Can I Retire at 64 with $800K in Savings? I want to Spend $6K / Month & $15K per Year Travel Budget

Retiring at 64 with $800,000 in Savings. Am I ready to retire? I'd like to have a retirement income of $6,000 per month along with a $15,000 per year travel budget. Do I need to do any Roth Conversions? When do I need to take Social Security? In this case study, Troy Sharpe, CFP®, answers these questions.
00:00 Introduction
01:08 Start of Hypothetical Case
05:09 Monte Carlo Situation
06:52 What if Inflation/Crash?
12:33 $29,000 Travel Budget
14:36 A look at Social Security
17:00 Stress Tests
21:00 Health Care Expenses
23:25 Contact Us
Working with a CFP® professional can be an important step toward reaching your financial goals. Not only do these advisors meet rigorous education and experience requirements, but they are also held to some of the highest ethical and professional standards in the industry.
Education
CFP® professionals must master nearly 100 integrated financial planning topics, including:
- Investment planning
- Tax planning
- Retirement planning
- Estate planning
- Insurance planning
- Financial management
In addition to completing a comprehensive financial planning curriculum approved by the CFP Board, or equivalent academic coursework, CFP® professionals are required to complete continuing education coursework, including a CFP Board approved code of ethics course, to ensure their competence in financial planning.
Examination
CFP® candidates must pass a comprehensive 6-hour CFP® Certification Examination that tests their ability to apply financial planning knowledge in an integrated format. The exam is notoriously difficult and only 64% of people who took the exam in 2017 passed. Based on regular research of what planners do, the exam covers:
Establishing and defining the Client-Planner relationship
Gathering information necessary to fulfill the engagement
Analyzing and evaluating the client’s current financial status
Developing recommendations
Communicating recommendations
Implementing recommendations
Monitoring the recommendations
Practicing within professional and regulatory standards
Experience
CFP® professionals must have a minimum of three years experience in the personal financial planning process prior to earning the right to use the CFP® certification marks. As a result, CFP® practitioners possess financial counseling skills in addition to financial planning knowledge.
Ethics
As a final step to certification, CFP® practitioners agree to abide by a strict code of professional conduct, known as CFP Board’s Code of Ethics and Professional Responsibility, that sets forth their ethical responsibilities to the public, clients and employers. CFP Board also performs a background check during this process, and each individual must disclose any investigations or legal proceedings related to their professional or business conduct.
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#retirementplanning #financialplanning #retirement #retirementtravel #travelling #retirementbudgeting
If you have $500K or more and would like a partnership with a firm to help you manage your investments and financial plan as in these videos, click on this link to connect with our advisors: click2retire.com/64with800k

[@kimrowe8571]

As a window, I can tell you that expenses do not drop when one person leaves this world. Food, utilities, property tax, transportation...very little change. Costs can go up if you have to hire help, lawn, pool, handyman etc

[@sheneedsme]

Not sure that’s true. My wife spends a small fortune on personal maintenance. She gets her hair and nails done at least once a month. She gets hair extensions, eye lash extensions, goes to a blow dry bar often. Starbucks every day. Likes high end restaurants and of course and expensive high end car. Packages coming every day with shoes, purses, clothes. Expects to go on multiple vacations including out of the country. She also likes to buy gifts for all her friends on their birthdays. She is in her late 50’s and retired. I’m in my late 60’s and can’t retire because there is no way I can afford all my wife’s expenses. I’ve been happily married for 35 years but can’t imagine how my wife could survive if something happened to me. If God forbid something bad happened and I lost her I could afford to retire tomorrow. She’s a wonderful person but has never worried about money a day in her life and I have not lived a single day not worrying about it.

[@larryusagmail4751]

@@sheneedsme My neighbor is a guy about your age in a similar situation. But his wife is 31. She doesn't have a job but he says she does a lot of what he described as "work." Has invited herself over a time or two. 😏

[@humudsaid8500]

@@sheneedsme it’s the opposite n my household, except that my husband is the bread winner. He’s the spender, so I have no choice but to save. He complains about me not getting nice nails, no eyelash extensions, not dressed up like a wh@&$ basically. I have to manage the finances and cook and clean for the household of 6 including his mom. While he likes to spend without constraints 🙄 we are at the point of negative savings 😩😤

[@timtoolman9940]

@@sheneedsme the dreaded multiple vacations out of Country. Since I fear 8/10 in the world are uncivilized I'm not doing it. I don't know how to budget for it. Isn't a hamburger in Germany $50?

[@craftsmanctfl3493]

In addition, if both spouses return receive Social Security, when one dies, the lower of the two SS payments goes away.

[@cliffluxion7019]

Thank you for another set of helpful illustrations!

[@PH-dm8ew]

Great video. You explained a lot with your very specific examples

[@jazzjokesjalopies]

Excellent video. Thank you!

[@applied.precision]

Subscribed after half this video. Great stuff. I'm 44, haven't saved like I should've, have good financial prospects, and save like hell now. This is great information, great ways of looking at possible futures.

[@larryusagmail4751]

Congrats. Keep looking online. Lots of good info out there.

[@clarifyingquestions]

Make sure that you own that choice - in your 60s , 70,s 80, 90 etc. It is annoying to hear people defend the elderly today with - worked and contributed their whole lives. While I am sure this is true but did they SAVE.

[@craigleonard9243]

I retired in Mexico at age 56. It’s 30% of the cost of living I had in the US. Get out of debt and get rid of unused items. I lost 50% to my Ex too. My apartment is $ 175 a month😎 medical care has been great for me too here. Anyway, food for thought….

[@crystallake6198]

Great feedback, which area of Mexico?

[@Rajbala85]

Share some tips about the area you are in!

[@62kevin]

While I am happy for you, I'm not retiring in a third world country.

[@Ww8.3]

@@dsmith6601 what are these many instances? The ones you hear on cnn? I go down to Mexico monthly for YEARS and never have had issues.

[@craigleonard9243]

Everyone is worried about crime down here. It is every where. I feel safer in Ensenada than LA, or Chicago, etc…

[@jenj6934]

Great video. Keep sharing

[@carlosraygoza9153]

My goal is to retire in my early 50s. I want to be relatively young, have enough energy to travel etc.

[@conniepauig1419]

I retired At the age of 62 years and i have only 800.00 savings at that time. My pension is 3000.00 both sss and pension. I am very happy that i retired early for life is too short. Any one that had that kind money does not need a financial adviser. My second daughter died at the age of 45 years old last 2014. God Blessed my second daughter . Amen.

[@peeudo]

I’m so sorry for your loss. May she RIP. May God continue to bless and keep you strong.

[@albertoseverino1755]

If I was 64 and in the Dominican Republic 🇩🇴, I could retire with half of that and live an amazing life, including travel!

[@OstasHs]

Great idea! How is life there Alberto?

[@albertoseverino1755]

@@OstasHs I work in real state and vacation business type. According to this increasing surge of people from USA, Canada and the likes buying houses here and bringing their family: it’s great, not only for them but me. There’s not weird politics or indoctrination in school, and we have amazing schools bilinguals so any one can be educated under international standard if have the money, but without the weird things you see in USA 😅 So, you can live a quiet life in here, mostly secured, with no fear. I mean that ;)

[@DaveIngle1]

Thanks for this video. I've watched many and have also subscribed. I've looked at many videos on what the average person has at retirement and that is a low number. I have have more than most and less than others. I'm sure these videos take time. I would love to see you create multiple videos at lower total savings. I believe it would be more realistic to, more people. I would also assume that lower savings means lower social security payouts. (If someone has high social security payout and low savings, I am also assuming poorer investment strategies and shame on them. Sorry, Cold, I know it.) I think showing people videos for $300K, $400K, $500K, and maybe $600K of retirement savings would hit a larger audience and maybe get you more subscribers. Thank You

[@miket9670]

Thanks Troy. This is very close to our situation including the travel allowance and flexible spending plan. If markets go south during any given year (or two) we can reduce discretionary spending and get by on cash reserves and Social Security.

[@suzanneemerson9787]

Remember, folks, unless Congress acts, SS benefits are going to be cut by 25% in 6 years from today. None of the politicians seem concerned about that. Why should they be? They don’t depend on SS for anything. The longer they wait to act, the more the benefit will be cut. Also, the not too bright people who are not in favor of immigration are shooting themselves in the foot. Our population demographics are changing in America. There are more and more older people, and fewer young people. Social Security is paid out from what is coming in from payroll taxes. Fewer young workers means less money coming into the system, and pretty soon there won’t be enough coming in to pay the benefits at the current level. 6 years is the best estimate. We need young, strong immigrants coming in, working jobs Americans don’t want to do, and paying taxes, especially SS taxes. Otherwise, your SS checks are going bye bye. First cut by 25%, then 50%, then 75%, and finally they’ll settle at about 2%.

[@richardj3715]

@@suzanneemerson9787 We are not in favor of illegal immigration which drains resources and doesn't support Social Security.

[@keithwiebe1787]

@@richardj3715 than make it legal.

[@slocumb1270]

​@@suzanneemerson9787 Then why are your party's mayors in Chicago, NY, and DC screeching about a few bus loads from Texas?

[@1Mannco]

@@suzanneemerson9787 Assuming, not factual.

[@steveg6978]

I'm not sure about waiting till 70. My brother waited till 69 and died 4 years later. By the way his wife got his social security because hers was lower. But in total it was a substantial reduction of income for her, another thing to consider for married couples.

[@laurie812]

These are such great videos. I’m 48 and starting to get serious about retirement so I appreciate the information.

[@jamessharman7963]

Hey Laurie, how’s the weather over there?

[@lordperilous]

Laurie, I started my retirement planning in my 40's as well. It's great to be informed early. I'm in my late 50's now and ahead of schedule to retire early. Good luck!

[@laurie812]

@@lordperilous That is a relief to hear! I really wish I would been more serious about it sooner but I think I’ll be able to pull it off. Thanks so much for the encouragement.

[@soufienetchantchane2839]

Life is short ! 800k is very very good !

[@christopherort3045]

I retired at 58 with that amount and we are doing great. You manage the expense amount, and it's easy.

[@OakHarvestFinancialGroup]

Until large unexpected expenses occur? Or a 2-3 year bear market? How much will be left in 20 years with that strategy?

[@derbywinner6316]

How do you manage healthcare insurance? Thank you

[@keithwiebe1787]

@@derbywinner6316 Surely you've heard of the ACA?

[@derbywinner6316]

@@keithwiebe1787 yes, I heard of the Affordable Care Act. I guess my question is how much is the annual 💲 cost? Thank you for your answer

[@dking1362]

@@derbywinner6316 The annual ACA cost depends upon your income (only, not your savings/retirement money.) The cost will also vary depending upon which insurance policy you choose. There is a further, temporary reduction through 2022 due to Covid.

[@paperjoes6913]

Thanks Troy. Could you do a video on retiring at 64 with $800,000 in savings while living in Cuba or Nigeria?

[@NipItInTheBud100]

Another great video!!

[@bananapatch9118]

Maybe. Using the 4% rule say $32,000/year plus 2 social security checks, so how much are your SS checks ?

[@Voluntia]

So, now we are in JAN. 2023. How did they do, hypothetically? Inflation and all travel dreams and still being 64? Is it /was it still a valid option to retire. BTW, I love your KZbin.

[@basharatali7698]

I'm 41 retired poor living of nothing still happy you don't need a lot of money to retire just cut down on stuff you don't need in life anymore if you no u no I'm happy just relaxing away watching the world go round 👌

[@albertoseverino1755]

I’m 41... What did you do to retire like that? I need that, the normal world is not for me, I need to relax and stop trying to fit in. Tell me!

[@Never2Late2Change]

@ Basharat Ali…how do you define poor?

[@albertoseverino1755]

With 850,000 dollars, assuming that being today 41 I’ll die in 50 years, I could retire right now. In my country 🇩🇴, if you divide that amount in 50 years, with what that gives per month I could live a golden live. Even could help feed and educate my two kids until they get their first job while paying a 20 year loan for a house.

[@basharatali7698]

@@Never2Late2Change poor not much cash I'm property rich I collect rent and I enjoy it

[@basharatali7698]

Lots of people in the world are cash poor I'm one of them that don't have a lot of money Rich people are those who have million in cash

[@Chiroman527]

Troy, too many variables are disallowed - yet they are Real. IMO, retirees or people on the brink of Retiring should not be in the stock market to this level. I would and have sought stocks with solid paying dividends. This year, my wife and I who are both retired (71, 69 yo respectively), collecting small pensions and Social Security, purchased US Treasury Series I Bonds for $10 K each (the max you can buy in a year) yielding 7.42% & 9.42% interest per annum. They are based on the rates of Inflation. Your comments about waiting until 70 to collect SS is a good one. However, my accountant advised to file at Full retirement age (66) and take that money to pay off debt! I did and paid down our mortgage in large chunks. Moreover, according to his calculations. it would take me 8 years of collecting the 32% higher SS checks at age 70 to make up the amounts that I received since age 66. The other Major factor is the cost of Health Care is Extraordinary. Medicare / Supplemental/ Dental. Eye Care are increasing. INFLATION is a killer to financial planning.

[@ThreeGreenthumbs]

Really easy-to-understand video. The portfolio sumimulation tool you show looks great...is that available to use as a free trial or other?

[@strikerz2912]

Craziest question I ever heard

[@qeinfinity]

"Higher than normal inflation due to supply chain disruptions"... Riiiiiight

[@urbanart7325]

Would you look at longevity deferred annuity for later years medical expenses if they don't have long term insurance? I like the ithiugh of creating an income floor that sets long term equity investments

[@timtoolman9940]

I see the I have this and that amount in savings but for most people it's tax deferred accounts so dont forget that. With a pension and SS IRA or 401k withdrawals can get into high tax bracket. I'm doing 401k to Roth conversion for 7 years to reduce the coming RMDs. I'm thinking retirement could be more work that working given the financial headaches and stay healthy elder care is expensive.

[@calledout4437]

They absolutely can! They can spend a heck of a lot more than that if they don’t mind a little more risk and being aggressive. Number one use some margin. High yield dividend funds and stock. My favorites IEP, RYLD, XYLD, USOI GOF, RA

[@jonathantaylor6926]

lol retired and trading on margin.

[@wlfpac5607]

I watch this like 8 months after you published it. Yeah that worst case scenario I think happened or is happening right now

[@billyoung8118]

I have never been happier to be a T1 diabetic then planning on retirement. I'm 54, T1 since age 17. I certainly can live another 10 or 20 years, no doubt. But I will never live another 30 or 40 years. I'm not depressive, just facing a reality. I've taken advantage of life insurance policies every possible opportunity, always buying the largest amount of guarantee issue that I can (I actually work in the insurance industry as a statistician). My goal is to get my house, and a rental, paid off before retirement. I'm now funding a 401(k) that has a minimal balance because I newly started it, but doing 10% plus employer match of 3%. At my current rate I should have just around $1 million by retirement, and completely debt free, with one rental and our residence home both paid off. This means I could then move into a retirement community and have 2 income producing homes to support us. When I pass, this means my wife (never had kids) should be set for the rest of her life.

[@jwil4905]

Pretty good plan as long as your properties don't require expensive maintenance.

[@1Mannco]

Also with better health knowledge, new medicines out, new and better excercise programs, really healthy food lifestyle diets popping up, you can take the opportunity and take advantage of these different possibilities and live into your mid 80's. So don't cut yourself too short saying 10 or 20 yrs only.

[@roberthansen9558]

Thanks for a realistic model. In their favor, they are not retiring early and they have a reasonable and comfortable budget. Obviously, taking SS late would be the better course in this example. It wasn't mentioned how much of the $6k was discretionary, but I would imagine they have room to tighten when needed. Also, if they own their home, that would certainly put them over the top for success and be a backup for any surprise costs later.

[@wheelie642]

It seems to me one of the more priority questions is how much are property taxes? Does their state spend a ton on entitlements and continually getting worse?

[@eyeorewolf]

Hello, I'm wondering if you could do a case study for our situation. We have $328K between precious metals, Regular IRA and Roth IRA. We also have $250K in liquid savings spread out between high yield savings accounts and a CD ladder. Total is currently $580K. Our total net worth excluding vehicles (we have several) is currently $795K using very conservative estimates. Everything is paid for, we have a nice home that we aren't currently considering leaving and several vehicle as mentioned. My monthly SS gross will be $2,808 a month currently, $3,371 at 67 or $4,270 at 70. I am 64 and my wife is 58. We have only been married for a little over 3 years and don't know what her SS will be at this point. We can easily get by on $40K per year but plan to spend $50K per year including taxes. I'm currently using 80 as my life expectancy. What are our chances of being OK?

[@mikesilverman705]

I think Inflation will be the downfall of our retirement planning. Paying attention to inflation is probably the most important part of retirement planning.

[@davidmalone9022]

There are some very good lessons to be learned from hyperinflationary economies, the principal one being avoidance of monetary assets. Some very good (but not perfect - nothing is ever perfect) hedges against inflation is to include in your portfolio things like commodities, precious metals, real estate, etc. The really good news is that there have only been a few very brief periods of relatively high inflation (for us,) including most recently 1979-1981 when interest rates peaked at just under 15%. So, when compared to some of the technical definitions of hyperinflation (e.g., 100% for a three year period,) we've never had that kind of exposure. As is so often the case, the trick is a well balanced portfolio that tends to balance the various risks attendant to the components of that portfolio.

[@jwil4905]

And taxes. Have to plan carefully and pay attention to it. In retirement, your full time job is watching you money.

[@sylviaguzman9330]

I can live a simple life in $800thou How I wish I have that much money

[@markn5604]

Short answer for this couple is nope you cant retire with the spending model desired. Forget about all the monte carlo simulations, you dont need them. Use the Rule of 4, which states you can spend 4% of your retirements funds each year adjusted for inflation and not run the risk of out living your savings. In this case, the couple can safely spend $32K per year. Their desired spending model requires 87K for a shortfall of $55K/year. What they should do is wait another year and take SS and Medicare at 65. This will give both medical coverage and with the addition of SS, they should be able to easily cover the $55K deficit.

[@wheelie642]

My question, what is their property tax? $12,000 per year? Do they pay landscapers, do the pay for snow plows, chimney sweepers, appliance contracts, are the living in close proximity to a major hospital, an airport, is their investments high risk or low risk.

[@roberthansen9558]

Actually, the 4% rule is now 4.5%, but more importantly, you don't apply it blindly. First, the 4% (now 4.5%) rule is based on the same premise as Monte Carlo simulations, except instead of using randomly generated scenarios with return % patterns similar to those experienced in the last 100 years, it uses the actual returns the last 100 years. Either way, they are both based on patterns for the last 100 years. Secondly, the 4.5% rule is a worse case scenario. There are many ways to be prepared for a worse case scenario. Finally, and this is most important, what you spend in retirement is variable, not fixed. You can spend more than 4.5% in the beginning, delaying SS, and then much less than that once SS kicks in, and be on track to a safe retirement. You can (and almost everyone does) spend less when the market is declining, which greatly increases your odds. In any event, the 4% rule isn't even used by most people, once they retire. Spending patterns are variable and involve many factors. The 4% is a simplified what-if exercise, and nothing more.

[@suzanneemerson9787]

Actually, because life expectancy is rising rapidly due to medical advances, I recommend planning on living to 100 unless you have a terminal illness and know for certain you won’t get there. Also, there is a likelihood that you will need long term care, which is quite costly, so build that into your budget. Where I live in northern California, the average cost today is $12,000/month and rising for a reasonable placement. (That is, not a Medicaid facility for the indigent. Those places are horrible.) My friend was in long term care for 7 years with dementia before she died. Fortunately, her husband, who died before she needed it, left her with enough money to cover the cost. I believe each adult needs $2million to retire securely.

[@peeudo]

If they have retirement income of $10,000 per month including a pension/retirement plus Social Security, they can splurge on $6,000 a month living expenses and still travel. God has been good to them. Pay your tithes first and give some money to charity. Enjoy the rest of your life IMO.

[@Lawdog1523]

4% rule and modern money theory does not account for negative sequences of return early on and low interest rates. It is an oversimplified "rule" that fails to account for where the income comes from (taxable, tax deferred, tax free, etc). SS timing/maximization, part time income, guaranteed streams of income help with longevity. These guys do a good job of laying out scenarios.

[@dhix2388]

MOST IMPORANT choose an FIDUCIARY adviser with your goals front and center. not products pay the most commision.

[@RJRussoVids]

They will need to scale back that travel budget. It's extravagant for their situation.

[@rockybridges4820]

this video hit us square in the ....since we are both 64 with a little more than 800K and both retired and need to get some financial and tax advice before we take our SS. i get a pension until i die but when im gone so is the pension for my wife. thx for the video and can a retired person get HSA?

[@360VRStudios]

If you waiting to retire to travel, you done it wrong!!!!!!!!!!!!!!!!....You gave your best years to the system.

[@reyjjavellana514]

Retiring in the Philippines would be a good idea. Living as a couple in relative comfort with some travel to the countryside every two months or so, with main residence in the capital city, MetroManila, will cost you only about $1.5k a month! Live in the other major cities around the country, closer to nature, with many beautiful relaxing places just nearby, $1k a month will be very doable. But the best thing you will get will be very friendly, approachable and helpful people Filipinos! You’ll never get lonely!

[@slocumb1270]

A few other considerations about living in the PI regardless of budget: No central AC, hot water in only one room, no reliable internet or electricity, several power outages per week many lasting hours and occasionally all day while your home bakes in midday tropical sun, frequent unavailability of basic western grocery items like Diet Coke, peanut butter, lowfat milk, breakfast cereal, Doritos, etc. In the PI, you don't go shopping for what you want or need, you go shopping for what they have. If you value peace and quiet bring a good set of ear plugs, between the barking dogs, crowing chickens, traffic, and loud neighbors, you'll need them. And don't complain or argue with the neighbors about the noise. You may win the argument, but life in your neighborhood will suddenly become difficult for you and you will lose in the end. No person in a position of authority will ever side with you against a local. Otherwise, great place to retire.

[@chessdad182]

@@slocumb1270 Sounds like the voice of experience.

[@1Mannco]

@@slocumb1270 Hard pass, yes living in a 3rd world country isn't always the better option.

[@sivkm1]

Does the model assume $33,000 per year for him and $24,000 per year for her as the post tax social security cheques after 65 ? I did not get that part

[@nixworld767]

Dang. This is good. I'm retiring 12/31 at 64....in Thailand. (more life, less money). I've got enough cash saved (i think) to cover all expenses there for 2 solid years, so I'm not planning on taking social security or touching my 401K until those two years have passed. Have $1.3 million going into retirement. I was thinking "4%", but your video has given me a lot to think about. Curious, do you charge a flat fee or a percentage of the portfolio annually? Pedestrian level here.

[@OakHarvestFinancialGroup]

Hey @Jetnick! Glad you enjoyed this video! And thanks for your great question - We have a Competitive, Understandable and Transparent fee policy here at Oak Harvest, which you can read more about here: oakharvestfg.com/transparent-fees/ If you're ready to take the next step and talk with our team, we'd love to schedule a complimentary visit with you! Set that up here: click2retire.com/64with800k

[@dennisd4027]

Save us the time and just tell them the truth...no.

[@bradbenedict3108]

Agreed... the spending is beyond the capacity of the amount saved. Unrealistic.

[@Minnie--ru2ew]

Where can we contact you? Are you available in So Cal? Thanks

[@clarifyingquestions]

So how much will they =have left when they die. My plan is to never touch the capital amount but live on the interest.

[@Donkeyearsa]

I looked for a retirement probability success calculator like the one you used for my specific situation and could not find one. I found retirement calculators but not one that lets you put in all values that would be needed for me to know how safe it would be for "me" to retire now or in the close future with my current fanatical starting point.

[@dnewman62]

Look for Monte Carlo model

[@billimbriale8535]

Unsure about the way this was presented. Did the original analysis of the $6,000/month spending budget include the $58,000 or so from Social Security at age 65? If so, then the actual initial annual spending budget is $72K plus $58K or $130K. Correct or did I miss something? Thanks

[@OakHarvestFinancialGroup]

Anytime we mention spending it is inclusive of SS. It's taxes and inflation that most people underestimate the impact over time. To spend the same 6k in 20 years you will need to have around 12k-13k coming in to have the same purchasing power. Of course, that depends on actual inflation and taxes but that's a decent estimate.

[@FunDuude]

Sure you can. And if you're house is paid off and your cars, then you sure as hell don't need 6K a month to live on. Especially not at 64.

[@vickybiagini8623]

Exactly, you're so old at that age. I'm 47 and have no energy, lol

[@tharrigan5661]

Funny…..wait until you are 64…

[@gailsmith4889]

Can you retire. Answer is yes. How long will your money last? Depends on inflation, unexpected expenses. Health problems. Financial mistakes. Divorce settlements are another unexpected expense.

[@alansach8437]

Exactly. No one can answer these questions. They can advise, but that's all. Very few people actually run out of money in retirement, because you tend to adjust as you have to. People are scared of running out of money by all these financial advisors who tell them they are going to live to 100 and had better be ready. Then they die at 73 having never enjoyed their retirement because they were pinching every penny! Then their kids take their money and go on a trip to Acapulco!

[@wdeemarwdeemar8739]

This video sure is a cautionary tale that inflation only 2 months later all time highs.

[@beernutzbob]

Your presentation was deceptive in that no mention was made of the couple both collecting social security when you ran the Monte Carlo and found a 92% success rate. There's (almost) no way them pulling $87k inflation adjusted from an $800k portfolio, a 10.9% withdrawal rate, could succeed in the long term.

[@OakHarvestFinancialGroup]

Watch the whole video please. Go to the 14 minute mark for an in-depth conversation about SS.

[@eleanor0714]

Not enough in California. Need to triple the saving amount

[@jef4063]

Our situation is somewhat similar to your example. My wife and I are 67 and 66 drawing Social Security of $55k and have a fixed lifetime pension of $12k, both lifetimes with no increases. Our retirement savings is $550k in 5 year fixed annuity paying 2.65% and Mutual funds of $258k where we hope to get an 8-12% average return. Cash is about $64K. House paid for with no debt. Currently our annual spending is $93-95k. I’m just guessing of course but believe our probability of success to have sufficient funds through age 94 is about 80%. If we end up on the wrong end of the numbers in our old age, the plan is to sell the house which is currently valued at $500k and start our new diet of beans and rice. These projections are extremely difficult. The variables seem to be infinite. Thanks for sharing your helpful example.

[@TopVillain]

You’ll be fine better than alright

[@paulfmurphy617]

how do you spend $95K/year when your house is paid off and 80% of your life is in the rear window?

[@DaveM-FFB]

So, the initial budget is $72K + $15K = $87K. Minus Social Security approx $60K = $27K. There's a high probability of success because they're taking very little from retirement savings. Their SS is higher than average, and their budget is reasonable.

[@jwil4905]

I arrived at exactly that (pretty simple) conclusion. With that much SS they should cruise easily as long as no big health care expenses crop up. Actually, they'll have a bigger tax issue than anything else due to hitting minimum retirement distribution rules when they hit 70.

[@famousamos1]

Wrong they need $87k net after tax. Up to 85% of their SS income will be taxed and since they have a majority of their $800k in taxable retirement accounts. They will need to withdrawal around $44k from their $800k if we assume a 15% federal & state tax average to net $87k. So $44k/yr from a portfolio of $800k is a 5.5% withdrawal rate and the Monte Carlo simulation is assuming a 3% inflation withdrawal.

[@jef4063]

Yes. My situation is very similar to the example and I agree with your analysis.

[@EconMBAStudent]

@@famousamos1 thanks for running through that math, makes total sense. I am trying to save as much as I can in Roth IRA so overall tax burden is lessened, Troy mentioned the mandatory distributions at 72. I have yet to run the numbers on that. I am enjoying and learning from these videos and comments

[@tholm4307]

@@jwil4905 the rule changed last year I believe to 72 years for RMD’s.

[@Stocks1986]

Would there be any reason to maintain some money in a pre tax IRA after age 72? I think I can get everything over to a Roth before then. Just want to make sure I'm not missing something. Thanks

[@aquabliss9194]

I think only reason to keep it there is because you haven’t converted to Roth yet. Otherwise RMD’s will get ya. Roth space is gold.

[@Lawdog1523]

Yes. Tax balance. I.e if you don't have enough cash to cover or want to do a FULL Roth conversion and won't have too much guaranteed income, then some in traditional IRA may make sense. Depends on tax brackets and income streams in my opinion. If at 72 you have over 100k in income between pensions and ss, and have say 2M in traditional tax deferred accounts, RMDs are approx 80K...whereas converting 1M to Roth over time (370k tax bill) means you only have to take 40k....which means no Medicare IRMA etc. Roth conversions take 8 or more years for equivalency so life expectancy plays a part as well as legacy goals. No simple answer.

[@jwil4905]

Pre tax IRA (and 401k) holdings are ok in retirement, you just don't want to be required to pull more than will push you into a higher tax bracket for the year.

[@bernie9728]

If you are 64 with $800,000 it means only one thing. You should have retired 2 years ago. Life is short. Work hard, save your money and retire early.

[@mikedv39]

SS Q. I never get the same answer form this Q. I will retire next year with 39 years for the Gov. I will retire under the 30 years MRA 56.5. I will receive Full pension, TSP and social security supplement. So, Will my 39 years count for Social Security at age 62? or do to not working for the next 5 years add a 0 for those years and just count the last 35 years from 62 back? From one retirement class no worries you have 35 plus years. The other said NO! it says if you work till 62. Very confused on this. So if I wanted to wait and get a bigger Social security pay out and waited till 67 or 70 , that would be 11 years gone for 67 and 14 years for 70. A huge penalty just for starting my career at 17 years old. Please help on this . Its getting frustrated to think I will need to work till I have either 44 or47 years to retire when more people retire with 30 years. Mike V

[@davidfolts5893]

Your Social Security earnings are indexed, or the dollar you made thirty years ago is much more valuable than the one you earn today. If you have thirty-nine years of earnings, the top thirty-five count towards calculating your benefit, with the four lowest not being calculated. Mike Piper has an excellent book on Social Security which includes a description of how it works when you are a government worker.

[@vickybiagini8623]

Why would someone at 64 even ask such a question? The average lifespan is 75, of course you can retire at 64 with 800,000 saved. Wow, people really think their living forever.

[@Existential_Dread]

Yes, people do think they are living forever.

[@giantsfan8872]

Im 33 and i could retire with that money now

[@jwil4905]

Because you have to assume a long life so you don't run out of money in case you make it to 90+. It's shortsighted and foolish to assume you'll die at the average.

[@f430ferrari5]

If one is already 64 then the life expectancy for male is 18 more years or so. For female 21 more years.

[@vickybiagini8623]

@@f430ferrari5 , you're probably right, but their all bad years. So retire by 67 would be okay. We definitely can live till 88.

[@tebbywafer1665]

why is it not modeling inflation and health care variations???

[@chepthakomutaeshi]

With US800000 in pocket you can retire happily in Thailand. You don't have to worry about all those graphs and complex calculations. Life is simple , live it simple. Don't speculate too much.

[@sorctime8782]

unless Thailand start developing their nation and the cost of living starts sky rocketing.

[@jwil4905]

@@sorctime8782 Or unless, you know...you don't want to live in Thailand.

[@warrenpeece1726]

What you need is a financial advisor named Nostradamus.

[@Sky1]

I calculate an absolute minimum of 1.5 Mil and that is if your home and cars are paid off.

[@gunawanhadinegoro8763]

Yes u can, stay in Indonesia

[@jgallone]

The dynamic retirement income seems to be the most logical to me...years where the market does well, take more out and the years the market is down, take less out. Additionally, do these simulations assume that you will spend every penny you withdraw each year?

[@MuzixMaker]

For tax reasons, take only what you need.

[@travis4118]

Social Security input - please do this math on your own, but realize this is pretty close to any example for anyone trying to decide choosing SS at 62.5 or 67. If you expect to receive $1000/mo in SS at 62.5 or waiting and getting $1250/mo at 67 (holding off that 5 years to obtain an extra 25%). The break even is close to 77 (i.e. to overtake those monthly payments starting early). This ignores any outside influences of the variables (inflation, if you reinvest, health issues, etc)...just straight math. IF you expect to live into your 90s cause you are healthy, etc...well go with waiting on SS benefits. IF your expect you are average (the average age of death is still near 78 for all Americans)--in this case you take the SS at 62 and enjoy more of your money now.

[@eleanor0714]

Exactly, I will take it at 62

[@lancephinney5538]

75/25 that's aggressive for someone 65, where would they be after this year?

[@wendyshoo3476]

Come to Malaysia. US$600K for 1 livinig comfortably or 2 US$400K x 2 (Couple) ok too

[@jamessharman7963]

Hello Wendy, how’s the weather over there?

[@leesin4321]

Can you do one for younger folks? Like early 40s? How much do I need to retire if I want a lifestyle of $80k per year? I think that will be really helpful to know my savings gap. Thanks.

[@matthewclark2123]

You need 2 million $ producing at least 4% a year, plus an emergency fund of three years in cash. That’s $2.3 million. Enjoy.

[@aquabliss9194]

I’m mid 40’s and think I could do fine with $100k/yr. currently at $1.7M and no way I am comfortable retiring yet. Probably need around $3M in my mid 50’s to with $100k/yr to comfortably retire. That is my goal.

[@kelly51757]

@@matthewclark2123 my husband & I just retired at 56 and we have way more than that we even don’t count SS once it’s time to withdraw so I feel good to know thank you 🙏

[@deanc2000]

Can you do an analysis with people who choose to move to another country like Portugal, Costa Rica, or Panama? Is this a good idea for retirement?

[@OakHarvestFinancialGroup]

Personally, I have no idea what the cost of living is in these other countries. It could only be reflected assuming a lower expense burden in retirement. It's not a bad idea for me to look into and make a video about!

[@chessdad182]

My Lyft driver was selling me on the idea of going to Panama when I mentioned my retirement. I've heard some positive things about Panama. Likely won't retire there, but a vacation in December-February... could be.

[@1Mannco]

Things overall are a bit cheaper in those countries but prices are going up there too. Then you have some language barriers, weather and almost 3rd world country factors. Food stores are different, sometimes lacking, then you mostly buy from the street venders and transportation issues, theft, etc.

[@forrgy89]

What's the answer to the question " can I retire............... . I guess it's call you and give you some of my money. lol

[@twomp1162]

Here's a little something to include when your projecting life expectancy. This video you say living to 90. What quality of life will that 90 year old have? If a 90 year old can't feed themselves OR wipe their own butt, then you are effectively done! And that's not living in my opinion.

[@adkads27]

Need to know what your social security benefit is but probably not

[@SidinPhilly]

Social security?

[@timmurphy8920]

Long Term Care = Irrevocable Income Only Trust. Why is that not an option?

[@david9192]

If you buy a piece of cheep land in Colorado and develop it

[@betty2905]

Can u discuss the retirement with lifetime pension .

[@OakHarvestFinancialGroup]

Hi Betty! That's a great idea, we'll add it to our content idea list. Thank you!

[@Jane5720]

Although this is going to be unpopular there are so many Americans that can’t even touch anything close to this portfolio, I don’t know why you’re all bitching about it., This is not my portfolio so but I’m just saying stop bitching about it because Some don’t even have close to this and those that say they’re going to work until they die, no they are more likely to be disabled before they die. Of course they could get a divorce in a couple years and they’re going to have to split that so they would only have $350,000 or whatever left in a couple years so for a single person to have that that’s not a good thing. I think it would be interesting to find out more about if this was a single person or a married couple how that would all play out for the same amount of money, is it cheaper for two then it is for one? Well we know it’s not but then there’s not double Social Security coming in but they’re still working off to save investment money, they’re not even talking about A pension so I’m not sure how that plays in either If they even have them anymore they are still around on some jobs Let’s be real, when they need assistance and care they will be going into assisted living with the state and the federal government paying for it so just like everyone else Who didn’t save for retirement and believe me there’s a whole boat full of them. I don’t need to have anything left when I reach 90 because I’m not leaving it behind to anybody’s they can just go make their own freaking money

[@frenchcreekvalley]

So, I guess your answer to the $800K question is "Maybe, maybe not"?

[@GuillePozzi]

With that money you can Selling Puts with monthly expiration WAAAY in the money so you have almost no risk of getting assigned and getting between $10/$20K per month...

[@aquabliss9194]

Ya great idea then when the market drops 30% this couple will wake up one morning owing $300k and retirement is forever destroyed.

[@GuillePozzi]

@@aquabliss9194 not even current TESLA’s drop would have gotten assigned for that kind of premium, but even then if they do get assign, it will still recoup. You never should trade options on a stock you don’t believe in

[@aquabliss9194]

@@GuillePozzi ok I’m willing to play. Give me a ticker (index ticket also ok), and a contract expiry, how many puts you would sell, then let’s revisit closer to the expiration date and see if they would have been assigned and/or how much is the profit/loss.

[@GuillePozzi]

@@aquabliss9194 TESLA, go weekly, SELL PUTTs, search for a strike with 90% profit, you’ll get a premium between $5 to $7… With that amount of money you can get 10 contracts now. That’s at least $5,000 weekly. Last week when price was at $1,180, that strike was $950, even with current drop it still hasn’t reach… But paper trade it and come back on next expiration

[@GuillePozzi]

@@aquabliss9194 and if you DO get assign, just hold because Tesla will still be growing a lot the next few years

[@BuckWeed]

I have about $14 thousand in the bank and I'm 79 years old. Why are you worrying about not have enough money to retire ? Money will not buy you happiness and you can't take it with you when you die.

[@hejiranyc]

This scenario only works because the estimated SS benefit payout is VERY generous. Unrealistic perhaps. In order to receive $33K and $24K SS payouts, they had to have been earning over $200K combined for decades, which means that their nest egg should have been much larger. In other words, why does a 64-year-old couple receiving that kind of SS payout only have $700K? They must have been really, really bad with money!

[@stuartclubb4302]

Indeed. I commented that if you backfit the PIA for AIME this couple were making roughly $120K+$60K = $180K. I don't see the lifestyle downgrade working for them given that if they were making ~$180K indexed for 35 years and only amassed $800K.

[@billimbriale8535]

It's just a theoretical exercise. Assume anything you want. In reality, any assumption about what someone SHOULD have accumulated based on their working income is a fool's game. Where do they live, how many children, own or rent, how many working years, etc. In the universe of possibilities, you will find every scenario imaginable, not just those that seem likely.

[@hejiranyc]

@@stuartclubb4302 Yeah, indeed. They must have been blowing through their working income of ~$15K/month. So can they suddenly cut back to $6K/month in retirement? Again, it beggars belief. Nothing about this really makes any sense.

[@stuartclubb4302]

@@billimbriale8535 Sure - And i suspect that the scenario we're theorizing is probably more common than many like to admit. High income, High lifetime spend, low savings. It's just that when you start to talk about Social Security incomes north of $60K, you're really on the right hand of the bell curve.

[@OakHarvestFinancialGroup]

These are very normal numbers for anyone that has worked for 35+ years and made a decent income. You do not have to make 200k per year for decades.

[@davidsaldivar6735]

People live there whole lives making 3000.00 a month

[@nappiral]

I've watched a few of these and was fully expecting this plan to get a sub 50 score but it's 92%??

[@ariefraiser140]

$800,000 will yield $32,000 - 40,000 a year assuming it's invested and withdrawal is 4% or 5% annually. The rest will need to come from pensions or social security. Social security of $2500 yields $30,000 a year. Wife's social security will be at least half her husband's if using his work history or $1250 a month. So $15,000 a year. That gets them $77,000 - 87,000 per year.

[@dancorkill7033]

Can anyone asking these questions use a calculator?

[@urbanart7325]

why not add an deferred on immediate annuity to the basic income floor withour dipping into the equity market

[@OakHarvestFinancialGroup]

Hi Ram! That quite possibly could be a solution for some. I just started an annuity series that is going to run for the next several weeks on this channel discussing that concept and many others. The goal is to transparently educate the public about annuities, the pros and cons, and how they can be used while "lifting the hood" on the industry to help empower consumers. You should watch! Thanks for commenting!

[@urbanart7325]

I truly beginning to believe in first generating an income floor built from annuity and social security while having a second bucket composed of growth stock and dividend producing stocks

[@hownwen]

Ugh....markets down a lot more...

[@MWS1960]

I would take my pension at 64 and invest….take the money and invest at 6%…I do not plan to wait to 67. I’ve put a lot of money in SS.

[@indidesitourer585]

Go to india with that money, ur a king already

[@rocketlasr1158]

Troy.. What is the average income for these two individuals? Social Security payments seems pretty high.

[@kimrowe8571]

The SS income is unreasonable. If they made that much money in 30+ years of working, they should have more than $800k saved

[@jef4063]

@@kimrowe8571 Not necessarily. Bad things happen to good people. A serious health challenge can nearly bankrupt even the highest income earners. Personal experience with that.

[@giantsfan8872]

H yea you can…just buy like 3 or 4 houses and rent them out

[@johnurban7333]

Realistically most people have $200,000 401k and $2000 a month SS

[@paultynan8705]

Update?

[@ibrahimseth8646]

Capital=800,000 { Expenses(10 Year)=720,000 Balance=80,000 } Payout(10 Year)=1,000,000 If Yield=29% Premium=1,000,000/1.29^10 Premium=78,400 Balance=80,000 { Premium=78,400 Extra=1,600 } Thank you.

[@OakHarvestFinancialGroup]

Thanks for commenting, @ibrahimseth8646!

[@petehindle-ib2mx]

You didn’t mention _ is your house payed of or not ?

[@emox6400]

Here we all are deciding between 3% and 4% withdrawals and you're like 11%! Go for it! 😂

[@markmarkyyy5632]

If a person can't make it on $800K in savings alone, than they obviously desire too much in retirement!

[@stephenc2481]

depends on how long you live. it is great if you only live 10 years, after retirement.

[@jennydkwong]

If you're in mid 40 & your assets worth $2.7millions plus a little more than $250k saving for retirement, can you retire comfortable with those money this year living in Massachusetts? The living expenses in most States are cheaper & in a few States are more expensive.

[@jwil4905]

Depends how liquid your assets are and if you can liquidate them or are they required (your house, for example).

[@3lazawa2ak20]

I am retirement four years please let do all from 25 age I am not plan this

[@sct4040]

Medical insurance alone for the 2 of us is $1600 per month.

[@patrickh9910]

Are you not on Medicare? Under 65? I thought Medicare Advantage, including prescription drugs, dental, vision, is less than $800 per person per month.

[@ariefraiser140]

You're not on Medicare then.

[@alansach8437]

Why? Medicare is what 150.00 plus change for part b. A is free. Even a good G plan that covers everything but your part B deductible (200.00) is less than 200.00 a month. That's 350.00 and maybe 20-30 bucks for drug coverage (I think mine is like 12 bucks).

[@dennistyler8746]

Retire poor enough to qualify for an affordable plan with Obama care...

[@aldeiceci818]

Here's the plan..Forget the graphs..Live on 30k + pensions and make your 800k work for you in the market hopefully giving you a stable 5-6% return..Relocate and get out of North America to live well elsewhere..It's not rocket science..Another point is to own nothing...

[@jwil4905]

Most people don't WANT to leave the country in their retirement years. That's an act of desperation for most. A few want to make that big change.