Ari, I have to admit in a little ageism I’m experiencing here. You appear way too young to be talking about this stuff and yet from my research, you are spot on! This is my issue, not yours. Your content is good enough that you’re going to force me to subscribe. I’m 59 and planning on retiring early next year. I’m a DIYer but I can see how you bring a lot of value to people who can use the help and aren’t interested in managing their retirement finances. I’d love to see more content from you on Roth conversions. My goal is to maximize them in my early retirement years.
One of the nicest comments I’ve received. I am always looking for new content ideas and will make a new video on Roth Conversions soon! I’m glad you’re enjoying the content! How did you find the channel? Yes - I am young and focus on retirement planning because too many advisors are retiring and therefore people won’t have a financial partner to come alongside them for the rest of their lives. I find retirement planning very exciting when executed well as it helps people live their best life. Thank you for supporting the channel!
@@earlyretirementari I found your channel via the RUclips algorithm, I guess. I watch a lot of retirement and early retirement content and your content started popping up. Great point on your ability to be there long-term for your clients! As we get older, we start losing our long-time doctors to retirement, I’ve noticed. It makes sense that the same thing would apply to financial advisors. Congrats on your channel. I foresee a great future for you!
Very informative video. What is your estimate of medical expenses for a 62 years old with $100,000 Roth conversion per year? For a lot of people thinking of retiring before 65, this is one of the biggest uncertainty.
You're very welcome Mark! Medical expenses vary, but don't think of them with a Roth Conversion in the same sentence (I know that sounds odd). You're right - most people retiring before 65 are uncertain about healthcare. Let's assume you spend $800/mo. on private insurance for 5 years. It's not cheap, but the real risk is you don't have proper coverage and I'd rather be conservative. $100k of Roth Conversions can be effective to reduce RMDs and create additional tax-free income. However, you may want to ensure you're not additionally drawing from your IRA/pre-tax accounts pushing you into an even higher tax brackets during these years before Medicare. It can often make sense before Social Security to get on those conversions! The real risk, Mark, may be that you don't retire early solely because of a short-term insurance expense (in many cases).
@@earlyretirementarithanks for taking time to reply. A 100k Roth conversion could mean we would lose the ACA tax credit. But without the conversion, we would pay more tax upon RMD. How do we balance that was my question.
er....The 60/40 rule is an investment strategy that allocates 60% of a portfolio to stocks and 40% to bonds. not 60% toEquities and 40% stock like you stated
Great information But 2 question do you consider the 5-year safe money part of your allocation. Because even if the 1 million was all stocks and the 500,000 was all conservative fixed income that's a very conservative portfolio. That would be very close to 60/40. Question 2, you recommend a 5% withdrawal rate. Is it 5% in the 1 million or is that 5% from the 1.5 million?
Thanks, John! Question 1: Yes I do consider that part of the allocation and in this case it would be close to 60/40. I use round numbers for the easiest examples and this framework can then be applied to your individual situation. Question 2: 5% is from the $1.5M. Have you heard of Guyton's Guardrails approach?
@@johngill2853 if followed correctly, you can take out 5.2% - 6% instead of 4% and never run out of money for 40+ years assuming you’re managing correctly.
@@earlyretirementari I would probably say it's a high probability that you wouldn't run the money. Of course we all know the Trinity study and 4% was very conservative on top of being non-diversified. I would never use all S&P 500 for my stocks, it would not allow me to sleep at night it's not enough diversification. But I still only will start with 4% probably, assuming I meet my goal (actually a little less than 4% because I don't see how I won't overshoot my goal) As we talked about before I want to be a permanent tourist and from 64 to 70 I'm going to live in Vegas. When 70 comes and I collect my social security I will reevaluate my portfolio and hopefully increase my withdrawals (assuming I don't get a bad sequence returns). Then my next destination at 70 will be somewhere on a beach and hopefully with a large portfolio providing larger withdrawals. But I would have no fear of withdrawing 5% if something were to happen and I had to retire early and didn't reach my goal and just simply stayed home where my family is.
I'm 61 and if the US had a real healthcare system like a civilized country I could retire at 62. But since we have the crappiest healthcare system I'll be holding on to my employer insurance (which includes dental and vision too) with a, pardon the pun, death grip. Instead of making room for a young, hungry, up and coming worker I'll be quiet quitting over the next 6, 7, 8, 9 years and stashing away a mountain of money instead.
Ari, I have to admit in a little ageism I’m experiencing here. You appear way too young to be talking about this stuff and yet from my research, you are spot on! This is my issue, not yours. Your content is good enough that you’re going to force me to subscribe. I’m 59 and planning on retiring early next year. I’m a DIYer but I can see how you bring a lot of value to people who can use the help and aren’t interested in managing their retirement finances. I’d love to see more content from you on Roth conversions. My goal is to maximize them in my early retirement years.
One of the nicest comments I’ve received. I am always looking for new content ideas and will make a new video on Roth Conversions soon!
I’m glad you’re enjoying the content!
How did you find the channel?
Yes - I am young and focus on retirement planning because too many advisors are retiring and therefore people won’t have a financial partner to come alongside them for the rest of their lives. I find retirement planning very exciting when executed well as it helps people live their best life.
Thank you for supporting the channel!
@@earlyretirementari I found your channel via the RUclips algorithm, I guess. I watch a lot of retirement and early retirement content and your content started popping up. Great point on your ability to be there long-term for your clients! As we get older, we start losing our long-time doctors to retirement, I’ve noticed. It makes sense that the same thing would apply to financial advisors. Congrats on your channel. I foresee a great future for you!
@@srconrad Thank you for sharing and congratulations on your not-too-distant retirement! Very exciting. I appreciate the feedback.
Excellent content, Ari. When you dive into the numbers, you have a solid foundation for a good plan.
Thanks, David. Appreciate that feedback and yes, it's all about the solid foundation!
Very informative video. What is your estimate of medical expenses for a 62 years old with $100,000 Roth conversion per year? For a lot of people thinking of retiring before 65, this is one of the biggest uncertainty.
You're very welcome Mark! Medical expenses vary, but don't think of them with a Roth Conversion in the same sentence (I know that sounds odd).
You're right - most people retiring before 65 are uncertain about healthcare. Let's assume you spend $800/mo. on private insurance for 5 years. It's not cheap, but the real risk is you don't have proper coverage and I'd rather be conservative.
$100k of Roth Conversions can be effective to reduce RMDs and create additional tax-free income. However, you may want to ensure you're not additionally drawing from your IRA/pre-tax accounts pushing you into an even higher tax brackets during these years before Medicare.
It can often make sense before Social Security to get on those conversions!
The real risk, Mark, may be that you don't retire early solely because of a short-term insurance expense (in many cases).
@@earlyretirementarithanks for taking time to reply. A 100k Roth conversion could mean we would lose the ACA tax credit. But without the conversion, we would pay more tax upon RMD. How do we balance that was my question.
@@Markrtsoon Depends on living expenses / projected RMDs.
Instead of clips of random clipart, get on a whiteboard or show a spreadsheet
er....The 60/40 rule is an investment strategy that allocates 60% of a portfolio to stocks and 40% to bonds. not 60% toEquities and 40% stock like you stated
i think he mis-spoke and didn't realize it. I caught that also. Weird mistake though, right?
Great information
But 2 question do you consider the 5-year safe money part of your allocation.
Because even if the 1 million was all stocks and the 500,000 was all conservative fixed income that's a very conservative portfolio. That would be very close to 60/40.
Question 2, you recommend a 5% withdrawal rate. Is it 5% in the 1 million or is that 5% from the 1.5 million?
Thanks, John!
Question 1: Yes I do consider that part of the allocation and in this case it would be close to 60/40. I use round numbers for the easiest examples and this framework can then be applied to your individual situation.
Question 2: 5% is from the $1.5M.
Have you heard of Guyton's Guardrails approach?
@@earlyretirementari yes I looked at the guardrail strategy after you mentioned it.
@@johngill2853 if followed correctly, you can take out 5.2% - 6% instead of 4% and never run out of money for 40+ years assuming you’re managing correctly.
@@earlyretirementari I would probably say it's a high probability that you wouldn't run the money.
Of course we all know the Trinity study and 4% was very conservative on top of being non-diversified.
I would never use all S&P 500 for my stocks, it would not allow me to sleep at night it's not enough diversification. But I still only will start with 4% probably, assuming I meet my goal (actually a little less than 4% because I don't see how I won't overshoot my goal)
As we talked about before I want to be a permanent tourist and from 64 to 70 I'm going to live in Vegas. When 70 comes and I collect my social security I will reevaluate my portfolio and hopefully increase my withdrawals (assuming I don't get a bad sequence returns).
Then my next destination at 70 will be somewhere on a beach and hopefully with a large portfolio providing larger withdrawals.
But I would have no fear of withdrawing 5% if something were to happen and I had to retire early and didn't reach my goal and just simply stayed home where my family is.
I'm 61 and if the US had a real healthcare system like a civilized country I could retire at 62. But since we have the crappiest healthcare system I'll be holding on to my employer insurance (which includes dental and vision too) with a, pardon the pun, death grip. Instead of making room for a young, hungry, up and coming worker I'll be quiet quitting over the next 6, 7, 8, 9 years and stashing away a mountain of money instead.
I’m sorry but this was nothing more than a commercial. You didn’t provide any answers!! Think of this and that etc. etc.. I already knew these things.