Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.
The strategies are quite rigorous for the regular. They are mostly successfully carried out by pros who have had a great deal of skills/knowledge to pull such trades off.
Excellent illustration. Thank you. As people enter retirement their biggest fear is running out of funds before they die. So they exercise extreme frugality. You are showing people that it’s okay to spend a little more and enjoy retirement. Your analysis is similar to my retirement plan if I retire at 60.
can you do one at SUPER early retirement like 20 t0 25 years old, like they made money on bitcoin or parent died and left 2 million. but there willing to live cheap. and grow as they get older.
Nice clear analysis! I find having retired early at 51, that it is a delicate balance between Roth conversions to qualify for ACA and pulling every few years from my portfolio to top up my cash reserves. And being widowed means I am pressured even more by the single bracket values. Oh well, good financial situation to be in none the less. Writing this from Canary Islands where I am at a sport activity resort 🥳
The ability to downsize your home has been diminished by the rising cost of real estate period. In many case, you pay more for less so it doesn’t make sense to make the move. We don’t plan on leaving our home we built 20+ years ago.
I feel like this video is made for my wife and I. Our retirement funds are at 2.7M at age 55, but in our case we have no debt including the house which is worth about 250K and I plan to keep working and retire at age 60 when my employer will offer me group health insurance at 50% the cost until age 65. Our social security will be $3400 and $1700 and I have another $1400 pension starting at age 67. Our monthly expenses will be $10,000 in today's dollars. I feel like this plan is pretty strong and will allow for a trip or two if we want to travel every other year as we tend to be pretty frugal and prefer to stay close to home.
Thanks for watching! The order of withdrawals would be taxable, tax-deferred, and then tax-free. However, as I mentioned in the video, they'll be doing Roth conversions while taking income from the taxable account.
I guess the professionals in the finance world call it “tax control triangle” or “tax management triangle”. Great insights. Individuals on the FIRE path should definitely consider tax smart income sources before they can access tax advantages investments without penalties.
As someone in a 2 Pension household the lack of Pensions has altered the dynamics of retirement saving, investing and spending in a big way. Should the value of a Pension be included in a Net Worth Calculation ? I assume Pensioners can spend more than the 4 pct rule ?
Did the assets also include the $1.5M home or only stock/bond investments? How many +90 year olds will still be living in their original residence? The house seems like a source of revenue that can be sold later in life and should be included in your analysis in terms of not running out of money.
Why would he, they have 800K in non-tax sheltered accounts, obviously they would use those first. If you're retiring even earlier there are other ways to access 401k funds.
Invested in dividend stocks yielding 3.5%, $95K without touching the principal. And you’ll get a raise every year that keeps up with our beats inflation.
Great case example/study for me because it's very similar to my scenario (except I'm 60, single and have already depleted my brokerage account). I also have the "retirement tax valley" and have started Roth conversions to the 24% tax bracket. Curious why Roth conversions only to the 22% bracket in your example.
Thanks for sharing, Rick! Lots of factors involved, so next week I have video that I think you would find useful because it goes deeper into that exact question. So stay tuned!
@@MCalcagno People need to look at the Shiller CAPE table and what future returns look like when the CAPE is over 20 (currently close to 30) - hate to be the bearer of bad news but it's 5.3-5.4% for the next 10 yrs - if you put any stock in this information 6.5% might end up being optimistic
We are paid a fee based on the assets we manage, and that covers everything we do with tax planning, withdrawal strategies, investment strategies, etc. If you'd like to chat more, click the link in the video description.
Did this couple receive an inheritance? Does this couple have children? I find many people with high levels of investible assets well in advance of traditional retirement age, often have rec’d a significant inheritance and or have not had kids!
This is anecdotal, but I’d say a majority of the folks I personally see in a position to retire early either own a profitable business or they were given company stock that has done well. Although you’re probably right, there’s a growing amount of folks that can now retire in advance after receiving an inheritance!
May I suggest; Understanding the power of compounding at an early age is more important. Having a high income, having a high savings rate coupled with no kids all help also. Example: Investing $800 per month at 10% year in an index fund grows to $2.7 million in 35 years Starting at age 22 you’d get there at 57. Ten years ahead of the traditional age. Knowledge compounds as well as dollars and cents. Best wishes in your financial journey 😊 Stay Hungry.
Im 42, married with one toddler. Net worth almost 3 million. Me and my wife bought our first home early 20s. Then used equity to buy more properties. I'm a tradie on 150k PA and my wife teacher was 100k now 30k PA casual work. When you start early and invest it's amazing what can be achieved with pretty standard income (we are in Australia). Our first couple houses where purchased when we both earned well under 100k PA
@@lengererIt's already starting to happen here. People are selling homes and living in campers and mobile homes instead. It's one less thing to worry about when you die and it saves money today. People are learning-the home is an expendable asset that you don't need.
400%??? Assuming a drop of 50% a year, That means a $1 million home would be worth $500K after a year and then $250K after two years and then $125K after three years and then $62K after four and then $32K after five and then $16K after six and then $8K after seven and then $4K after eight. I thinking your analysis may be off a tad. 🤦♂️
According to the 2019 Federal Reserve Survey of Consumer Finances (SCF) data, the median retirement savings between age 55-64 is $134,000 in the U.S. Only 8.2% of the population have over $500,000 in savings, so people with $2.7 million are in the noise... So, this video is not at all for your typical, average American.
well, to be fair, the title of the video was not "I'm a typical, average American with $2.7 Million at age 57. How Much Can I Expect to Spend If I Retire Early?" It's targeted at people who've saved a lot and want to retire early.
Well, as described in the textual summary, it's a case study. You want many cases studies to see which resembles your situations more. If we get "median" scenarios stated, well, it's a case, and is probably not very useful for many people.
I used to think so too. But once you cross the million mark. And you are planning for 35+ years of retirement And factor inflation into the equation. You realize a million is not that much (at that income level). Trust me. This is a legitimate concern for folks in this bracket.
all depends on your expenses - ALL - throw 5-7% inflation in the calculator and see where that 2.7 gets ya - not good! and higher persistent inflation is likely the future
The problem is it’s NOT savings. It’s investments. If you’ve got $4 million, $3M should be in the S&P500 so it can grow and $1M in bonds or laddered CDs.
Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.
The strategies are quite rigorous for the regular. They are mostly successfully carried out by pros who have had a great deal of skills/knowledge to pull such trades off.
@WilliamsJulians Please can you leave the information of your investment advisor here? I'm in dire need of one.
@WilliamsJulians Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible.
Excellent illustration. Thank you. As people enter retirement their biggest fear is running out of funds before they die. So they exercise extreme frugality. You are showing people that it’s okay to spend a little more and enjoy retirement. Your analysis is similar to my retirement plan if I retire at 60.
Great analysis. Gives a full spectrum of changing variables that should be considered.
Thanks for watching!
can you do one at SUPER early retirement like 20 t0 25 years old, like they made money on bitcoin or parent died and left 2 million.
but there willing to live cheap. and grow as they get older.
Excellent. Thank you
Nice clear analysis! I find having retired early at 51, that it is a delicate balance between Roth conversions to qualify for ACA and pulling every few years from my portfolio to top up my cash reserves. And being widowed means I am pressured even more by the single bracket values. Oh well, good financial situation to be in none the less. Writing this from Canary Islands where I am at a sport activity resort 🥳
@@FionaMacDonald thanks for watching! And enjoy your time in the Canary Islands!
The ability to downsize your home has been diminished by the rising cost of real estate period. In many case, you pay more for less so it doesn’t make sense to make the move. We don’t plan on leaving our home we built 20+ years ago.
This is very true. The cost of property is insane now.
Why not ACA instead of $2000/month plan?
For them the value of Roth conversions during that early retirement tax window would exceed the few years of cheaper health insurance.
I feel like this video is made for my wife and I. Our retirement funds are at 2.7M at age 55, but in our case we have no debt including the house which is worth about 250K and I plan to keep working and retire at age 60 when my employer will offer me group health insurance at 50% the cost until age 65. Our social security will be $3400 and $1700 and I have another $1400 pension starting at age 67. Our monthly expenses will be $10,000 in today's dollars. I feel like this plan is pretty strong and will allow for a trip or two if we want to travel every other year as we tend to be pretty frugal and prefer to stay close to home.
Glad it was helpful!
When you convert a regular IRA to a ROTHIRA don’t you have to pay tax then?
You don't take into account they only have 900K in taxable, are they to start depleting that before and start non taxable assets "early"?
Thanks for watching! The order of withdrawals would be taxable, tax-deferred, and then tax-free. However, as I mentioned in the video, they'll be doing Roth conversions while taking income from
the taxable account.
I guess the professionals in the finance world call it “tax control triangle”
or “tax management triangle”.
Great insights. Individuals on the FIRE path should definitely consider tax smart income sources before they can access tax advantages investments without penalties.
As someone in a 2 Pension household the lack of Pensions has altered the dynamics of retirement saving, investing and spending in a big way.
Should the value of a Pension be included in a Net Worth Calculation ? I assume Pensioners can spend more than the 4 pct rule ?
Did the assets also include the $1.5M home or only stock/bond investments? How many +90 year olds will still be living in their original residence? The house seems like a source of revenue that can be sold later in life and should be included in your analysis in terms of not running out of money.
Yes, that was addressed in the video.
@@MCalcagnothanks, sorry I missed it
Watch it again.
Why do you keep calling it a linear projection?
A linear projection is basically a method of modeling these long term financial planning scenarios that assumes a constant rate of change over time.
No mention of the penalty for early distribution before 59 1/2 years old.
Why would he, they have 800K in non-tax sheltered accounts, obviously they would use those first. If you're retiring even earlier there are other ways to access 401k funds.
Invested in dividend stocks yielding 3.5%, $95K without touching the principal. And you’ll get a raise every year that keeps up with our beats inflation.
In my opinion there are more optimal ways to generate income and better control taxes.
Great case example/study for me because it's very similar to my scenario (except I'm 60, single and have already depleted my brokerage account).
I also have the "retirement tax valley" and have started Roth conversions to the 24% tax bracket. Curious why Roth conversions only to the 22% bracket in your example.
Thanks for sharing, Rick! Lots of factors involved, so next week I have video that I think you would find useful because it goes deeper into that exact question. So stay tuned!
There's a HUGE difference. There's only one of you, but two people in this example. The heading should be 'We're 57', not 'I'm 57'.
Excellent!!
Why assume 6.5% Rate of Return? Seems very conservative. Why not 7.5% or 8%?
In practice you can test all types of returns. 6.5% is more conservative and it’s more of a baseline for the first iteration of the plan.
@@MCalcagno People need to look at the Shiller CAPE table and what future returns look like when the CAPE is over 20 (currently close to 30) - hate to be the bearer of bad news but it's 5.3-5.4% for the next 10 yrs - if you put any stock in this information 6.5% might end up being optimistic
Goldman Sachs just predicted 4 Pct for next 10 years.
I am curious how much an analysis and plan like this cost to have you setup and would that include the specific invest guidance?
We are paid a fee based on the assets we manage, and that covers everything we do with tax planning, withdrawal strategies, investment strategies, etc.
If you'd like to chat more, click the link in the video description.
They’re still making mortgage payments?
I mean what's so difficult?
Just live off the dividends and not sell any stocks
Are you AUM based?
Yes
@@MCalcagno how does the AUM fee factor into the projections? They would likely be paying $2000+ per month to a financial advisor.
These projections already factor in our fee. Our fee would be lower than $2k/mo anyways.
Nice work.
Thanks for watching!
Did this couple receive an inheritance? Does this couple have children? I find many people with high levels of investible assets well in advance of traditional retirement age, often have rec’d a significant inheritance and or have not had kids!
This is anecdotal, but I’d say a majority of the folks I personally see in a position to retire early either own a profitable business or they were given company stock that has done well. Although you’re probably right, there’s a growing amount of folks that can now retire in advance after receiving an inheritance!
May I suggest; Understanding the power of compounding at an early age is more important.
Having a high income, having a high savings rate coupled with no kids all help also. Example: Investing $800 per month at 10% year in an index fund grows to
$2.7 million in 35 years
Starting at age 22 you’d get there at 57. Ten years ahead of the traditional age.
Knowledge compounds as well as dollars and cents.
Best wishes in your financial journey 😊
Stay Hungry.
Im 42, married with one toddler. Net worth almost 3 million.
Me and my wife bought our first home early 20s. Then used equity to buy more properties. I'm a tradie on 150k PA and my wife teacher was 100k now 30k PA casual work.
When you start early and invest it's amazing what can be achieved with pretty standard income (we are in Australia). Our first couple houses where purchased when we both earned well under 100k PA
Your projection for taxes during retirement and inflation is unrealistic not to mention that 401k will require huge taxes that needs to be paid
Roth conversion taxes are paid over time not all at once.
$150k with both your eyes closed at night.
The main problem with this plan is the the value of their home. I'm expecting the home market to crash 400% over the next 10yrs.
Hahahahaha
@@lengererIt's already starting to happen here. People are selling homes and living in campers and mobile homes instead. It's one less thing to worry about when you die and it saves money today. People are learning-the home is an expendable asset that you don't need.
400%??? Assuming a drop of 50% a year, That means a $1 million home would be worth $500K after a year and then $250K after two years and then $125K after three years and then $62K after four and then $32K after five and then $16K after six and then $8K after seven and then $4K after eight. I thinking your analysis may be off a tad. 🤦♂️
That’s the funniest prediction I’ve ever heard.
According to the 2019 Federal Reserve Survey of Consumer Finances (SCF) data, the median retirement savings between age 55-64 is $134,000 in the U.S. Only 8.2% of the population have over $500,000 in savings, so people with $2.7 million are in the noise... So, this video is not at all for your typical, average American.
I found it extremely interesting.
well, to be fair, the title of the video was not "I'm a typical, average American with $2.7 Million at age 57. How Much Can I Expect to Spend If I Retire Early?" It's targeted at people who've saved a lot and want to retire early.
Well, as described in the textual summary, it's a case study. You want many cases studies to see which resembles your situations more. If we get "median" scenarios stated, well, it's a case, and is probably not very useful for many people.
Well that’s on you. Turn away and go find another case study
I can’t make every video representative for everyone. But you could have $100k or $10M and these principles can still apply.
🙄 Anyone that has $2.7M at 57 and isn’t sure if they can retire cannot be real
I used to think so too. But once you cross the million mark. And you are planning for 35+ years of retirement And factor inflation into the equation. You realize a million is not that much (at that income level).
Trust me. This is a legitimate concern for folks in this bracket.
Yeah, it really depends on the area you live in and the standard of living you want.
all depends on your expenses - ALL - throw 5-7% inflation in the calculator and see where that 2.7 gets ya - not good! and higher persistent inflation is likely the future
You need 8 mil in savings to retire today as a couple. Anything less and you live past your 80s you're dead broke and working at walmart.
if inflation continues at a real 12-20% per annum 8 mil wont be enough
@@agates9383 if inflation stays that high-stocks would skyrocket along with that valuation... so no, I won't need more money.
The problem is it’s NOT savings. It’s investments. If you’ve got $4 million, $3M should be in the S&P500 so it can grow and $1M in bonds or laddered CDs.
@@glasshalffull2930 or a mix of PMs and BTC lumped in with bonds and some 5% govt mm's for as long as that lasts
House should not be included in the 2.7m sum - the income generating part of their portfolio is only 1.4m thereabouts.
The 2.7m does not include the house.