How much do I need saved to retire at 60?

[@yourfinancialekg]

*Free Retirement Download: The Checklist to Retirement:* 📊 pearlwealthgroup.com/ **

[@think_ffs3934]

Earned a like on this one. I often try to think of retirement in phases just like this as I'm trying to work out an early retirement- some kind of safe-ish amount to cover the early retirement portion at a higher expense rate and lower return rate that helps me be sure I can make it out to Medicare/Social Security. That first pool of money in safe assets, which reduces the sequence of return risk since if markets go down, only the longer-term portion of my money is going to take the biggest hit, and that has years to recover. This is a cautious approach in a sense, but it helps reduce the single biggest risk of an early retirement - retiring into a down market exactly when you need to be making the biggest withdrawals.

[@kevinfestner6126]

I plan out to 94 years as a compromise. Living as long as Jimmy Carter is rare. I have more than that saved. I plan on working a seasonal tax accounting job till 73, for additional cash, and variety. I do want to buy my last car. Other issues are portfolio mix, etc. Great analysis, TY.

[@Alex-jx5bx]

100 years longevity😊 is a very generous assumption

[@doncox5727]

That's what I said. But I guess if the numbers work figuring you're going to live to 100, they should really work if you live to 85.

[@vernshird711]

@@doncox5727 Exactly. I based my projections on living to 100 and not ever working again. My logic - if it works for age 100, it works for age 90, or in your example, age 85. If it works without me ever working again, then it works if I get a p/t job.

[@Steve56-w9r]

Hey Drew, The 25x rule is based off of the 4% rule (25 is the reciprocal of 4%). Since the 4% rule gives you an inflation adjustment each year, wouldn't the 25x rule then, by default, include inflation?

[@donnymac575]

Good question. I'd like to know too.

[@davebickers7209]

How did you arrive at 285, 175 at 67? 50K*7 yrs 350K even if it was 6 years shouldn't it be a minimum of 300K before inflation?

[@scottwilbanks9888]

Need to plan on additional 1k a month for healthcare for 5 years.

[@stephenhegarty6179]

I have to say the numbers sound right up to maybe 75 of age but then I think spending goes down as the the No Go years kick in or at least slow down and the average money each will go down by how much I don’t know but amount needed at 60 will be lower, what if someone goes with a 80-20 and gets a 8-9% roa ? The need to cover the cost till SS kicks is key and it be what is coming from that 80/20 savings…. Thanks

[@procharged67]

I don't know anyone with 1 million dollars let alone 100k ... so no one can ever retire I guess

[@ddddsd20]

This is based on living to 100, what percentage of people live that long?

[@Alex-jx5bx]

I bet it is less than 5% of population

[@JohnDoe_1609]

@@Alex-jx5bx • Centenarians (people aged 100 or older) make up about 0.02% of the population, or roughly 1 in 5,000 people. -thx ChatGPT

[@Alex-jx5bx]

@JohnDoe_1609 thank you! So we should ask to use 90 instead of 100 in these scenarios 😁

[@JohnDoe_1609]

@@Alex-jx5bxI would use the social security longevity calculator.

[@think_ffs3934]

@@JohnDoe_1609 Careful with the way you seek that number. Imagine a universe where people's "warranty" expires at 100 and they live to 100 and only a few weeks later on average. Very few people would be 100 years old at any time, because people die shortly thereafter - but 100% of the people make it to their warranty date, so the odds of reaching 100 is actually 100%. Of course, that's a ridiculous example but it highlights that the number of people in the overall population over a certain age isn't really the same question as how many people will make it that far. Also, life expectancy has increased over time, so if you're younger you might plan for longer than what people today are experiencing. If you make it to 65, the average life expectancy is still short of 90 -- I don't know what % make it to 100, but planning out to 100 is probably overly cautious, especially if you ALSO pad margins of safety at other points (i.e. well, I don't want my plan to show I'm broke if I live to 100, so now I also want to have a certain floor of money at the latest plan age, and I want to get there with only conservative investment returns, and I want to assume taxes go up, and that social security takes that ~25% cut people say is coming, and..... etc.

[@kennymartin379]

I think $2000 a month will work

[@bwillsboys]

How did you get 400,000?

[@think_ffs3934]

He took the expenses (after social security) and did a "future value calculation" - essentially, that's a shortcut for the work of determining, given some assumed investment return rate, how much money it would take at age 67 to be able to draw down that expense rate every month and have that pool of money run out only when you're at 100. It's a simplified example, surely, based on flat return expectations.... IMO (and I think in Drew's) this isn't the kind of detailed plan people should really do just before actually retiring, this whole video is to get someone in the ballpark of what they need or in this case, he's arguing the bare minimum is what this produces. I think he's right about that - I think this is even a little TOO "back of the envelope" for this purpose. His inflation adjustment here is probably close enough for the 7 year period, and TBF he does highlight how you can do the real calculation and says he'll do that in another video, but.... using that method for that 33-year period VASTLY undercounts the inflation impact - adding only the same 3% of the original value for year 2 all the way out to year 33 gets wildly off at than length of time since by the end of 30 years you're not 3% more than the start value for every year, you're actually way more than DOUBLE the original value meaning you should be adding 100% and more for those later years. Maybe the fact that he's adding that simple total back to to future value number without further reducing it for future value is somehow offsetting in a way that's close to the real number, but.... I'm not betting my retirement on this simple method. Maybe a better way to do this is to use a "return above inflation" number in calculating your future value dollar pool if that's possible to do the inflation impact more justice - this seems kinda unreliable even related to other "back of the envelope" methods you might come up with. That said, I liked the video - the most valuable part of this example is thinking about your retirement as needing different pools of money for different phases of retirement - e.g. the part that gets you from early retirement to medicare/SS age, and the part to cover after that. This is doubly true if the first part is before 59.5 and you need to be sure you have money that actually available that gets you there before you can touch your 410k without penalty, etc., then get from 59.5 to 65 or 67, then what comes after. I think the math part for each section (especially the longer portion) needs some work. But I know Drew uses software to do the heavy lifting for real plans, so I'm assuming those get done with more accuracy. :)

[@bwillsboys]

@@think_ffs3934thank you very much for explaining..

[@bwillsboys]

Thank you