How Much Can I Expect To Spend In Retirement with a $2 Million Portfolio?

John and Jane’s dreams of financial independence have finally taken shape - a $2.7 million net worth, with $2 million in liquid assets, at the age of 60. The question is not just when they can retire but also how much they can comfortably spend in their retirement.
In this video, I delve into the intricate details of their financial landscape, dissecting their goals, income sources, and expenditures. I’ll walk through the key steps that John and Jane, or anyone in a similar situation, should consider when planning for a secure and fulfilling retirement.
Defining Retirement Goals - By exploring different scenarios, we unearth the flexibility to retire earlier or later, aligning with their preferences.
Estimating Living Expenses - To determine their financial needs, we constructed a detailed budget, which revealed an average monthly spending projection of $5,500 throughout retirement.
Planning for Healthcare Costs - By addressing Medicare premiums, supplemental coverages, and potential out-of-pocket expenses, we create a comprehensive plan that ensures their health needs are adequately covered.
Incorporating Specific Goals - Beyond basic living expenses, John and Jane share specific goals. Each goal is considered in the financial plan, providing a holistic view of their aspirations.
Analyzing Income Streams - By analyzing John and Jane’s salary income, Social Security benefits, and contributions to retirement accounts, we paint a picture of their financial landscape.
Projecting Portfolio Growth - With a 6.5% annualized growth rate, the projection shows an expected portfolio value of approximately $3.2 million by the time they retire.
Assessing Withdrawal Rates - By carefully calculating the percentage of their portfolio they plan to withdraw annually, we ensure that their spending aligns with a sustainable approach.
Exploring Alternative Scenarios - The beauty of financial planning lies in adaptability. We explore alternative scenarios, offering a comprehensive view of John and Jane’s financial journey and empowering them to make informed decisions aligned with their values.
Ultimately, their financial plan serves as a compass, guiding John and Jane toward a retirement that aligns with their unique vision. There are shifts towards intentional living, prompting discussions on work preferences, generosity towards family, and the freedom to explore new adventures.
Financial planning is a dynamic, personalized journey. It's about embracing the possibilities, aligning financial decisions with personal values, and navigating toward a retirement that reflects the life you've envisioned.
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⏱Timestamps:⏱
0:00 - Case study: John and Jane
1:45 - Priorities and expenditures
4:37 - Travel, family, and income
7:42 - Now see what’s possible
10:44 - Projected expenses and taxes
12:52 - Compare total outflow with inflow
15:31 - 2 key pieces of information
18:25 - Considering possibilities
22:03 - Goal: spark conversations
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[@RootFP]

Many of you have asked what software I'm using in these projections. The software is only available through licensed advisors, but you can get lifetime access to it in my Retirement Planning Academy here → retirement-planning-academy.mykajabi.com/rpa

[@karenmcgovern3452]

Looks interesting. How much of the content is different and more specific that your KZbin videos? I’ve watched them all😊 Will it walk us through how to input into this software?

[@pglover19]

So, for a one-time fee of $195, I get lifetime access to the Retirement planning tool used in your case study videos? Please confirm.

[@RootFP]

correct@@pglover19

[@RootFP]

Similar concepts, but the videos are different than my KZbin videos@@karenmcgovern3452

[@gregjohnson4695]

The information in this video is exactly what i've been looking for! So just to confirm, simply by joining the Retirement Planning Academy, i'll have full access to the software tool you used in this video? even without being a client of your firm?

[@cleetussmith6652]

I retired seven years ago. When I retired I owned my own home on a five acre parcel and my truck was paid off. After utilities, insurance, taxes, food and just about everything else, my monthly cost is around $1100. Instead of focusing on how much money I need to save, I focused instead on how well can I prepare and what makes me happy. I get immense amount of joy working the land and it keeps me in shape. I have great neighbors in a community that is unbelievably good. In fact, when I dream about going on my dream vacation I think of right here where I live. If you focus on being happy and preparing sensibly, then everything else becomes trivial.

[@pamsmith7369]

So agree! If I had $4000/month in SS, I’d think I was in heaven! I live on a lot less!

[@oneznzeroz]

You’re doing exactly what I dream of. I’m retiring in about 12 years. I’m investing almost 25% of my salary. I’m going to own a little house in the country side and grow a garden. Have the family over and just enjoy life.

[@AddictOfLearning]

That is awesome to hear you have such great community in retirement!

[@bman6502]

I also have a large estate (6 acres), that has a current value of around $2.5 - $3m.. it’s fully paid off and we love the land but I’ve thought about selling once we retire (sometime in the next 3-5yrs)…. My thought is, would I be better off renting in retirement so I don’t get hit with major repairs or expenses on a home??? New HVAC can run 15-20k.. a new roof 20-30k… those would be brutal expenses in retirement…

[@FatherGapon-gw6yo]

Love it!

[@james.yt.00]

This was great. I appreciate your soft calm voice and the absence of annoying sponsors and pushing for subscribers and likes. Generally classy. Thank you!

[@RootFP]

I appreciate that! Thanks for watching.

[@MikeSuding-]

My thoughts exactly

[@jmcks1]

I absolutely love real life scenarios and how you take us step by step through the analysis. Very informative and helpful as always!

[@BorninMornin]

James, I’m 57 and I have been watching videos about retirement on KZbin endlessly. This was by far the most informative and helpful. At least it will help me to initiate conversation with the financial advisor and ask about different scenarios.

[@neilfoster5397]

Yes, case studies such as this are very useful. Keep ‘em coming!

[@RootFP]

Will do, thank you.

[@Dream10timesover]

I think this is the best retirement analysis I've ever seen. Incredibly helpful. Thank you!

[@danaefloyd]

This is great. We are retiring this summer and just went through all this with our financial planner. We have a bit more assets but this scenario is close. You confirm everything we have been told. Thank you. Love your channel and your content, James.

[@RootFP]

Wonderful!

[@samanthaweston2957]

Yes! It’s helpful, and not only that but you’re breaking these concepts down in a clear way that is easy for me to understand.

[@kevddpp]

So helpful! This is the first time I've seen such a detailed analysis that also includes real example numbers. Thank you for going through it all!

[@RootFP]

Glad it was helpful!

[@scottl91]

To answer your question - very helpful! Thank you so much for all of your videos - they are very well done!

[@daveslomski9612]

James does by far the best case scenarios for retirement. No one else on youtube comes close. Both realistic examples and very clear and easy to understand.

[@Kirankarnati0007]

This is the only channel I came across on YT with actual retirement case study examples, this is Gold. I will recommend your channel to friends and may even use your services if you are fee only financial planner. THANK YOU

[@Davek111]

James, this might be one of your best videos yet.

[@shaymichellestudios]

This was so informative and easy to understand. Thank you so much. I finally understand some things I've always been uncertain about.

[@davidanderson4502]

This video is extremely helpful. This detailed analysis lets me see some expenses I didn't plan for.

[@richard9827]

Great presentation. We have for 48 years been savers. We are retired and did a similar analysis two years ago and and repeated it over and over and over again. Couldn’t believe the results. It showed that we weren’t spending enough to meet our goals and still have a fair amount to leave to the next generation. Now we are thoughtful spenders. We always thought of ourselves as middle class but it turns out we are rich 😂😂😂😂. Who would have figured. 😊

[@mroberts566]

That’s awesome. What’s your approximate net worth?

[@TuBui2]

On your way to retirement did you ever feel like you had any regrets of not spending more?

[@MNP208]

@@TuBui2I regret not traveling more with our three kids (now adults). At one point, we were investing $1000/month in their 529 plans and fully funded their college educations. You can’t predict your future income level when in your 20’s. You also can’t predict how far you’ll advance in your career, i.e. working your way into management. We never imagined our salaries would be as high as they eventually were.

[@jrairdan]

This is a great video. I appreciate how clearly you articulated the different options available to them.

[@pamsmith7369]

Very helpful! I’m hooked on this stuff. I’m older than John & Jane but get the gist of the models you are providing.

[@colleendolan4533]

We are approaching retirement and this is the single best analysis I've seen in how to plan for our financial strategy. Thank you!

[@sandylamba2546]

This is very helpful information. Thank you for showing us this scenario.

[@JonBusey]

Yes James, very helpful going through this detailed example. Well done.

[@phildibello1141]

Very, very well done! There are many CFP/CPAs who present this, and you are one of the better presenters!!

[@conureron3792]

This has been very helpful. Will watch this a couple of times. Thanks.

[@kwokchow3196]

James, It is very helpful example because we are in a similar situation. We enjoy all your details and analysis. Please keep up the great work!

[@Coda1850]

100% helpful. Really enjoying the in depth analysis.

[@anacaona1982]

Yes ; Very Helpful! Thank you for doing this and sharing.

[@JulioHernandez-gz5lr]

I’m 68 planning to work till 70 - this has been very informative and d eye opening - you have integrated all variables in a concise manner. Thank you!

[@dannycamardelle2592]

Thanks for sharing so much detail on your video.

[@travgal9903]

Very helpful! Thanks for the clear explanation and graphics.

[@GowdyStuff]

I listen to your podcasts all the time, and this is a great example and very useful to me...Thanks!

[@loborocket]

I think the detail in this video is great. You have modeled almost exactly my situation to almost the last $. Loved seeing it.

[@RootFP]

Glad you enjoyed it!

[@rodneynapier8264]

This scenario is very helpful. Much appreciated. Great job illustrating life balance

[@peterbailey8012]

Very helpful video. You walk through your structured thinking clearly and stepwise. It’s great when you call out what the major drivers are in your analysis

[@JimmyLucero]

I love this amount of detail. Great work.

[@paddyterhune]

This is definitely useful, thank you for sharing and making these videos.

[@johnh2812]

This IS very helpful when you do a case example. Really well done. Thank you.

[@evilgiraffe]

This is useful. Thank you for taking the time to do this.

[@RootFP]

Thank you for watching

[@CarlSegers]

Great information. Awesome to see it visually with real-world examples. Thank you.

[@andygullion9730]

Yes, the case study is great. I appreciate seeing your analysis.

[@theoriginalmrs.d538]

This is fabulous - extremely helpful to learn from others’ considerations.

[@stevelarcher9920]

Excellent presentation. This is the closest scenario to my own that I have run across. I am very appreciative

[@taggerung890]

This is amazing and super helpful , thank you!

[@shaynelaw9629]

This detail is fantastic! Liked and subscribed. Thank you fir sharing. About to turn 54 and really starting to think about retirement and have been learning and planning. Hopefully ready in 8-10 years.

[@anilbouri1485]

Enjoyed watching your analysis, well done. Very helpful for future planning.

[@jonathancooper4976]

This was very helpful. I appreciate the pace of your presentation.

[@tomaridance]

This particular video was very helpful because it runs thru the real life numbers and situations we can face.

[@slimdawgwoof]

Helpful! Thank you for doing this.

[@mikec.6571]

This is probably the most helpful channel I've seen on KZbin regarding the actual planning process. As someone who's looking at financial planning as a second career, this is invaluable content. The examples/scenarios and the thorough, detailed walk-throughs are excellent. Please keep it up!

[@RootFP]

Glad it’s helpful. Good luck with this new career.

[@squintywhisper8247]

This video has great information and helps me start planning for the next 30 years. Thank you!

[@melodyk.]

These detailed examples are very helpful. Thanks, James!

[@RootFP]

Glad you like them!

[@gbarton800]

Good scenario based information for retirement planning. Thank you!

[@shanet2436]

This is very high quality. Well done 🎉

[@alchaudhari]

Amazing James. You are very detailed on how it works. Thank you.

[@BrentSFinch]

This is my first time seeing your content, and I want to say you are a phenomenal presenter of information.

[@mgoldberg1234]

Great video! Like your calculator tool and explanation…thanks!

[@jodeanoconnor6906]

This was absolutely fantastic, thank you!

[@user-mo9od7cs1t]

Very helpful to see a plan model like this. Thank you.

[@blindkap]

Extremely helpful. All videos great but these in particular are super helpful.

[@RootFP]

Glad you like them!

[@testodude]

This was my favorite of all of your videos.

[@SalweyGaming]

loved this! im on the back half of my 30s now and im alway crunching these numbers. loved to see such a detailed real world example

[@beninniger2088]

Thanks. This was very interesting and super helpful.

[@alanyoung159]

Love these kind of analysis, not just top down, but bottom up assessments

[@user-ly8wh7gb2k]

Great video. The detailed scenario that you show on screen is perfect. Clearly I need to give you a call.😊

[@fr9714]

This was fantastic analysis honestly. Very insightful.

[@chrismarttila6726]

Yes, This info is very informative and relevant. Thanks.

[@kzalaska4804]

The most impactful thing I've heard is that planning is very important, and it is 100% guaranteed that your plan will be wrong, but by doing the planning you learn what levers to pull to effect things so you can adjust your life to fit the circumstances.

[@markgordon6717]

This was very helpful to see everything laid out. I'm sure it varies by person and location, but seeing an estimate on how much to budget for healthcare was very helpful.

[@andylewis5662]

Yes it is helpful. And I do apply it like you suggest to my own plan. Thank you.

[@goldnitz42]

great presentation James. Really clear and really logical.

[@bobby350z]

Very nicely explained. Thank you.

[@adrianortiz]

What a clear presentation, wow. I had never seen it presented like this. First of your videos i watched, but I am now subscribed. Great job!

[@tylerforeman5788]

First time viewer, great video! Well explained and loved all the alternate plans. This is so helpful to inform people who don't have as much fiscal knowledge

[@RootFP]

Welcome aboard!

[@user-mo4oz7ux2g]

Great explanation and tool with high confidence level.

[@AKim-uu4hg]

Super helpful & interesting to compare our situation to this one! Thank you!

[@RootFP]

Glad it was helpful!

[@retirementplanplaybook5444]

Great video. Nice walk through.

[@MarkSKazmierski]

This is great stuff. Thanks.

[@BradColemanisHere]

Good analysis and thoughts here. Thanks.

[@shane7150]

Enjoyed this, thank you.

[@2214drk]

yes. this is very helpful. and this example is one of your best you have done. great work.

[@RootFP]

Glad to hear that! Thank you!

[@tshooter4419]

Keep it up! Very helpful.

[@jimray4210]

This approach and information is very helpful

[@M22Research]

As usual, well done. “How do we get the most life out of our money?” Excellent!

[@RootFP]

Thank you!

[@thomasshreve750]

Very useful information. The best I've seen.

[@RootFP]

Thanks for that nice feedback

[@dannybeard2861]

James, this was very helpful to see the variety of details.

[@RootFP]

Thank you. I’m glad to hear that.

[@markg996]

Excellent video! Thank you

[@jerrylohr3491]

Very useful and helpful information. Thanks

[@jenniferschultz9669]

This is great analysis James! Appreciate all you are doing.

[@RootFP]

Thank you Jennifer!

[@progression_decibel]

This was an AWESOME video - my wife and I planned goal is to retire comfortably by age 60 (we are both mid-40's). This video definitely helped set realistic expectations on that endeavor!

[@pavelm4484]

These are super helpful and great to see the thought process!

[@RootFP]

Glad you think so

[@aarongant1982]

Super helpful and a very realistic example

[@marksalinas917]

Excellent video. Thank you.

[@gizmobowen]

Thanks James for another useful video. I think basic videos like this are very helpful to illustrate how a certain portfolio could be used in retirement. In your video, you talk about stress testing it and I think that would be an excellent follow up. Additionally, tax management is very difficult in retirement and that could be the third video that you could make, using the same clients. A multi-part video with the same clients/portfolio isn't something I've seen other people demonstrate, but I think it would be very helpful to illustrate the numerous facets involved in creating and implementing a retirement plan.

[@RootFP]

Good point. I'll look to do a follow up that shows how we stress test this.

[@joymok1226]

Very informative! Many Thanks.

[@robertoherreraoikawa2581]

Another amazing video!!! Thank you!!

[@RootFP]

thanks for watching

[@mines851]

Very helpful and clear to see. Thank you

[@RootFP]

Glad you liked it

[@user-vd4gf4qu5d]

Very helpful! Thank you.

[@lindaclough2277]

I'd like to see these tools more broadly available for everyone to model and change over time. This is an Awesome video - while I was aware of this - THANK YOU for providing this information to everyone!

[@tomwalsh4592]

Check out New Retirement software. Extremely powerful and inexpensive

[@Hintz6]

Super helpful insight and that software looks well designed. Great presentation and advertisement for your employer.

[@icanbenchmorethanyou429]

I'm 23, fairly finance savvy, and about to graduate college w an engineering degree. I found this very helpful to better understand how I'll need to think about retirement👍