Do you need a million dollars to retire? Real-Life Case Analysis

[@anthonybutler3157]

Refreshing to hear. Need more of this thoughtful planning for retirement rather than some magic number. Retired to portugal 6 years ago (age 57) on 500k. We are completely debt free and are enjoying a very non sacrificial retirement

[@cmtphysiques]

Long term care costs were a main contributor to my decision to retire here in Japan

[@Eric-Marsh]

That was a big factor in our move to Spain after my retirement.

[@larriveeman]

No magic number, know your total expenses, know your total retirement income, factor in inflation

[@icedteamama176]

Also depending on where you plan to retire…much less in other countries.

[@kevinfestner6126]

This is good. I plan on retiring with a seasonal work at home job until 70, on just a bit less than 1 million in savings, just my 3.75 pct mortgage as my only debt. I need to do some home improvement before I retire. Working at home for part year will bring in extra cash, and you can't vacation all year.

[@PostalNerds]

8:07 Thailand, Philippines, Vietnam or Malaysia.

[@mikewarby9795]

Just subscribed. Came across your video. Agree no debt is very important!! As you work and save, live below your means. Once you do retire, you will be living a reasonable lifestyle and your $$ you saved is what you've got so live within your savings and social security and perhaps a pension. Thanks for the good information and look forward to future ones

[@stevelee2471]

I don't have anywhere near a million in liquid funds. However, our pensions bring in $68500.00 per year plus SSA of 30k and everything paid off. I'm four years into retirement and haven't touched the nest egg.

[@buckibanker]

A 68k pension is worth the equivalent of about a $1.5m portfolio, so you have the equivalent of well over. The million would be for most folks, which don’t have pensions. Not a slight to you, congrats on working at a place that offers that amazing benefit!

[@stevelee2471]

@@buckibanker Yes, I am fortunate. The company I worked for stopped providing pensions to anyone hired in after 2005.

[@GaryH-pw9cm]

@@stevelee2471 I retired in 2001with a good pension. But all new hires after July 2005 came under a different retirement plan. Higher payment and less benefits. 🙁I feel lucky.

[@crimsonpearl4686]

Today's long term care insurance premiums are way out of reach for most Americans, and a total waste of money. I just turned 62, single, no kids, very healthy and ZERO debt, with just a tick over 1 million in retirement savings. I plan to "retire" next fall of 2025 when I turn 63. I project my monthly expenses in retirement to be right around $4200. My employer's health insurance continues in retirement for life (employer pays 80%, I pay 20%). I think I should be fine. I also plan to work part time in retirement.

[@DLTJR1959]

Agree. Almost all retirement planners talk about long term care insurance that no one can afford. Retire and enjoy yourself. If you have no debt you can sell your assets for it. A long term care facility here will let you stay until you die if you deed your property over to them. I know that seems extreme but I know some folks in their 80's that's done that and are happy that they did.

[@crimsonpearl4686]

@@DLTJR1959 I feel most financial advisors heavily push LTC to benefit them with the commission....sad.

[@GaryH-pw9cm]

@@crimsonpearl4686 I got ripped off by a major LTC that I paid into since 1996. They went bankrupt 10 years ago and I was put into a special fund. My payments went way up and the benefits went way down. My retirement plan gave it the green light in 1996. But they did not know so I don't blame them. They were suckered into it also. It was a big company; A big LTC company would not rip you off. Yes they would and did.

[@Markrtsoon]

We do have saved 20x of our current salary. But that is only because we have low salaries.

[@Pouncer_Fox]

I can say I have 100x saved if I have $0 saved. 😂

[@BigRed2]

It’s expenses you save not salary, you want 20X annual expenses

[@Sylvan_dB]

Of course the answer is, as always, "it depends." If you AND YOUR EMPLOYER are ready, willing and able for you to work until age 67 you need less than if you get shown the door or are otherwise unable to work years before you can claim SS. If you expect to travel the world first class, you are going to need a lot more, of course. How much do you make? The lower your income, the less you need to have saved. Social Security replaces the highest percentage for lower income folks, only 15% for the top SS bracket and nothing for income past that SS limit. What do you expect for your post-retirement lifestyle? If you expect to live at least like you did before retirement, you are going to need to have saved enough that when added to your social security it is pretty similar to your pre-retirement income. If you expect to do some more expensive things you didn't do before, you'll need more savings or some other way to cut your expenses enough to pay for them. When do you expect to retire? Is there a chance that your employer will show you the door 5 years before then? Or even 10 years before then? The earlier you retire the more you need to have saved to provide for your longer time being retired. This is doubly so if you retire before 62, or if you wish to delay SS to provide longevity insurance for a significant other.

[@fredswartley9778]

This was a good balanced perspective on saving for retirement.

[@matthewowcarz8259]

Thanks Kevin, great content as always. One of the best on al gores internet.

[@foundryfinancial]

Ha. Thanks!

[@Al-mk4xl]

Inflation and rising healthcare cost and cost of premiums and out of pocket healthcare cost and potential SS depletion are enough to keeping me up at night and no amount seems to give me comfort in my golden age. I can see the struggle of some seniors who found themselves out of money and living a pitiful life. If you’ve been married and your spouse decides she/he is not happy and divorces you, your savings may take a big hit just as you enter retirement age. My solution was to retire abroad and self pay for healthcare cost which is far more cost effective than paying premiums for part B and D of Medicare plus long term care insurance etc…so my advice is to maximise the savings and investments until you can’t and hopefully you’ll have enough to spend when needed.

[@GaryH-pw9cm]

A divorce in retirement can clean you out. I was lucky and it only cost me 30K. But 30K is a lot when living on retirement income only. Can't plan for everything.

[@bun-n-cheese1290]

I think this is a good break down. My only gripe is I dont think total value of the pension was really factored in the way it should really be looked at. If we dont look at home equity then he had 300K plus the value of the 25K annual pension for lets call it 25 years if he lives that long. Thats actually very close yo 1 million dollars. So for those without a pension, the million would still be what they need to accomplish this same outcome. I always factor in total value if my pension if I live to a certain age to makr sure Im looking at it objectively.

[@fredflintstone2234]

Is this number on top of owning a house? I’m a renter, no real estate. All my money is in retirement savings.

[@marton349]

I could retire very nicely on 250-300k when I retire.

[@Wayneman50]

Dude, you are really hung up on long term care. What is the percentage of people that will actually need or use it?? My wife and i have both being in health care for 40yrs, and my wife was a hospice nurse for her last 12yrs in the field. We will absolutely use our home with a reverse mortgage if it really comes down to it. It helps that we have no heirs. But, we believe most people do not spend 2 yrs in a long term care facility, that is just fear mongering. Retire and enjoy your hard earned money without fear.

[@foundryfinancial]

You’re the perfect example. You have no heirs to care for you and the studies show you’ll need some sort of LTC. 48% of people turning age 65 who will need some type of paid long-term-care services in their lifetimes. And the avg. duration for men 2.2yrs - for women it’s 3.7yrs.

[@fredflintstone2234]

@@foundryfinancialTrue! I would not doubt if it was longer.

[@BradBeck-f5b]

I think the LTC cost is the big unknown besides the obvious of how long you will live. My father had Alzheimer’s and Parkinson’s and he was in a LTC for about 6 months. Prior to that my parents have been living in a retirement community. My mom continues to live in the retirement community. LTC insurance is so expensive for so many years (with restrictions), that it seems to me it would be better just to use your IRA instead of purchasing LTC insurance.

[@BradBeck-f5b]

@@foundryfinancialSource of the averages would be helpful. Not disagreeing, rather asking out of curiosity.

[@PostalNerds]

My wife and I’s federal pensions say that we need zero saved to have a good retirement.

[@jl_andreu]

Thank you, very informative! What is the name of the software you used for simulating the scenario?

[@billyjohnson9166]

Retire overseas you’ll live like a king. Always spend less than your income.

[@Pouncer_Fox]

You're not wrong. The downside is you have to live overseas. (Visas, new legal docs, new currencies, language barrier, leaving friends and family behind)

[@billyjohnson9166]

@@Pouncer_Fox actually for me there was no downside only upside. It changed my life. It’s never been better.

[@Eric-Marsh]

@@Pouncer_Fox we moved to Spain. I consider most of those things to be part of the adventure, but yes language has been the big challenge.

[@curiouspenguin6887]

Fidelity, a firm that makes money investing your money, says you need a million dollars. Interesting.

[@cathylingo9521]

For most people, all of these amounts are unattainable. Can’t work forever. Do the best you can with what you have. Not much savings, no debt, full pension and SS.

[@tommays56]

We spent 12K on the dentist this year

[@GaryH-pw9cm]

If you have a million dollars and spend just one penny, you don't have a million dollars anymore. 😪

[@amara1954]

I’m screwed

[@330DKNY]

Lot of missing information from the title. 24K per year pension, needs to be included in assets.

[@scottH18370]

Could you do some video on an IRA in conjunction with military disability

[@chrisforker7487]

All depends on what you want to do in retirement! Inflation will continue to grow faster than your investments will, unless you’re heavily invested in stocks.

[@dkhnova]

0:05 ... Is $1.46M the amount the "average American" thinks is necessary to retire ... or is it the average of what Americans think is necessary to retire?

[@YinusaSaheed]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family..

[@ClarieZwiehoff]

I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...

[@YinusaSaheed]

@@ClarieZwiehoff *MARGARET MOLLI ALVEY* ..

[@ClarieZwiehoff]

@@YinusaSaheed Oh please I’d love that. Thanks!

[@YinusaSaheed]

@@ClarieZwiehoff *MARGARET MOLLI ALVEY*

[@YinusaSaheed]

Lookup with her name on the webpage,

[@Bremerhaven_Rocks]

There is a difference between living and surviving

[@3thinking]

1920's : I feel like a million dollars! 2020's : I feel like a million dollars....I am in poverty.

[@Eric-Marsh]

What many Americans don't consider is that one can retire and live well elsewhere in the world. When I retired we moved to Spain where we live much better that we would have if we had remained in the US.

[@jkd1975]

Can I ask how you handle healthcare?

[@Eric-Marsh]

@@jkd1975 sure, for the first year after getting our visas we needed private insurance. After that we moved onto the public plan. In the Valencia communidad it's provided with what is called a Convenio Especiale (excuse my spelling). Up to age 65 if costs 60 Euro a month, after that 158. No deductible no copay. In general the system is pretty good. I can make a doctor appointment on my app with a phone. Usually it's for the next day. The doctor's office is a kilometer from me. It doesn't cover medicine but generally that runs at about 1/8 the US cost.

[@M.Campbell]

Being debt free is the key. Having debt is like having a giant parasite.

[@buckibanker]

That stat is exactly the reason boomers were able to retire and gen X is too to struggle

[@fredswartley9778]

Do you think long term care is worth it? What are the chances that it will actually save you money in the long run?

[@KungPowEnterFist]

I take a different approach. The first question is not how much debt do you have. The answer to that question is obviously none. I mean, seriously. If you have debt, you should not be contemplating retirement. Anyway, the actual first question is what do you think is a comfortable retirement today. That includes all your base expenses (assume a paid off house, cars, etc.) and discretionary. Last thing I want to do in retirement is sit at home and watch Netflix. Today that number is at least $100k/yr. Then inflation adjust that to the year you want to retire. So, for example, 10 years from now, that becomes at least $150k/yr. Ten years later that becomes $225k/yr. That's how much cash you need to withdraw every year when you retire. You don't have to use my base number or inflation rate. Pick whatever suits your fancy. Anyway, even if you were retiring today, I doubt $1M is enough to get you to 80yo without running out of money, and that is assuming you have two SS's and a pension. Folks ten years from now will be a lot less likely to have a notable pension, and SS is on pace to become insolvent and pay reduced benefits. So that means you will need to fund even more of that spread between your fixed income and desired expenses from the pot of money. If this math result is just too beyond what you can possibly do, then when you retire go van life and make TikToks or leave the US. IMHO, for those 10 years out and planning to retire in the US, you should be aiming for at least $3M.

[@MC-gj8fg]

If you're retiring today, are old enough to receive social security or pension, and you're retiring in a 3rd world country without a lavish lifestyle, then $999,999 may be enough.

[@jaeminkim7406]

❤❤❤❤❤❤❤❤❤❤❤❤❤❤❤❤❤❤

[@jameschaves5723]

Kevin I would love to see a video addressing the shift from a lifetime of saving to now spending that money. I’m 53 with $2 million saved and have no idea how to spend money! My therapist says “set a have fun budget”. Dinners, weekend trips, small toys. Even then I feel guilty as hell 🥲

[@foundryfinancial]

Great suggestion!

[@jameschaves5723]

@@foundryfinancial thanks Kevin. People are going to laugh at that video but I assure you, ITS REAL!!! I’m surrounded by it everyday. “Birds of a feather”, all of my friends are as frugal as me with millions in investments!!!

[@cheetahb5]

@@jameschaves5723 I'm the same way. I'm 52 and have $3 mil accumulated. I grew up with parents who sent through the Great Depression, so I inherited a lot of their frugality traits. My financial advisor has shown me what my yearly income would be in retirement and I can't even fathom how to spend that much!

[@GaryH-pw9cm]

I retired at 53 in 2001 and have gone through 1.7M. I shop at Target, Walmart, estate sales, yard sales. Blue jeans and work shirts. No designer clothing here. A little here a little there. Money has a way of disappearing so be careful.