$1,000,000 for a Retirement at 55???

[@davidpeters9675]

It totally depends on your living situation. Paid off house (and no other debt), live in low-cost area, have a large inflation-adjusted pension and knowing you'll get significant Social Security starting in your 60s and you might not need much of a need a nest egg. Live in NYC or San Francisco with a big mortgage and no pension and you better have millions.

[@YourRichAuntie]

What if your pension fails and social security sinks. Most advisors would never advise to rely on social security and pension alone. Only 14% of gen x have pensions while over 50% have access to pensions as well

[@Markrtsoon]

Thank for the level headed video. There are too many of those who are preaching one could “retire” in their 50s with 500k. Yes, it is possible to survive and most of those are doing part time jobs. You made one excellent point, it will be very difficult to continue to do that into your 70s, let alone in your 80s. With all recent strikes and proposed tariffs, the inflation will be on the high side. Thank you for using at least 3%.

[@YourRichAuntie]

Great point!

[@FireNes]

Thank you 🎉 I really appreciate your info🙏😎

[@YourRichAuntie]

Thank you!

[@markaustin5269]

Thanks for the video. Too late for me to retire at 55. But if I had a million at 55 it may have been possible to retire at that age. Primarily due to low yearly expenses and low lifestyle expectations. Though I probably would have delayed to 60 due to longevity in my family. Delaying 5 years can make a big difference. Total expenses and how long one lives matter quite a bit.

[@Y2k1914]

As a High Income Earner and planning to retire in 2025 at 54/55, the only thing I didn't see you didn't take into account or "bring to light" is that your spending will decrease as you get older. You'll spend less in your later years.

[@YourRichAuntie]

True in some cases. Some people spend vastly more because of healthcare or home care needs that have to come out of pocket. Unless you have a wonderful long term care policy that will actually do as they promise and cover long term medical care costs, you're covering everything out of pocket

[@markaustin5269]

Discretionary spending goes down with age. But poor health could offset that with an increase in healthcare expenses.

[@saynay333]

I disagree with $4100 not being enough to live in SF and the wider Bay area. The biggest x factor is housing and if you own vs rent and when you bought, which is true anywhere. If you're retiring today at 55 with $1M in the Bay, you probably bought a house in the late 90s or early 00s which was infinitely cheaper than it is now, especially in places like Oakland, Berkeley, and parts of the peninsula. Younger people looking to the future that's definitely out of reach.

[@YourRichAuntie]

If you are a homeowner in the Bay Area, how could you cover property tax and insurance on $4,100 a month? My taxes and insurance are staggering and I’m working - I’m not sure how people on a fixed income do any of this

[@saynay333]

Definitely depends on when and where you bought. My neighbors are locked into absurdly low tax rates because of prop 13. 😑

[@YourRichAuntie]

@@saynay333 yeah, I remember a couple of years ago where changing prop 13 was on the ballots. If that ever changes (and it probably will eventually change), those people are cooked

[@cutehumor]

@@saynay333 all the billionaires are moving out of California, so the tax revenue will drop. the democrats want health care and pensions in California, that prop 13 will be thrown out eventually

[@Mindyourbusiness82]

Lol..I always like that you end with "Tell me what you like. Tell me what you don't like." Lol. I don't like that you've kind of proved true what I've suspected for some time. For years, I've heard "1 million" is the golden amount to have saved. But I have been hearing that for some time and I started realizing that 1 million number is old. For my generation (I'm a so called "elder millennial" at 42) it's likely closer to 1.5 or 2 million should be the goal which feels daunting to say the least.

[@YourRichAuntie]

Exactly!! No one is really talking about the role inflation plays and the fact that we've had supersized returns in the market over the past 20 years. I think it's going to be a lot harder or people in their 40's and younger to retire - we all have to reconcile working until at least 70

[@vchap01]

People without a decent pension should not spend more than 4% of the portfolio a year. That's only $3,333 a month gross without accounting for health care (until Medicare) and taxes. If you want to spend $4k a year + taxes + insurance, you are going to need at least a $2.25M portfolio at a 4%/year spending rate. Yes, there is social security that can replace a part of that number but who knows what it is going to be. I would not be comfortable with less than $1.75M with some of that money in a bridge brokerage account. On top of that, a retiree should have a couple of years of spending in an emergency fund (HYSA or treasury notes). There should be enough bonds in the portfolio for 5-7 years (at the very least). Yes, people have retired with a lot less money. But a working an extra 3 years can make a big difference for a high earner. It is not just cumulative interest but the reduced number of years until the SS and Medicare benefits. It is also going to put you within 18 months until 59.5 when you can start using your retirement accounts without the issues that Rule of 55 (in some companies) and 72t rigid distributions present. That time is going to go by quickly and can save you a lot of headache in your 70s or 80s. You are still going to have enough time to do Roth conversions before RMDs become a problem.

[@Markrtsoon]

One thing I would like for you to clarify is the $3700 SS. Unless the person has full 35 years of high income at 55, it is really unlikely to have that high SS at FRA. Right? The projection of $3700 a month is based on full 35 years of high income. It is difficult for a 20 years old to make6 figures.

[@YourRichAuntie]

Yes. It’s based on decades of being a high income earner. It’s well above what most people would get for social security

[@Riffman42]

Remember, SS does adjust your wages for inflation, so those early years will look better for the calculations.

[@mikechr88]

Love your videos and presentation style. Just a comment about this scenario: you are saying this person lived just fine on their 4095/month net for 12 years until age 67, they from that point forward they get a 3700/month bonus every month, indexed for life (social security). That's an extra 44k/year. So one would think, that extra amount, which you clearly don't need to live, would cover all most of the "what if" scenarios, what if you need a new roof, have a health expense, etc.

[@YourRichAuntie]

Good point. In worst case scenario, if the person has health issues they could have sharp escalating medical costs and could use some of that extra money to cover those additional costs or perhaps for home care

[@mikechr88]

@@YourRichAuntie Exactly. So another way one might prefer to model it, is keep them at that same initial spending level, and invest the surplus (social security), and see how that goes. This will build up accounts and shows they are just fine for pretty much any eventuality, especially if they own their home as that is yet another back-stop.

[@YourRichAuntie]

@@mikechr88 The question is - what if you don't own a home? There are a lot of younger generation (millennial, gen z) that will reach retirement without home ownership

[@mikechr88]

@@YourRichAuntie Yes, true. Regardless, if this is the scenario you are modeling, would be good to show how things progress, what kind of buffer they build up if they don't just blow that extra 44k annually (in real dollars, so in fact more nominally) starting at age 67.

[@YourRichAuntie]

$44K sounds like a lot, but 12 years with 3% inflation, its more like $23K in today's dollars? Thats a couple of emergencies in a year at the rate everything now is going

[@masoncnc]

Stupid question: how does 5% inflation kill your retirement? Doesn't inflation effect equities as well as food/gas/housing? I'm guessing the problem is actually the return-free-risk of a heavy bond portfolio. Warren Buffett says 10% short term bonds

[@YourRichAuntie]

Maybe I should do the calculations to show how 5% inflation completely kills everyone’s retirement. It kills retirement because the cost of living increases far outstrips solid market performance + taxes over time. Remember the average market return on a 60/40 is 8%. We’ve seen record breaking returns over the past twenty years. If this market cycle ends and we return to 8%, between taxes and inflation at 5% your portfolio returns couldn’t keep up with price growth

[@JeanP-f7m]

If you want to beat the 9 - 5 rat race in the corporate world, please invest asap...time is your friend, to be sure. If you have pension, that's a plus but rare. Honestly, we're all trading time for money...do you really want to work till you die? Are you taking that money to your grave & confident that money will be available to you in your next life? Hopefully, you make wise financial decisions..so you can enjoy the limited time on earth...good luck to all.

[@rolandosouffrain7957]

Im not a high income earner but I plan to have 1 milly by age 55. I am part of that 5%. Lol. I will have it all in my Roth 401k and Roth IRA. I'm 48 and have a $740K net worth. OHH RAH. LOL 😂😂😂 Should have $2.5 Milly by my retirement age of 60. Only 12 more years

[@YourRichAuntie]

Congratulations!!

[@susanbibeault]

But why do you have them not reducing portfolio withdrawals when starting SS? The amount they are taking as income at that point jumps from about 80K to 120+K. Unless I misunderstood the xls. I am much more fearful of the pre 67 years where I would probably have a more active lifestyle and don't have extra $$ from SS to lean on.

[@susanbibeault]

That said, I love your channel. So many advisors on KZbin paint rosy pictures of early retirement. It is nice to see more conservative perspectives.

[@YourRichAuntie]

Another viewer asked the same question. I wanted to show that you could keep the same levels of withdrawal from investment accounts should you so choose (but it would mean running out of money at some point). You’d be shocked how many people choose to keep the higher withdrawal and include social security and use the extra money for medical expenses or other expenses.