------------------------------------------------------------- *_PLEASE STOP USING Spreadsheets!_** It falls way short optimizing every retirement factor* Retirement Tool Link I reference and use and recommend -- New Retirement. Free 2 week trial. $120/yr after. You will buy this after trying (I have purchased for 3 years). www.newretirement.com/?nr_product=NRC&nr_a=35&nr_medium=affiliate& -------------------------------------------------------------------- *Need a CFP to create your retirement plan for a one time fee?* My Recommendation: Neil Fortwendel (812) 471-2492. Neil created my plan. Plan updates as you wish for a smaller fee. Check Neil out on Facebook and LinkedIn. ---------------------------------------------------------------------- *DO NOT GO IT ALONE!!!!!!!* *Money Pickle - FREE! use link to set up a FREE 45 minute dialog with a Financial Advisor* No obligation. Get answers to your questions. Get an expert to look at your plan. moneypickle.com/joekuhn --------------------------------------------------------------------- *Plant Manager, Maintenance Manager and Career Consulting -- 1 hour virtual via Teams/Cell Phone* sowl.co/s/bQifp ------------------------------------------------------------------------- Most Popular VIDEOS *Health Insurance before Medicare* ruclips.net/video/KPs4RXOOS64/видео.html *You Cannot retire with these 4* ruclips.net/video/4qlCbfizoaI/видео.html *2 shocking surprises in retirement * ruclips.net/video/pCDR29HztnQ/видео.html *15 things you must let go to retire * ruclips.net/video/Hg0nvDeM1X4/видео.html *My retirement budget* ruclips.net/video/A5PCt_43Ruo/видео.html * 5 early retirement regrets* ruclips.net/video/9qCbvCF2Swk/видео.html *this convinced me to retire* ruclips.net/video/cU6qG_xC5CU/видео.html *Timing of Social Security* ruclips.net/video/UMH4UM3F3Ag/видео.html *How I fill my buckets* ruclips.net/video/vKMGjb1Myv0/видео.html *How I document my retirement plan* ruclips.net/video/aYmiXTmZAms/видео.html *What I have learned from 300 retirement coaching clients: * ruclips.net/video/EqZutxRckUw/видео.htmlsi=dqz8JoLrcpfgjj9t --------------------------------------------------------------------------- RECOMMENDED FINANCIAL ADVISOR - Assets under Management or one time plan creation Neil Fortwendel with Northwestern Mutual ph: 812 471 2492 Video by Lean Driven Reliability LLC This is not investment advice. For entertainment ONLY. Seek professional help to understand your unique situation. #retirement #retirementplanning #retireearly #retireearlyandtravel #financialfreedom #financialindependence #retirementincome #retirementstrategy #findingpurpose #keto #ketodiet #ketovore #hiit #hiitworkout #healthylifestyle #howmuchcanIspend
Good morning Joe, Retired and I am still getting up at 3:30 am, here in California. There is just something about heading out the door at sunrise for a hike, walk or run.
I’m with you, I love the peace and quiet of early mornings! I’m in Texas so the early mornings are also the most comfortable for taking to dogs out for a walk. I’ve always been happy that my internal clock is set between 3:30-4:00am. Enjoy your walk today!
@@ChristopherEvans-650 retired at 54 and get up every morning at 5. Not quite managing your 3:30 🤣. Love going for runs and walks like yourself. Wish you the best in retirement 👍🏻
Joe - subscriber here - “Retirement is the start of a new marathon”. Such great advice. Spouse and I so very much appreciate every piece of content. ADK mountains out.
First, this is one my favorite videos you have done. I agree with a lot of what you said, especially when you say that for some people getting a financial advisor makes sense. I get really tired of seeing people in retirement groups on FB (like New Retirement) shame people for using an advisor. Some people do not have the aptitude or maybe the desire to handle their finances in retirement...and that is okay. They will benefit greatly from the services of a *good* advisor. It is great if one doesn't need that....but there is nothing wrong with someone using one if it fits their wants and/or needs. That is the other thing you kind of spoke of in a couple of different items on your list....one size does *not* fit all. Everyone's situation is different, at least to some degree, and what is right for one may not be right for others. The main thing is to learn a lot and then apply what works for you to your situation. Anyway, thanks for putting out enjoyable content on a regular basis.
@@BadPhD777 Not psychologically. There is the fear of missing out (FOMO) that you will have to deal with. I've taken action in the past and been happy with it, for a while. A year or two or more down the line, I realized doing nothing would have been better. A lesson typically learned over time is that sometimes the correct decision doesn't initially feel good. What's kind of backward is that outside investing, this usually means actively doing something now that you don't like for future benefit. In managing investments, not doing something that feels correct is sometimes the best choice for future benefit.
Unlike some RUclipsrs who give out financial advise with no financial credentials, I appreciate that you state your videos are about your experiences in retirement. Big difference.
🙋♀️absolutely! I can’t believe people take advice from folks who have not planned or prepared for their own lives. They selling this SS early product ,as if it’s one size fits all. They just pushing for views and more buy me a coffee.
Happiness for me is having the CHOICE to do whatever I want to do when I want to do it and not be hindered through poor health or lack of funds. That’s it for me 🙏🏼
Great list. In the ssi, we almost never hear people talk about how taking it at 62 gives us an income limit for 63 and 64. You’re so right that people need to take a deep long look at their personal situation when deciding.
Good video. One correction on a comment you made about the COLA adjustment. If you defer you can’t add the 3% COLA to the 8% and say it’s 11% because you get the COLA whether you defer or not. You only get a larger COLA on the extra 8% bringing the total to 8.24% (3% of 8% is .24%).
Agreed that health is more important than money And bad health is one of the most expensive situations But the main point is most bad health is self induced from a lifetime of sedentary days and standard American diet A retirement of idle relaxation is a great way to Eradicate, good health once and for all
Another great video, Joe. Thank you for your advice, insights, and for mining the comments for fantastic content ideas. You are making a big difference for all of us out here who are either nearing retirement (me) or already retired. You are a straight shooter and I love your style. I am glad you had a wonderful trip to Alaska with your wife. Alaska is a great place to visit, and for me, work on my current project. I appreciate you buddy!! Joe from Texas, OUT!!
There’s many bad advice. They don’t consider these issues. 1. Income should take into account Social Security and Pension benefits that can reduce by more than half of current expenses. 2. Roth conversions when your outlook is 10 to 30 years of remaining life expectancy. You’re not going to save that much in taxes when the tax bill on taking the distribution is punishing and won’t make a difference. You only take distributions as you need them at the lowest tax bracket. 3. Advice to run the money down when you’re likely to use the money if you need long term care. You might get a terminal illness or become bedridden and need around the clock nursing care. Yes, you might outlive your money, but that’s better than having no money at all. 4. A spouse that lives longer than you because she is younger and have life expectancy of an additional 10 years. So she will live 20 to 30 years longer after you die. 5. A million to 3 million is not enough. Of course it’s enough, but don’t give contradictory advice like the 4% rule. Actually you should take less money out, not more money. In case you do take more money out, it’s about using the tax laws to your advantage when you’re in a lower tax bracket. Keep the money in cash in case there’s an emergency expense.
Another thing to look out for is FDIC insurance for deposits of conservative family members. I found out that my parents had $800,000 in a local bank that was uninsured. All of their accounts and cd's were titled the same way. They would received $250,000 insurance and the remaining $800,000 was above the insurance limits. After my mom had passed away we realized the mistake. I have 2 siblings and with the help of the FDIC insurance web tool were able to title each CD and account to be covered by deposit insurance. We are not in a banking crisis like in the past, but this bank did have a large loan default on a loan causing bank examiners to intervene. The personal banker in Nebraska was frighteningly uninformed. When I asked my local banker if his bank reviewed customer accounts to make sure they were able to maximize deposit insurance. He said his bank did not either. Just because the staff is nice and live locally doesn't mean they are looking out for their customers.
Hi Joe, Good list. The one advice IMO that is hallow is reverse mortgage. IMO, they are a pet rock, great as long as you don't use it. Once you do, the negative compound interest eats away about 40 cents on every dollar over time. The premise is that you pay your mortgage for 30 years with interest. In order to access your equity, if you do, you pay a huge penalty due to a negative compound interest. Nuts!
Agree on the consideration to delay SS. THE BIGGEST ADVANTAGE OF DELAYING IS THAT YOU CAN CHANGE YOUR MIND AT ANY TIME. If you take early, changing your mind is not possible!(some minor exceptions). As to do it yourself retirement, it is possible, but very difficult. Really only for the very few. But, either way you need to educate yourself and learn. The thoughts about what retirement IS and what makes it work, varies from person to person. We are all different. What works for Joe is not the same as what works for me. But, each of us needs to find what works, and it likely is not the same as you imagined before retiring. Life definitely is a journey, and that includes the retired years. Which way you go will affect how it goes, but you CAN change your direction at any time to get to a different place. We are retired for about 4 years now, and it is better than expected, but not the same as expected! We are often adjusting our short term goals, and reimagining our long term goals. Pretty much the same methods we used while working, since life tends to be a little hard to predict with any kind of certainty.
Yes and no. If you make it to the break even point 78-80 y/o you would have gotten the same amount of money from the feds regardless of weather you started at 62 or 70.
@@clbcl5 my point was just as to how to decide. I’m currently 65 and delaying for survivor benefits and also because my life expectancy is at least average. If my wife or myself get an illness next month that will change our life expectancy, I can start drawing Social Security the month after if it makes sense. Both my parents claimed at 62, and both made it to 86, and mom is 88. They lost a lot of SS by taking early! Mom has a small check and is poor.
@@randolphh8005 And mine was that a lot of people think delaying equals more money when it is only bigger checks. Delaying is fine if you have an alternate source of income. I chose early and it all is in an s&p 500 account. Our spending comes from my wifes job.
@@whatsup3270 I’m no longer using one, but I have in the past. The problem is that the average retiree is not able to handle their own investments. Paying for good advice is not cheap, but doing it on your own with no knowledge usually costs even more. I have nothing against people doing it on their own if they have the aptitude, education and focus. I used to work with the elderly in my career. Many of them were not capable of handling their own investments, especially at advanced ages. Obviously some got hooked up with unscrupulous advisors, but keeping your money buried in the back yard doesn’t work either. I also know of several men who did their own investing, died and left minimal to no information for their spouses. So on average I would recommend an advisor.
I love this list. Probably my favorite Joe video, yet. You covered all the good ones, but I’ll add one that may not be list-worthy. “Take a part-time, stress free job in retirement to supplement your income.” Where are all these “stress free” jobs for seniors??? Working at Home Depot? Walmart? Other retail? Substitute teaching? That’s a laugh. Stress free jobs are one in a thousand. No thanks.
If I gotta get up and go work, I'm going for the money.. no such thing as stress free..these entry level customer service gigs are the farthest thing from stress free having to deal with the public entitled clowns all day long
All 9 of these are correct...and incorrect. Retirement, planning and execution, is different for every individual/couple. Our retirement goals are vastly different from most. That doesn't mean we are "right." It means we are right for us. We bought 13 acres in 2019, remodeled the house, and moved in February of 2020, just as Covid hit. I retired in July. We set our income needs at exactly the amount we were bringing home when I retired. It worked out to slightly over 4% of our invested assets,but not close to 4% of our total net worth. We hunt and fish. We raise about 75% of our own food. Beef, pork, and chicken we raise here. We have venison and fish from our own property. This is what we enjoy. It takes care of our physical and mental health because it requites daily work to keep up a farm with livestock. I'd go bat-crap crazy sitting in a condo at the beach or downtown all day. That's right for us, but it's not for everyone. I took SS at 62 and my wife is planning to begin at age 70. She has a longer life expectancy than i have and our SS benefits are virtually the same. None of my forebears have lived past 8, while both of her parents are close to 90 now. The 4% rule is a guideline, and actually an excellent planning tool. Like you said, I don't know anyone who actually uses it as their retirement plan, but it's a good starting point. Much of the retirement advice on RUclips is just financial planners doing math with a spreadsheet. Hell, I can do that for free. I'm good at math. Very good. Let me solve the retirement equation for you, and make it so everyone can understand. A= Life Expectancy B= Inflation C= Market returns X= Healthcare costs Y= Amount saved for retirement. Z= Social Security The only given is Y. You can know how much money you save. Even your SS figure isn't a guarantee, because Congress can change that. There's no real solution to a math problem with one given and 6 variables, at least not a simple solution. If you knew how long you were going to live or exactly what market returns will be, or what inflation will be, then you could give an actual mathematical answer. Having even one confounding variable makes any results unreliable. I have a friend who does all of his own planning and another who has a big chunk in an incone annuity. Who's right and who's wrong? I use a financial advisor for most of our invested funds because I'm not knowledgeable enough to keep up with it. I gladly pay the fee because I have no interest in looking at the market daily. We really uave np worries about running out of money because we were big savers on good incomes. We saved for our retirement, put money aside to get 4 kids through college, paid cash for our home that we now rent, bought our farm with cash, bought a larger farm with a friend, and had zero debt after age 50. I still watch RUclips videos about retirement and i always pick up a tidbit I can use.
Great summary Joe, but a couple comments: 1. While social security amount grows by 7% a year, by taking earlier, you get the compound effect of the returns on the total amount accumulated…generally the “crossover” occurs at around 82 years. Live longer, you would be ahead, expire earlier you’d be behind (by taking early). I’d say if you must rely heavily on SS to make your plan work, delay as much as possible,, but if it’s more just “icing on the cake” take earlier 2. 4% rule. I agree very few would live by this rule in practice, but at the end of the day, everyone must be comfortable with some “rule” to decide to retire. What was the rule that helped you decide? Ie take your retirement fixed income sources - well thought out expenses = differential. How much of a nest egg percentage wise is a good rule of thumb for withdrawal rate to make up that differential, and what assumptions on market returns and inflation rate to use? These are the “Big 3” in my opinion…there’s a video idea for you!
@jeffs3627 You can invest your SSI money into CDs, treasures and munies. At current rates you can lock in anywhere from 4.5% to 5%+ depending on the duration/ maturity (treasury bills and intermediate bonds are especially attractive). For liquidity, there are high yield savings and money market accounts that also would currently give you 4.5%-5% annualized yield.
@@fargoaerials3456 It’s not a rate of return, it is an increase to make up for the money you didn’t get! I’m planning on 70, because I like the idea of a higher check for longer, and the survivor benefit, but I know I’m gambling on having longevity for me or my wife. The money has more value to me in old age than now, and it is good insurance. However there is no ROR unless you live well into your 80’s.
Yes, when to take SS is different for everyone. However, if SS is your only source of income in retirement, you’ve already messed up. I like Dave Ramsey’s advice of taking it early and investing it. Why miss out on 5-8 yrs of payments? Approaching 70, you are now entering your slow-go and no-go years. And, unless Congress does something, SS may be cut by 20% starting in 2035. Lastly, a lot of people don’t know this, but you can withdraw your SS application within the first year, but you have to also return any payments you received.
I’m single and don’t need the SS income to fund my retirement. I’m taking SS at 62 to invest it. That guaranteed increase plus bump for inflation is just a number on a piece of paper. As the other poster said, a bird in hand is worth two in a bush. Even Joe recognizes this for certain single retirees.
I remain invested 100% in USA market level ETF stock at age 70, 12 years retired now. IMO, I am in the highest return, and least risk area. How? I reverse the 'sequence of returns risk' by a selling plan based upon 10% trigger points. Using this logic based formula, it forces me to sell at certain points. In this manner, you are reaping the sequence of gain opportunity. I sell one year of expenses at every 10% price gain. In a super year, I may put 3 years worth (30% stock gain) of cash in the money market. In the unusual event I find my cash balance low and having to sell, then I sell 'one month worth' of cash needs 2 weeks before I need it. In this manner, I mitigate the loss on these sales. I average 10% gains on the stock, 1.2% dividend, 17% standard deviation and 0 advisor fees. IMO, this beats the 7 to 8% social security planned increases, so I went at 62 for my social security.
Well articulated. That is a very sound approach and solves problems for people who don't understand how to use any of these bucket or rebalancing systems. You've got a good solve.
Super video! Some folks are cut out to be DIY, some will not even consider it based on their own personal skill set. I have a request for you. When you add your tag line "This is Joe out", could you pause for two extra seconds at the very end? This will allow me to hit pause so that I may read the comments before the end of video ads kick into gear.
I've taken out a fixed 4% of the total of my account (at that time) for the past 2.5 years. I have not had to adjust it for inflation, nor have I increased it due to my balance getting larger over those years. It's the same monthly auto-deposit as it was 30 months ago. Has been working well for me.
We each purchased fixed, immediate, annuities a year ago on just for a portion of our portfolio. Yes, it is kind of a crap-shoot whether it pays off in the end vs investing everything in the market. For us, it is there for sequence-of-return risk mitigation because we have a slow ramp up in retirement income over the next decade.
Retiring end of the year, 63.5 , my plan is to hold off till least 65 for my SS. Not sure if I will even take it then. Have my budget set without taking it.
Exactly. I've seen some people on RUclips claiming they're going to retire early by investing in cryptocurrencies or something. That sounds risky to me.
Have you thought about working with a financial advisor? work better for you in retirement and plan for unexpected expenses. It might give you more peace of mind and help you enjoy your retirement more. Best wishes!
You're absolutely right about the importance of having an advisor, especially for retirees. As a businessman, l've worked closely with my advisor, who expertly managed my portfolio, growing it from $200k to $1.8 million through stock trading. Despite the stock market's current instability, she continues to make profitable trades. This has given me the confidence to take charge of my financial future without relying solely on government support for myself and my family.
I sure was glad to hear your second point. I've been twisting my brain over which withdrawal method is best since they all have positives and negatives. Even though I should have more than I need, it's been making me crazy.
I'm 4 years into retirement. This year I started selling some IRA shares in June and July to build up cash in the IRA. Based on my years of DIY investment experience since 1987, everything has loaded up a market crash. Cash is king at the highs and at the lows. I'll start buying when an S&P 6-month chart looks like yesterday's 5-day chart. Stocks are back up today, but most likely from rookies who are buying at 'the lows'.
The annuity information is helpful. I didn't know the annuity does not keep the dividend payouts from corporations. Also, you need to be aware of surrender charges when exiting annuities.
A small annuity with extras can be helpful for supplementing income on top of social security particularly in times when the market has downturns, and later in life when you don’t have the timeline for recovery. It should be part of an overall plan, not your only plan. You need to be able to resist high pressure tactics though.
Great video Joe, especially on the first two items. I see so much bad advice on RUclips, especially about taking Social Security early. One Size Does Not Fit All. Everyone needs to evaluate their own financial conditions and circumstances.
Your video is certainly timely for me. I'm thinking of retirement in several years but its the financial aspect that really has me concerned. Your video has given me a lot to think about and I need to start think about a plan. I think to start I am going to look the Retirement Tool you mentioned.
Managing sequence of return risk, IMO, is the most easily ignored aspect of a model. It is especially dangerous if you have not locked in returns the year you retire. Lock in the returns and I think you should run a conservative play the first 5 to 8 years of your retirement and maybe dip your toes back into more stocks, for example, after you have kickstarted the TVM equation.
Comparing the increase of SS by waiting to growth rates of S&P growth is comparing apples to oranges. They just ain't the same concept. But I agree with your position on this. My income varies way too much to even use a 4% rule. Right now I'm in a lull between before SS So I have to spend more now from the IRA/savings and less after I start receiving SS. Retirement is the beginning of your next journey, don't waste it.
I find it impossible to articulate the difference between a 7.5% ROI, and the 7.5% you pick up annually for delaying SS. Even Mike Piper hasn’t explained it well. Intuitively, I understand the difference, but it’s hard to explain to someone.
@@davidperry2725 There is not a ROI on the payment. However, there is a break even point. If there was a ROI, then figure out your life expectancy. If you start this year you would get so much [sum of all payments] (#1). If you wait till next year you will get 12 less payments but more $$ (#2). The ROI is (value of #2/ value of #1) -1. If you die early, it will be negative. If you die later it will be positive but it changes each year you live. Of course its zero on the break even point. Which should be less than your life expectancy if you are of normal health because life expectancy has shifted to being longer since the IRS developed the scheme.
As someone in my 60's, my fear is I'll keep waiting for my Social Security, and that wait will be for nothing, because it will be cut. Every statement says by 2034 they will only be able to pay 80% of expected benefits. Do we think Congress is going to fix that? Why wait to get 124% at age 70, when that may be reduced to 80% of promised, which is only 99.2% of what it would have been at full retirement age? That impending change makes it impossible to accurately decide when to start taking benefits.
Well let’s say you start taking SS at 62 and get $1000/mo then but then it’s cut by 20% in 2034 when you are 70 (and assume no COLAs between now and then). So now after 2034 you just get $800/ mo. That’s down to $9,600/yr from $12,000/year. Now assume you waited until you’re 70 in 2034 to get SS and it would have been $3000/mo but then drops by 20% to $2,400/mo or $28,800/yr. So if in scenario 1 you were collecting that $1,000/mo for eight years before the drop to $800/mo that’s 12,000/yr received or $96,000 over 8 years. But in scenario 2 that’s 28,800/ mo reduced benefits but you will have exceeded that $96,000 + your reduced $800/ mo benefit from scenario 2 in about 6-8 years. So in many cases even with a reduced benefit many are still better off waiting. Throw it in a spreadsheet.
@@asandrik3124 but will I live those 6-8 years? Also it's not practical to take at 62 since I'll still be working. Don't really know when that will stop. There are more variables than just the numbers. But I take your point, one can do some kind of Monte Carlo analysis on it.
As with most decisions in life, “It depends” when apply rules or guardrails. Deferring Social Security can also delay IRMAA payments by keeping you MAGI below the thresholds. Thanks Joe.
I'm taking my retirement at 62, only because I was forced to retire on disability at 57. I'm not married, have no kids. My disability really doesn't affect my longevity. I also have investments and an inheritance.
Great video as always. Your points resonated very well with me with the exception of two. One was the use of a fixed rate when calculating withdrawals. My thinking is that a bucket strategy mentality on a portfolio helps to soften the dynamics of the market, which gives some credence to using an average approach when looking at overall portfolio performance. I much appreciate your videos, thanks.
On social security, I've run and stress-tested plans where I collect at 62, 67, and 70. Collecting at 62 works out better than 70, but not by much. Maybe there's something unique about my situation? I've been fortunate in my career and investment decisions, making social security less critical in my plans.
@@joekuhnlovesretirementPensions help a lot. I am fortunate to have two pensions. One from the military and the other from the corporate world. Also, being wise with my spending and investing has allowed me to retire in my 50s.
My pet peeve is people say that you should never retire. But I can assure you that they have not been a boilermaker or Ironworker welder as I have been for over 40 years. I can't wait until next year when I turn 65 to retire. The main reason I have not done so earlier is because I need the Medicare at 65.
Personal finance and retirement income are basically a function of math. If you have enough retirement income based on the math then retire at 62 or 65. However, math does not care what kind of work you did and for how many years, it only cares about the numbers. Some people should never retire because the math does not work for them.
Go ahead and retire, but the point is : then do something different that you enjoy for purpose instead of for income Maybe a little part-time fabrication business or maybe something completely different but Sitting around being sedentary will be harder on your body than welding was - former carpenter
I believe in having a financial advisor for me personally. There are so many different things to invest in and honestly I have no idea what a lot of those things are. I don’t want to risk blowing my money on bad decisions because I was to proud and thought I could do it myself.
I took SS early because of cash flow. I don't really need the money now and when RMDs start, for sure I won't need it. So I take the SS money now and give it to my kids and charity. When you're a hitchhiker in life, do you really turn down a ride because a better ride is on the horizon?
Advice that fails to contemplate unique circumstances is generally bad advice. If retiring early were as easy as most people try to explain it to be, then everyone would do it and there would be no need for channels like ours. The fact is that everyone’s circumstances are unique, and thank you for recognizing that. Keep up the great content and perspective.
What's interesting/puzzling to me, is that Ficalc tells me I would get more if I took Social Security at 62. I'll probably wait anyway, but it still puzzles me. I have a large amount in my brokerage account, and don't have huge expenses, so maybe taking Social Security would allow my brokerage account to grow unfettered. I think I may just have to learn to spend more, which is hard to do when you're used to doing nothing but saving. By-the-way, the best definition I ever heard of for happiness came from Alfred Hitchcock. I saw him say in an interview that happiness is a clear horizon.
If your savings exceed critical mass, it would trigger that. Simply that means the person is already projected to pass with a balance of unused savings.
One piece of advice is set up your retirement like you are going to live forever. My dad was a doctor and couldn't wait to hang it up at 65. He set up his retirement drawdown with the expectation he would live 20 years. Well, guess what? He's 94. If he had worked just one more year or drew down1% less each year, he would probably be fine. Instead, he's trying to make do with social security.
I think delaying SS just depends really.. Also to the people saying you can't change your mind once you take SS, I don't believe that is true. You can pause or stop it within a year if you decide it was a bad idea I believe. It's almost like taxes, sure delaying it might be a lower-risk return estimate, but at the same time if you risk potentially losing all your investment portfolio and the return on the investments would be greater, even at a lower return (5-6%), then it's hard to justify not taking SS at that point. Like you've said (quoting Josh S.) once you've won the game stop playing.. If you can take SS early and it makes sense with your investment portfolio to have your desired income each year, I really don't see any issue with taking SS earlier, but it's all a math equation similar to tax planning.
Everyone that I hear suggest what a great investment it is to take Social Security later and use the longevity reasoning, should also talk about WEP and GPO. If you are affected by either of these , one needs to understand how these rules work. I have a small state pension as a teacher and the GPO rule will leave me with no survivor benefit if my wife passes before me. Scenario, she waits until 70, but gets cancer and passes at 70, my survivor benefit will be $0 and all the taxes she paid will be for nothing. Instead, take as early as possible and invest (very easy to get 8% return). WEP also applies in my case as well, having worked 10+ years in the private sector, my social security is cut by 50% due to my pension that is just barely over the threshold. These rules are in place to make sure that someone in my situation is going to live as close to the average social security recipient as possible, it is not a system that returns what a household/person contributes. Moral of the story become a student of investing and figure out what works for you.
yes I agree these videos are game changers for real but one needs to work with an expert if you want to make sufficient passive income.. Imagine investing 200k and getting 5% profit, thats too low when people are raking up big amounts with the same exact capital.
this is accurate! despite having no prior investment knowledge, I made about a million last year just by working with an expert.. people don't know how much it helped to outsource
I’m going to retire next year at 65. Also seeing a financial planner next month. Who knows what the future will hold especially with the current administration
I use an AUM for a couple of reasons. First, he did a magnificent job in the accumulation stage and seems to be even better in the retirement stage. Second, I have witnessed a couple smart guys do some really financially stupid things later in life. Loved the two definitions of happiness!
I like the RONCO system of set and forget it. Go home with the girl that you brought you. I was conservative with investing while working. I never needed to make any adjustments going into retirement. For sure I missed some gains while working, but I slept well at night.
@@donnymac575I don’t agree with that. We actually own both, lol. Our timeshare has been great which I know is rare, and I would advise great caution in buying one. But, just like an annuity there are situations when they make sense and can provide value. Our timeshare came with 20 years of free skiing, and we have had tremendous vacations both there and at resorts we traded into. The cost has been quite reasonable. We bought a modest amount of QLAC annuities starting in early 80’s, primarily to protect the widowed spouse. No regrets. It allows us not to worry about “running out of money” and we are planning on spending down nearly all of our portfolio by age 85. Maintaining a portfolio after age 85 to cover ongoing needs would lead to substantial assets remaining at death, which is not our goal.
Not sure if the advice I heard was good or not. I can't figure out how to model it in NR. Advice was regarding drawdown order. Advised taking money from tax deferred accounts first, paying taxes as you go and leaving Roth and taxable accounts till later in retirement. What do you think Joe? thanks from Cave Creek AZ
@@joekuhnlovesretirement great point. I'll check that out. NR defaults to the tax deferred accounts first. It makes it hard to run a scenario when you can't control the account order of the spend downs. Thanks again Joe for all your amazing work!
Good subject and I agree with each point!! You touched on it with the 4% rule but how about the thought one can withdraw 8-12% based on S&P returns but not thinking about the downside risk!
I retired 7 1/2 years ago. My wife retired two years later also at age 62. To date we have not touched a dime of our retirement savings. We are having zero issues living on nothing more than our Social Security. What's our secret? Simple, we retired debt free. Just remember it matters more how much you own than it does how much you have. It's a simple plan. Take care of your debt before you retired and eliminate money worries after you retire.
Only if a good amount of folks do what you teach, just imagine how many millionaires we already have or will have in the future. I have been looking at similar opportunities. As Warren Buffet noted, he has witnessed this occur frequently. Never did my husband and I make more money than others in the middle class. With a $250k stock portfolio, we intend to retire at age 58. Never have we ever sold even one share of stock...
Great channel and great info… Thanks. Joe, you always mention running your plan with others. How do you find people that would be willing to help out. The only exposure I have is to FPs that basically want to take everything over and charge a quarterly commission. I’m not sure how to develop group or network of people to talk with. How did you do it?
When you say SS is an “asset” that grows X percent, have you crunched the discounted cash flow? You have to use less years as you use higher cash flows.
I ignore the vast majority of RUclips videos on this type of content - there are lots of fools out there and lots of spam videos and spam in the comments - I watch your channel and three others ( all UK based) and thats all I need. The 4% rule is extremely dangerous.
I'm not sure I've heard a good argument why the 4% rule is extremely dangerous. That statement in of itself is dangerous. Bengen does 4.7% withdrawal in his retirement. The last I checked, 4.7% was higher withdrawal and more agressive than 4%.
I really liked so I subscribed. I like advice from a regular person not trying to sell me something. At this point, if you don’t have at least some grey hair, I am not going to listen.😂😂
For me I see a few people on youtube have a single retirement plan that they say will fit all. Different people have different situations that require a different retirement plan. For example when to take SS is a big one. There are many reasons one will take SS at 62 or Full Retirement Age or at 70. It depends on your personal situation.
The whole different situation require different plan is a marketing gimmick from a financial advisory industry that wants you to pay them. Your retirment plan comes down to basic math. As far as when to take ss, I take the govt's perspective: the govt is willing to pay more the longer you wait, because the govt knows it will pay less. So, I'll take ss at the earliest possible gate.
@@hanwagu9967 I disagree. There are lots of reasons why you should take SS at different times. In my case I want to protect myself from having all my eggs in one basket, the stock market. If you take SS at 62 you will get a smaller amount and will need to rely more on your investments. If you take SS at 70 you will get the max amount and will need to rely less on your investments. So taking SS at 70 will help protect me from a long down stock market. Some will say but if the stock market does well it would have been better to take SS at 62. True but I do not care about making the Max return I want to protect myself from a down market. I am not saying everyone should take SS at 70 but rather look at your entire plan and make a decision on your situation.
Yeah right. They must mean to all the people that can afford it. I know so many that tried to retire early with no savings, pensions, 401k's. Or just complete boredom they had to go to work to survive. To each their own I guess.
i'm pretty sure they aren't telling "you" you are a fool for not taking ss at 62yo. The normal argument will be based on the break even point, which is a strong argument for taking ss at 62yo rather than waiting. In contrast, basing an argument that waiting is the same as earning a rate of return of 7%+ for doing nothing but waiting is a bit misleading, because you aren't earning that rate of return while you are waiting and you get zero if you die before you cash in and you earn less if you die before break even. The question isn't why do the YTer financial experts care, the question is why you care enough to watch and listen to YT financial experts?
The retirement police rely on an outdated definition of retirement. That’s why they insist you’re not allowed to monetize your productivity, otherwise you’re not retired. Volunteer to look after the grandkids and you should be okay, however you must refuse compensation to retain retirement status. I don’t pay myself for doing housework or yard work, so I think I’m good.
Money is a store of value. Currencies loose value. Money is not currencies. Trying to retire at 50. Building an off grid cottage for retirement. Utilities always go up. I see too many that didn't plan for inflation. 250000 in 20 years at average inflation isn't much. inflation at 2% a year means currencies devalued by 40% in 20 years. Real estate when most pay 2% or more property tax. Agricultural tax exemptions really cut that 2% property tax down in most states. Get out of debt then save for retirement. Realize currencies loose value and everything will cost more in the future. That's my advice.
I turn 72 on Saturday. I started my own company when my employer closed in January. I will not sit still. I service commercial heating and air conditioning equipment on commercial roofs. I take three missionary trips to second and third world countries every year. My Goal is to serve God by serving others. I have no debts and pay no interest. I do not react to the markets. I do not listen to fear mongers who sell insurance instruments. Be healthy, be happy, and be of service.
The inflation is there for social security whether one takes it earlier or later. So that's not a factor. If one is living primarily off one's IRA, taking SS early allows one to leave that money in the IRA, growing tax free. Taking that into account, even if it grows at a conservative 5%, the break even point becomes age 92 or so. Also, taking less out of the IRA mitigate sequence of return risks. Also, SS is taxed at a lower rate. Only 85% is taxable, and it isn't taxed at state level in most states. Add in the devaluation of the dollar over time, and the real break even age is closer 98 or well into 120s if IRA grows more. Then add in that SS may not even be solvent by 2033, and I'll take the bird in the hand, thanks.
Your other 8 points were spot on. Also, I should add that if one's pension and other sources of income are already covering all living expenses, or the survivor's benefit is something one will be relying on, then it may make sense to wait on SS.
-------------------------------------------------------------
*_PLEASE STOP USING Spreadsheets!_** It falls way short optimizing every retirement factor*
Retirement Tool Link I reference and use and recommend -- New Retirement. Free 2 week trial. $120/yr after. You will buy this after trying (I have purchased for 3 years).
www.newretirement.com/?nr_product=NRC&nr_a=35&nr_medium=affiliate&
--------------------------------------------------------------------
*Need a CFP to create your retirement plan for a one time fee?* My Recommendation: Neil Fortwendel (812) 471-2492. Neil created my plan. Plan updates as you wish for a smaller fee. Check Neil out on Facebook and LinkedIn.
----------------------------------------------------------------------
*DO NOT GO IT ALONE!!!!!!!*
*Money Pickle - FREE! use link to set up a FREE 45 minute dialog with a Financial Advisor*
No obligation. Get answers to your questions. Get an expert to look at your plan.
moneypickle.com/joekuhn
---------------------------------------------------------------------
*Plant Manager, Maintenance Manager and Career Consulting -- 1 hour virtual via Teams/Cell Phone*
sowl.co/s/bQifp
-------------------------------------------------------------------------
Most Popular VIDEOS
*Health Insurance before Medicare* ruclips.net/video/KPs4RXOOS64/видео.html
*You Cannot retire with these 4* ruclips.net/video/4qlCbfizoaI/видео.html
*2 shocking surprises in retirement * ruclips.net/video/pCDR29HztnQ/видео.html
*15 things you must let go to retire * ruclips.net/video/Hg0nvDeM1X4/видео.html
*My retirement budget* ruclips.net/video/A5PCt_43Ruo/видео.html
* 5 early retirement regrets* ruclips.net/video/9qCbvCF2Swk/видео.html
*this convinced me to retire* ruclips.net/video/cU6qG_xC5CU/видео.html
*Timing of Social Security* ruclips.net/video/UMH4UM3F3Ag/видео.html
*How I fill my buckets* ruclips.net/video/vKMGjb1Myv0/видео.html
*How I document my retirement plan* ruclips.net/video/aYmiXTmZAms/видео.html
*What I have learned from 300 retirement coaching clients: * ruclips.net/video/EqZutxRckUw/видео.htmlsi=dqz8JoLrcpfgjj9t
---------------------------------------------------------------------------
RECOMMENDED FINANCIAL ADVISOR - Assets under Management or one time plan creation
Neil Fortwendel with Northwestern Mutual ph: 812 471 2492
Video by Lean Driven Reliability LLC
This is not investment advice. For entertainment ONLY. Seek professional help to understand your unique situation.
#retirement #retirementplanning #retireearly #retireearlyandtravel #financialfreedom #financialindependence #retirementincome #retirementstrategy #findingpurpose #keto #ketodiet #ketovore #hiit #hiitworkout #healthylifestyle #howmuchcanIspend
Good morning Joe, Retired and I am still getting up at 3:30 am, here in California. There is just something about heading out the door at sunrise for a hike, walk or run.
I’m with you, I love the peace and quiet of early mornings! I’m in Texas so the early mornings are also the most comfortable for taking to dogs out for a walk. I’ve always been happy that my internal clock is set between 3:30-4:00am. Enjoy your walk today!
@@ChristopherEvans-650 retired at 54 and get up every morning at 5. Not quite managing your 3:30 🤣. Love going for runs and walks like yourself. Wish you the best in retirement 👍🏻
I admit that when working I got up to run at 0400. Since being retired I get up at sunrise. It's great to be outside in the daylight.
Joe - subscriber here - “Retirement is the start of a new marathon”. Such great advice. Spouse and I so very much appreciate every piece of content. ADK mountains out.
First, this is one my favorite videos you have done. I agree with a lot of what you said, especially when you say that for some people getting a financial advisor makes sense. I get really tired of seeing people in retirement groups on FB (like New Retirement) shame people for using an advisor. Some people do not have the aptitude or maybe the desire to handle their finances in retirement...and that is okay. They will benefit greatly from the services of a *good* advisor. It is great if one doesn't need that....but there is nothing wrong with someone using one if it fits their wants and/or needs. That is the other thing you kind of spoke of in a couple of different items on your list....one size does *not* fit all. Everyone's situation is different, at least to some degree, and what is right for one may not be right for others. The main thing is to learn a lot and then apply what works for you to your situation. Anyway, thanks for putting out enjoyable content on a regular basis.
"Most of the time, doing nothing is the right action." Now THAT's good investment advice.
And doing nothing is so easy to do 😂
@@BadPhD777 Not psychologically. There is the fear of missing out (FOMO) that you will have to deal with. I've taken action in the past and been happy with it, for a while. A year or two or more down the line, I realized doing nothing would have been better. A lesson typically learned over time is that sometimes the correct decision doesn't initially feel good. What's kind of backward is that outside investing, this usually means actively doing something now that you don't like for future benefit. In managing investments, not doing something that feels correct is sometimes the best choice for future benefit.
I've lost the most money in my portfolio by acting "smart" on news or charts.
@@richarddespres8011 me too. I've quit doing that!
@@dgs8011 sure glad I got out when I did. This market is a dumpster fire!
Unlike some RUclipsrs who give out financial advise with no financial credentials, I appreciate that you state your videos are about your experiences in retirement. Big difference.
🙋♀️absolutely! I can’t believe people take advice from folks who have not planned or prepared for their own lives. They selling this SS early product ,as if it’s one size fits all. They just pushing for views and more buy me a coffee.
Happiness for me is having the CHOICE to do whatever I want to do when I want to do it and not be hindered through poor health or lack of funds. That’s it for me 🙏🏼
KISS
Me as well.
Me also, including being pet-free. 🎉
Great list.
In the ssi, we almost never hear people talk about how taking it at 62 gives us an income limit for 63 and 64.
You’re so right that people need to take a deep long look at their personal situation when deciding.
ssi? Supplemental Security Income? That's SSI to the Social Security Administration.
Good video. One correction on a comment you made about the COLA adjustment. If you defer you can’t add the 3% COLA to the 8% and say it’s 11% because you get the COLA whether you defer or not. You only get a larger COLA on the extra 8% bringing the total to 8.24% (3% of 8% is .24%).
Happiness is reality exceeding expectations and rerirement is a journey/ new chapter. Spot on!
Agreed that health is more important than money
And bad health is one of the most expensive situations
But the main point is most bad health is self induced from a lifetime of sedentary days and standard American diet
A retirement of idle relaxation is a great way to Eradicate, good health once and for all
Another great video, Joe. Thank you for your advice, insights, and for mining the comments for fantastic content ideas. You are making a big difference for all of us out here who are either nearing retirement (me) or already retired. You are a straight shooter and I love your style. I am glad you had a wonderful trip to Alaska with your wife. Alaska is a great place to visit, and for me, work on my current project. I appreciate you buddy!! Joe from Texas, OUT!!
I can always depend on Joe from Texas to comment. THanks.
There’s many bad advice. They don’t consider these issues.
1. Income should take into account Social Security and Pension benefits that can reduce by more than half of current expenses.
2. Roth conversions when your outlook is 10 to 30 years of remaining life expectancy. You’re not going to save that much in taxes when the tax bill on taking the distribution is punishing and won’t make a difference. You only take distributions as you need them at the lowest tax bracket.
3. Advice to run the money down when you’re likely to use the money if you need long term care. You might get a terminal illness or become bedridden and need around the clock nursing care. Yes, you might outlive your money, but that’s better than having no money at all.
4. A spouse that lives longer than you because she is younger and have life expectancy of an additional 10 years. So she will live 20 to 30 years longer after you die.
5. A million to 3 million is not enough. Of course it’s enough, but don’t give contradictory advice like the 4% rule. Actually you should take less money out, not more money. In case you do take more money out, it’s about using the tax laws to your advantage when you’re in a lower tax bracket. Keep the money in cash in case there’s an emergency expense.
Another thing to look out for is FDIC insurance for deposits of conservative family members. I found out that my parents had $800,000 in a local bank that was uninsured. All of their accounts and cd's were titled the same way. They would received $250,000 insurance and the remaining $800,000 was above the insurance limits. After my mom had passed away we realized the mistake. I have 2 siblings and with the help of the FDIC insurance web tool were able to title each CD and account to be covered by deposit insurance. We are not in a banking crisis like in the past, but this bank did have a large loan default on a loan causing bank examiners to intervene.
The personal banker in Nebraska was frighteningly uninformed. When I asked my local banker if his bank reviewed customer accounts to make sure they were able to maximize deposit insurance. He said his bank did not either. Just because the staff is nice and live locally doesn't mean they are looking out for their customers.
Brokerage accounts such as Fidelity, Schwab, Vanguard have SIPC insurance of $500,000 per account.
Hi Joe,
Good list. The one advice IMO that is hallow is reverse mortgage. IMO, they are a pet rock, great as long as you don't use it. Once you do, the negative compound interest eats away about 40 cents on every dollar over time. The premise is that you pay your mortgage for 30 years with interest. In order to access your equity, if you do, you pay a huge penalty due to a negative compound interest. Nuts!
Agree on the consideration to delay SS. THE BIGGEST ADVANTAGE OF DELAYING IS THAT YOU CAN CHANGE YOUR MIND AT ANY TIME. If you take early, changing your mind is not possible!(some minor exceptions).
As to do it yourself retirement, it is possible, but very difficult. Really only for the very few. But, either way you need to educate yourself and learn.
The thoughts about what retirement IS and what makes it work, varies from person to person. We are all different. What works for Joe is not the same as what works for me. But, each of us needs to find what works, and it likely is not the same as you imagined before retiring. Life definitely is a journey, and that includes the retired years. Which way you go will affect how it goes, but you CAN change your direction at any time to get to a different place.
We are retired for about 4 years now, and it is better than expected, but not the same as expected! We are often adjusting our short term goals, and reimagining our long term goals. Pretty much the same methods we used while working, since life tends to be a little hard to predict with any kind of certainty.
Yes and no. If you make it to the break even point 78-80 y/o you would have gotten the same amount of money from the feds regardless of weather you started at 62 or 70.
@@clbcl5 my point was just as to how to decide. I’m currently 65 and delaying for survivor benefits and also because my life expectancy is at least average. If my wife or myself get an illness next month that will change our life expectancy, I can start drawing Social Security the month after if it makes sense.
Both my parents claimed at 62, and both made it to 86, and mom is 88. They lost a lot of SS by taking early! Mom has a small check and is poor.
@@randolphh8005 And mine was that a lot of people think delaying equals more money when it is only bigger checks. Delaying is fine if you have an alternate source of income. I chose early and it all is in an s&p 500 account. Our spending comes from my wifes job.
@@randolphh8005 How much do you pay your FA and how do you know he is not double or triple dipping.
@@whatsup3270 I’m no longer using one, but I have in the past. The problem is that the average retiree is not able to handle their own investments. Paying for good advice is not cheap, but doing it on your own with no knowledge usually costs even more. I have nothing against people doing it on their own if they have the aptitude, education and focus.
I used to work with the elderly in my career. Many of them were not capable of handling their own investments, especially at advanced ages. Obviously some got hooked up with unscrupulous advisors, but keeping your money buried in the back yard doesn’t work either. I also know of several men who did their own investing, died and left minimal to no information for their spouses.
So on average I would recommend an advisor.
So many variables, married, single, lifestyle, location, health etc.
I love this list. Probably my favorite Joe video, yet. You covered all the good ones, but I’ll add one that may not be list-worthy. “Take a part-time, stress free job in retirement to supplement your income.” Where are all these “stress free” jobs for seniors??? Working at Home Depot? Walmart? Other retail? Substitute teaching? That’s a laugh. Stress free jobs are one in a thousand. No thanks.
Great add. There is NO SUCH THING!
If I gotta get up and go work, I'm going for the money.. no such thing as stress free..these entry level customer service gigs are the farthest thing from stress free having to deal with the public entitled clowns all day long
You know what you call a stress free job? A hobby.
All 9 of these are correct...and incorrect.
Retirement, planning and execution, is different for every individual/couple. Our retirement goals are vastly different from most. That doesn't mean we are "right." It means we are right for us.
We bought 13 acres in 2019, remodeled the house, and moved in February of 2020, just as Covid hit. I retired in July.
We set our income needs at exactly the amount we were bringing home when I retired. It worked out to slightly over 4% of our invested assets,but not close to 4% of our total net worth.
We hunt and fish. We raise about 75% of our own food. Beef, pork, and chicken we raise here. We have venison and fish from our own property. This is what we enjoy. It takes care of our physical and mental health because it requites daily work to keep up a farm with livestock. I'd go bat-crap crazy sitting in a condo at the beach or downtown all day.
That's right for us, but it's not for everyone.
I took SS at 62 and my wife is planning to begin at age 70. She has a longer life expectancy than i have and our SS benefits are virtually the same. None of my forebears have lived past 8, while both of her parents are close to 90 now.
The 4% rule is a guideline, and actually an excellent planning tool. Like you said, I don't know anyone who actually uses it as their retirement plan, but it's a good starting point.
Much of the retirement advice on RUclips is just financial planners doing math with a spreadsheet. Hell, I can do that for free.
I'm good at math. Very good. Let me solve the retirement equation for you, and make it so everyone can understand.
A= Life Expectancy
B= Inflation
C= Market returns
X= Healthcare costs
Y= Amount saved for retirement.
Z= Social Security
The only given is Y. You can know how much money you save. Even your SS figure isn't a guarantee, because Congress can change that.
There's no real solution to a math problem with one given and 6 variables, at least not a simple solution. If you knew how long you were going to live or exactly what market returns will be, or what inflation will be, then you could give an actual mathematical answer. Having even one confounding variable makes any results unreliable.
I have a friend who does all of his own planning and another who has a big chunk in an incone annuity. Who's right and who's wrong? I use a financial advisor for most of our invested funds because I'm not knowledgeable enough to keep up with it. I gladly pay the fee because I have no interest in looking at the market daily.
We really uave np worries about running out of money because we were big savers on good incomes. We saved for our retirement, put money aside to get 4 kids through college, paid cash for our home that we now rent, bought our farm with cash, bought a larger farm with a friend, and had zero debt after age 50. I still watch RUclips videos about retirement and i always pick up a tidbit I can use.
Well said. You can solve for life expectancy by planning to 100. SS is not needed by everyone to accomplish that. 2 more variables solved.
Market returns buy 10,20,30 year bonds. 3 variables solved
No stock exposure no market risk. 4 variable's solved.
TIPS and deferred SS payments. Inflation risk reduced but not solved.
Amount saved for retirement solved which by default also solves healthcare costs. Done.
Great summary Joe, but a couple comments:
1. While social security amount grows by 7% a year, by taking earlier, you get the compound effect of the returns on the total amount accumulated…generally the “crossover” occurs at around 82 years. Live longer, you would be ahead, expire earlier you’d be behind (by taking early). I’d say if you must rely heavily on SS to make your plan work, delay as much as possible,, but if it’s more just “icing on the cake” take earlier
2. 4% rule. I agree very few would live by this rule in practice, but at the end of the day, everyone must be comfortable with some “rule” to decide to retire. What was the rule that helped you decide? Ie take your retirement fixed income sources - well thought out expenses = differential. How much of a nest egg percentage wise is a good rule of thumb for withdrawal rate to make up that differential, and what assumptions on market returns and inflation rate to use? These are the “Big 3” in my opinion…there’s a video idea for you!
Regarding #1, you could also lose money on the amount you're investing if collecting at 62.
@jeffs3627 You can invest your SSI money into CDs, treasures and munies. At current rates you can lock in anywhere from 4.5% to 5%+ depending on the duration/ maturity (treasury bills and intermediate bonds are especially attractive). For liquidity, there are high yield savings and money market accounts that also would currently give you 4.5%-5% annualized yield.
That's a 7% RISK FREE rate.
Timing is everything and all luck.
@@fargoaerials3456 It’s not a rate of return, it is an increase to make up for the money you didn’t get! I’m planning on 70, because I like the idea of a higher check for longer, and the survivor benefit, but I know I’m gambling on having longevity for me or my wife. The money has more value to me in old age than now, and it is good insurance. However there is no ROR unless you live well into your 80’s.
Yes, when to take SS is different for everyone. However, if SS is your only source of income in retirement, you’ve already messed up. I like Dave Ramsey’s advice of taking it early and investing it. Why miss out on 5-8 yrs of payments?
Approaching 70, you are now entering your slow-go and no-go years. And, unless Congress does something, SS may be cut by 20% starting in 2035.
Lastly, a lot of people don’t know this, but you can withdraw your SS application within the first year, but you have to also return any payments you received.
Take Social Security early only if you need it. Good things come to those who wait $.
One bird in your hand is better than two in the bush.
I’m single and don’t need the SS income to fund my retirement. I’m taking SS at 62 to invest it. That guaranteed increase plus bump for inflation is just a number on a piece of paper. As the other poster said, a bird in hand is worth two in a bush. Even Joe recognizes this for certain single retirees.
I remain invested 100% in USA market level ETF stock at age 70, 12 years retired now. IMO, I am in the highest return, and least risk area. How? I reverse the 'sequence of returns risk' by a selling plan based upon 10% trigger points. Using this logic based formula, it forces me to sell at certain points. In this manner, you are reaping the sequence of gain opportunity. I sell one year of expenses at every 10% price gain. In a super year, I may put 3 years worth (30% stock gain) of cash in the money market. In the unusual event I find my cash balance low and having to sell, then I sell 'one month worth' of cash needs 2 weeks before I need it. In this manner, I mitigate the loss on these sales. I average 10% gains on the stock, 1.2% dividend, 17% standard deviation and 0 advisor fees. IMO, this beats the 7 to 8% social security planned increases, so I went at 62 for my social security.
Well articulated. That is a very sound approach and solves problems for people who don't understand how to use any of these bucket or rebalancing systems. You've got a good solve.
Super video! Some folks are cut out to be DIY, some will not even consider it based on their own personal skill set. I have a request for you. When you add your tag line "This is Joe out", could you pause for two extra seconds at the very end? This will allow me to hit pause so that I may read the comments before the end of video ads kick into gear.
Nice advice
Arthur Thomas Ware did a video recently about , retiring early on modest income. The best video I’ve ever heard on the subject.
For me, an early retirement will be 30-33 hours work week in my 40's, 50's, and 60's, and enjoying my 3-4 day weekends.
I've taken out a fixed 4% of the total of my account (at that time) for the past 2.5 years. I have not had to adjust it for inflation, nor have I increased it due to my balance getting larger over those years. It's the same monthly auto-deposit as it was 30 months ago. Has been working well for me.
Happiness is a choice. Let nothing take your happiness. Planning is my wish list. What happens is God's gift to me.
We each purchased fixed, immediate, annuities a year ago on just for a portion of our portfolio. Yes, it is kind of a crap-shoot whether it pays off in the end vs investing everything in the market. For us, it is there for sequence-of-return risk mitigation because we have a slow ramp up in retirement income over the next decade.
Retiring end of the year, 63.5 , my plan is to hold off till least 65 for my SS. Not sure if I will even take it then. Have my budget set without taking it.
I've been watching a ton of retirement advice on RUclips lately, but it's hard to know what's actually good advice.
Me too! Some of it seems too good to be true, or just plain unrealistic.
Exactly. I've seen some people on RUclips claiming they're going to retire early by investing in cryptocurrencies or something. That sounds risky to me.
Well, early retirement is very possible.
Have you thought about working with a financial advisor? work better for you in retirement and plan for unexpected expenses. It might give you more peace of mind and help you enjoy your retirement more. Best wishes!
You're absolutely right about the importance of having an advisor, especially for retirees. As a businessman, l've worked closely with my advisor, who expertly managed my portfolio, growing it from $200k to $1.8 million through stock trading. Despite the stock market's current instability, she continues to make profitable trades. This has given me the confidence to take charge of my financial future without relying solely on government support for myself and my family.
I sure was glad to hear your second point. I've been twisting my brain over which withdrawal method is best since they all have positives and negatives. Even though I should have more than I need, it's been making me crazy.
I'm 4 years into retirement.
This year I started selling some IRA shares in June and July to build up cash in the IRA.
Based on my years of DIY investment experience since 1987, everything has loaded up a market crash.
Cash is king at the highs and at the lows.
I'll start buying when an S&P 6-month chart looks like yesterday's 5-day chart.
Stocks are back up today, but most likely from rookies who are buying at 'the lows'.
The annuity information is helpful. I didn't know the annuity does not keep the dividend payouts from corporations. Also, you need to be aware of surrender charges when exiting annuities.
A small annuity with extras can be helpful for supplementing income on top of social security particularly in times when the market has downturns, and later in life when you don’t have the timeline for recovery. It should be part of an overall plan, not your only plan. You need to be able to resist high pressure tactics though.
Great video Joe, especially on the first two items. I see so much bad advice on RUclips, especially about taking Social Security early. One Size Does Not Fit All. Everyone needs to evaluate their own financial conditions and circumstances.
Your video is certainly timely for me. I'm thinking of retirement in several years but its the financial aspect that really has me concerned. Your video has given me a lot to think about and I need to start think about a plan. I think to start I am going to look the Retirement Tool you mentioned.
You can do it!
Retirement should be a gradual transition. Our society does not accommodate that however.
The problem is the health care issue in the US. I wish this was an easier solve.
I don't intend to retire. It will just be a different phase of this life.
🎯
Managing sequence of return risk, IMO, is the most easily ignored aspect of a model. It is especially dangerous if you have not locked in returns the year you retire. Lock in the returns and I think you should run a conservative play the first 5 to 8 years of your retirement and maybe dip your toes back into more stocks, for example, after you have kickstarted the TVM equation.
Comparing the increase of SS by waiting to growth rates of S&P growth is comparing apples to oranges. They just ain't the same concept. But I agree with your position on this. My income varies way too much to even use a 4% rule. Right now I'm in a lull between before SS So I have to spend more now from the IRA/savings and less after I start receiving SS. Retirement is the beginning of your next journey, don't waste it.
I find it impossible to articulate the difference between a 7.5% ROI, and the 7.5% you pick up annually for delaying SS. Even Mike Piper hasn’t explained it well. Intuitively, I understand the difference, but it’s hard to explain to someone.
@@davidperry2725 There is not a ROI on the payment. However, there is a break even point. If there was a ROI, then figure out your life expectancy. If you start this year you would get so much [sum of all payments] (#1). If you wait till next year you will get 12 less payments but more $$ (#2). The ROI is (value of #2/ value of #1) -1. If you die early, it will be negative. If you die later it will be positive but it changes each year you live. Of course its zero on the break even point. Which should be less than your life expectancy if you are of normal health because life expectancy has shifted to being longer since the IRS developed the scheme.
As someone in my 60's, my fear is I'll keep waiting for my Social Security, and that wait will be for nothing, because it will be cut. Every statement says by 2034 they will only be able to pay 80% of expected benefits. Do we think Congress is going to fix that? Why wait to get 124% at age 70, when that may be reduced to 80% of promised, which is only 99.2% of what it would have been at full retirement age? That impending change makes it impossible to accurately decide when to start taking benefits.
Well let’s say you start taking SS at 62 and get $1000/mo then but then it’s cut by 20% in 2034 when you are 70 (and assume no COLAs between now and then). So now after 2034 you just get $800/ mo. That’s down to $9,600/yr from $12,000/year.
Now assume you waited until you’re 70 in 2034 to get SS and it would have been $3000/mo but then drops by 20% to $2,400/mo or $28,800/yr.
So if in scenario 1 you were collecting that $1,000/mo for eight years before the drop to $800/mo that’s 12,000/yr received or $96,000 over 8 years. But in scenario 2 that’s 28,800/ mo reduced benefits but you will have exceeded that $96,000 + your reduced $800/ mo benefit from scenario 2 in about 6-8 years.
So in many cases even with a reduced benefit many are still better off waiting.
Throw it in a spreadsheet.
@@asandrik3124 but will I live those 6-8 years? Also it's not practical to take at 62 since I'll still be working. Don't really know when that will stop. There are more variables than just the numbers. But I take your point, one can do some kind of Monte Carlo analysis on it.
@@fredfinger7092of course no one knows the day, if we did then it’s a simple math problem! 👍🏻🤔🤣.
Having a great CPA is a must..
As with most decisions in life, “It depends” when apply rules or guardrails. Deferring Social Security can also delay IRMAA payments by keeping you MAGI below the thresholds. Thanks Joe.
Nice car!
I'm taking my retirement at 62, only because I was forced to retire on disability at 57. I'm not married, have no kids. My disability really doesn't affect my longevity. I also have investments and an inheritance.
Great video as always. Your points resonated very well with me with the exception of two. One was the use of a fixed rate when calculating withdrawals. My thinking is that a bucket strategy mentality on a portfolio helps to soften the dynamics of the market, which gives some credence to using an average approach when looking at overall portfolio performance. I much appreciate your videos, thanks.
On social security, I've run and stress-tested plans where I collect at 62, 67, and 70. Collecting at 62 works out better than 70, but not by much. Maybe there's something unique about my situation? I've been fortunate in my career and investment decisions, making social security less critical in my plans.
good chance. Having a pension or a ton of fixed income assets helps.
@@joekuhnlovesretirementPensions help a lot. I am fortunate to have two pensions. One from the military and the other from the corporate world. Also, being wise with my spending and investing has allowed me to retire in my 50s.
My pet peeve is people say that you should never retire. But I can assure you that they have not been a boilermaker or Ironworker welder as I have been for over 40 years. I can't wait until next year when I turn 65 to retire. The main reason I have not done so earlier is because I need the Medicare at 65.
Personal finance and retirement income are basically a function of math. If you have enough retirement income based on the math then retire at 62 or 65. However, math does not care what kind of work you did and for how many years, it only cares about the numbers. Some people should never retire because the math does not work for them.
Go ahead and retire, but the point is : then do something different that you enjoy for purpose instead of for income
Maybe a little part-time fabrication business or maybe something completely different but
Sitting around being sedentary will be harder on your body than welding was
- former carpenter
I believe in having a financial advisor for me personally. There are so many different things to invest in and honestly I have no idea what a lot of those things are. I don’t want to risk blowing my money on bad decisions because I was to proud and thought I could do it myself.
Go S&P 500 in your 401K until you’re about 10 years from retirement and then pay a fee only advisor to plan out your retirement choices.
I took SS early because of cash flow. I don't really need the money now and when RMDs start, for sure I won't need it. So I take the SS money now and give it to my kids and charity.
When you're a hitchhiker in life, do you really turn down a ride because a better ride is on the horizon?
Advice that fails to contemplate unique circumstances is generally bad advice. If retiring early were as easy as most people try to explain it to be, then everyone would do it and there would be no need for channels like ours. The fact is that everyone’s circumstances are unique, and thank you for recognizing that.
Keep up the great content and perspective.
Thanks buddy.
What's interesting/puzzling to me, is that Ficalc tells me I would get more if I took Social Security at 62. I'll probably wait anyway, but it still puzzles me. I have a large amount in my brokerage account, and don't have huge expenses, so maybe taking Social Security would allow my brokerage account to grow unfettered. I think I may just have to learn to spend more, which is hard to do when you're used to doing nothing but saving. By-the-way, the best definition I ever heard of for happiness came from Alfred Hitchcock. I saw him say in an interview that happiness is a clear horizon.
If your savings exceed critical mass, it would trigger that. Simply that means the person is already projected to pass with a balance of unused savings.
Agreed on SSI at age 62. Get that federal money flowing asap. Tomorrow may never come.
Small thinking
Beware of anyone selling a course.
Good one
Thank you for this excellent video! There's a lot of bad advice out there to sort through.
Great video. Being a fellow early retiree, this video provides peace of mind.
Hey there Sabado.
One piece of advice is set up your retirement like you are going to live forever. My dad was a doctor and couldn't wait to hang it up at 65. He set up his retirement drawdown with the expectation he would live 20 years. Well, guess what? He's 94. If he had worked just one more year or drew down1% less each year, he would probably be fine. Instead, he's trying to make do with social security.
I think delaying SS just depends really.. Also to the people saying you can't change your mind once you take SS, I don't believe that is true. You can pause or stop it within a year if you decide it was a bad idea I believe.
It's almost like taxes, sure delaying it might be a lower-risk return estimate, but at the same time if you risk potentially losing all your investment portfolio and the return on the investments would be greater, even at a lower return (5-6%), then it's hard to justify not taking SS at that point.
Like you've said (quoting Josh S.) once you've won the game stop playing.. If you can take SS early and it makes sense with your investment portfolio to have your desired income each year, I really don't see any issue with taking SS earlier, but it's all a math equation similar to tax planning.
You might be required to pay back the money.
@@marilynsue4273 Yes, you will be required to pay back the money.
Everyone that I hear suggest what a great investment it is to take Social Security later and use the longevity reasoning, should also talk about WEP and GPO. If you are affected by either of these , one needs to understand how these rules work. I have a small state pension as a teacher and the GPO rule will leave me with no survivor benefit if my wife passes before me. Scenario, she waits until 70, but gets cancer and passes at 70, my survivor benefit will be $0 and all the taxes she paid will be for nothing. Instead, take as early as possible and invest (very easy to get 8% return). WEP also applies in my case as well, having worked 10+ years in the private sector, my social security is cut by 50% due to my pension that is just barely over the threshold. These rules are in place to make sure that someone in my situation is going to live as close to the average social security recipient as possible, it is not a system that returns what a household/person contributes. Moral of the story become a student of investing and figure out what works for you.
5.5 for me, too. I wish I had retired at least a year earlier. In retrospect I could have. Even two.
I take 2%, and it's been fantastic ❤money makes money......let it grow.
Your videos have been a game changer for me. Thanks for another great one.
yes I agree these videos are game changers for real but one needs to work with an expert if you want to make sufficient passive income.. Imagine investing 200k and getting 5% profit, thats too low when people are raking up big amounts with the same exact capital.
this is accurate! despite having no prior investment knowledge, I made about a million last year just by working with an expert.. people don't know how much it helped to outsource
Excellent job Joe
I’m going to retire next year at 65. Also seeing a financial planner next month.
Who knows what the future will hold especially with the current administration
I use an AUM for a couple of reasons. First, he did a magnificent job in the accumulation stage and seems to be even better in the retirement stage. Second, I have witnessed a couple smart guys do some really financially stupid things later in life. Loved the two definitions of happiness!
I like the RONCO system of set and forget it. Go home with the girl that you brought you. I was conservative with investing while working. I never needed to make any adjustments going into retirement. For sure I missed some gains while working, but I slept well at night.
Somebody's up early today. Good one Joe.
Secret: I time release my videos when more people are watching.
Getting an annuity sounds like buying a timeshare.
@@donnymac575 It’s like getting your own pension, but there’s hucksters, just like financial advisors
@@jayholiday256 which usually ends the day you pass, even if that was only a few years later.
@@whatsup3270 not always, you can get joint life with a 20 year period certain that would pay beneficiaries in case of early death
@@whatsup3270 Just like social security... Don't claim it , dirt nap early , no money for you
@@donnymac575I don’t agree with that. We actually own both, lol. Our timeshare has been great which I know is rare, and I would advise great caution in buying one. But, just like an annuity there are situations when they make sense and can provide value. Our timeshare came with 20 years of free skiing, and we have had tremendous vacations both there and at resorts we traded into. The cost has been quite reasonable.
We bought a modest amount of QLAC annuities starting in early 80’s, primarily to protect the widowed spouse. No regrets.
It allows us not to worry about “running out of money” and we are planning on spending down nearly all of our portfolio by age 85. Maintaining a portfolio after age 85 to cover ongoing needs would lead to substantial assets remaining at death, which is not our goal.
Wow great video Joe, appreciate this!
Yeah the next 10 years looks like a shit show. God help us.
This was very encouraging. Thanks for sharing it.
Not sure if the advice I heard was good or not. I can't figure out how to model it in NR. Advice was regarding drawdown order. Advised taking money from tax deferred accounts first, paying taxes as you go and leaving Roth and taxable accounts till later in retirement. What do you think Joe? thanks from Cave Creek AZ
Good basic direction. I also can see my RMD years which drive Roth conversions due to tax brackets
@@joekuhnlovesretirement great point. I'll check that out. NR defaults to the tax deferred accounts first. It makes it hard to run a scenario when you can't control the account order of the spend downs. Thanks again Joe for all your amazing work!
Good subject and I agree with each point!! You touched on it with the 4% rule but how about the thought one can withdraw 8-12% based on S&P returns but not thinking about the downside risk!
Very good video again Joe! From Sainte-Cecile de Milton , Quebec, Canada 🇨🇦 🥳🥳🥳
I retired 7 1/2 years ago. My wife retired two years later also at age 62. To date we have not touched a dime of our retirement savings. We are having zero issues living on nothing more than our Social Security. What's our secret? Simple, we retired debt free. Just remember it matters more how much you own than it does how much you have. It's a simple plan. Take care of your debt before you retired and eliminate money worries after you retire.
Wise
Only if a good amount of folks do what you teach, just imagine how many millionaires we already have or will have in the future. I have been looking at similar opportunities. As Warren Buffet noted, he has witnessed this occur frequently. Never did my husband and I make more money than others in the middle class. With a $250k stock portfolio, we intend to retire at age 58. Never have we ever sold even one share of stock...
@@DE-Burrows
Retirement planning means preparing today for your future life so that you continue to meet all your goals and dreams independently.
Great channel and great info… Thanks. Joe, you always mention running your plan with others. How do you find people that would be willing to help out. The only exposure I have is to FPs that basically want to take everything over and charge a quarterly commission. I’m not sure how to develop group or network of people to talk with. How did you do it?
Ask a friend you’ve known for 10 plus years that likes to study. Everyone wants such a group but no one likes to make the first move
Joe, great video and points. Wondering if all the folks in your retirement group use New Retirement software? Many thanks from Cave Creek AZ
2 of 3 use NR.
When you say SS is an “asset” that grows X percent, have you crunched the discounted cash flow? You have to use less years as you use higher cash flows.
I ignore the vast majority of RUclips videos on this type of content - there are lots of fools out there and lots of spam videos and spam in the comments - I watch your channel and three others ( all UK based) and thats all I need. The 4% rule is extremely dangerous.
I’m honored. Thanks. Be sure to suggest content
I'm not sure I've heard a good argument why the 4% rule is extremely dangerous. That statement in of itself is dangerous. Bengen does 4.7% withdrawal in his retirement. The last I checked, 4.7% was higher withdrawal and more agressive than 4%.
Retirement planning means preparing today for your future life so that you continue to meet all your goals and dreams independently.
Love this video! One of your bestest!
Excellent video. Hope you get lots a viewers on this one!
I really liked so I subscribed. I like advice from a regular person not trying to sell me something. At this point, if you don’t have at least some grey hair, I am not going to listen.😂😂
Thanks for the sub! I wish I had more hair of any color
@@joekuhnlovesretirement lol you look great.
I'm making around 10% interest on my divided stocks. My only problem is I can only put a couple hundred a month into them.
So to be happy, I should just have low expectations. Sounds easy enough.
"Proper" expectations is a better way to put it.. 😊
Helps your income in retirement too
For me I see a few people on youtube have a single retirement plan that they say will fit all.
Different people have different situations that require a different retirement plan.
For example when to take SS is a big one.
There are many reasons one will take SS at 62 or Full Retirement Age or at 70.
It depends on your personal situation.
Yes. A major factor is having a pension. Hard to compare actions of someone with a pension to someone without.
The whole different situation require different plan is a marketing gimmick from a financial advisory industry that wants you to pay them. Your retirment plan comes down to basic math. As far as when to take ss, I take the govt's perspective: the govt is willing to pay more the longer you wait, because the govt knows it will pay less. So, I'll take ss at the earliest possible gate.
@@hanwagu9967 I disagree.
There are lots of reasons why you should take SS at different times.
In my case I want to protect myself from having all my eggs in one basket, the stock market.
If you take SS at 62 you will get a smaller amount and will need to rely more on your investments.
If you take SS at 70 you will get the max amount and will need to rely less on your investments.
So taking SS at 70 will help protect me from a long down stock market.
Some will say but if the stock market does well it would have been better to take SS at 62.
True but I do not care about making the Max return I want to protect myself from a down market.
I am not saying everyone should take SS at 70 but rather look at your entire plan and make a decision on your situation.
I ignore all advice on RUclips, entertainment only and there is alot of it.
Great video man.
10. Don't make your retirement side-gig making videos of pretending to steal luggage from airports.
Must be more to this story
I’ve never understood why all of the financial “experts” on RUclips are constantly telling me I’m a fool for not taking SS at 62. Why do they care?
Why do YOU care?
Yeah right. They must mean to all the people that can afford it. I know so many that tried to retire early with no savings, pensions, 401k's. Or just complete boredom they had to go to work to survive. To each their own I guess.
@muskygoss1 if your only source of income is SS..then retiring is a harddddd road
i'm pretty sure they aren't telling "you" you are a fool for not taking ss at 62yo. The normal argument will be based on the break even point, which is a strong argument for taking ss at 62yo rather than waiting. In contrast, basing an argument that waiting is the same as earning a rate of return of 7%+ for doing nothing but waiting is a bit misleading, because you aren't earning that rate of return while you are waiting and you get zero if you die before you cash in and you earn less if you die before break even. The question isn't why do the YTer financial experts care, the question is why you care enough to watch and listen to YT financial experts?
Such a great video; thank you for it!
You are so welcome!
Thank you for your insight.
The retirement police rely on an outdated definition of retirement. That’s why they insist you’re not allowed to monetize your productivity, otherwise you’re not retired. Volunteer to look after the grandkids and you should be okay, however you must refuse compensation to retain retirement status. I don’t pay myself for doing housework or yard work, so I think I’m good.
That's why I retired at 56, to help raise my grandsons. I'd rather be the influence on them as opposed to a daycare.
Thank You.
Totally agree!
Money is a store of value. Currencies loose value. Money is not currencies. Trying to retire at 50. Building an off grid cottage for retirement. Utilities always go up. I see too many that didn't plan for inflation. 250000 in 20 years at average inflation isn't much. inflation at 2% a year means currencies devalued by 40% in 20 years. Real estate when most pay 2% or more property tax. Agricultural tax exemptions really cut that 2% property tax down in most states. Get out of debt then save for retirement. Realize currencies loose value and everything will cost more in the future. That's my advice.
I have been investing for years, I get out at the top and get back in at bottom. You believe that you believe in Santa 🧑🎄
Can’t agree with advice #1. You lose income for the years you don’t collect. It doesn’t make sense.
I turn 72 on Saturday. I started my own company when my employer closed in January. I will not sit still. I service commercial heating and air conditioning equipment on commercial roofs. I take three missionary trips to second and third world countries every year. My Goal is to serve God by serving others. I have no debts and pay no interest. I do not react to the markets. I do not listen to fear mongers who sell insurance instruments. Be healthy, be happy, and be of service.
The inflation is there for social security whether one takes it earlier or later. So that's not a factor.
If one is living primarily off one's IRA, taking SS early allows one to leave that money in the IRA, growing tax free. Taking that into account, even if it grows at a conservative 5%, the break even point becomes age 92 or so.
Also, taking less out of the IRA mitigate sequence of return risks.
Also, SS is taxed at a lower rate. Only 85% is taxable, and it isn't taxed at state level in most states.
Add in the devaluation of the dollar over time, and the real break even age is closer 98 or well into 120s if IRA grows more.
Then add in that SS may not even be solvent by 2033, and I'll take the bird in the hand, thanks.
Your other 8 points were spot on.
Also, I should add that if one's pension and other sources of income are already covering all living expenses, or the survivor's benefit is something one will be relying on, then it may make sense to wait on SS.