I Reviewed A Subscribers Retirement Plan (Here’s Where They Went Wrong)

[@angelolamantia]

Perfect example of many friends I have that make $300k or more and can’t retire because they spend way too much and refuse to cut back. They think they are wealthy but it is all relative. I on the other hand will retire at 62 having more income in retirement than I do now.

[@ericwebster6911]

Don't let your parents get suckered into buying an annuity.

[@joycef8443]

Too late! there were nice young men from my MIL’s church and the nice young lady at her bank!

[@user-cv2vv2oz6n]

Great video thanks. Being an armchair planner lol, 2 things jump out, asset allocation obviously and 12k a month spending outside of housing expenses. Trying to wrap my head around this amount, even with luxury car leases, nice vacations, restaurants, golf club membership, etc. Last but not least the SS payments of 2300 and 2600 (I think these are their SS payments) amounts don't add up with his income.

[@Susanhartman.]

Retirement becomes truly fulfilling when you possess two essential elements: ample financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.

[@ThomasChai05]

One crucial aspect of earning profits from stocks is to avoid being frightened and selling them prematurely. It is vital to understand that stocks should not be treated as mere lottery tickets. Consider acquiring the assistance of a financial expert to navigate your investments.

[@mikegarvey17]

This is why I've entrusted a fiduciary with my investment decisions. Many underestimate advisors until emotions lead to losses. My advisor crafted a tailored strategy aligning with my long-term goals, guiding entry and exit points for the equities I focus on. This has grown my portfolio to $780k, generating sufficient dividends for my household's needs.

[@mariaguerrero08]

@@mikegarvey17My partner’s been considering going the same route, could you share more info please on the advisor that guides you

[@mikegarvey17]

‘’Izella Annette Anderson’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.

[@Grace.milburn]

She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.

[@patrickmurray1246]

The primary problem was obvious from the beginning: spending too much on gifts early in retirement….the asset allocation changes help but you never directly called out the largest driver of failure here which was the huge hits to their portfolio in the early years from gifts to children. We all want to help our children but we can’t become a burden on them later in retirement because we gifted them down payment assistance at age 60-65. You should have set a simple a 50/50 asset allocation and then shown more analysis of how reducing the gift strategies would have still allowed for age 60 retirement. Also, 65% probability of success is too low in my book, I think another scenario to get that to say 85% would have been helpful and I bet 60 was doable with lower gifting, ie they can gift out assets when possible and let that be more flexible as they see how the stock and bond markets actually perform each year earlier in their retirement window.

[@ronpizur2627]

Great discussion on the annuity element of their situation. Annuities are great, as long as you don't confuse insurance with investment. Having the assurance of a fixed income when you want it is great, but it will never produce the same results as owning the equivalent in personal investments. The bottom line is people should get independent advice and guidance and not rely solely on the promises made by an insurance agent. Your analysis and discussion was right on. Keep up the good work.

[@petermartin9494]

Regarding annuities: "An annuity is a contract that's issued and distributed by an insurance company and bought by individuals." So, why would you purchase an annuity when the insurance company could become insolvent and you would lose everything? Does not make any sense to me.

[@darrenmatthews1667]

Yes. if you go with an annuity, you want a reputable company that is reinsured in case of insolvency. It is a small risk with a reputable insurer but it is a risk.

[@ThePurpleSnork]

The short answer would be: One, most of the top insurance companies are well over 100 years old now, and are among the most if not the most stable companies in existence. And two, there are regulations, reinsurance, and other processes in place to handle the insolvency of an insurance company. Other insurance companies step in, take control, and make good on the promises that were made. There are plenty of reasons to not buy an annuity, but the risk of the insurance company failing is typically not one of them. However, if you buy an annuity from a “bad” insurance company (and there are plenty of them) the risk of their insolvency is much higher, but the same protections I mentioned before are still in place.

[@ASD128London]

In my country there are govt requirements on insurance companies about how they invest the money you put with them. These mean they shouldn't go bust, or be unable to pay you the annuity sum. But they also mean the rate of return they achieve - and hence the amount of the annuity - is low.

[@enonknives5449]

The initial 1% success rate was so absurd that I can't pay any more attention. This is just plain stupid. They have plenty to retire immediately.

[@buckwildz]

They have 3.6m liquid. They want to spend over 230k per year. That is close to an 8% withdrawal rate. That along with their high bond portfolio will not make it and will fail eventually. I agree they can retire but not with the amounts they want to spend every year.

[@Yette]

As soon as I saw the $4M+ net worth I moved on. Imagine the folks below thinking retirement plans are simply "scalable" and not tailored to infibidual circumstance. Amazing

[@scottsinnott2636]

I agree that is not relatable for most of us

[@PorscheSpeedster-kz6nc]

I disagree. These case studies are always scalable up or down. The fact that they are too conservative in their investments is one example in this video. There always can be applicability in these videos. Don’t view, you miss a learning opportunity. 😮😢

[@cheeseboi6040]

@@scottsinnott2636maybe for you.

[@BigRed2]

We are not all lazy planners/Investors

[@buckwildz]

Disagree, it's useful to some of us and for the rest you can scale the numbers. Divide it by 2 or 4 or whatever your plan is. It doesn't exactly work like that but it gives you an idea of how to think about it.

[@William-y1d-l5c]

I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.

[@duanec.sutherland5292]

Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.

[@petermartin9494]

This is overthinking on a level over and beyond... they have plenty of money to retire this minute. Investments should for the most part be in an index fund. they will be fine for the rest of their lives as long as they do not flush money down the toilet. And why does James want to retire anyway? Does he hate his 300k a year job that much?

[@draguts]

Comical comment on so many levels

[@petermartin9494]

@@draguts Pointless comment on one level.

[@johnspelman8976]

Good video and the sames steps are followed regardless of how much you have. Also, they need better financial advisors

[@Bum_Hip]

Can we do some more examples of less high income earners? Nothing against people who have done well for themselves, but I believe more of us are making $100,000 or less, and are needing more practical advice to get to the finish line, as opposed to advice for living a certain lifestyle that they have grown accustomed to.

[@PorscheSpeedster-kz6nc]

While I appreciate the comment, these studies are always scalable. The mechanics of the math do not change. Always an opportunity to learn from these.

[@Bum_Hip]

@@PorscheSpeedster-kz6nc I think it is not as much about scalability, as it is about relatability. I understand there is not as much money, or prestige dealing with more moderate numbers, but there are way more of us. Listen to your subscriber like me, or don't, just trying to offer perspective.

[@PorscheSpeedster-kz6nc]

@@Bum_Hip understood. Just to be clear, I am a viewer like you. It’s not my channel but like the content and the processes and math behind these strategies discussed.

[@fialee8ca132]

If 37% of their net worth came from an inheritance, and they make about $500k, and save only $30k plus a little more... they got a huge spending problem, and lack of savings discipline.

[@petkuscinta9797]

I do not like the chart on the wall:) Why? BEcause it suggests that retirement means going down on capital by spending savings. I would much rather see picture that at retirement peak exponential moves to 3% uptrend (capital growing covering inflation and spending would simply be annual cream capital+3% makes each year.

[@Sylvan_dB]

The annuities are effectively part of their cash allocation. The rest of the portfolio should have additional stock allocation to compensate. The history is past, and the initial fee already paid and surrender costs are unlikely to make it worth "freeing up" the value of those annuities when you consider they have plenty of room in the cash bucket for that amount and more.

[@darrenmatthews1667]

Don't get caught in a "sunk cost fallacy" Go to schwab's annuity calculator (google it) and check out current rates - it's free. They would get a much better annuity dumping what they have and getting a new one. Never leave money on the table.

[@darrenmatthews1667]

OMG I had to go back to look at the annuity I bought after seeing that horrible annuity they got. I bought a lifetime annuity with survivorship for my spouse that paid out immediately last year at the age of 56. I'm currently getting $704/mo for $150000 = 5.63% I used IRA money so I could avoid penalties and immediate taxes to smooth out my early retirement. It is a very small part of my portfolio. Anyway the point is that the annuity in this video is why people think all annuities are a scam and I would agree if it was what all of them were like.

[@ugot1try]

I agree that there can be a large difference in quality between annuities, just buy shares of different blue chip REITs. Right now most pay over 5% and you would have a similar if not better rate of return with more options.

[@darrenmatthews1667]

@@ugot1try REITs may have a large payout but that is because they don't retain any earnings and end up diluting shares and will eventually collapse when they need to recapitalize due to extraordinary maintenance expenses.

[@deandmellow944]

Money is relative. Disciplined people can retire comfortably with very little. Undisciplined people spend 12.5k per month on Door Dash and Tesla Trucks. All good though....money flow helps America.

[@fialee8ca132]

Any advisor who uses the 4% rule is ripping off their clients.

[@josephj6521]

They’re spending $12k per month? On what? Unless they’re into very expensive holidays, gee, they’re swimming in money to retire very comfortably.

[@ugot1try]

Spending 12,000 a month is crazy. Hopefully I never get that frivolous regardless of income

[@josephsayers4480]

I volunteer as tribute! Make me and my wife your next KZbin video, please 😊 I would love a deep review like this. Really helpful.

[@bobcounihan5042]

This all seems a little crazy to me. Why would presumably reasonable people plan to have such a high acceptable failure rate? I may just have a different POV here, but I would not advise anyone with this type of net worth to have such a plan. Plenty of folks with less net worth will have to be exposed to such risk, but this affluent group just seems ill-advised. I will likely be the guy who takes it with them type but why save money if you are not motivated by security? Lifestyle creep is a big thing I imagine but I still drive my 2005 Ford Ranger and dress like a hobo. I am planning on being able to live off of 1 to 2 percent of my assets and will likely need a good bit of pushing to live off of more. I envy people who live lavishly to some small degree but just don't desire it for myself. Good Luck to all pursuing their dreams and having the freedom to live like you want to. Growing up poor and working as hard as I have for what I have it is hard to imagine spending so much. Most people would say it is a good problem to have but they just don't understand the mindset it takes to achieve such goals. If spending a lot of money was one of the goals, I would have done that already for sure. We shall see how it all works out....and best of luck to all.

[@LiamOlivia-4]

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.

[@AlilatTiamiyu]

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.

[@AlilatTiamiyu]

@@LiamOlivia-4 Oh please I’d love that. Thanks!

[@LiamOlivia-4]

@@AlilatTiamiyu *MARGARET MOLLI ALVEY*

[@LiamOlivia-4]

Lookup with her name on the webpage.

[@AlilatTiamiyu]

@@LiamOlivia-4 Great , i will do that now . Thanks for sharing

[@MyGoogleYoutube]

Dude. Kids are expensive.

[@rolandosouffrain7957]

It's all about how much u going to spend. It would be 100% 8f they spend less. Way less. Lol

[@Andre-qo5ek]

missed an opportunity to name the Seymore and Audrey 😅🪴