Some great ideas. One of the big problems is that I've seen very little growth in the Financial Planner mindset over the past 20 years. Monte Carlo simulations and the 4% rule are still a major part of the industry's mantra, yet we all know intuitively that people don't live according to a straight line on a spreadsheet. Watching your parents age helps show that the "smile" graph you talk about really is the way people live and age in retirement. Thanks for stepping out of the crowd and helping people like me feel more confident about the journey of retiring.
I've taken a blended approach to retirement income. Last year I bought a deferred income annuity. Plan to start lifetime income payments in 7 years at 65. Will defer SS until at least that time as well. Will retire in August a couple months before my 58th birthday. I'm very excited to start my next stage on life.
I've watched literally hundreds of retirement videos and this is one of the best regarding struggling to spend. I'm single, retired 13ish months ago at 59.4, and am fortunate to have more saved than most (but most in pre-tax). My big broker has been pushing annuities, but I'm not biting. That said, with today's higher MM rates, I am considering placing most of my pre-tax funds in a MM fund to create my own pseudo-annuity (thought being I mitigate sequence of returns risk). If/when rates go back down, then I dollar cost average back into equities. I'm thinkin' this plan might help me spend more.
Thanks, Rick! That strategy has inflation risk. If you want to create your own annuity I’d look into a TIPS ladder, but it has its own issues. Actually, there’s interesting new product built on top of TIPS that might be a good option, especially since you’re single. It functions similar to an annuity without the commissions.
Great video. I’ve always heard that annuities are not the best investment (which you confirmed), but you make some great points about the emotional side of investing. Having at least some portion of your retirement income coming from an annuity sounds like a good idea.
My wife and I have been practicing our retirement budget for the past 5 years. Spending $5,000 per month but our health insurance is not included because I have a health plan at work. So when we retire we will have a $6,000 budget to include Medicare coverage and a little more monthly fun things like eating out. I will be retiring on May 31 2024 at 67 1/2 and will be taking SS at 70. Once we start getting SS we will still have a budget of $6000 per month but will also have a special big fun budget of $20,000 per year. The $20,000 is for big fun things like trips, extended family parties etc. This way if we need to cut back we just stop doing the big fun things.
Interesting ideas. The likelihood of someone receiving 70%, let alone, 100% of salary from a work pension is extremely low. Many good pensions provide maybe 50%.
Waiting until 70 for SS is a poor gamble. Many will get nothing if you wait, thats what gubmint is betting on. If you wait until 70 you will still get same amount but in fewer but larger payments in inflated dollars and then only if you live a long life. Do you feel lucky?
And if you live a long time you will find yourself with less money in your later years when you have no ssy over income or health expenses. Waiting till 70 is an insurance policy not a money making scheme. And if you die before the break even point you are dead and money doesn't matter
A guaranteed income stream is not just talking about converting investments into an annuity. The term annuity is a pension or social security. In my opinion, I would be very concerned about converting investments into an annuity when one has a pension. I’m pretty suspicious of annuities anyway.
Do you think you could be spending more money in retirement?
Some great ideas. One of the big problems is that I've seen very little growth in the Financial Planner mindset over the past 20 years. Monte Carlo simulations and the 4% rule are still a major part of the industry's mantra, yet we all know intuitively that people don't live according to a straight line on a spreadsheet. Watching your parents age helps show that the "smile" graph you talk about really is the way people live and age in retirement. Thanks for stepping out of the crowd and helping people like me feel more confident about the journey of retiring.
Thanks! I do think more advisors are catching up, but you’re right - the industry is way behind.
I've taken a blended approach to retirement income. Last year I bought a deferred income annuity. Plan to start lifetime income payments in 7 years at 65. Will defer SS until at least that time as well. Will retire in August a couple months before my 58th birthday. I'm very excited to start my next stage on life.
Congratulations on the next stage of life!
I did something very similar
I've watched literally hundreds of retirement videos and this is one of the best regarding struggling to spend. I'm single, retired 13ish months ago at 59.4, and am fortunate to have more saved than most (but most in pre-tax). My big broker has been pushing annuities, but I'm not biting. That said, with today's higher MM rates, I am considering placing most of my pre-tax funds in a MM fund to create my own pseudo-annuity (thought being I mitigate sequence of returns risk). If/when rates go back down, then I dollar cost average back into equities. I'm thinkin' this plan might help me spend more.
Thanks, Rick! That strategy has inflation risk. If you want to create your own annuity I’d look into a TIPS ladder, but it has its own issues. Actually, there’s interesting new product built on top of TIPS that might be a good option, especially since you’re single. It functions similar to an annuity without the commissions.
@@foundryfinancial I would argue that sequence of returns risk is potentially much more devastating than inflation risk...but thanks for the TIP. 😜
Time in market has proven reliable in growing a portfolio. Timing the market has been proven to almost always underperform the market.
@@fialee8ca132 Agreed, but retirement (time running out) can change one's investment strategy.
More money!
Thank for sharing...really good information.
Thanks!
Great video. I’ve always heard that annuities are not the best investment (which you confirmed), but you make some great points about the emotional side of investing. Having at least some portion of your retirement income coming from an annuity sounds like a good idea.
My wife and I have been practicing our retirement budget for the past 5 years.
Spending $5,000 per month but our health insurance is not included because I have a health plan at work.
So when we retire we will have a $6,000 budget to include Medicare coverage and a little more monthly fun things like eating out.
I will be retiring on May 31 2024 at 67 1/2 and will be taking SS at 70.
Once we start getting SS we will still have a budget of $6000 per month but will also have a special big fun budget of $20,000 per year.
The $20,000 is for big fun things like trips, extended family parties etc.
This way if we need to cut back we just stop doing the big fun things.
Interesting ideas. The likelihood of someone receiving 70%, let alone, 100% of salary from a work pension is extremely low. Many good pensions provide maybe 50%.
Annuities are great for people that sell them 😂
Variable annuities are bad, but there are several kinds of annuities, and some are better than others. Fixed annuities have much lower fees.
What about folks who retire with a low amount of money in their nest egg, no guaranteed income.
The idea is people underspend relative to what they could potentially spend.
Waiting until 70 for SS is a poor gamble. Many will get nothing if you wait, thats what gubmint is betting on. If you wait until 70 you will still get same amount but in fewer but larger payments in inflated dollars and then only if you live a long life. Do you feel lucky?
Enjoy telling that story to your 85 to 90 year old self who will be wondering "what was I thinking taking less back then?"
And if you live a long time you will find yourself with less money in your later years when you have no ssy over income or health expenses. Waiting till 70 is an insurance policy not a money making scheme. And if you die before the break even point you are dead and money doesn't matter
A guaranteed income stream is not just talking about converting investments into an annuity. The term annuity is a pension or social security. In my opinion, I would be very concerned about converting investments into an annuity when one has a pension. I’m pretty suspicious of annuities anyway.