Single, 54, condo paid off ($600k), no other debt, $1M in savings (cash, investments). Around $2500/mo expenses. Still work but I’m a dogwalker now. I’m in CA too. $325/mo HOA. Insurance is like $350/yr
This is my situation, single with expected longevity. On past videos I asked why care giving expenses were not included in late retirement. This has not been addressed here, but I know my mother's expenses went up A LOT for non-medical care in her 90s. Nursing home , memory care or other types of home help are not covered by Medicare except after hospitalization for a period of rehab. I care for my mother, who has a pension, investments and Social Security. I can assure you she would have spent all her savings several years ago if she hired caregivers or was in a facility. That leaves SS and pension, but those combined would not begin to cover memory care, which she needs now. Something which concerns me as I have no children to rely upon in my extreme old age.
I agree. This seems to be lacking in these videos. If you had a nice income, you should have done at least SOME travel before retirement. I saw dementia care wipe out a woman well before she died at age 98. Her family took her to Florida, which is the most generous to seniors, but they still had to kick in hundreds per month. Mind you, I think it’s ludicrous for most people to plan on living to 98, unless you are quite vigorous, which this woman was, well into her 70s. If she had remarried, it would have helped. Yes, marriage for economic reasons -happens all the time, no reason to pretend or to hide it.
$5200/month without taxes, insurance, travel or condo fees seems like a pretty high level of expenses. As a single retiree, that seems high to me. Nicely detailed video overall!
Thanks for looking at single retirement. If I were her, I'd stay put and enjoy the community she's created there. One thing you didn't consider in the scenario is that if she did find herself at 90 running out of money, she can sell her home and rent out an apartment for the remainder of her life comfortably.
Thank you, James, for a sample case of a single person in California! Moving away from Paradise is NOT an option for me, so I guess I’ll keep my nose to the grindstone (or whatever that expression is) a while longer!
Thanks James for another very informative video! i always like to seeing case studies especially for a single person and your thought process of consderring all the possible solutions.
I took my IRA money and opened a Self Directed IRA and bought rental properties. I chose NC that has lower home prices and low taxes. Lori could take her $1M and buy 3 rentals (nice newer non fixers in suburban areas) that will NET her $5000-$6000 per month (fully managed turnkey by a Property Manager). Do you ever recommend these types of investments.
Lori, check out NC to retire to. I have a 7,000 sq. foot house that cost me less than your condo in the mountains. Average temperature year round is 74.
Where do you recommend? I am from South Florida and home insurance and new regulations make it ridiculously expensive stay. I love kayaking so near water please with convenience of groceries stores within ~15-20 mins away.
Thank you - This was great - the scenarios with joint tax payers with 3M do not always help me. I’m 60 and have fixed income vehicles to last until 70, plus stock qualified accts.
if I were Lori, I'll just lease the car. the difference between purchase versus lease will remain invested and continue to grow. besides, the car is a depreciating asset anyway. the less is spent on it, the better off she will be.
I made the decision years ago to be a life-long renter in California when I realized I could only afford a condo -- condos give you too many of the downsides of renting without a lot of the upsides of owning.
bingo. For me it's a detached house or I rent. Owning a condo or townhouse is the worst of both worlds, esp in older communities where the community maintenance costs begin to climb.
My monthly HOA went from $340 to $800 last year thanks to Surfside condo collapse in Miami. We also had a $5k assessment and anticipated more to be compliant with the new regulation and insurance. South Florida will force a lot of people out. I was planning on retiring here in few years but looking at relocating now. I feel so bad for all those that retired and are on fixed income. What can they do except borrow from their condo equity if the paid off their condo but since most didn’t so they have lien on their place now 😢
Loved this! James, you are so clear in showing what the plan would look like and some ideas to tweak it. I was thinking that when you suggested working longer, she walked out the door, and you haven't heard from her since then. Seriously, you had lots of great ideas. We're driving old cars and plan to go several more years before replacing them.
How about this. Instead of stressing out over her current job, why don't she just retire and find a less stressful or even a part time job to cover the expenses for the next few years until she's 67 if she wants to remain in California. There is absolutely no rule saying that once you retire, you cannot work anymore. I have seen many retirees going back into the work force because they want to, not because they have to. You adapt to your situation. Also, if the government passes the tax-free SS law, this will also benefit her future retirement.
The AUM (Assets Under Management) fee model does not work for us - we do not need full time babysitting of our investments and plan. We need an initial plan/review and perhaps not even annual, if that, later reviews. That value-add is simply not worth a 1% per year fee either initially or every year. And we do not need, nor want to transfer all our funds to an obscure fiduciary firm utilized by the planner, no matter how safe it is. Seems like there is a market opportunity for a smart planner/firm to, yes, reduce fees per client, but make it up in volume since those clients don’t need or want all the time baby-sitting. Note: we already fully understand “sequence of returns risk”, the trade offs of social security timing, Monte Carlo simulations, and the factors going into Roth IRA conversions, the bucket spending methodology, etc…
Yeah, Florida used to be inexpensive to live in. No longer. Housing is much higher. Homeowners, flood, health and auto insurance are all very expensive in Florida.
In saying that Lori could sell her expensive home in California and buy a cheaper place somewhere else, haven't you overlooked the substantial capital-gains tax that she'd have to pay on the presumably large profit she'd make on the California place if she had owned it for a long time? She's single, so under the federal tax laws, only the first $250,000 of that profit would be tax-free. So if she sold the place for, say, $1 million more than she paid for it -- which is not unlikely in California -- she would owe capital-gains tax on $750,000 of profit.
Let’s say her cost basis is $500,000 and she sells it for $1,500,000. The cap gain tax would be $187,500 (assuming 15%Fed, then State and other taxes). Not too bad on a $1.5 million sale. She could probably replace that condo in other areas of the county for half that. Unless she is tied to California, of course.
I think i saw in the numbers she paid like $470k and it’s now worth $750k - going off memory. Taxable gains are also reduced by improvements and I think at least some closing costs - I’m single sitting on a big gain in FL….
The property was valued at 750k and the purchase price was 475k. He wouldn't be much of a financial advisor if he didn't account for the tax on realized gains on the 50k and it was all in the first 2 minutes of the video. In all likelihood after closing costs and fees it is entirely possible she would have less than 250 in realized gains.
Not really….Fla insurance and HOA fees are going thru the roof and property taxes are high. Doesn’t CA have a claw back tax on retirement funds earned in the State? I may be mistaken.
Being single and moving elsewhere is not an ideal option if you don't have established friends or family in those areas. At least it would be for me. Even if you are in great health you may need to rely on others for things like one day medical procedures or a knee replacement recovery. In her scenario of being single, having a lifetime annuity should be considered. She doesn't want to place a large percentage of her assets into that lifetime annuity but your monthly annuity pay outs are higher if you have a single annuity vs a joint annuity.
Hi James. Your videos are very detailed and helpful. Thank you so much! Can you answer a question for me. I have a relatively small investment portfolio but will have a relative high SSA income. I am 61. I want to retire in 1 year. I use NewRetirement (plan says 99% chance of success). I plan to take SS at age 70. From 62 - 70 I plan to spend a good bit more than 4% per year of my portfolio. So, at age 70 my portfolio goes down by about 55%. But then, because my SSA is expected to be relatively high, by age 70, the portfolio continually rises until end of life. I hear almost all experts say that spending > 4% is a no-no. In my scenario (SSA saving the plan at age 70) is this ok? Is it irresponsible to rely on politicians to do what has been promised to keep my plan successful?
I am in your situation as well. I plan to retire at 62 but not take ss until 70. I plan to take out well more than 4% of my portfolio between 62 and 70. I am single so having a higher guaranteed monthly retirement income is more important to me than leaving money to others.
If I join the Retirement Planning Academy, will the software allow me to export the results of my planning to Excel? I have other planning calculations that I've already developed, and I would want to be able to combine the results from the software with what I already have if possible. Thank you!
What if she takes social security at 67 and did tax planning? She could also stop investing quite as much to tax deferred account and build up taxable brokerage more over next 5-7 years.
Thit is a fantastic presentation. Saving will get you a little rainy day fund ... Investing will get you a lot more. In your IRA select VOO for Vanguard S&P 500 Index and Invesco QQQM for NASDAQ top 100. My home and Social Security are my non-equity investments.
Housing prices are criminal in California. If you bought one 30,40 ,50 years ago that is great, but it is unaffordable for most people to buy now. I don't know how people live there.
She only makes $155k a year in California and managed to save $1 million + $780k condo? I think she's sacrificed a lot over the years to save that amount.
If she bought the condo 30-35 years ago it was much cheaper. Housing prices are crazy in California and have gone up a lot even in the last 5 years. I wish I had moved to CA in 1990. I could have made a lot just from my condo with the housing prices. She also has 180,000 from inheritance. Maybe she also paid off her condo with some inheritance money.
You must be younger than Lori and I. When you buy your first house in 1988 ($195k) and save 20% in 401k plus employer match it’s not hard to save this amount at 60 in CA. Also don’t eat out and buy a BMW. The next generations will have a much harder time.
She can retire NOW, not at 67. She has plenty of money, but she needs to cut expenses. #1 Move out of Cali, #2 why does a single person need an 800k home, downsize and pickup 300K in equity. Live on the 300k and rollover some 401K and IRA money (No income years) to a ROTH. Honestly, if you cannot retire on over a 1 mil portfolio something is very wrong!
I'm in similar boat as Lori except I'm 40 instead of 60. She won't have any problem living anywhere in North America regardless of how expensive the city she choose to live in with $1M portfolio. 6% dividend yield $5K a month tax free income. That's more than enough for a single with home paid off already. Where the hell does she spend $5,200 a month all on herself is beyond me. Collecting useless gucci bag?
She’s planning on Social Security still being there at the current level when she is 70? I’m on it now and we’re bracing for a decrease of at least 25% very soon. One adverse health event and she’s in big trouble. If she has no family to care for her, she’ll have to pay for care. Expensive!
thanks James, do more single people scenarios!
Single, 54, condo paid off ($600k), no other debt, $1M in savings (cash, investments). Around $2500/mo expenses. Still work but I’m a dogwalker now. I’m in CA too. $325/mo HOA. Insurance is like $350/yr
This is my situation, single with expected longevity. On past videos I asked why care giving expenses were not included in late retirement. This has not been addressed here, but I know my mother's expenses went up A LOT for non-medical care in her 90s. Nursing home , memory care or other types of home help are not covered by Medicare except after hospitalization for a period of rehab. I care for my mother, who has a pension, investments and Social Security. I can assure you she would have spent all her savings several years ago if she hired caregivers or was in a facility. That leaves SS and pension, but those combined would not begin to cover memory care, which she needs now. Something which concerns me as I have no children to rely upon in my extreme old age.
I agree. This seems to be lacking in these videos. If you had a nice income, you should have done at least SOME travel before retirement. I saw dementia care wipe out a woman well before she died at age 98. Her family took her to Florida, which is the most generous to seniors, but they still had to kick in hundreds per month. Mind you, I think it’s ludicrous for most people to plan on living to 98, unless you are quite vigorous, which this woman was, well into her 70s. If she had remarried, it would have helped. Yes, marriage for economic reasons -happens all the time, no reason to pretend or to hide it.
$5200/month without taxes, insurance, travel or condo fees seems like a pretty high level of expenses. As a single retiree, that seems high to me. Nicely detailed video overall!
I think it includes travel, which as a single person, I don’t plan on doing so much.
Also, home maintenance is high for a single woman who can’t do it herself.
Thanks for looking at single retirement. If I were her, I'd stay put and enjoy the community she's created there. One thing you didn't consider in the scenario is that if she did find herself at 90 running out of money, she can sell her home and rent out an apartment for the remainder of her life comfortably.
Two couples I know found it VERY difficult to start over socially in their sixties.
Thank you, James, for a sample case of a single person in California! Moving away from Paradise is NOT an option for me, so I guess I’ll keep my nose to the grindstone (or whatever that expression is) a while longer!
Thanks James for another very informative video! i always like to seeing case studies especially for a single person and your thought process of consderring all the possible solutions.
I took my IRA money and opened a Self Directed IRA and bought rental properties. I chose NC that has lower home prices and low taxes. Lori could take her $1M and buy 3 rentals (nice newer non fixers in suburban areas) that will NET her $5000-$6000 per month (fully managed turnkey by a Property Manager). Do you ever recommend these types of investments.
I was hoping you add one more scenario where play with the social security 62, 67, 70 as part of the discussion
Please incorporate planning for nursing care and/or survivorship scenarios in a future video!
Survivors are also single!
Lori, check out NC to retire to. I have a 7,000 sq. foot house that cost me less than your condo in the mountains. Average temperature year round is 74.
Where do you recommend? I am from South Florida and home insurance and new regulations make it ridiculously expensive stay. I love kayaking so near water please with convenience of groceries stores within ~15-20 mins away.
Yes. Calling all poor people in California. Please move to North Carolina.
That average temperature sounds wrong to me.
Really? 74 degrees. Trying to get out of CA but can't find the same weather as CA
I did the NC move to the Lake Norman area. For the price of her condo I can get a 3000+ sq ft home. She can get 2000 sq ft 4/2.5 for
Thank you - This was great - the scenarios with joint tax payers with 3M do not always help me. I’m 60 and have fixed income vehicles to last until 70, plus stock qualified accts.
very insightful. thank you for sharing.
if I were Lori, I'll just lease the car. the difference between purchase versus lease will remain invested and continue to grow. besides, the car is a depreciating asset anyway. the less is spent on it, the better off she will be.
I made the decision years ago to be a life-long renter in California when I realized I could only afford a condo -- condos give you too many of the downsides of renting without a lot of the upsides of owning.
bingo. For me it's a detached house or I rent. Owning a condo or townhouse is the worst of both worlds, esp in older communities where the community maintenance costs begin to climb.
Please, videos on singles at retirement age that rent with modest savings. Thank you!
My monthly HOA went from $340 to $800 last year thanks to Surfside condo collapse in Miami. We also had a $5k assessment and anticipated more to be compliant with the new regulation and insurance. South Florida will force a lot of people out. I was planning on retiring here in few years but looking at relocating now. I feel so bad for all those that retired and are on fixed income. What can they do except borrow from their condo equity if the paid off their condo but since most didn’t so they have lien on their place now 😢
Loved this! James, you are so clear in showing what the plan would look like and some ideas to tweak it. I was thinking that when you suggested working longer, she walked out the door, and you haven't heard from her since then. Seriously, you had lots of great ideas. We're driving old cars and plan to go several more years before replacing them.
As is always the case, another very clear video... Keep up the good work. :)
James, your firm's AUM model is just too costly. Do you have a flat fee model as well?
Thank you so much for this eye opening video!
I’m her age and my health care is $440 per month no deductible PPO
Regarding the software link - is this the same software that is used in your podcasts that discuss tax strategies?
How about this. Instead of stressing out over her current job, why don't she just retire and find a less stressful or even a part time job to cover the expenses for the next few years until she's 67 if she wants to remain in California. There is absolutely no rule saying that once you retire, you cannot work anymore. I have seen many retirees going back into the work force because they want to, not because they have to. You adapt to your situation. Also, if the government passes the tax-free SS law, this will also benefit her future retirement.
Wonder what it would’ve looked like if she takes her SSI earlier?
His of $500 is tiny!!! A condo high rise hoa is generally over $1k
The AUM (Assets Under Management) fee model does not work for us - we do not need full time babysitting of our investments and plan.
We need an initial plan/review and perhaps not even annual, if that, later reviews. That value-add is simply not worth a 1% per year fee either initially or every year. And we do not need, nor want to transfer all our funds to an obscure fiduciary firm utilized by the planner, no matter how safe it is.
Seems like there is a market opportunity for a smart planner/firm to, yes, reduce fees per client, but make it up in volume since those clients don’t need or want all the time baby-sitting.
Note: we already fully understand “sequence of returns risk”, the trade offs of social security timing, Monte Carlo simulations, and the factors going into Roth IRA conversions, the bucket spending methodology, etc…
Yeah, Florida used to be inexpensive to live in. No longer. Housing is much higher. Homeowners, flood, health and auto insurance are all very expensive in Florida.
In saying that Lori could sell her expensive home in California and buy a cheaper place somewhere else, haven't you overlooked the substantial capital-gains tax that she'd have to pay on the presumably large profit she'd make on the California place if she had owned it for a long time? She's single, so under the federal tax laws, only the first $250,000 of that profit would be tax-free. So if she sold the place for, say, $1 million more than she paid for it -- which is not unlikely in California -- she would owe capital-gains tax on $750,000 of profit.
Let’s say her cost basis is $500,000 and she sells it for $1,500,000. The cap gain tax would be $187,500 (assuming 15%Fed, then State and other taxes). Not too bad on a $1.5 million sale. She could probably replace that condo in other areas of the county for half that. Unless she is tied to California, of course.
It's worth 780,000 and paid off. She paid 475,000 for it so minimal capital gains taxes.
I think i saw in the numbers she paid like $470k and it’s now worth $750k - going off memory. Taxable gains are also reduced by improvements and I think at least some closing costs - I’m single sitting on a big gain in FL….
The property was valued at 750k and the purchase price was 475k. He wouldn't be much of a financial advisor if he didn't account for the tax on realized gains on the 50k and it was all in the first 2 minutes of the video. In all likelihood after closing costs and fees it is entirely possible she would have less than 250 in realized gains.
Capital gains is taxed at 12-15%. I see it as lucky to have that kind of money to pay taxes on.
What about selling condo and investing the monies?
Not really….Fla insurance and HOA fees are going thru the roof and property taxes are high.
Doesn’t CA have a claw back tax on retirement funds earned in the State? I may be mistaken.
No, talked about. Not passed.
Real estate prices between California to Florida is a lateral move?!!!
Why do you accept 60% as acceptable probability of success? That seems very scary to me - 4/10 failure.
Being single and moving elsewhere is not an ideal option if you don't have established friends or family in those areas. At least it would be for me. Even if you are in great health you may need to rely on others for things like one day medical procedures or a knee replacement recovery. In her scenario of being single, having a lifetime annuity should be considered. She doesn't want to place a large percentage of her assets into that lifetime annuity but your monthly annuity pay outs are higher if you have a single annuity vs a joint annuity.
How are about take SS income right after her retirement to protect her investment?
Condo repairs will cost lots of money too
“The cost of everything will continue going up”
Gas hitting 10k then 100k per gallon will be crazy.
Where can I get tax planning software that will do this kind of calculation?
Hi James. Your videos are very detailed and helpful. Thank you so much! Can you answer a question for me. I have a relatively small investment portfolio but will have a relative high SSA income. I am 61. I want to retire in 1 year. I use NewRetirement (plan says 99% chance of success). I plan to take SS at age 70. From 62 - 70 I plan to spend a good bit more than 4% per year of my portfolio. So, at age 70 my portfolio goes down by about 55%. But then, because my SSA is expected to be relatively high, by age 70, the portfolio continually rises until end of life.
I hear almost all experts say that spending > 4% is a no-no. In my scenario (SSA saving the plan at age 70) is this ok? Is it irresponsible to rely on politicians to do what has been promised to keep my plan successful?
I am in your situation as well. I plan to retire at 62 but not take ss until 70. I plan to take out well more than 4% of my portfolio between 62 and 70. I am single so having a higher guaranteed monthly retirement income is more important to me than leaving money to others.
Helped ppl own their own $780k condo and retire with >$1M in retirement funds. Yeah that's way better than most single Americans!
If I join the Retirement Planning Academy, will the software allow me to export the results of my planning to Excel? I have other planning calculations that I've already developed, and I would want to be able to combine the results from the software with what I already have if possible. Thank you!
$500/month in HOA is nothing. I pay $1k in NYC ( that includes real estate taxes).
What if she takes social security at 67 and did tax planning? She could also stop investing quite as much to tax deferred account and build up taxable brokerage more over next 5-7 years.
Thit is a fantastic presentation.
Saving will get you a little rainy day fund ... Investing will get you a lot more.
In your IRA select VOO for Vanguard S&P 500 Index and Invesco QQQM for NASDAQ top 100.
My home and Social Security are my non-equity investments.
Housing prices are criminal in California. If you bought one 30,40 ,50 years ago that is great, but it is unaffordable for most people to buy now. I don't know how people live there.
Root financial only takes you as a client if you have $3 miilion or more, so forget you if you only have $1 million...
She only makes $155k a year in California and managed to save $1 million + $780k condo? I think she's sacrificed a lot over the years to save that amount.
Just dca into spy. Not impossible. Inheritance helps too.
If she bought the condo 30-35 years ago it was much cheaper. Housing prices are crazy in California and have gone up a lot even in the last 5 years. I wish I had moved to CA in 1990. I could have made a lot just from my condo with the housing prices. She also has 180,000 from inheritance. Maybe she also paid off her condo with some inheritance money.
Q
All she had to do was invest 3000 per year in S&P500 and adjust it for inflation since 1991 and she would have about 862,000.
You must be younger than Lori and I. When you buy your first house in 1988 ($195k) and save 20% in 401k plus employer match it’s not hard to save this amount at 60 in CA. Also don’t eat out and buy a BMW. The next generations will have a much harder time.
If she moves to Florida, her insurance costs will be through the roof.
She can retire NOW, not at 67. She has plenty of money, but she needs to cut expenses. #1 Move out of Cali, #2 why does a single person need an 800k home, downsize and pickup 300K in equity. Live on the 300k and rollover some 401K and IRA money (No income years) to a ROTH. Honestly, if you cannot retire on over a 1 mil portfolio something is very wrong!
1 Million, single and still working well into her 60's - ugh. Hopefully she moves and it works out for her.
$1.75 mill doesn't go as far as it used to apparently.
Sadly, Bidenomics has destroyed some of our dreams.
I'd be interested to know where $5200 monthly expenses (not including housing) goes
Thats easy, move out of California
And Condo with HOA 👍🏼
$700,000 home 🏡 = BUFFER
If her house is paid off, she won’t be able to spend $5k a month.
And this ladies and gentlemen is what Gavin has done to California!!! Very very sad🥲🥲
Is it still the 7th largest economy in the world?
Helped a single woman own her own $780k condo outright and have >$1M in retirement savings. Yeah that's better than most Americans!
I'm in similar boat as Lori except I'm 40 instead of 60. She won't have any problem living anywhere in North America regardless of how expensive the city she choose to live in with $1M portfolio. 6% dividend yield $5K a month tax free income. That's more than enough for a single with home paid off already.
Where the hell does she spend $5,200 a month all on herself is beyond me. Collecting useless gucci bag?
Move out of wackyfornia and you can live like a queen on that money. Not kidding.
She’s planning on Social Security still being there at the current level when she is 70? I’m on it now and we’re bracing for a decrease of at least 25% very soon.
One adverse health event and she’s in big trouble. If she has no family to care for her, she’ll have to pay for care. Expensive!