AVOID These 3 Retirement Strategies!

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This information is provided solely as an informational resource and should not be construed as investment advice or recommendations. Decisions regarding investment strategies, retirement timing, and other financial planning aspects constitute critical choices in one's lifetime and should never be taken lightly.
This information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific person, and may not be suitable for all individuals.
It is crucial to note that this information is not intended to form the primary basis for any investment decision. Always consult your own legal, tax, and/or investment advisor before making any decisions related to investment, taxation, estate planning, or financial considerations.
Contrary to the notion of "get rich" programs, success in financial matters often involves fundamental strategies, diligence, and time in the market. Conduct thorough research, make prudent choices.

[@pameladarling5497]

Love your channel 😍. Thank you. I retired before 50 and went to 20:50 SE Asia .My main goal is to live below my means retired or not. Pay cash for big ticket items, pay off cards before due etc. I know that if can supplement my own money with a side hustle I did it. I've tried to spend as little of retirement $ as possible. I'm frugal but not to the point of feeling like I m missing something. To the contrary protecting my $ helps me get what I want and that feels great. I'm living my dream. Cultivating loving the simple things in life can be very rewarding. Gardening, travel,my cat, my koi pond, art, a good book or movie, exercise, praying or meditation,healthy eating, no alcohol, a purposeful existence. This works for me.

[@user-bg9em7ch6k]

Sounds absolutely lovely, and totally empowering!😊

[@rob-fb5xs]

Another strategy I’ve considered is to aim to spend most of my pension pot over the 10 year period following retirement when I expect to be more active. Leaving only enough to give me a small amount each year to top up the state pension when I’m older and less active. If the pot isn’t big enough to give a big annual income for 30 or 40 years this is attractive to me as it gives me more when I might need it most.

[@adamsaunders9876]

My thoughts exactly, all this spreading it out over 30/40 years is making the big assumption your going to live that long and more importantantly stay healthy enough to enjoy spending it!

[@lissajeri1492]

There is another psychology of approaching 'the number' of what is needed in retirement. From one end, it is setting the goals and then adjusting what you can do to achieve those goals based on the actual amount available per year. The other end is setting the actual amount that can be realized each year and then deciding what you can do with it. Different people, different ways of seeing the elephant, different awareness of what goal might be. But across the board, discipline and consideration of the long term must be front and center. And this is a reach for so many people.

[@2GoRoam]

Agreed Lissa, I will be talking about that specifically in a future video! Hope you are well.

[@sid35gb]

Hold 2 years worth of money in cash and 2 years in bonds rebalancing yearly if the market is down don’t rebalance that year and wait for a recovery. Most big corrections last about 2 years. So you don’t need to change your plan at the whims of the market. Plus when state pension kicks in the plan can be even more robust. Although towards the end of life an annuity can be used to cover the uncertainty. It’s a possible strategy but again not suitable for all.

[@TheFlairGuy]

We love the dry subjects. There's 10,000 other channels to see the beaches. Thanks Neil!

[@2GoRoam]

Ah very kind of you to say! We do worry that we bore people :-)

[@pegan60]

@@2GoRoam You are a refreshing resource for those us responsible to see our retirement provide us with a better quality of life and last. Thank you!!!

[@andrewrobinson2565]

I've never owned a share or a bond, and put everything into property from age 25. 8 rooves + 2 pensions = 9 incomes; because you always keep one roof for yourselves 😘👍. Always good to listen to others' methods +1.

[@1clkvideos140]

Wait just a dang minute Neil! You just spent 20% of this video blowing my plans all to hell! OF COURSE I’m using all of your (de facto) financial advice to plan EVERY STEP of my retirement! Why, just WHY should I do any research or invest any personal thought regarding my own situation when I have you here just laying it all out there for me. Now, of course, if it doesn’t work out for me - I’ll be looking for someone to blame - because it sure can’t have been MY fault! 🤣🤣🤣 Seriously - I’m glad to see you back in a capacity that works better for you and Sarah. You look refreshed; I think the shift has been good for you.

[@Greylocks129]

Vanguard dynamic spending strategy is worth looking at. Plus at least 2-4 years in cash to sleep at night

[@KateS1172]

In Australian the Aged Pension (at 67) is means tested. If you have a pot of money then you won’t be eligible.

[@DonFury-pi3dy]

You can have up to $500k and still get the Australian pension

[@andrewrobinson2565]

​@@DonFury-pi3dyI'd be stuffed then. Got over double that, which should mean I wouldn't need a state pension. I get 520€ pm in France at 63 based on 20 years of contributions.

[@2ndSprings]

This is a brilliant presentation of these retirement strategies. Thank you so much!

[@2GoRoam]

You're very welcome! Really appreciate the feedback.

[@chipledhungaman]

The 4% rule research was also based on US stocks and shares.

[@donnadickenson8992]

Thank you. Very interesting. I haven't heard any mention of labour suggesting major changes to the state pension. I will look into that.

[@sonjak2395]

Great video again! 😀👍 A German finance magazine suggests to put a certain amount into a savings account and the rest into a well diversified exchange traded funds portfolio. When stock markets go well you withdraw from your portfolio. And if not, you withdraw from your savings account.

[@ThePolishedapple]

I came here to say this. I retired at 48 and although I have a stream of passive income. When I don't, I'll be holding 3 years of short dated bonds / savings / CLO ETFs and withdrawing from them, when the markets do well I'll be trimming gains from my diversified stock portfolio and topping up my bond / savings / CLO ETF portfolio to 5 years or back up to 3 years depending on whether you've had to draw from it. It's similar to your suggestion, but you want your non-volatile portfolio to always sustain 3 years of poor market returns but also generate some income when not in use. The key is to diversify but also layer your portfolio so that you NEVER have to dip into growth or dividend stocks when the market isn't doing well but have enough income and liquid funds to take you through a period of poor market performance.

[@stevenrix7024]

Makes sense. James Shack (on his KZbin channel) shows simulations of applying the 4% rule historically, where there are risks of running out of money early in a bad market and also wasting the proceeds from a booming market. (If your pension pot doubles in value after five years despite your withdrawals, you might want to consider buying an annuity (I.e. a guaranteed income for life) from some of the gains to reduce risk from a subsequent crash; if you have no dependents then in some scenarios you even end up with more in your pot after 30 years than you started with, which you have missed out on enjoying.)

[@sonjak2395]

@@ThePolishedapple Thanks for the insight. 😀 This is how I plan to do it, but was unsure if a backup of three years would be sufficient.

[@marton349]

The only issue i have with any formula is the fact you wont need any more than the state pension beyond your health. After 85 i would say your desire to travel the world seriously diminishes. The crucial factor for retirement is no debt or mortgage and extremely low overheads. So im planning a damn good 20 years from 65.

[@jimspencer3072]

Exactly, but 85, I'd say past 75 if you get there you ain't travelling the world as a playboy ffs, it's over...

[@grannythebuilder395]

Isn't the risk that your spending will go up paying for things you currently do yourself like cleaning, gardening and DIY. You might not be taking expensive holidays but you might need to spend on remaining comfortable at home.

[@clewis5220]

After 80 I understand travel and car insurance goes up massively even if you well so I would say over 80 I won’t be travelling much

[@nicobass1966]

Good man and thanks - lots of thoughts in my head about retirement but I'm getting there, look forward to the next one

[@2GoRoam]

Great to hear that you are thinking about Retirement. Appreciate the kind comment.

[@pegan60]

Neil and Sarah. We love you channel. I am the financial planner in the family. I am struggling with finding a good way to have real time retirement account information in one place ie. a spreadsheet. I go into each account periodically and update the numbers but this is not correct 1 hour after I update it. You are a master at finding great tools! Any suggestions would be appreciated! Thank you.

[@rickymclaren]

I am planning to use the endowment strategy. Basically a smoothed version of the percentage of portfolio. Assuming a 5% of portfolio you start with 5% withdrawal in year 1 then when you calculate your 5% o year 2 pot you adjust it to be 70% of your last years withdrawal and 30% of your new years calculation. And if the pot is going down too far I will dial down the percentage.

[@2GoRoam]

Yes Endowment is a really balanced approach to drawdown, we like that one.

[@ThePolishedapple]

@@2GoRoam another option is to simply save enough up such that you don't have to invest in equities. Simply build a bond ladder from 5yr ,10yr, 20yr (4.55%) and 30yr (4.45%) bonds and chill. No interest rate risk, no market risk and a long term return of over 4%.

[@carlyndolphin]

@@ThePolishedappleThis doesn’t work

[@StuartVinter]

Just stumbled across your channel and very pleased that I have. Just retiring and all your thoughts and experiences (and ramblings) are well worth a listen. Looking forward to the best drawdown option next. Thanks and keep up the good work. And I hope your back is improving!

[@nickhumphries6220]

Here's a good strategy. Read, "Who Stole My Pension". It's about US pension system but relates to the UK. Learn a foreign language for a cheaper country than the UK and move there when retire. The Government will wreck your retirement funds, and the UK is now not as safe as it was. Finally, if you look around, the health care is better than in the UK too. Just make sure it is a country where your Government pension can be transferred to. That's not pension advice but retirement advice. I retire next year. Italy here I come.

[@payroll970]

I use the Vanguard dynamic spending strategy which takes elements of all the strategies you have mention..

[@payroll970]

The biggest flaw off the 4% rule is that you most likely die with a large amount of money left in a portfolio meaning you could have lived a better life style while you were alive.

[@tootietatum8737]

Although you are both a ways away from stopping your travels, I don’t think I am alone in wondering what your transition planning looks like from a life of travel to one back in one location. Any particular pointers on how you plan to re-purchase a house, or if you plan to even, do that? I think one of the things that gives me pause about making the leap to travel is the unknown of making that transition back and reestablishing a life and one spot. What does that financial planning look like? I’d love to hear what you guys have done looking forward, especially considering that smile-shaped curve.

[@leestorm5640]

Thanks a lot for simulation ,becouse older people not everyone can work with excel and set up all point. Thanks one more time. Keep going, god bless you .

[@user-fv1576]

Top video . Sounds like we read the same retirement planning material ! 😂 I’ve been searching for a software product to help in the uk 🇬🇧 however they are all locked behind IFAs or silly money .Great products in the USA new retirement , not Uk . Looking forward to seeing your spreadsheet- hopefully save me building similar or some software.

[@waynev5097]

These are very interesting strategies. I think these would assist people particularly prior yo retiring when they are trying to work out how much capital they may need to retire. Unfortunately they seem to all attempt to set an amount/percentage and set and forget. Surely the best way is to estimate how much you think you will need per annum. Track your expenditure each year. Use this data to calculate your draw down each year. As time goes on you will probably reduce discretionary spending but some areas like health may increase.

[@DVDKEV]

One option would be a mix of an annuity and then a % of remaining portfolio with the balance. The annuity being index linked, covering your essential living expenses. Any balance of your pot providing a % of portfolio set at say 4% for example. That way you have a guaranteed basic income for the rest of your life plus a pot which shouldn’t get depleted in its entirety and should you need to increase the drawdown in your final years, due to healthcare, there is that option. It’s disappointing that pension providers don’t allow the customer to set the % of portfolio method at outset and then review periodically if they wish to, thereby negating the need for them to ‘claim’ the drawdown each time they need to. Claiming is probably more difficult the older you get - there’s a good chance the older, frailer and more forgetful you get the greater the chance you might not claim it on time, make an error in your calculations or forget to claim at all.

[@nigel1654]

I'm 60 soon. 15 years of quality time left. After that , doctor's appointments and not been insured for holidays. Put in a home and money gone. Take your pension and blow it for 15 years. Good times. Then, walks and cream teas. Odd whisky 🥃 If you think long term you loose it. ££££££. It'll be taken off you in a home. One room with a commode. Spend.

[@edwinsvoboda8067]

I'd retiring or working less in 8 years, and considering this financial recession, Im deciding to begin taking up skilled trades. I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $120K per year but nothing to show for it yet

[@retirementdiaries68]

Great stuff Neil! Fantastic content.

[@andylayard8114]

Great video just a comment from me is to be aware of platform and investment charges on your portfolio. Inflation is critical but other costs should be considered. Finally think about tax and what the number is net of all the above. Cheers 👍

[@livingworkingoutsidebox]

Well done. Great food for thought 👍

[@nicolacornish7935]

Love these videos. Thanks!

[@2GoRoam]

Thank you so much Nicola! Really appreciate the feedback.

[@omrouk]

Looking forward to the case studies.

[@2GoRoam]

Thank you! We think you will find them interesting :-). Hope you're all well.

[@omrouk]

@@2GoRoam just got back from a month of travel and have begun to catch up on your videos :-) hope you both are doing great!

[@2GoRoam]

You did a cruise didn't you! ? Looked amazing.

[@omrouk]

@@2GoRoam A week in the UK, a week in the Netherlands (Efteling is amazing if you have any interest in theme parks), and a 13 day cruise up the coast of Norway up into the Arctic Circle. An amazing trip!

[@edwinsvoboda8067]

Absolutely correct

[@forgit4562]

simple and brilliantly explained.

[@travellinman382]

Good info, I’m one of the few who have a retirement pension so I’ll be watching for that video.

[@preparingforretirement]

Thank you for the discussion... good stuff! I had to laugh when your example took the 500k down to 1k. I gotta tell you.... if that sort of crash happens I would say that the world is probably imploding. I think I'd be rather distracted with trying to stay alive in the panic and rioting. HA! 😁 We will be retiring and leveraging geoarbitrage against our savings, which includes selling our home and retirement funds. We will also have SS and by my calculations should have quite a few years without having to touch the balance of our funds, at least until one of us passes. Lord willing anyways. The only real way for us to do this is to leave the USA. The medical system here leaves us too vulnerable to a catastrophic event and nursing homes/assisted living in this country are either much too expensive or they are complete horror stories. We've already had a bout with cancer while employed with great employer coverage and have zero desire to do that while retired and on medicare here. No thanks - I'll go elsewhere and spend my money in that economy. Thank you again!

[@2GoRoam]

Haha yes, when you say that a particular drawdown strategy guarentees that you don't run out of money it can sound enticing! But the reality of living on $40 a year is a tricky one :-) Thanks so much for the comment.

[@GrrliinaK]

Yup! Same feeling about US inability to provide medical coverage for those under 65. To be fair, my mother is 85 and gets excellent care on Medicare, but I don’t want to be trapped waiting till 65.

[@ThePolishedapple]

​@@2GoRoam 40 pounds or 1000 pounds is going to ensure you drop a few trouser sizes!

[@user-bg9em7ch6k]

Just learned the term “geoarbitrage”-love the reality, but didn’t know the moniker! 🙏

[@Mexicobeanpole]

@@user-bg9em7ch6k. It’s a beautiful thing. We’re 15 months into geo retirement. Currently in Mexico.

[@andrewrobinson2565]

I'm feeling a little behind. It must be Thailand 😊.

[@AG-so4gl]

Bucket approach refined 😊

[@2GoRoam]

Sounds good. We like the Bucket approach a lot.

[@richardbouchier2502]

Thank you for this. Finance is important and we don't think about this when we are young! If you are near the tax bands it may be worth pulling out less to get more. And if you do get a pension that may also affect the tax you pay. God bless you both

[@user-bg9em7ch6k]

This is what I’m dealing with…

[@DanKeeley]

Subtle thing there regarding inflation and 4% rule I just thought you take 4% of your pot as it stands in that year. In fact yeah the % of portfolio is what most people do in fire.

[@Golemofstone]

Pension "Smile"... Having a partner who works in the Care sector i feel that should be refferd to as a pension grimace... But thanks XD

[@2GoRoam]

Yes, I take your point totally on the grimace... we have friends that work in the care sector and we hear this a lot.

[@burnley1966]

I'm 57 my wife is 49. Should we count the state pension as part of our portfolio?

[@kinggeoffrey3801]

With Labour in charge who knows. 😅

[@grannythebuilder395]

Yes, don't worry

[@jacmac9996]

Hi Neil Were pushing hard for retirement, but not sure to sell house or not? Worried about never managing if to get back into market when we are old and have no parents to visit! Any regrets selling house?

[@user-bg9em7ch6k]

I sold mine 7 years ago, and haven’t looked back. I love the flexibility, freedom from maintenance, taxes, fears of the big earthquake that is predicted for the Pacific Northwest… I travel, visit friends and family, work on my Spanish, and I will eventually land somewhere affordable. I couldn’t make that choice yet because… I’m still exploring 🙌🏼💃😁

[@jacmac9996]

Thank you! 😀 Think I could go soon if I sold…appreciated your incites! Big help! ✔️

[@grannythebuilder395]

Could you rent it out while you are away?

[@jacmac9996]

@@grannythebuilder395 Yes…that has been the plan, to keep foot in the market, so not to be locked out in future years! But many are selling before travelling, maybe they have parents to visit when back in the country, or a house to inherit in the future? Feel I have to keep mine for that kinda back up! 👍

[@johnmadrid9865]

Selling all you own is ok, but what happens when you need to eventually buy a house

[@taruarualearnmaori]

Bucket strategy?

[@LS-id5hc]

I watch a FIRE video once. It wad v funny as it was baded in an actual fire. No-one or anything was hurt. I thought i need to have a bit more of a life.

[@andgray]

I live in Thailand and 200 pounds a week is easy to live off. State pension better exist in ten years.

[@grannythebuilder395]

I wouldn't want to leave all the people I love and live in a foreign country so it's not an option for me.

[@BoninBrighton]

The pot fluctuating doesn’t matter or share values- what really matters is the dividend yield as this is your annual ‘income’…. So I don’t understand why you focus on the value of ‘the pot’ it’s purely an income generator. So any shares not producing good dividends need to be swapped out for better ones. What strategy do you call this?

[@stevenrix7024]

I guess the pot at the end of year 1 includes dividends received, so the pot can grow from both that and from price growth from non-dividend paying stocks. (Some companies choose not to pay a dividend even though they could, preferring to invest the cash in their business or pay down debt - increasing value that way.) There is a risk that companies paying a 5% dividend are those that were previously paying a 2.5% dividend but have run into trouble, so their share prices have halved; yield looks good mainly because they haven’t cut their dividend yet. It might not be the best idea to be too heavily invested in such stocks!

[@BoninBrighton]

@@stevenrix7024 we have a pot containing 40 sticks Steve do review of these as dividend generators every 3 mths swapping a few in/out. Sometimes we swap 40% out into cash and wait ….. until dividends overall look better then we buy back in again. Hubby has been managing our 2 pots for 10 years now and avoids management fees, he always does better than the fund manager market leaders which is surprising to us!

[@marton349]

Come on...tell us how much youve got man!😅

[@user-sr7pg2mx1z]

Stop the stupid jump in and jump edits.. keep it as a single position.. looks amateurish

[@cseosborn892]

You still managed to dodge the question of how much money you retired on, with an unsatisfactory answer.