of means so it's not money as much as something else. I think for me, and I'm going to retire at 67, as I think about; I'm I still relevant, I'm I still having fun, can I still contribute, am I too tired to stay up with technology. It will be great to get your thoughts. Second, when you look at indexes of health care quality and cost, safety, quality of life, and many other key KPI the US is typically in the high twenties (24 - 28) so a second topic, that might be out of your wheelhouse, is considering where to live in the world as a retire whose SS & investment income can meet most countries minimums for residency. Enjoy your thoughts if it is in your wheelhouse. I used your channel to plan my retirement and to seek out the right professionals to help me manage my assets. Thanks again for all you do - I know it is a lot of work to produce, I'm very grateful.
I made sure I'm out of credit card debt, so when I retire, I don't have to worry about that.
It really depends on how much money you have saved. If you are really rich, then you might be able to retire early and travel and enjoy yourself. If you are not rich, then you need a budget from year 1.
What is early and what is rich? I'm curious
@@willcover6142rich… 5 million plus… early… late 40,s
By rich, I mean you have sufficient assets to at least cover your living expenses from interest and dividends, but more is better. If you retire at 55, you may be around another 40 years, so you need to be able to grow your assets, not spend them down.
@@vinyl1Earthlink thanks. Makes sense. I retired at 62. Luckily my wife still works and is younger. However I knew she would want to retire as soon as she saw how life could be lol. We have been able to live off her salary and put away a lot of money as well while she's working. Haven't touched my 401k. Hopefully I can keep her working another 5 years
They gave her 20% off because they knew they'd make more money than that from the credit card interest.
The first is trusting a financial advisor
Geoff. She knew all of that before hand. 😂🤣. She suckered you into paying off her credit card in full. 😂
Holy Schmidt!!! 🤣
You’re a good Dad. 👍
I doubt that shelearnrd much, other than to hide it from Dad - next time!!
Whenever possible, pay down your credit cards monthly. Do not let those charges continue to pile up and up; it can lead you into a financial hole that is hard to escape.
retired early, ima good except for travel, but ima not going overboard.
Anytime I have taken anything out of Fidelity, it ALWAYS defaults to a 10% tax deduction. I can change it, but I do not.
How do credit card companies get away with providing those loan shark rate cards to people with little credit? That seems criminal to me.
I am retiring 2024.Taxes and healthcare.I put a lot of time to set just theses two payments in line.😮😮
Wow, 31.99% interest, just crazy!
Go Blue! But where is that other helmet from??? Is there a connection there?
Looks like the Buckeyes to me so yes, a VERY deep connection.
In what states are you licensed, please?
where can i find the link to the excel budget tool referenced in the video?? thx Dave
HolySchmidt.com/budget
No link to the 156 million problem?.
❤
Personally, I learned nothing, but probably, the majority of people who listen to this probably would not either, as those who would benefit from this information are too busy running up CC debt. Very nice presentation.
Tax “surprises” & 401K withdrawals - at least in our case, Vanguard claims Federal law requires them withhold 20% for federal taxes. So as long as you are under the 20% tax rate, no need to set aside more money for those taxes.
I though everyone including teenagers understand cc debt is bad. The issue isnt igborance, it discipline and the ability to forgoe short run goods and services with long term goals. Its an american epidemic. Some of its due to ignorance. But i think its just indulgence
Social Security at full retirement age is rarely mentioned. Why is that?
Go Blue
31.9%, omg!
31 %
SHOULD be Illegal
31.99% ?!?!?! How is that not against any usury laws?
That looks like a Delaware mud hens helmet.
The helmets reminds me of the Wolverines and the Buckeyes...
I used to live in Columbus.... and have been in Anarbor a time or two....
Toledo mud hens
It may be helpful to show people how to set up and pay estimated taxes to the treasury of the US.
Beware the scammers. Report their posts.
Social Security Retirement is a very poor return on investment overall. So the fact that it's also subject to income tax is just a total travesty. Horribly evil.
SS never was never setup as a retirement account, but people think it is. It was a fall back for your family if you died and them not going without completely. You can setup your retirement so you are in the zero % tax bracket or 10% and still not pay tax on your SS. Lots of up front work but it can happen.
31.99%!!! Good Lord!
I use my credit card to autopay my bills and pay the balance off each month.. is this still ok in retirement?
As long as you pay off you credit card in full it’s fine.
Go Blue!!!! Hail to the Victors!!
Since the Buckeys can't, I hope you just embarrass the Tide. Enjoy your shiny new trophy.
I thought that was Michigan helmet! It was fun to watch M punish Oh How I Hate Ohio State! Very rude fans they are.
Did not realize he had a Michigan connection. Go Blue!
GO BLUE!!!!!
Not retired but on the cusp,so buying another Harley just feels right,the bank said I'm good for it..
I bought an orange Corvette C8 to go with my orange CVO Street Glide!
😅😅😅
Hopefully your cosmetic- c credit card story was a fictional one: otherwise you have lots of educational time you will need to give over the breakfast table.
Unfortunately no. Great learning opportunity
I doubt t she will listen and learn from dad.
At under 25 years old, humans judgment part of brain is Unerdeveloprd. = TRUE SCIENCE !@
@HolySchmidt under 25 years old = human brains are not fully developed in regards to JUDGMENT
This past year, we all had the opportunity to turn $1000 into $1200 by investing in a S&P500 Index Mutual Fund.
Certainly this past year has been unusual but the record over 7+ decades has been an annual compounded average of 8% returns.
In America, it is difficult to get rich quick but easy to get rich slowly.
How much did she spend on this makeup?
Definitely a challenge if someone like a daughter sees discounts and uses "Girl" math for the purchase 😅. Girl math apparently doesn't work as well as real math.😂
The better lesson would have been to let your daughter pay it back herself and really learn a real life experience. Bailing her out was probably not the best example of personal financial responsibility both for her and you.
I thought so too.
Well honey, time to return ALL that to the store for a refund.
Consumer credit is a tool of the devil.
You’ve been hacked. If I could have found an email address I would have told you there
Seeking guidance from an investment adviser is highly recommended for navigating the current financial /Investment market landscape, especially for those nearing retirement. I've been consistently consulting with an adviser and I've miraculously transformed a modest $70k investment into a staggering $950k and the numbers continue to climb.
Sharon Sue Parker, an esteemed financial consultant, has been a beacon of guidance for me. Her name might ring a bell from a recent Newsweek feature. She's a leading luminary in the financial market, definitely worth exploring further!
SCAM ALERT
Geoff needs to get rid of that disgusting helmet behind him. It represents cheating.
LOL
Got them both!
@@HolySchmidt I didn't notice that. At least you are fair but still need to dump the blue.
I am truly impressed by the video you shared and I want to express my gratitude for breaking it down into digestible pieces. Even though the current economic climate is facing a downturn, I am ecstatic to share that I have been experiencing significant financial gains. To be more specific, my initial investment of $9,000 has resulted in returns of $48,000 every 21 days. This news brings me immense joy and I am grateful for the opportunity to share it with you.
SCAM ALERT
Amazing video and thank you for breaking it down!! Despite the economic downturn, I'm so happy 😊I have been earning $ 60,000 returns from my $9,000 investment every 21days.
SCAM ALERT