How Much $ Do You Need to Retire? The 4% Rule for 2023
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- Опубликовано: 23 июл 2024
- 🐪 Hump Days Newsletter ➭ humpdays.substack.com
How much money do you need to retire? We talk about the 4% Rule, retirement time horizons, how much we spend in retirement, your magic number, the FIRE movement, along with data from Vanguard and Fidelity.
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Timestamps:
0:00 - Intro
0:19 - 4% Rule
1:40 - The Chart
3:43 - Updated Guidelines
5:38 - Time Horizon
7:14 - Dynamic Strategy
9:01 - Retirement Spending
11:33 - Your Magic Number & Calculator
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Would be interesting to see a video from you about living off of dividends versus selling the underlying asset.
For example, my Roth IRA pays me dividends of 3% every year, which is what I plan to live on in retirement without selling the underlying asset. I’m curious to see how that changes the charts.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time. I retired with about $650k in my 401k.
People don't really know this, You need to create your own process, manage risk and stick to the plan, through thick or thin while also continuously learning from mistakes and improving.
After the pandemic, things became extremely difficult, which is precisely when I sought a Financial advisor. I've been investing with the help of my FA for nearly 3 years and have built up a stagnant reserve of $280K to $570K in just over 24 months.
I completely agree; I am 66 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, i didn't achieve all this on my own, i did it with the help of a Financial advisor. Just do your due diligence to identify a fiduciary one and the rest is history
@@RizkiTukijan I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
My CFA ’Melissa Jean Talingdan’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k.
Its unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $57k passively by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
@@maiadazz I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same.
@@jeromesand Firms can be unscrupulous as they prioritize their own commission over your profitability. On the other hand, I prefer working with individual investors like MARGARET JOHNSON ARNDT, who only take a share from your profits, not your initial capital. I must say, my experience with her has been exceptional thus far.
@@maiadazz Thanks a lot for this recommendation. I just looked her up, and I have sent her an email. I hope she gets back to me soon.
@@richardhudson1243 don’t fall for that ad bro there just trying to drum up business. They even roped you into asking for the persons name.
I began my investment journey at the age of 27, primarily through hard work and dedication. I'm to share that my passive income exceeded $100k in a single month for the first time. This success reinforces the importance of the advice mentioned earlier it is not about achieving quick wealth, but rather ensuring long-term financial prosperity
Investors should exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields
This is superb information,as a noob it gets quite to handle all of this and staying informed is a major cause, how do you go about this are you a pro investor?
Wow that's stirring! Do you mind connecting me to your advisor please. I desperately need one to diversify my portfolio
Timothy Eric Meek
@@AngelaHunt290just Google the name to know more about his profile
It is not always fear. Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value.
This is the problem! Most times people with little or no knowledge of the stock market try investing by themselves. It once happened to me, then I learned my lesson and contacted a US-based finance consultant by name MICHELLE CHRISTINE PARKER and everything changed. I started enjoying huge returns from my investment.
@@AstaKristjan Who is your financial coach, do you mind hooking me up?
@@simonbad She is available on the web for more information.
I started stacking to SAVE wealth. I've always been the type of person to spend my entire paycheck. I hate having money just sit in the bank. I am under pressure to grow my reserve of $950k. before I turn 60, I would appreciate any advice on potential investments.
I can feel your pains. New guys need to realize the risks that come with all of this. You could lose it all and you could win it all. It goes both ways. Second, what works for A may not necessarily work for B and you should not be a bandwagon investor. A good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
@@rickertcoles That's impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the Adviser you're using.
@@rickertcoles Thanks for the info, i found her website and sent a message hopefully she replies soon.
@@rickertcolesdoes anyone actually fall for this shit?
Thanks for talking about this! It's nice to have your take on things that go deep enough on subjects like the 4% rule that there's actionable nuance. A whole generation or more of people are out there making dangerous assumptions with incomplete information because of short articles and videos claiming that the 4% rule is a universal safety blanket.
Watched Humphrey go
From 15k subs to 1.2m. People eventually realize how good u are at what u do. Thanks for educating us Humphrey!
I appreciate that!
Loved how deep you went in this analysis. Excellent video; very informative.
Much appreciated!
@@humphrey Wait, wait, but in what type of account would you need to put all that money in so you can take out +3% yearly without problem?
I am 36 years old now. I have about 2.4 million net worth, mostly in real estate. With my medical condition, I will only live to 65/70 years old. I plan to retire in about 4 more years, and enjoy the rest of the days of my life. I plan to travel the world.
Good for you. You should enjoy your life
What are you doing?
You have enough.
Stop. 2.4 mln in CRE generates 240k a year.
@@sammencia7945 I enjoy my W2 job and want to do it for a few more years.
The best strategy is for you to give me your money.
@@Juangalt I can give you some, if you need help. Always willing to lend a hand
We experienced the peak of our era, and now it is gone. Recession is tanking everything including 401K. My retirement equities portfolio of $750K is in the reds. I keep losing because of inflation. This world will fall to the corrupt rulers in the same way that Rome did. I'm sorry if you're thinking about retiring and you're worried that your pension won't be enough to meet the rising cost of living. Horrible foreign policies everywhere, bad regulatory policy, bad fiscal policy, and bad energy policy.
After the pandemic, things became extremely difficult, which is precisely when I sought a Financial advisor. I've been investing with the help of my FA for nearly 3 years and have built up a stagnant reserve of $280K to $570K in just over 24 months.
@@carssimplified2195 I’m in dire need of guidance so i can salvage my portfolio due to the massive dips and come up with better strategies. How can I reach this advisor?
@@Justinmeyer1000 ‘’JULIE ANNE HOOVER’’ is my adviser and she is highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
@@carssimplified2195 Thanks for sharing this. I did my own little research, and your advisor looks advanced and experienced. I wrote her and dialed her twice but she didn't pick up so I scheduled a phone call.
you are too pessimistic or want to be a victim so that you can force someone to comfort you. By the way, I've recovered all of my retirement equities this year.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
Effective personal finance management is more significant than the amount of money saved, independent of income source (work or investment). To optimize financial outcomes, individuals might seek help from a professional financial advisor, who can provide specialized advice and strategies to reduce expenses and maximize revenue.
@@Lorre386 I completely agree; I am 60 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
@@JosephineGaule This is exactly how i wish to get my finances coordinated ahead or retirement. Can I get access to your advisor?
Do your due diligence and opt for one that has tactics to help your portfolio continue consistent and steady growth. “Emily Lois Parker” is accountable for the success of my portfolio, and I believe she has the qualifications and expertise to accomplish your objectives.
@@JosephineGaule This is useful information; I copied her full name and pasted it into my browser; her website popped up immediately and her qualifications are excellent; thanks for sharing.
There's actually another way to the lower cost and get more value for money. Move to a more low-cost country or state where the value of your dollar is downright massive. Thanks Humphrey! It helped me a lot in planning for my early retirement.
This added real value, thank you
Eyyy glad to see you release this video :) excited to watch
I remember in movies from the mid 90's-2000's some character's plan was "that last hit" to retire. And the truth never crossed my mind how much it could be.
I plan on retiring when I hit 57 and though I'll be a little short according to the FIRE calculator, I'm doing it anyway 😁
Love this guy read his book how he was the only Chinese kid in his New York school, hope he runs for president again and gets every citizen a 1000 dollars
Always great content.
i've heard a lot ppl talk about how they want to retire early, but there's not much to do if you retire. working toward a goal gives us purpose which is why million and billionaires keep working
Retirement also doesn't mean what it used to. Not many people see retirement as sitting on the porch "yelling at the neighborhood kids, Get off my lawn!" Anymore. Most people see retirement as allowing you to spend time on the things you are passionate about or take the risks to follow your dreams without the threat of risking your financial well being.
that's why it's good to develop some hobbies early on so that you have more to look forward to after you retire.
Thanks for the info
Thanks for sharing.
Thanks!
Another gem for the people! You are the man Humphrey 🙏😁
I appreciate that!
Thanks for bringing me back to reality. Lean FIRE for sure is too risky for my lifestyle and age
Any time!
This is a very good video, explains the retirement world very well. If we only knew how long we will live, these calculations would be a lot easier!😢
Nice video, thanks for the info 👍
No problem 👍
That calculator is very helpful ! IT does crush my dream of quiting any time soon lol.
Hi Humphrey, what to do when I am done paying off my rental property when I retire? Do I still collect rent money from my tenants and collect social security at the same time? Or should I sell the property before I retire? Btw I love all your videos! They really helped me revamp my finances. You are doing an amazing job!!
Great video, it’s rely edukativ and I enjoy waching your content.
Glad to hear it!
Nice video. Where did you those charts you show at the beginning? Also would like a video explaining the pros and cons of 50/50 stock and bond, especially with the current market
Great video!
I’ve trained myself to feel the same kind of joy I get from spending money to saving/investing money. Not instant. But it’s possible.
Should this include estimated inflation instead of just using 80% in today's dollars?
I've also struggled to have a consistent number because my salary has changed over the years. It feels like retirement is always a moving target.
I have a pension, ROTH 401k, traditional IRA, and a ROTH IRA (when I was making less). The dean of my graduate school told us that we would be working till our 70-80's and that scared the hell out of me. The dynamic strategy makes sense but you will have to take your tax status and medical bills (estimates put it at $300,000 should be saved if not more) into account along with your investments.
Love this guy read his book how he was the only Chinese kid in his New York school, hope he runs for president again and gets every citizen a 1000 dollars
Great video
Probably going to do a 90/10 split and heavily into high quality dividend stocks with cash reserve.
Your videos are great quality, I need to get on your editing game!
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Maria Reyes.
I'm surprised you know her. I've been making a lot of profits investing with her for a few months now.
I'm new at this, please how can I reach her?
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
She often interacts on Telegrams, using the user name written below
REYES40 💯
Cool video🔥
Thanks for the info. You have an avid follower and fan here in St.Louis County.
amazing, thank you Punisher
How do you figure out a FIRE number or when you can retire if you will get a pension? If you are doing Roth IRA, savings, etc. on your own, for most people with non-pension jobs, these calculators are great. But if you'll have a pension (that will kick in before age 60), and can't draw social security yet, how much outside of the pension do you need to save?
the tables you showed have different values from the trinity study even with the same allocation and length of retirement.
Something very important to understand about the 4% rule is that it continues to increase the amount you take out by 2% every single year, but actual spending by retirees has been proven to slow down considerably as they age, because they are no longer healthy enough to go out and do as many things. For this reason, the 4% rule is now considered to be too conservative. Also, the 80% rule for post-retirement spending is horsecrap. If you were saving 15% of your pre-retirement income, you were already living on just 85% of your income. Factor in a lower effective tax rate when your income drops, and due to some retirement revenue being subject to lower taxes, if any, and then realize that you're not incurring all of the expenses associated with working. Most people spend slightly more than they were prior to retirement, for a few years, then it drops off considerably. The fact that someone has retired doesn't obviate the need for an actual budget...something financial advisors are always loathe to even mention, for some reason.
Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
The answer is, like with most inquiries about investing, it depends. I would advise you to look into advice management.
Agreed, the role of advisors can only be overlooked, but not denied. I remember in early 2020, during covid-outbreak, my portfolio worth around 300k took a slight fall, apparently due to the pandemic crash, at once I consulted an advisor in order to avoid panic-selling. As of today, my account has yielded big fat yields, and leverages on 7-figure, only cos I delegate my excesses right.
There are a lot of independent advisors you might look into. But i work with “Vivian Carol Gioia” and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her
One reason I do not watch retirement videos on those "retirement" channels is the mental gymnastics and flexing that older people (especially the men) post on those videos. The time to launch your clever plan is in your 20s and 30s. In your 40s and 50s (me) you need to be stuffing away cash and living frugally. By your 60s, you either have a retirement or you don't.
The probability charts you shared were interesting but I noticed that while the higher percent of bonds did have a higher probability of success for shorter retirements, their probability falls off where the higher % of stocks had much higher chances of success in longer retirements… I get that’s riskier but would be interested in hearing more about this point.
Love this guy read his book how he was the only Chinese kid in his New York school, hope he runs for president again and gets every citizen a 1000 dollars
Because inflation destroys the value of the portfolio over time. Bonds do not keep up with inflation. $40,000 in 30 years will be nothing. Keep in mind in the year 2000, a $60,000 annual salary was the equivalent of a $105,967.60 today. The coveted "6 figure income" of $100,000 in 2000 is $176,612.66 today.
I saw you donated 5K to Ryan's fundraiser. Good stuff.
The biggest bad assumption that people make when talking about the 4% rule is that they'll never ever make a single cent the rest of their lives. People like to work... just not 40+ hours a week, every week, doing something they don't like, forever. Get a job serving at a brunch restaurant that's only open 9am-2pm on weekends, teach one piano lesson a week, babysit occasionally for one of your friends who's still working full-time, sell boogie boards on the beach during the summer, be a mall Santa for a month between Thanksgiving and Christmas. A little work, some good interaction with other people, and maybe a few thousand dollars a year of income, and suddenly your money that would have lasted you 30 years will easily last you infinity years.
Research also shows that people spend less money as they get older, which means as time goes on, you'll need to withdraw smaller and smaller amounts from your principal. This will also make your money last much longer than any "flat 4% every year, forever" chart will show.
I plan on retiring at 35-40 range need some good years with the kids and able to be active
@mychannel-youtube yea just send me your social security number and name and I'll see if I can help you grow by looking for opportunities in a comment section
It breaks me when i see 65-70 year olds working construction, fast food, warehouse etc, that can barely walk but they have to work, just to not starve. Im getting serious at 25, yeah im late I should’ve been investing since 18 but im willing to take the hit and start now!!!!
VTSAX isn’t based off of large cap stocks only which was the original study. Is this a valid comparison? Honest question here. Wouldn’t an S&P 500 be a better option to run the scenarios?
That was a brilliant way to work in happy Gilmore. Great example 😂😂
hey Humphrey, lemme know if I am totally mixing up concepts here, now that 30-year treasury-bonds are starting to break into the 5% range (and maybe hey it goes to 6%) can I now start thinking since I'll be getting over 4% then I'll just park my money in these t-bonds? Why would that not be a good idea? What factors are being missed in that thought process? (inflation, stock value gain/loss, etc?)
I’m heading into the first year (2024) I’m going to have to start pulling money out of my various accounts to make ends meet. It’s what I saved and invested for but still kind of feel defeated that I have to start digging into it. 🤷♂️
Great video, as always. ❤ May I suggest that some of us would have more than enough dividends from investments to live off from. I know some people do the minus 10% rule where they not only not draw down their portfolio, but are able to increase their portfolio amount by another 10% or more yearly during their retirement.
Thanks Humphrey. I know some people that purely live off just their SS.
Is there a calculator that factors in numbers such as social security and/or military disability?
I think the big asterisk with this analysis is it’s based on history. Bonds paid more and market returns have been higher than recent years
The 4% rule is a great starting place. Here's to FIRE!
Does this calculation include assets like a house when calculating net worth?
I have a question. Is rolling over a Roth IRA from one bank to another, considered a contribution?
What do you think about using index funds for “early” retirement aka 40-60 years old. Then using 401k funds for “actual” retirement, since those can’t be accessed until a certain age. For example, putting money into index funds in your 20-30s and then retiring and pulling from those 40-60 yo, running out and switching to 401k funds. Thank you!
I'm living off of about 75% of income (25% going to retirement).
I'm hoping to live off about 100% in retirement, since I'll have a lot more free time to spend it.
Hey I saw you from a video and wanted to know if you are Hmong or not?
With new funds like JEPI and JEPQ is the 4% rule obsolete?
Well researched video. Lot of idiots like andre jikh calling 4% an infinite money glitch don’t deserve a yt carrer.
You earned a sub
You're the only financial channel people should be watching. Genuine advice. Legitimately useful content. Not sure what compels you to help people so, but thank you.
I appreciate that - my goal is to just to help as many people as possible
Healthcare is definitely going to be a big hit for everyone if you're living in the US.
guys, dividend ETFs or stocks vs 4% of growth stocks or ETFs???
dudes right, 5%+ is about right. More often than not ive see more people expire before they can retire, right when they retire, or
Just draw 2% which is the snp500 or a world index dividend and you never run out of money and go 100% equities easy..
Maybe add 10-20% real estate for diversification and to increase the % of the cash return of your portfolio adding 20% real estate with 8% rental yield will increase your portfolios cash return to 3.2%
Wait, wait, but in what type of account would you need to put all that money in so you can take out +3% yearly without problem?
8:35
If you have 2 years worth of savings essentially as an emergency fund, would it not make sense to still put all but a few (3-6) months worth into investment?
Even if you have to pull those investments, it seems like it could still make more money unless every one of your assets is down
4:35 I would hope that even if someone ran out of money at the age closest to death or at the tail-end of their retirement (say 80's and 90's), that they would at least have their home paid off in full by that point (no mortgage). PS: I recommend everyone to consider a retirement abroad to take advantage of currency arbitrage. Not only will your expenses be significantly lower, but you get to experience new cultures, delicious cuisines, excellent healthcare & dental care for a fraction of US prices, and overall safer (if you consider how bad gun violence is in the US).
Non stop fishin erry day in retirement. Hittin all sorts of lakes around da US would be nice.
Why with a lower withdraw rate e.g. 3% we even need more money to retire? It seems to me I withdraw/spend yearly less money, theoretically it also leads to less amount of money needed?
I retired last year with a large pension (that more than covers all of my bills) and very large TSP. I just started monthly TSP installments at 6%, but am not readjusting each year for inflation (seniors tend to spend less as they get older), keeping it in the C fund (S&P 500 equivalent) because I have a lot of risk tolerance, with a pessimistic expected 7% long term return (C fund averages 11%), steady reliable income every month for the rest of my life, and should last greater than 30 years.
I have a question for you. I am currently 26. I’ve been investing in a Roth Ira since I was 18. Maxing out every year and I now have a company provided 401(k) I would like to retire around 40 or up to 50. What steps should I take to do that? And would it be better to pull early out of my 401(k) or out of the Roth IRA?
I have a Rollover IRA with Charles Schwab from a previous job. With my current job, I have 11% going into my pension monthly. Other Investments with Robinhood. Trying to figure out a fixed monthly percentage to add I to my Schwab account.
at 12:06 in the video, Shouldn't we add inflation while calculating how much would we yearly spend after retirement, so may be if I am 30 years old right now and plan to retire at 60, then my retirement spend might be something like >80K. I feel this would change the match by quite a bit depending upon how far are you from retirement
4:00 IF you were making $58k and looked to have 80% at retirement (e.g. $46,400) where would you put your withdrawal rate? Assume IA residence paid for in full, no debts, married filing jointly, $3,650 / mo. pension and $2,000 / mo. SS income between the two people. This pension and the SS does not run out after 10 or 20 years. All health indicators suggest that 20 to 25 years will be the high side of average life expectancy for this couple and set amounts already project 146% of target need. We have part of our retirement in ROTH and that may become a small inheritance between our two kids. We do not want to go to sleep (permanently) with an abundance that is not allocated.
what happens if you run out of money at 90?
Assuming you retie and draw social security at age 62, do you really need to plan to live until 115 years old? This make NO sense. From age 62, there is an 85% chance of dying in less than 30 years, and a 95% chance of dying in less than 35 years. I think he is spot on that 4.5% to 5% annually lasts 30 years and is a good planning factor. 30 years from early social security retirement is longer than all but 1 standard deviation that as a whole, we will live. "People are living longer" is a true statement. But, that is already factored into actuarial tables. When my grandfather retired if the average male lived 5 to 8 years past retirement, they were ahead of the curve. You should really think through this advice. Realistic advice, based on realistic data and realistic assumptions, is very important. This is not realistic advice because it's based on faulty assumptions and does not use widely available actuarial data.
people forget that beyond 75.... your life is fcked anyhow and you will have to make do with being warm and getting around the house barely trying to keep yourself from having to crawl to the toilet to take a dump... so if you find yourself with limited money from 75 onwards... it is not all that bad
By contributing to a Roth 401k rather than traditional, aren’t you losing a significant portion of your match? Since employer match is always traditional, but they would be matching your post tax amount (20%) less for me.
It depends on your employer plan. My Roth 401k matches 50¢ on the dollar for the first 6%. But I would have to pay for the tax on the 3% my employer contributed.
Nah man, 5% gang here. Dividend growth portfolio and rental real estate. Paid off primary residence. Low floor of fixed expenses so I can flex easily in a down market.
I'm in investments that earn 8% a year if you are only taking 4% a year how is there a proability of running out of money at any age? It should last forever not be gone by age 90 or even age 120 the maximum of the human life span.
What do I want to do in retirement?
Dude I barely know what I want to do this year
Your estimated expenses in retirement should be based on what you actually spend while working not your income while working. People seldom spend exactly what they are making. If you are doing right and actually saving for retirement your expenses may be substantially less than your income. If you are doing wrong then expenses might be substantially greater.
Do you have to withdraw by a certain timeframe. I thought I heard you couldn’t just leave the money in your 401k for entire retirement. Is this true? If so, don’t you take tax penalty if a lot of your retirement is not in a Roth
This is exactly the video I’ve been looking for! Taking control of my finances this year and being debt free with decent income made me wonder if I was on track to retire at 40! Thank you ❤
You got this!
Is the 4% rule assuming that by the end of 30 years, all the money is exactly used up and balance is 0?
I’m just here to boost engagement
that 4% withdrawal each year may not be spent completely, thus building up further reserve for a rainy day.
that 4% withdrawal may not be enough, thus reducing further reserve for a rainy day.
Im confused why the percent of success goes down after 40 years, I’m thinking the longer amount of time you are withdrawing, eventually it would balance out and avg at 7% where you should be safe. The risk would be highest if you wanted to go 30 years and they could be exceptionally bad 30 years….
I would be retiring or working less in 5 years and I want to know best how people split their pay, how much of it goes into savings, spendings or investments. I earn around $165K per year but nothing to show for it yet
If you are making $165k you should be saving somewhere in the range of $40-60k per year, but if you are retiring in 5 years then you need to be saving at even a higher rate, you need to cut your spending to where you can save at least 80k per year. I would also highly recommend selling some of the stuff you have bought to enhance your savings (and it will also likely lessen you outflow in expenses in maintaining or using those things). In reality, if you cannot drastically cut your spending (permanently) you will not be retiring in 5 years.
you will spend more in early retirement than you will 20 years into retirement therefore you can do 5-6% withdrawl in the early stages of retirement years say 1-10, cut that back to 3.5-4% in years 10-20, and then 4-4.5% in the 20-40 years
2 million dollars,sweet spot!
My retirement plan is to put MY brain in a robot body as well, Humphrey. Vive immortality! lol
4% is sol low, its around 5-6%, because inflation is avg 4.5% already
I don’t understand “If you withdraw less, you’re going to need a higher balance to start with.” It seems like you’d spend your money slower, so not need as much. What am I missing?
Percentage.
@@alisonf6478 Can you explain further?
I feel like dying with millions is probably, objectively, worse than going broke.
I say this because the end years are usually not great. Having millions in a retirement account when you're stuck in a bed is useless.
Is there a method that allows for higher withdrawals that taper down? At 60 I'll probably be up for a European vacation. At 80 maybe not.