Want me to look over your numbers? You've got options. Check out the website for more information: www.approachfp.com/ Note: I do not discuss offerings, pricing, etc. in these comments. Please proceed to the website, where you can find a substantial amount of detail.
i'm in my mid 50s - retired at 44, I don't plan on living another 30 years. living until mid 80s isn't realistic for most people. from what i've seen over the last 20 years, I have seen most people die either in their mid 60s or late 70s. I know what statistics say and all, but the reality is that most die well before 80.
Wonder how many folks are on the 'pile under the mattress' plan , not earning any interest or gains anywhere . i heard someone ask that if their tokens were 'in cold storage if would stay at that price , right?' . thanks for doing 500k while most vids are talking 7 digits which is scary far away
Wait a minute. My understanding of the 4% rule is totally different. I thought the idea was to NOT to take a fixed amount based on 4% in year one, but rather to take 4% of the principle, whatever that is, each year. When the market is up, you take more, when it's down, you take less.
Your understanding is wrong if you are talking about things like the Trinity study or original study The historical data shows that a starting point of 4% and adding an inflation adjustment should last 30 years
The thing that always puzzles me about these types of videos is this: anyone who was disciplined enough to earn a good living, spend less than they make, and build up a sizable retirement nest egg, is very well-acquainted with living on a BUDGET. Investment advisors never want to talk about budgets, because it undermines their efforts to encourage you to put more "Assets Under Management", or AUM, which is how they make money off your money. This video/channel isn't as bad about it as most of them are, but there still wasn't one mention of the word "budget". He did say something about tightening the belt, but then immediately mentioned how they want you to spend as much as possible in retirement, which is the antithesis of following a budget. He then goes on to make the process more complicated than it needs to be, hopefully encouraging folks to enlist his services to sort it all out for them.
20 does not seem like too much to assume people will need each year. I used to live on about 13K to 14K years ago!!!! So nope pulling the same amount of money each year while somehow not getting high enough returns could cause issue. Well but if we assume people can just live on less well then anything is possible.
You don’t have to live on a budget. While it might help some people I always found it boring and tedious. I am 49 years old, have never lived on a budget, and I have enough money saved now to pay off our home, and live securely at a modest rate for the rest of my life. I want to live more than just modestly though. So I will work a few more years. The key is to not have debt, and to keep big expenses like a house, and a car reasonable. I drive a $6k car. Not a typo six thousand. I have one that’s older with low miles. Our house will be paid off in less than 5 years, and I have enough money in the bank to pay it off now. It doesn’t make financial sense to do that though.
@@billibarou - Do you have a very high income or are you just naturally frugal? Has to be one or the other, if you don't follow a budget and have achieved some degree of financial success, because it is never just a happy accident.
If You have $500K and even average a 5-6% return which is kinda low, you will have money left over a 30yr return. A rate of a 8% return average you would be rallying good cause your taking out 4-5%, plus inflation could be 2% on average you definitely have money left over
The point of the "4% rule" is to not run out of money taking an inflation-adjusted fixed amount each year. It doesn't worry about having money left over. The rate of return used was based on a 50/50 US only portfolio, then tested on all 30-year periods of history back to the early 1900s. Your portfolio might be different, so you can calculate your own safe withdrawal rate.
This video has a link in the description to download a spreadsheet with the model shown here (it's on the second tab): ruclips.net/video/qMBKpfjj-2o/видео.html
In this case, we're assuming you pull the $20k out at the beginning of the year, so you really only have $480k invested for the year. The subsequent years use the same assumption (it keeps things simple and is a bit more conservative that way).
A lot of them use New Retirement at about $150/yr. It is cheaper than a financial Advisor. If you already have a financial advisor, they have it or a very similar version, so they can show you their file on you.
Want me to look over your numbers? You've got options. Check out the website for more information: www.approachfp.com/
Note: I do not discuss offerings, pricing, etc. in these comments. Please proceed to the website, where you can find a substantial amount of detail.
i'm in my mid 50s - retired at 44, I don't plan on living another 30 years. living until mid 80s isn't realistic for most people. from what i've seen over the last 20 years, I have seen most people die either in their mid 60s or late 70s. I know what statistics say and all, but the reality is that most die well before 80.
My 401k stands at 500k this week. Very intuitive explanation. It shows factors to be considered easily.
Congrats! My is at 460k!
Please remember when withdrawing 401k funds one needs to pay taxes, so donot have the full 4% to spend.
@@irwinsaltzman979 Probably helps if one moves to a state without income tax?
Really good financial teaching !! Thanks!
Great Job, Justin! Thank you for using Average Joe amounts!
Excellent demonstration. Time to pull out the spreadsheet and make something similar. Looks like a fun way to predict potential outcomes. Thank you.
Very clear explanations - Thanks!
As always, clear, concise and relatable content. Thank you Justin for the time and effort in making these videos.
Sincerely, A Grateful Viewer
Outstanding vid, Justin; thank you!
Wonder how many folks are on the 'pile under the mattress' plan , not earning any interest or gains anywhere . i heard someone ask that if their tokens were 'in cold storage if would stay at that price , right?' . thanks for doing 500k while most vids are talking 7 digits which is scary far away
Thank you valuable information
love love love your videos
Thanks as always for your content.
Now I understand . Thank You
Wait a minute. My understanding of the 4% rule is totally different. I thought the idea was to NOT to take a fixed amount based on 4% in year one, but rather to take 4% of the principle, whatever that is, each year. When the market is up, you take more, when it's down, you take less.
Your understanding is wrong if you are talking about things like the Trinity study or original study
The historical data shows that a starting point of 4% and adding an inflation adjustment should last 30 years
Based on a 50/50 portfolio
No, that's a fixed percentage withdrawal, and it has very different risks.
I want to keep my money where there is zero risk and is immediately available.
All investments have risk. It sounds like your risk will be inflation
The thing that always puzzles me about these types of videos is this: anyone who was disciplined enough to earn a good living, spend less than they make, and build up a sizable retirement nest egg, is very well-acquainted with living on a BUDGET. Investment advisors never want to talk about budgets, because it undermines their efforts to encourage you to put more "Assets Under Management", or AUM, which is how they make money off your money. This video/channel isn't as bad about it as most of them are, but there still wasn't one mention of the word "budget". He did say something about tightening the belt, but then immediately mentioned how they want you to spend as much as possible in retirement, which is the antithesis of following a budget. He then goes on to make the process more complicated than it needs to be, hopefully encouraging folks to enlist his services to sort it all out for them.
20 does not seem like too much to assume people will need each year. I used to live on about 13K to 14K years ago!!!! So nope pulling the same amount of money each year while somehow not getting high enough returns could cause issue. Well but if we assume people can just live on less well then anything is possible.
You don’t have to live on a budget. While it might help some people I always found it boring and tedious. I am 49 years old, have never lived on a budget, and I have enough money saved now to pay off our home, and live securely at a modest rate for the rest of my life. I want to live more than just modestly though. So I will work a few more years. The key is to not have debt, and to keep big expenses like a house, and a car reasonable. I drive a $6k car. Not a typo six thousand. I have one that’s older with low miles. Our house will be paid off in less than 5 years, and I have enough money in the bank to pay it off now. It doesn’t make financial sense to do that though.
@@billibarou - Do you have a very high income or are you just naturally frugal? Has to be one or the other, if you don't follow a budget and have achieved some degree of financial success, because it is never just a happy accident.
If
You have $500K and even average a 5-6% return which is kinda low, you will have money left over a 30yr return. A rate of a 8% return average you would be rallying good cause your taking out 4-5%, plus inflation could be 2% on average you definitely have money left over
Google
"Sequence of return risk"
That is the part you've missing
The point of the "4% rule" is to not run out of money taking an inflation-adjusted fixed amount each year. It doesn't worry about having money left over. The rate of return used was based on a 50/50 US only portfolio, then tested on all 30-year periods of history back to the early 1900s. Your portfolio might be different, so you can calculate your own safe withdrawal rate.
How can I get my hands on that excel spreadsheet?
This video has a link in the description to download a spreadsheet with the model shown here (it's on the second tab): ruclips.net/video/qMBKpfjj-2o/видео.html
$20k a year and 3% inflation??
at 5% return on $500,000 wouldnt you get $25,000 return not $24,000 the first year?
In this case, we're assuming you pull the $20k out at the beginning of the year, so you really only have $480k invested for the year. The subsequent years use the same assumption (it keeps things simple and is a bit more conservative that way).
After spending?
@@theacase8738 Ok got it thanks
What software do you use which allows you to test future tax returns?
A lot of them use New Retirement at about $150/yr. It is cheaper than a financial Advisor. If you already have a financial advisor, they have it or a very similar version, so they can show you their file on you.
The mock 1040 in this video is from RightCapital.
Inflation is high is far higher than four percent.
Your inflation may be. We all feel inflation differently
What software do you use?
Most of this video is showing Google Sheets, and I use RightCapital and IncomeLab for more detailed work.