5 Steps To Create A Portfolio for Lifetime Income!
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- Опубликовано: 30 июл 2024
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In this video, we'll go over the insights on building a portfolio that ensures lifetime income, particularly for those considering early retirement.
We'll emphasize on the importance of not running out of money but also not dying with too much, allowing us to maximize the retirement income while still having health and energy.
The video covers the significance of diversification, the impact of market downturns, and how to balance equities and fixed income to create a stable retirement income stream.
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Time Stamp
00:00 Introduction
01:41 Comment highlights and discussion
03:17 Building the correct portfolio for lifetime income
06:51 Portfolio examples
09:09 Importance of diversification
12:45 Impact of different portfolios over time
15:36 Real-life client example
17:30 Worst case scenarios and preparing for downturns
19:21 Final thoughts and recommendations
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Ari Taublieb, CFP®, MBA, is the Vice President of Root Financial Partners (Fiduciary) and host of the Early Retirement Podcast.
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⚠️ "DISCLAIMER:⚠️
All content is not to be received as financial advice, and each individual should consult with their dedicated financial planner, tax preparer, estate attorney, etc., before making any financial decisions.
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The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for. It's especially difficult for people who are retired.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
Even if you’re not skilled, it is still possible to hire one. I was a project manager and my personal portfolio of approximately $850k of my retirement pension took a big hit in April due to the crash. I quickly got in touch with a financial planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $250k since then.
This is great! think your advisor would get on the phone with an unknown? i'm in dire need of proper portfolio allocation
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with Leah Foster Alderman for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Found her, I wrote her an email and scheduled a call, hopefully she responds, I plan to start the year on a woodnote financially.
one of my favorite videos so far, Ari. you're on a roll lately. diversification produces more options to leverage regardless of market conditions.
Appreciate that! Always trying to up my game
The "die with zero" strategy doesn't mean you don't have dependents, it means if you do you will disburse the money to them when you're still alive and when it is likely more useful to them than after you're dead and they're middle aged. "Die with zero" means leaving money to people earlier rather than later when you die. Of course there can be very negative tax consequences since inheritance laws are generous.
There was also something called the lost decade, 2000-2010. Many of us in or near retirement care more about not losing what we've accumulated, than Optimizing a portfolio with unnecessary risk.
The biggest problem with income producing products is that most of them are bonds. Which is a debt based product. As banks continue to fold due to the debt crisis these bond “income” products completely fail. The only reason you are able to use prior statistics to support your thesis is solely because the US continues to bail out banks and print more money. When that music stops playing many will not find a safe chair to sit in because nobody will be there to bail them out
Thanks Ari for another great video with very useful information!
Glad it was helpful!
Love the topic. :) Can't wait to watch it.
Hope you like it!
Hello Ari, i feel this is your best video yet. I really appreciate the information and enjoy the content.
I appreciate that!!
Step 1, build monster portfolio, step 2 build castle in the hills. step 3 pass down portfolio to next generation step 4 watch my kingdom grow from cloud recliner chair
Appreciate you, Ari. Thank you!
You're so welcome!
Thank you so much!!
Very informative. Thank you!
You’re welcome!
I loved portfolio visualizer and now it’s paid. I haven’t found a good alternative but I want to run this before I believe the numbers. It’s looking off to me but I’m sure it is right because you might have checked it.
Great video. Thanks! Do you have a video that covers how to change diversification as you near retirement?
This was a good one.
Thank you!
I can’t imagine dying while wishing I spent more. There is always someone to give it to.
However, perhaps better than running out of money before you die, no?
I can imagine sitting in the house wishing I had the money to be on vacation, tho. Or looking at a stack of money while wishing i would have spent it on experiences. 🫤
Great video, Ari. I'm still working and am invested 💯 in index funds. I've dabbled in REITs and international funds but never saw great returns. However you've given me a lot to think about diversifying in my retirement years. Thank you.😊
Thank you!!
Very good illustration of how greater diversification can actually outperform the tradtional balanced portfolio and the S&P 500. I've used Portfolio Visualizer a number of times but I didn't have the withdawal portion so I was always just looking at how the accounts grew and the S&P fund would always crush balanced or diversified funds. It's amazing to see how withdrawals change the outcome.
I also enjoy the idea of doing ROTH conversions during a bear market. If you could schedule a bear market for me in a few years when I'm ready to retire, I'll feel better about moving my pretax savings into a ROTH😃
Excelente
Thank yiu
Instead of measuring the lengths of bear markets, wouldn't it be better to measure the length of time to recover back to previous level. Although the 2000 bear market lasted only 929 days, it took 8 years for S&P 500 to be at previous high. If we take dividend and inflation into account, it took even longer.
Beyond a sequence of return risk and with a person comfortable with both the variability of using a dynamic spending strategy and volatility of a 100% US Market asset class it seems like a 100% US Market portfolio would fare better than the portfolio 3 mix.
Nicely done and enjoyed the playful tone - there’s plenty of too dry, too serious highly qualified financial content out there.
You made it pretty clear, but it bears emphasizing, that fully diversified portfolio looked best here because the investor was “taxing it heavily with significant withdrawals *every single year*. An investor who does not need to hit their portfolio heavily every year, who perhaps can decide to take money out only when the market is up (“cash/spending bucket” strategy), or who does not need as much in general from their portfolio can likely be more heavily in or all in equities.
Well said
Some of what you advocate I agree with. For example, depending on other income sources and what percentage of your expenses are covered by them should impact your portfolio mix. But other than that, I think its a case by case individual situation. Also while I don't suggest timing the market, having cash does give you opportunities to make changes in asset allocations. I think we both would agree, that the most important is not to have to liquidate assets when they are at market lows. And I think we both know that equities DO out perform fixed assets over time. So for me, even though now it looks like I AM spending about 2% of the portfolio value, because of my income sources including SS, dividend and option trading income, and soon my wife's SS. cover about 70% of the expenses. Other than increasing my cash level to about 2 years of burn I am mostly in equities. Specifically income stream is about $13 a month. Monthly expenses now about $19K, but going to $16K . but the portfolio is one where the difference between the 2 is about 0.0001% the value of the portfolio. So I am not going to be "taxing it: to much with the withdrawals. My plan is to be able to weather any large correction of the market
It's easy when you look back and alreay know what happened.
Good point. I wonder if the results would be different if we pick a different starting period.
It's important to invest for desired outcome.
Costs have ALWAYS and will always be the highest they’ve ever been! Get used to it and figure out how to get it done. I guarantee most people can cut unnecessary costs. Cut stuff you don’t use, don’t buy junk, whether junk food or junk stuff. Buy only real food, “good” “stuff” you love.
I often wonder about this. What is junk stuff. I just bought some stuff on Amazon Prime day. Some docker shorts, a belt, a small steam cleaner, some cheap sunglasses that I don't care if I lose or scratch, etc. Is it junk? To me it's quality of life and I can afford it. I could cut it out though if I needed to.
Should we use the same allocation % like portfolio3? Great stuff, thank you!
Depends which accounts you have - check this out: ruclips.net/video/zCVxJWF6E4w/видео.htmlsi=PKocpTeuBt86n6we
Does this mean that we should be diversified and reallocate when we start withdrawals in retirement? But until we start the withdrawals, we can be as aggressive as possible by being in 100% equities?
Check this out: ruclips.net/video/zCVxJWF6E4w/видео.htmlsi=PKocpTeuBt86n6we
Hmmmm . . . Ari . . . . I don't see ANY Bond funds in your 3rd portfolio. Do you think at this level it's ok to just have TIPS and long term treasury in place of bonds? Thank you for showing this. I would have guessed that the S&P 500 would have won.
When I read that comment and I thought what a selfish A-hole. 😮 But everyone needs to live their life on their terms!!! Thanks Ari.
You’re welcome!
Why is he an asshole? Because he wants to enjoy 100% of what he earned? 🤔
Ari- can you use pretax dollars on college tuition? Tax free?
My planning is for 7 generations. I want to give while I’m alive and leave as much as I possibly can to my children and heirs.
7 generations????
Can you add me? 😁
I like your content, but all these financial guides are for people who have a lot of money in retirement. Most of them seem to be used as advertisement for their services?
Can i do Roth conversations in retirement or at my full retirement age?
You can do them at any time. Don’t always recommend, but nothing is stopping you from doing it when you want to legally.
Work on building your energy and health aa well!!
Yes!
Fixed Lifetime SPIAs. Let the insurance companies bear the risk.