Tag: retirement calculator
Why Some Retirees Succeed and Others Live in Worry – 5 Retirement Truths
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
I want to share one of the most valuable pieces of retirement advice that I've ever heard if you're thinking about your retirement and you're wondering if you're doing the right thing or think that you should be doing something different or if you're just worried about all the things going on right now whether it's the economy or the markets or the value of your accounts be sure to watch this video because I'm going to share the retirement truths that every retiree goes through and it's these things right here we're going to cover today and every retiree goes through it and it they experience this in retirement so it's going to go over this and then also what to expect in retirement and then how to give yourself the best chances of maintaining your lifestyle in retirement as well now the negative of these retirement truths that we're going to look at is that many of them lead to increased uncertainty or worry about your retirement one of our goals though as we're thinking about it is really the opposite of uncertainty or worry in retirement it really should be more about confidence right the next years really all the way up until you pass away wait these are the the magic ears these could be the best years of your life and I know that because there's an actual study a research study uh proving this so let me pull that up really quick and show you the results and I'll link to it below people were asked to score their life satisfaction from zero to ten where 10 is the best possible life and then zero is the worst possible life and this is really just the average score by age and I thought it was encouraging to see that life satisfaction tends to increase as you can see as we get older and then it tends to Trail off as we get older but really the area the the period of time we want to focus on is that this is the magic time and we know this to be true as well because we've helped hundreds of pre-retirees move into retirement with confidence and excitement and these were the people who were coming to us that were feeling somewhat unsure or not 100 confident with their money plan and our firm streamline Financial has been around for 24 years and we've made it through quite a few bad Market periods with our clients and by the way if I haven't met you yet I'm Dave zoller and I own streamline Financial with Tim and Luke and Sean and if you're working with an advisor now that's mainly focused on investments and investment planning but doesn't talk about these key retirement strategies like the tax efficient withdrawal planning and income planning or just tax reduction overall feel free to reach out to us through the website now we don't always have time but I'll get back to you either way so let's get into this first truth in retirement it will be common to have that thought of maybe I should be be making a change or should I be doing something different it'll be normal to feel this way in retirement especially when you see the news or you're listening to friends talk about their finances there's this feeling or this thought of really making us doubt our current plan which causes some people to make more emotional decisions instead of making smart financial decisions and a good way to avoid this is really to avoid this feeling is by having an understanding of your plan which really leads to more confidence with what you're doing and having a plan for both the good times and also the bad Mark of times so that you know that you're prepared for either one of those and I'll give you some ways to achieve this coming up in this video now on to the second thing that comes up in retirement that we just have to be prepared for is we need to expect bear markets right you've most likely lived through a lot of them already and really in retirement though they feel a little bit different usually worse but because of the frequency creating a plan with bear markets in mind and really big Corrections built into the plan is a smart thing to do that way you don't have to worry when they eventually come now if you're not sure how to model out these various what-if scenarios or bad Market scenarios for your plan then you may want to talk to a cfp or check out my favorite retirement income planner below this video you should see a link to it it's one of the best consumer facing planners that I've seen and it doesn't cost thousands of dollars like the ones that we use for our clients the next thing to bring up is for pre-retirees who are close to stopping their wage especially if that's during bad markets they may think should I work a little bit longer maybe just one more year to kind of make it through this this difficult period we actually had a client call us up about five months ago and uh no she was five months into retirement and she said something like it seems like so much bad news is out there and what's going on with the markets I'm wondering if I it would have been better if I should have just kept working so we reviewed her plan and because we built in to her plan this expectation of bad markets everything looked great and and really the only reason to keep working would be if she really enjoyed this sort of work that she was doing and it brought her some some purpose but she didn't so it was great it was great confirmation that she was still on the right track so if this sounds like you take a look at another video I recorded I'm gonna either link on this screen or it'll be below and it gives a few real examples of what working an extra year might look like in a financial plan the next thing to know is that no one really knows what's going to happen next it seems like everybody has a prediction on TV or YouTube or at the dinner table with family or with friends and no one really knows what is definitely going to happen we know this uh in a logical way because you know there's that saying if you put 10 economists in the room together and they come up they need to come up with a conclusion they'll come up with 12 of different answers when they walk out knowing that it's important to prepare your investment plan for that four economic Seasons that we may go through in the future since we don't know which one we're going to go through next so just as as an example you've seen it before the four economic seasons are higher than expected economic growth or lower than expected economic growth and then higher than expected inflation or lower than expected inflation and there's asset classes that can do well in each one of those now again we don't know which way we're headed but having asset classes and each one of those potential Seasons that could be beneficial now that's just my opinion and really it's for all of this talk to your own Financial professionals before doing anything like this now on to the next one which really has more to do with human psychology than investment strategy and then after that I'll share the the really the most helpful piece of advice that I've heard related to retirement planning but if you'd like this so far please click on the the like button and and maybe this video can help somebody else going through the same things that that you're looking forward to so the next truth is in retirement we may have a tendency to compare ourselves to others the grass is always greener on the other side of the fence really throughout life that's we've got that tendency to compare it to others but it can harm us in retirement too if we do a video on this channel that mentions a dollar amount as an example we don't want that to really make you feel better or feel worse about your current situation because you know we help high net worth families at streamline Financial we sometimes mention big numbers but we don't want it to be about the numbers we really want to communicate just the principles and the strategies that can can really be applied to to anybody's finances and there's always going to be people with more than us and then there's always going to be people with less than us and the one who wins is the one who's content and at peace most at peace with their current situation you know that saying if I want to be able to practice being content with a little and I want to be able to practice being content with a lot and and you know healthy competition that's okay but comparing ourselves to someone else because uh you know if it causes us a feel of lack or less than that can hurt our retirement plans because that leads really back to that first point that we talked about in uh in this list of feeling like we should be doing something different for example if we see a guy on the internet and he's investing a certain way or he's deciding he's changing up his entire strategy um because of what's happening with the economy then that may cause us to feel like we should be doing something different and then start to increase the emotional level of uh of our decision making instead of staying to strictly logical or financial levels but again it's a normal feeling to feel that worry or fear or anxiety um with what's happening during during current periods but one of the most helpful pieces of advice that I've heard that we can apply to retirement planning is really the difference between those two words fear and anxiety knowing the difference between those two is actually very very helpful as we're planning retirement and talking about money that is if we want to feel better about what we're doing right now when we think about fear and anxiety we might think of them as being the same thing but actually they're completely different things and let me just pull up these two definitions if I can really quickly fear is a caution over a real and present danger and then anxiety is a worry over an imagined future danger now fear if we've got something right in front of us then it's obviously a very helpful tool for us as humans anxiety though is not always a helpful tool as as we're trying to process things partly because these anxieties there's nothing we can do to control or influence them you may have seen this drawing from Carl Richards before about things that matter and then things I can control here's a place to focus and then another way to look at it is we actually sent this to clients not too long ago on a video of what you can't control and what you can control so we can't control the markets and inflation and what they're doing with interest rates or what's happening in the news or the world or tax laws or the elections but a lot of these things actually do relate to things that we can control for instance you know markets are inflation or interest rates your portfolio allocation you can control that you can control when to pay taxes when it's related to in investing you know as we're talking about Roth conversions or the the costs the tax cost tax drag on some of the portfolio and not to get too nerdy about these things but two of the biggest things that we've seen is this idea of not controlling the news but what we can control is news consumption we've seen a big shift with uh some people who instead of someone who wants to consume the news they switch from TV news to reading news where you have a little bit more control of what's coming at you versus TV is just the next thing is coming at you if you know what I mean I don't know if that's if I if I'm explaining that the right way but back to the this video all the things that we mentioned before earlier here um a lot of these can be anxiety-inducing things as well right the severity of a bear Market or not being able to predict what's going to happen next in the world or comparing ourselves and doubting our plan or thinking that we don't have as much as as we wish we had when it comes to to money or the you know what if this happens and what if this happens how is that going to impact my plan and that can lead that sort of thinking can lead to paralysis and really no action being taken but what if you had a plan that was built in to show those different what-if scenarios so instead of the unknown future danger you're able to get more concrete scenarios in the plan as a result that's what I would recommend once you get get it out in the open then it becomes a lot less scary we both know that so either find a great certified financial planner who can show you that and show you the what-if scenarios or check out the the DIY planner or a different planner that helps you put in those what-if scenarios as well so it becomes less scary so don't forget anxiety is it can be the thief of Dreams it takes you away from enjoying the the present moment and it stops you from even taking the right action to make things better in the future because it really just makes you only focused on on the negative as you're you're moving through life that video that I mentioned earlier is called why delaying retirement might not be a good idea if you're pre-retirement and you're thinking you want to work a little bit longer because of what's going on take a look at that one coming up next or below and then I'll see you in the next video take care foreign [Music]
Why This Investment System Can Help Retirees Worry Less About Their Retirement Plan
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
I want to share an investment system for retirees to hopefully assist you as you're thinking about and planning for your retirement we're also going to look at how to prepare your retirement for the multiple potential potential economic Seasons that we may be headed into so we want to look at the multiple seasons and then the Easy System that's going to help lower taxes and then lower risk as well now if I haven't met you yet I'm Dave zoller and we help people plan for and Implement these retirement strategies really for a select number of people at streamline Financial that's our retirement planning firm but because we can't help everyone we want to share this with you as well so if you like retirement specific videos about one per week be sure to subscribe so in order to create a proper investment plan in system we want to make sure that we build out the retirement income plan first because without the income plan it's much harder to design the right investment strategy it's kind of like without the income plan it's like you're guessing at well 60 40 portfolio sounds good or you know May maybe this amount in the conservative bucket sounds reasonable you already know and and you feel that as you get close to retirement that goal of just more money isn't the the end-all goal that we should really be aiming for for retirement it's more about sustainability and certainty and then really the certainty of income and possibly less risk than before the last 30 years uh the things that you did to be successful with the financial side are going to look different than the next 20 or 30 years now if you need help defining the the income plan a little bit then look at the DIY retirement course below this video now once you do Define your goals for retirement and then the income needed to achieve those goals then creating the investment system becomes a lot easier and within the investment plan we really know that we can only control three things in all three things we actually want to minimize through this investment system the first thing we can minimize or reduce is how much tax you pay when investing we had a a client who was not a client of streamline Financial but of a tax firm coming to the the CPA firm in March to pick up his tax return and he was completely surprised that he had sixty thousand dollars of extra income on his tax return that he had to pay tax on right away before April 15th and it was due to the capital gains being recognized and other distributions within his investment account and he said but I didn't sell anything and the account didn't even go up that much last year and I got to pay tax on it but he was already in the highest tax bracket paying about close to 37 percent on short-term capital gains and dividends and interest so that was an unpleasant surprise and we see it happen more often than it should but this can really be avoided and here's two ways we can control tax so that we don't have to have that happen and really just control tax and pay less of it is the goal and I'll keep this at a high level but it'll get the the point across number one is the kinds of Investments that you own some are maybe funds or ETFs or individual uh equities or things like that the funds and ETFs they could pass on capital gains and and distributions to you each year without you even doing anything without you selling or or buying but it happens within the fund a lot of times now we would use funds and ETFs that are considered tax efficient so that our clients they can decide when to recognize gains rather than letting the fund company decide now the second way is by using a strategy that's called tlh each year there's many many fluctuations or big fluctuations that happen in an investment account and the strategy that we call tlh that allows our clients that's tax loss harvesting it allows them to sell an investment that may be down for part of the year and then move it into a very similar investment right away so that the investment strategy stays the same and they can actually take a write-off on that loss on their taxes that year now there's some rules around this again we're going high level but it offsets uh you know for that one client who are not a client but who had the big sixty thousand dollars of income he could have been offsetting those capital gains by doing tlh or tax loss harvesting that strategy has really saved hundreds and thousands of of dollars for clients over a period of years so on to the next thing that we can control in our investment plan and that's cost this one's easier but many advisors they don't do it because it ends up paying them less now since we're certified financial planner professionals we do follow the fiduciary standard and we're obligated to do what's best for our clients so tell me this if you had two Investments and they had the exact same strategy the same Returns the same risk and the same tax efficiency would you rather want the one that costs 0.05 percent per year or the one that costs 12 times more at point six percent well I know that answer is obvious and we'd go with a lower cost funds if it was all the same low-cost funds and ETFs that's how we can really help reduce the cost or that's how you can help reduce the cost in your investment plan because every basis point or part of a percentage that's saved in cost it's added to your return each year and this adds up to a lot over time now the last thing that we want to minimize and control is risk and we already talked about the flaws of investing solely based on on risk tolerance and when it comes to risk a lot of people think that term risk tolerance you know how much risk can we on a scale of one to ten where are we on the the risk factor but there's another way to look at risk in your investment strategy and like King Solomon we believe that there's a season for everything or like the if it was the bird song There's a season for everything and we also believe that there's four different seasons in investing and depending on what season we're in some Investments perform better than others and the Four Seasons are pull it up right now it's higher than expected inflation which we might be feeling but there's also a season that can be lower than expected or deflation and then there's higher than expected economic growth or lower than expected economic growth and the goal is reduce the risk in investing by making sure that we're prepared for each and every one of those potential Seasons because there are individual asset classes that tend to do well during each one of those seasons and we don't know nobody knows what's really going to happen you know people would would speculate and say oh it's going to be this or this or whatever might happen but we don't know for sure that's why we want to make sure we just have the asset classes in the right spots so that the income plan doesn't get impacted so the investment system combined with the income system clients don't have to worry about the movements in the market because they know they've got enough to weather any potential season I hope this has been helpful for you so far as you're thinking about your retirement if it was please subscribe or like this video so that hopefully other people can be helped as well and then I'll see you in the next one take care thank you
Is 1 Crore Enough To Retire? How to plan your retirement?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
Hi friends, welcome to Yadnya investment academy. We are going to talk about a topic of financial planning on Friday. And today's topic is very interesting. Because this question is asked regularly on many social media channels and workshops. That people have an amount in their mind that is 1 crore rupees. We think that if we have 1 crore rupees, our life will be good. So this question remains in the mind that if I have 1 crore rupees, can I retire now? Am I financially free? I don't have any tension of retirement now. Now whatever work I am doing is extra. So that 1 crore rupees is enough. And if you have retired now and got EPF money and total is 1 crore is it enough for you? And if it is enough or not, how much can you spend in both questions, when is enough and when is not.
We will touch on all those things in this video. I will explain everything through a calculator. You can check that calculator on our website investyadnya.in as well. We cover many topics of financial planning in this session. If you want to make your own financial plan, then go to investyadnya.in website There are many products related to financial planning. There are 1 to 1 sessions as well. You can check that out. Now I am going to my website and I am sure you can see my screen. If you go to the tool and calculator, here you can see the retirement calculator.
I don't think you will get this anywhere else. Now the question is, suppose I have 1 crore rupees, is it enough for me to retire? First of all, I will be asked what is my age? I am just giving an example, 50. Suppose I am 50 years old, what is my life expectancy? It is important to know when you will be retiring. I think we should keep it around 90. I am keeping it at 90. How much is the expense now? If you are retiring and you have 1 crore rupees, how much do you want to spend? What is your monthly or annual expense? Suppose I am thinking that I have 6 lakh rupees. I have put 6 lakh rupees here. How much inflation are you assuming? How much will my expenses increase every year? If India's inflation is around 6-7%, then you can assume that. Suppose 7% inflation till the end of life. Current asset, how much money do I have? I will put 1 crore rupees here. I have 1 crore rupees here. I will put that here. How do you invest this 1 crore rupees? How much return will you be able to earn? This is a very important question.
What type of investment do you want to put? Do you want to put it in PPF? Do you want to put it in Senior Citizen Savings Scheme? Or do you want to put it in FDs? Or do you want to create a portfolio of Mutual Funds like Hybrid Equity Funds? This is very important. Let's take all the scenarios. Suppose I want to put it in FDs. I don't want to do anything special. I will get 7% return in FDs. Whatever is the post tax. Or whatever you think.
You get 7.5% but let's keep 7% for calculation. Let's keep 7.5%. Let's keep 8%. We have put it in bonds, Senior Citizen Savings Scheme. And there is some money in EPF. So, we have kept some money in equity. So, my 8% will earn 1 crore rupees corpus. Which is 1% over inflation. I have taken 7% inflation and 8% returns. I have to put these 6 fields first. If I submit this, My retirement corpus is in deficit of 1 crore. This means that I need 1 crore more to develop this scenario. If I am 50 years old and I have 6 lakhs per month. And 7% inflation. And 8% growth. I need 2 crores. 1 crore is not enough. Now, let's change the scenario. What should I do if I am not able to do it.
I can either reduce it. I don't spend Rs 50,000 per month. I can do 30,000. Then we can change the amount. We have done 36,000. And then we have put this change. So, 21 lakhs is still less. So, basically it will come to 3 lakhs. So, now our retirement corpus is only 67,000 less. So, I can spend 3 lakhs per year. If I can spend Rs 25,000 per month. And if I take 7% inflation. And 8% growth. Then 1 crore is enough in 50. If I spend 25,000. If I spend 50,000 with same scenario. Then I will need 1 crore. Now, you will say that I invest in mutual funds. I know investing well. And I think that my corpus can earn 10%. If 7% is inflation. Then I think that my corpus can earn 10% per annum. Like our approach. You must have seen many videos on retirement. If you want to understand anything. Then put it in the comment section.
If I think that I can do 10%. So, let's try it on 6% after spending 3 lakhs. So, now our corpus will be 47 lakhs. So, it means that I can spend 4 lakhs or 4.5 lakhs. So, 4.2 or 4.3. Means I can spend around Rs 35,000 per month. If I can earn 10% return. Now, you will say that I have already retired. I am 60 years old. And now tell me what is this scenario. So, in that I can spend 50,000 per month. So, in 60 years also if you are earning 10% return. Then there is a deficit of 24 lakhs. If this scenario plays. You say that I have inflation. I don't spend much. 50,000 per month. Next year, I will grow according to 5%. Then it is good. 5% inflation, 10% rate of return, 1 crore rupees. You have enough. You have just enough. So, you can spend 50,000 per month. If you are 60 years old, you will get that money for 90 years. Now, there is one more thing. Many people think that I have a pension. I have a house. He is giving rental.
Or I am getting pension. Suppose you are getting pension of Rs 10,000 per month. Means it comes more than that. But I think 10,000 per month. So, I am getting a pension of 1,20,000. And we will make it 7 again. Is there any growth of pension? It seems that 2-3% growth is there. So, let's grow it by 3%. Till when will the pension come? Will it come till 90? Will it come till life expectancy or will it come soon? Many times, for limited time, money is going to come. So, we sell those things. Rental is going to come. I have to sell that house after 10 years. So, you can put that also. So, I have to get pension till last. Till 90. So, then in 6 lakhs, 7% inflation, 1 crore, 10% and all. So, then almost I am there. Means 3 lakhs is the only deficit left. So, in this way, you can find out that the money you have, is it enough for your retirement? So, now you can change the amount.
If you have 2 crore, 3 crore or 50 lakhs, then you can change the amount. Accordingly, you can find out how much expense I will have after retirement, my work will go smoothly till life expectancy which I have planned. So, this will be very very helpful for you. So, if you like Calculator, then do share this video with everyone. I think this will be very helpful to many people in retirement planning. And from the perspective of financial freedom also. And if you want our financial plans and personalized approach, if you want to understand how to get 10% rate of return, or what all I can do after retirement, then you can go to our website and call our customer service, sales team or relationship team. You can WhatsApp or call or email. And then we will reach out to you and we will surely try to help you on those things. That is all I have. I hope, do subscribe more. Because the topics of financial planning are not going on much. So, do subscribe and like the video if you like it. Have a great time, friends.
Jai Hind..
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When can I retire? | How much Retirement Corpus is enough?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
Hello friends welcome to
yadnya investment academy. Today is friday. So today we will talk about
a financial planning topic. Today's topic is Related to retirement planning A very common question of you all that come Obviously this all knows. Retirement is a very important goal. If we talk about financial goals. Mostly it should be. Mostly when i do financial planning So many persons financial
planning i have done personally Then in that comes. Retirement is a very important goal.
In which we need a lot of money Nowadays early retirement is occurring. FIRE environment talks are occurring. Financial free retire early In such things When retirement comes in goal One important thing comes How much money do I need? Tell me this much money is enough. Then I can retire. That is a normal question. For this we have already
developed an interesting calculator but that was before pay wall. Now we have removed that from pay wall because it is very useful calculator. So a retirement calculator we have made. In that with so many
permutations combinations We can get an idea This much retire corps I need. If I reach here then I have done well. I am at least financially free. Now I have to retire. We have to work further or not.
Then it is my decision. If above that. Now I am just sharing my screen. Now you will see here You will go on investyadnya website There is a section named
tracker and calculator. In this there is a retirement calculator. Open this Now here we have to fill information. Suppose i am putting age of 30. You have to retire suppose on 60. Suppose we took an
example i have to retire on 60. Life expectancy we mostly suggest We should keep 90, 95, 100. With a conservative estimate If you keep 100 then it is very
good conservative estimate. If you want to take optimistic If you took practical then it should be 90. Suppose i am putting here 95. Fourth information is our Current annual expense When we do retirement calculation Obvious we took assumptions. One assumption is this the
expense i am doing today Suppose when i retire Then also my expenses should be like this. Means my lifestyle of now remain maintained Neither i increase nor decrease.
Suppose I am spending 50k per month today. The expenses that are occurring. After retirement I will do the same expenses. After retirement expenses can reduce. It can be your house if
you are living now on rent. It can be so much rental expense. That can reduce. Now your children's expenses are so much. They will reduce at that time. Sometimes after retirement
expenses increase. Like vacation expenses mostly increases.
Sometimes medical expenses increase. Some expenses have increased. Mostly as an advisor If we took a general advice then we say. Keep the same expenses as they are now. Don't do much changes in that. Some increases some decreases. For example if we want
to do a simple calculation Then considering to current expenses Suppose my expense is 50,000 The profile we are taking has
expenses of 50,000 per month. Then it is 6 lakh rupees per year. You have to put today's expenses. You don't have to put off retirement age. That's all it will insert. Inflation number How much inflation number we have to take? 7% inflation is mostly suggested by India.
If you want to be conservative
then you can take 8%. If you want to be aggressive
then you can take 5-6%. Inflation you should calculate by your own. Every year how my expenses are increasing? If you know little bit idea about that These things are increasing
according to my expenses. Edcuation expenses children's fees It increases almost 8-10% every year. Rentals mostly 10%. Landlords mostly increases rent by 10%. My personal inflation is 8, 9-10%. You take according to your. So for calculation here
I am taking 7% inflation. Then return on investment. On the basis of return on investment. How much is my return on investment? Before retirement and after retirement. Now I am retiring at 60. At 30 I am starting investing. How much should I invest for that? How much retirement corpus I will get? The reason I am investing now.
On that how much return should I expect? It depends where you are investing. If you feel I will invest
mostly in equity markets. Retirement oriented because it is very long horizon. I am of 30 years and retiring at 60 years. Horizon is of 30 years. All that I am investing I will invest mostly on equity. Then we can take 11-12%
return on investment All that we will invest now. Or we kept in equity we can take that. If you feel This house is my retirement corpus This will increase according to that. Then on real estate the return
on expectations that remains. Basically there is round inflation of 7-8%. It depends on you if you have EPFO. That is a very big retirement corpus On EPF we get around 8%. According to that you have invested here. Overall that you are investing Or you are planning This is for retirement
and I am going to invest.
What are expected returns on that? Till 60. Pre retirement is retirement on investment. Suppose it is 12%. Whole the money I will put in equity. Then you took 12% return. Then post retirement my corpse will become. How much will it grow? Suppose I retire and I get corpus of 5 crores. Then 5 crore rupees Where will I invest? Again very difficult question If you are of 30 years then in 60 years.
This is very difficult. This is a very big assumption. We have to think mostly at 60 our risk profile decreases. We will not take much equity allocation. Suppose now we have 60-70 equity allocation That time it becomes 20-30% or 40%. I go a little bit on conservative. I say to most of the people Take percentage equal to inflation I get return same as inflation. If I want to take. Then 0.5-1% extra. We took here 8%. Means 8% of post retirement. My corpus will grow 8% after that. Inflation will remain 7%. This is planning according to that. We will discuss these points later. Therefore I am doing all these zero. We inserted these things. What we say? Our retirement age, life expectancy. Our annual expense, inflation. These all are our compulsory fields. If I consider this now.
Sorry some value needs to be inserted. Randomly value we are inserting. So that it can work. If I consider this now. Then I need retirement
corpus of 14.6 crores. If you are of 30 years and you have to do expense of 50k per month. At today's value Today's 50k offcourse will not remain same at the time of retirement. They will increase with inflation. If you have to maintain today lifestyle The 50k expenses you are doing today Same you want to do at 60. After 30 years. This is the value after 30 years. Don't be so afraid. Today 14.5 crore is very much. After 30 years the value of 14.5 That should be arounf 70-80 lakh or 1 crore I am doing guess work. It will not be more than that. Think if I have 1 crore rupees today then I will be able to do for next 35 years. 60-95 years means 35 years 35k per month That to inflation to adjust it.
I will get it consistently till 95 in 95 it will become zero. If i invest lumpsum then i can invest 50 lakhs. Considering I don't have anything. If I have 50 lakh rupees I will invest it. For 30 years they will grow by 12%. Expected pre-retirement. Then also my retirement money will be done. Monthly Sip that I have to do That is around 50,000 in this. 48,000 rupees sip i need in this. What is the meaning of step up? I will tell this in next. If you have plan in 30 years 60 years. I have to do all these things. Then you have to do monthly sip of 48,000. To retire for next 30 years. Remember this is a monthly sip. It will not increase. Every year you have to do 48k consistently.
Obviously our salary will increase in years Inflation increases salary increases. Now 48,000 will seem so big But after 3-5 years You will not feel big amount. That's what I am saying. In that our step up point comes. Now you will say I don't have 48,000 to invest. It is a very big amount. From where 48,000 will come. If we are spending 50,000 Then by saving 50,000 we
can invest in retirement corpus. That is not possible. Then in that our second comes step up sip What is the meaning of step up sip? What is annual increase in our income? Can we increase sip every year? I cannot invest 48,000 now but from next year i can increase. If you think my annual increase in income. If inflation is of 7%. With 7% income should increase If we take seven With 7% it is increasing. We considered 7% inflation. Salary is also increasing by 7%. In worst case salary is not changing. With 7% there is increase in salary. Existing investment Do you have any investment now? That you think this is my retirement income From that also it will reduce.
Suppose if you have EPFO corpus Suppose of 5 lakh rupees. 5 lakh rupees i inserted here. This is my EPFO of 5 lakh rupees. I will use it for retirement. On that how much return I will get on EPFO? Return are 8% Then we consider we will get 8%. It is tax free means you will get 8% Suppose i have 5 lakh rupees On that i will get 8% more.
Now let's do calculation again. Now since EPFO arrived. From 48 it became 46. Retirement corpus remained same. So now we have to do Sip of 46,000. We can do step up sip of 24,000. We invested 24,000 rupees this month. Every year we increase that by 7%. From annual increase in income we have to do this annual increase in sip. Today you started sip of 24,300. Next year increased 7% on that. Then again in next year increase 7% on that Compounding 7%. Increase 7% every year Till the age of 60. Then also your goal will be achieved. Then you will have 14.6 crores rupees. Considering these were our rates of returns So it is very very good. You can apply so much
permutations and combinations on this. I have little more money than 24,000. I can do upto 35,000. Can I retire early? Then can I retire at 58? On 58 it will happen at 29,000. I have 35,000. Can I retire at 55? Now your interesting calculation will start No you need 37,000 For retirement at 55.
Early retirement you can take at 37,000. If i do 37,000 per year. I invest in such investments
that give me 12% every year. 7% increase i put minimum. If you think 7% increase is less. Consider growth of salary minimum 8-10%. Why not? Consider 10%. Then in Rs 28,000 you can retire at 55. Retirement corpus also reduced. As early you retire that much less corpus you will want. Value of money comes less. At that time its value will be more. At the age of 55 we need 11.6 crores. How much lump sum funding we need? How much monthly sip
and stepup sip we need? I considered 10% annual increase. Like this If you can do so many
permutations and combinations. You can plan yourself. When can I become financially free? I think this is very interesting calculator If you like as i am a conservative investor I am not taking 12% from whole equity. Suppose we take 9%. This we keep 10. The rate of return become 9% from 12%. Obviously both the sip's will increase. You can do calculation according to that. Which type of investor is I am? If you think here is also 9
then it will change again.
These things you can do so many permutations and combinations
based on your profile. You will get so much support and understand If I invest this much money For this much time Then I can go towards a better retirement. This is how you should work on these things. You can plan early retirement. You want to spend so much or not. 50,000 will not be sufficient. I want to increase my lifestyle. Now I am spending 50,000. But at that time I want to spend 75,000. Acc to that by using
permutation and combination What are my savings now? I can plan such investments or not. Then in those things you will get
so much help from these calculator.. Do check that on our website. If you have any comment If there are complications
then visit our website. Below is our email address and
whats app number is given. All things are written below. You can email us there
if you have any query. Below there is comment section also. Must write in comment section. Hit a like if you liked the video.
If you think some knowledge is added Then hit a like Have a great time ahead friends Jai Hind.
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How to Plan for Early Retirement: Exclusive Retirement Calculator
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
When someone says the word Retirement, what comes to your mind? Is it the age at which you would probably retire or is it the bank balance that you would have or the abundant time you will have to do whatever you like doing. I think it's a combination of all three. Because all these three require lots and lots of money. Yes, in today’s video we will talk about how you can retire successfully and can generate enough corpus that your lifestyle does not get affected at all. Hi, I'm Samarth, for the past 11 years, I have been working in the finance industry and I'm currently the investments lead at wint wealth. Retirement, it should essentially mean financial freedom. In today’s example we will assume that you started your job or career at 22 or 23 years of age. And as of today, your age is 30 years. For the next 20 years, we are assuming that you'll continue your active line of work, essentially meaning that you will retire by the age of 50. Wait, wait, wait! I know you might be wondering that this video was for early retirement.
See the idea is to let you know that what should be the method for retirement calculation. If you are a little aggressive on that, you might retire by 40 itself or by 45. It all depends on your consistency and your persistence. For the time being , we have calculated this on a very conservative way and hence 50 has been considered as the retirement age. So now we'll be focusing on the example and for this we will be looking at the excel sheet. By the way, this Excel sheet that you can see on the screen can be downloaded using the link in the description and also help us know in the comments if you found this Excel sheet to be useful.
Infact, you can also download sheet right now and use it live while watching the video. You can change the numbers and see if it is suiting you and how it can help you to achieve your retirement. We have assumed that your current age is 30 years. And you started your work life or your career or your job around 22 or 23 years of age. You want to retire at the age of 50 years, your life expectancy is around 80 years. Now because you have already worked for around 7-7.5 years, we are assuming that you have saved roughly two to two and a half lakh per year, so your total savings as on date would be 16 Lakh Rupees. How is this split? Majority portion of investment is done in mutual funds. I too personally, when I started my career, so majority savings (up to 80-90%) I used to do in mutual funds. And I used to split them into growth mutual funds and a small part into dividend mutual funds.
After that since you are doing a job, you will contribute towards EPF. So we have assumed that this is around three lakh rupees. For emergency fund, you have kept some money into FD or bank balance, which is around two lakh rupees, and then remaining money, you have explored another debt option that is public provident fund and under this you have invested two lakh rupees. Basis our assumption and calculation, on this entire corpus of 16 Lakh Rupees up to the age of retirement, that is for the next 20 years, you will generate 10% returns.
So this 16 Lakh Rupees will get converted to 1.15 Crore Rupees. Yes, You heard it right. Believe me, if you do the savings consistently and in a discipline way, your Corpus becomes massive slowly. By the time I had completed five years in my job, I had enough money to pay for my car all in cash. But does that mean that mean, I did so? No. By the way, if you want to know if it makes sense for you to buy a car or use services like Ola and Uber, please watch this video. Now we are assuming that your monthly take home salary is one lakh rupees. And out of this 60,000, that is 60% of your take home salary is spent by you. After that how much would be your savings? 40,000 Rupees. Now if you keep saving this monthly, consistently in a discipline way, then you can easily generate the amount of corpus such that during your retirement life, you can manage your lifestyle very easily and won’t be financially dependent on anyone.
Next assumption which we have taken is that on your salary you will get an increment of around 8%. I know you might be feeling that the 8% figure is too high but you must also consider that although there might be years when you get only 5% or 7%. I really wish you never get so low increments, but there will be years when you will switch your job or get promotion, when your increment might be 20%, 25%. During your pre retirement age, that is up to the age of 50 years we have assumed that years care, return 10% on the amount which you're investing and on the corpus, which you already have save.
Then after retirement this figure drops to 7%. I know you must be thinking this is low, but considering that after retirement your priority will be to save capital and also beat inflation to maintain your lifestyle 7% is a very healthy number. One very important assumption that we have taken is that after retirement there will be a lot of expenses that you won't be incurring. For example, your petrol and traveling expense will reduce substantially. Then it is also true that services like internet where you require a speed of 1 GB currently, will come down to 100 or 200 MBPS then. So that will reduce your expenses. And there are many other such expenses. Okay. So we have assumed that there will be reduction of around 20% to your expenses post retirement.
All these expenses have been adjusted against inflation at the rate of 6%. There are many such expenses which are incurred once or twice in our lifetime. One of them being expenses for sending your child for higher education. If on today’s date, you send your child for higher education so may be you will spend around 30-32 Lakh Rupees, to send the child at a very good institution. This we have assumed that when you will be 52 years old, this expense will occur and at that time, considering the inflation of 6%, this will be around 96 lakh rupees. Now that you have sent your child for higher education, then after he gets settled, probably he or she will get married.
Right? We have assumed that if today you got for their marriage then you will end up spending around 25 Lakh Rupees. According to your assumptions, this event will occur when you will be 60 years old. At that point of time, you will be spending around 80 Lakh Rupees. So this also has been built in, in this model. Last but not the least and definitely one of the most important is: medical expenses. As and when you age increases, simultaneously your medical needs will also probably increase. I really wish, this doesn’t happen but it is quite possible. So on a conservative basis, we have assumed that by the time you turn 65, you might end up needing a medical expense budget of around 50 lakh rupees. Right? Which up till then will be around 1.6 Crores, right. 35 years from now, it would be around 1.60 crores. So assuming all of this if you see all this calculation, then you will find that you would probably end up needing around 8.25 Crore Rupees as your Corpus so that you can retire comfortably.
If you are able to generate this corpus by investing around 40% of your salary basis the following assumptions, month to month, year on year in instruments, which help you generate good returns like mutual funds and corporate bonds for the early starters, and then slowly and slowly moving towards more of conservative investments, where you can easily generate 9.5-9.7%, then you'll be able to achieve this corpus and basis this calculation, that you can see in the third sheet post retirement, you will see that even after you turn 80 years of age around around one crude Rupe, you will still be left with. So if you save in a disciplined way, start investments, then you can easily achieve your retirement. Under this sheet, you can also put your other additional expenses basis your age.
If you will see we have provided Additional 1 to Additional 8 blank spaces, as when you enter there it'll automatically get calculated and you will keep getting the results. The larger your retirement corpus, easier will be your retirement life, the more you will be able to afford to give to your family and enjoy the moments with them. This is why Savings are important. This is why retirement planning is important. And if you're worried to know how you can make your portfolio stronger and better in this video, we have discussed few revenue streams, which will help you generate passive income along with maintaining the safety of your portfolio until you meet next time. Happy Winting!
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Is 1 Crore Enough To Retire? How to plan your retirement?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
Hi friends, welcome to Yadnya investment academy. We are going to talk about a topic of financial planning on Friday. And today's topic is very interesting. Because this question is asked regularly on many social media channels and workshops. That people have an amount in their mind that is 1 crore rupees. We think that if we have 1 crore rupees, our life will be good. So this question remains in the mind that if I have 1 crore rupees, can I retire now? Am I financially free? I don't have any tension of retirement now. Now whatever work I am doing is extra. So that 1 crore rupees is enough. And if you have retired now and got EPF money and total is 1 crore is it enough for you? And if it is enough or not, how much can you spend in both questions, when is enough and when is not. We will touch on all those things in this video. I will explain everything through a calculator. You can check that calculator on our website investyadnya.in as well. We cover many topics of financial planning in this session. If you want to make your own financial plan, then go to investyadnya.in website There are many products related to financial planning.
There are 1 to 1 sessions as well. You can check that out. Now I am going to my website and I am sure you can see my screen. If you go to the tool and calculator, here you can see the retirement calculator. I don't think you will get this anywhere else. Now the question is, suppose I have 1 crore rupees, is it enough for me to retire? First of all, I will be asked what is my age? I am just giving an example, 50.
Suppose I am 50 years old, what is my life expectancy? It is important to know when you will be retiring. I think we should keep it around 90. I am keeping it at 90. How much is the expense now? If you are retiring and you have 1 crore rupees, how much do you want to spend? What is your monthly or annual expense? Suppose I am thinking that I have 6 lakh rupees. I have put 6 lakh rupees here. How much inflation are you assuming? How much will my expenses increase every year? If India's inflation is around 6-7%, then you can assume that. Suppose 7% inflation till the end of life. Current asset, how much money do I have? I will put 1 crore rupees here. I have 1 crore rupees here. I will put that here.
How do you invest this 1 crore rupees? How much return will you be able to earn? This is a very important question. What type of investment do you want to put? Do you want to put it in PPF? Do you want to put it in Senior Citizen Savings Scheme? Or do you want to put it in FDs? Or do you want to create a portfolio of Mutual Funds like Hybrid Equity Funds? This is very important. Let's take all the scenarios. Suppose I want to put it in FDs. I don't want to do anything special.
I will get 7% return in FDs. Whatever is the post tax. Or whatever you think. You get 7.5% but let's keep 7% for calculation. Let's keep 7.5%. Let's keep 8%. We have put it in bonds, Senior Citizen Savings Scheme. And there is some money in EPF. So, we have kept some money in equity. So, my 8% will earn 1 crore rupees corpus. Which is 1% over inflation. I have taken 7% inflation and 8% returns.
I have to put these 6 fields first. If I submit this, My retirement corpus is in deficit of 1 crore. This means that I need 1 crore more to develop this scenario. If I am 50 years old and I have 6 lakhs per month. And 7% inflation. And 8% growth. I need 2 crores. 1 crore is not enough. Now, let's change the scenario. What should I do if I am not able to do it.
I can either reduce it. I don't spend Rs 50,000 per month. I can do 30,000. Then we can change the amount. We have done 36,000. And then we have put this change. So, 21 lakhs is still less. So, basically it will come to 3 lakhs. So, now our retirement corpus is only 67,000 less. So, I can spend 3 lakhs per year. If I can spend Rs 25,000 per month. And if I take 7% inflation. And 8% growth. Then 1 crore is enough in 50. If I spend 25,000. If I spend 50,000 with same scenario. Then I will need 1 crore. Now, you will say that I invest in mutual funds. I know investing well. And I think that my corpus can earn 10%. If 7% is inflation. Then I think that my corpus can earn 10% per annum.
Like our approach. You must have seen many videos on retirement. If you want to understand anything. Then put it in the comment section. If I think that I can do 10%. So, let's try it on 6% after spending 3 lakhs. So, now our corpus will be 47 lakhs. So, it means that I can spend 4 lakhs or 4.5 lakhs. So, 4.2 or 4.3. Means I can spend around Rs 35,000 per month. If I can earn 10% return. Now, you will say that I have already retired. I am 60 years old. And now tell me what is this scenario. So, in that I can spend 50,000 per month. So, in 60 years also if you are earning 10% return. Then there is a deficit of 24 lakhs. If this scenario plays. You say that I have inflation. I don't spend much.
50,000 per month. Next year, I will grow according to 5%. Then it is good. 5% inflation, 10% rate of return, 1 crore rupees. You have enough. You have just enough. So, you can spend 50,000 per month. If you are 60 years old, you will get that money for 90 years. Now, there is one more thing. Many people think that I have a pension. I have a house. He is giving rental. Or I am getting pension. Suppose you are getting pension of Rs 10,000 per month. Means it comes more than that. But I think 10,000 per month. So, I am getting a pension of 1,20,000. And we will make it 7 again.
Is there any growth of pension? It seems that 2-3% growth is there. So, let's grow it by 3%. Till when will the pension come? Will it come till 90? Will it come till life expectancy or will it come soon? Many times, for limited time, money is going to come. So, we sell those things. Rental is going to come. I have to sell that house after 10 years. So, you can put that also. So, I have to get pension till last. Till 90. So, then in 6 lakhs, 7% inflation, 1 crore, 10% and all. So, then almost I am there. Means 3 lakhs is the only deficit left. So, in this way, you can find out that the money you have, is it enough for your retirement? So, now you can change the amount.
If you have 2 crore, 3 crore or 50 lakhs, then you can change the amount. Accordingly, you can find out how much expense I will have after retirement, my work will go smoothly till life expectancy which I have planned. So, this will be very very helpful for you. So, if you like Calculator, then do share this video with everyone. I think this will be very helpful to many people in retirement planning. And from the perspective of financial freedom also. And if you want our financial plans and personalized approach, if you want to understand how to get 10% rate of return, or what all I can do after retirement, then you can go to our website and call our customer service, sales team or relationship team. You can WhatsApp or call or email. And then we will reach out to you and we will surely try to help you on those things.
That is all I have. I hope, do subscribe more. Because the topics of financial planning are not going on much. So, do subscribe and like the video if you like it. Have a great time, friends. Jai Hind..
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Retirement Planning During Bear Markets – Especially if It’s Your First One In Retirement
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
bear markets can feel a lot different when you're retired and you're no longer earning income from work especially if this is your first bear Market since you stopped working when you were younger you know you had time on your side you know you may have even seen drops in the market as an opportunity because it gave you additional time and you got to purchase more shares well things were on sale so to speak but now most likely that's not the case the relationship between our money and our accounts now are of money going out versus money going in to put it simply and plus you may have noticed that there's this psychological component now around money and not wanting to mess things up because the decisions we make really carried much more weight now when we're close to or in retirement and it's really that's not only psychological or emotional it's true because planning the distributions is much more complex than the the planning around around saving and putting money into the investment accounts what led to our investment success the last 30 years is a lot different than what's going to lead to success the next 20 or 30 years or at last that's at least what we've been seeing at streamline Financial since 1998 since we've been around so I want to share how to endure through bad markets if you're close to retirement or you're already retired and then what you can do to actually take advantage of of this even if you're already retired and you're no longer saving money and we're going to do that because we know a universal law of physics that can't be disproven and we can actually apply it to our retirement and make it a little bit better if you're thinking Dave what the heck are you talking about here's a brief explanation so Newton's third law of motion is that every action there's an equal and opposite reaction right you've heard that before so the way that I see it is there's a positive to every negative and the same thing there's a negative to every positive it's the law of polarity so I want to share what the positive is to take advantage of during bad markets and by the way if I haven't met you yet I'm Dave zoller and Tim and Luke and I and Sean we run streamline Financial it's a retirement planning firm and we've been around like I had said since 98 so we've seen clients really go through it all the.com bust the financial crisis and then covet and then all the things in between all those uh you know those mini panics that we've had so we created this channel to share what's working and what has worked for them and so that you can hopefully glean some wisdom from them and then apply it to your your own life so the first thing we need to be aware of is that the previous 30 years there were four bear Market Corrections so that's a drop of 20 or more and then the 30 years before that there was a total of five bear Market Corrections so the main takeaway is we need to expect these bear markets to happen during our retirement during that next 20 30 years right the second thing is we don't want to make a change solely on an emotion right and it's not not just making a drastic change like selling everything and putting everything under the mattress right it's we were just talking to someone yesterday and emotions can cause us not to take an action when we know doing so is actually the Smart Financial thing to do for instance during March of 2020 when it wasn't easy to rebalance your accounts it was very difficult to do but if you did follow through and and do the correct rebalancing system or strategy if you were looking back now it could have made a lot of sense the third thing is update your income plan because that helps guide us and make really good planning decisions around our investment plan so it's really start with the income plan you've heard that before and that helps us make the investment decisions versus the other way around and updating your income plan during bad markets that can also give you some confidence as well as you're looking at where we are today and then looking at over the next few years and and seeing that things maybe aren't as bad as it might seem at least when you've got those two things of the unknown and then the known updating the plan is the known and you can get a little bit better picture on what the future might look like for you now to the two things that maybe could give us an advantage during a time like this this is back to the law of polarity so the possible things that we might be able to use here are well first before I say it as always this is not specific advice to you so we're not looking at your your plan together so before you do anything just talk to a financial professional but idea number one to think about is tax loss harvesting that could be a way to write off some of the losses while still keeping your investment strategy intact and I talk about this concept a lot more in other videos so I'm not going to go into details on it today but just keep that in mind the one thing to to really pay attention to though when we're we're talking about the law or talking about tax loss harvesting is that wash sale rule right so look for the other videos or talk to that Financial professional before thinking about doing that the second thing that could be a possible opportunity for really the first time in a very long time is that ability or option to lock in higher yields in that conservative bucket as you know the the bucket strategy you've seen that before where we've got the possible three buckets and having that conservative bucket here is a great way to plan out and prepare for for bad markets and now at the time of this recording some of those historically conservative asset classes are paying a higher interest a higher yield than what we've seen really over the last decade which could be a silver lining during this period of time so those are just two things possible things to look at which maybe could be taken advantage of by you for for your benefit so those are just two things to think about during this period of time that we're in right now if that short video was helpful please like this and then share it with others if you think it could help them too and if you'd like to talk more about your plan feel free to reach out to me in the in the description below or go to our website streamlinedplanning.com for get you click on the get started button we don't always have space available but you'll hear back from me either way so I hope that was helpful and then I'll see you in the next video
👉Retirement Planning At 60 in 2024 – 6 Tips💥
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
imagine this you're approaching your 60s and starting to think about retirement you've worked hard all your life and it's time to enjoy the fruits of your labor but before you kick back and relax it's time to get laser focused on your retirement plan in this video we'll cover six important tips to help you plan for your retirement at 60. tip one assess your financial situation Jane has a woman who's been working as a nurse for 30 years she's always been Frugal and saved as much as she could but she's not sure she's accumulated enough for a comfortable retirement to assess her financial situation she makes a list of all her assets and her expenses she realizes that she needs to save more if she wants to maintain her lifestyle in retirement tip two explore different retirement options Bob's a 62 year old man has been working as an engineer for the last 40 years his employer has a 401k and he's been contributing to it for years Bob also explores other retirement options such as an IRA to maximize his retirement savings tip three diversify your Investments Mike is a 65 year old man who's been retired for a few years he Diversified his portfolio by investing in many different stock and bond index funds by diversifying his Investments might minimize risk and ensure a stable retirement income tip 4 plan for health care costs Sarah is a 63 year old woman who's been working as a teacher for the last 35 years she's healthy now but she knows health care costs can be expensive in retirement to plan for health care costs Sarah bought long-term care insurance to cover any medical expenses that could arise in the future tip five consider your Social Security benefits Tom is a 64 year old man's been working in construction for the last 45 years he's not sure when to start receiving his social security benefits he decides to wait till 67 to start taking his social security so he'll get a higher benefit which will give him a more comfortable retirement tip six have an actual retirement plan in place Lisa is a 61 year old woman has been working as a sales manager for the last 25 years she has a plan in place that includes a budget for her retirement expenses and a plan for Hospital spend her time in retirement Lisa plans to travel volunteer and take up a new hobby in retirement to stay active and engaged following these tips and learning from the experience of others you can ensure a comfortable and fulfilling retirement it's a great idea to consult with a good financial advisor click on the link in the description if you'd like to set a time to talk with us
Pay This Off Before You Retire – Retirement Planning Tips
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
in this video we'll look at what expenses you should think about getting rid of before retiring and a few mistakes that retirees make when it comes to expenses in retirement there's a few things that you may want to say goodbye to before you say goodbye to that wage or that work income we're going to cover this in three parts it's going to look like this first we'll go over needs and wants and then what i'd call highway robbery and then also what to ear mark in retirement we've seen that the retirees that can get rid of these expenses before retiring have a little bit more breathing room and they feel better about their retirement plan because when you're planning for retirement we usually think about really two types of expenses it's the needs which are the essentials the absolute must-haves to just live you know as you think about my maslow's hierarchy of needs those things at the base layer and then there's the wants which are the the nice to have things but then there are other types of expenses that really don't fit into that category of needs or wants those are the things that we need to be done with before retirement and by the way i'm dave zoller and me and my team we run streamline financial it's a wealth management firm focused on retirement planning and we've been helping people personally for 13 years and streamlines been around for 22 years and we created this channel to share what's working with our clients so that you can benefit too so if you're close to retirement be sure to subscribe because i share one new video each week to make your retirement a little bit better i also put some free resources in the description below like my favorite diy retirement planner if you're more of a do-it-yourselfer so let's get into the list and then as you're watching if i leave something out please share it in the comments below i'd love to hear from you and then also i'll try to reply back to depending on how many comments i get so the first two you will probably agree with but you might not be thinking about the other ones and i want to show you ways to prepare and just make sure that your retirement is a little bit smoother by using our retirement planning software the first one which you already know is to pay off high interest debt which i sometimes think of as highway robbery it's when those interest rates are just so high and they're charging people it just seems unfair right that high interest debt i'm referring to is usually credit card debt and sometimes it's student loan debt and you'd be surprised at the number of people who in their first year of retirement they still have a large monthly payment towards credit card payments or student loan debt and this should be the number one thing that we should focus on to really reduce before we say goodbye to that job income or that wage because if you retire with credit card debt and then you get serious about paying it off in retirement then that means you've got this bigger amount that you got to take from investments which could alter your retirement plans i helped a woman recently who's not a client but she was looking at her plan and she wanted some help and she had about 20k of credit card debt she also had over a million dollars and her regular expenses adding on this 20k of a lump sum expense to her plan it really made quite an impact and once we looked at that together it gave her the motivation to work a little bit extra and extra hard to get this debt payment down to zero or get the credit card debt down to zero before retiring because she'd have a greater peace of mind and it would just increase her confidence as she was going into retirement that peace of mind it's key right i'm sure you're feeling the same way i actually want to share a little bit more about how to achieve this before you retire and during retirement and i share that at the end of this video so stay tuned the next ones are expenses that you can either pay early or at least you want to earmark these in your retirement plan and i'll show you what i mean when i say earmark that just means setting aside funds for specific purposes and either not including those funds in your retirement plan or including them but at least showing the specifics within the plan and i'll show you some images coming up of a retirement plan and how to do this number one thing to earmark is any big travel expenses that you're looking forward to that first year of retirement or really the first few years of retirement a lot of people kick off retirement and they'll really have a big special trip that they've always wanted to take or a place that they've always wanted to go to and lots of times that vacation it's going to cost more than the typical vacation that you might take on a regular year it's really that cap to uh ending work and then really doing a bigger than normal trip some clients choose to take one of those european uh river cruises that are pretty popular and they can cost 10 to 20k or more and knowing that this is a bigger than normal expense or a lump sum expense coming soon into retirement you can either pay that ahead of time like actually many of the cruise places make you do or you can at least earmark it in the plan and make sure that it all works with everything and i'll throw it in there as an example coming up soon here's an example of a retirement plan that's based on annual expenses going up each year three percent regular inflation rate and then over on the left side we can add some expenses that are bigger and irregular you know not the regular every year expenses but things we can earmark so that we can see the impact of on the plan before actually spending the money and doing it this way we can add some peace of mind to your retirement plan and your confidence as you're spending money and so you can just feel that it's a good decision and feel good about that vacation or whatever it might be a few other bigger than normal one-time expenses we've seen are related to your adult kids if you have them whether it's final college expenses or maybe a wedding that you want to help out with or future gifts maybe towards a home purchase or something like that for those you're not really able to pay those before you retire because we don't know when they're going to happen so earmarking them is the next best step and setting funds aside to make sure that these potential expenses that you might have in the future are ready and available ready to deploy when needed one mistake that we've seen some retirees make getting close to retirement is not factoring in these one-time expenses and then getting caught a little off guard when it's time to pay for them especially if we're in a market like we are now now you might be thinking one big expense that i did not mention and before i share that one if you enjoyed watching this video so far and you found it helpful please click the like button so this can hopefully spread to other people who are like you and might find it helpful as well so that one big expense that you might be thinking of that i didn't mention yet is paying off your whole mortgage before you retire and this is a big one for many people as you've heard before behind every financial decision there's also an emotional one as well and many people they feel very strongly or maybe adamant on on being debt-free in retirement and that's a really good feeling for for many people for others depending on their financial decision it actually a mortgage could actually make sense in retirement some people see it as a fixed expense which doesn't go up with inflation it actually gets cheaper as everything else increases with inflation and as one dollar can buy less and less over time which is basically what what inflation is it may be at really attractive interest rates as well and some people want to have a little bit more flexibility in their retirement accounts by keeping some funds available in their non-retirement accounts versus using that money to pay off the mortgage the more important thing to to think about when deciding whether this makes sense whether to pay it off or not is try to measure first just the emotional feeling or comfort with debt you know yourself and then also your spouse if you're married and then step two is map out both scenarios what does it look like that plan that we're just looking at over here what does it look like if you pay off debt early or don't pay off the mortgage at all look at the difference see which one's okay lots of times it comes down to the strength of the emotional feeling around debt for one person in the relationship or if it's just you then it's just whatever you prefer when we're thinking about paying off expenses or earmarking things in retirement get help from a financial professional a cfp could be a great place to start but i'd like to hear from you what did i not mention as we're thinking about these different expenses in retirement i'd love to hear your thoughts about these expenses and especially the thoughts on mortgage having a mortgage in retirement and i want to share another video about how increasing peace of mind and making sure that you get both parts needed for a successful retirement the sad thing is that in this industry the financial industry most of the time they focus on one thing but here's a video to watch that'll help you think about and prepare for both sides of retirement so hopefully i'll see you there and if you haven't already subscribe and then i'll see you in future videos take care you
Retirement Planning From a CFP® Professional: 6 Keys to a Happy and Successful Retirement
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
sometimes I feel like I've lived through my 60s and 70s thousands of times sitting with people in retirement or those that are entering retirement we come across a lot of the same fears negative thoughts and feelings that really hold people back from having a happier retirement now we try to address those through retirement strategy and implementing plans but in today's video instead of talking about strategy I want to talk to you about how we look at retirement so you can hopefully look at retirement through a different lens and I believe this will help you have a happier retirement foreign [Music] Happy Gilmore recently and there's this place that he goes to and he calls it his happy place and if you remember the movie the lead actress she's sitting there by like a fountain of beer with pictures and Happy's grandmothers there and it's just his happy place and this helps Happy Gilmore putt a little bit better to find your happy place in retirement I want you to shift your focus away from simply trying to maximize return in retirement it's not about growing Your Nest Egg anymore what we want to do is have an acceptable level of risk something that when the market goes down we can still stay invested we can stay committed to that plan but at the same time for that level of risk we have an expected return that can help make sure that you don't run out of money and generate enough growth to provide the income that you need to maintain your standard of living so here is one of the tools that we use to help understand your willingness to take risk so risk tolerance really has two components it has a capacity component meaning given a certain level of income that you desire from your portfolio can your portfolio withstand a certain level of risk and still provide that income so that's what we call risk capacity but then you have your willingness to stay invested in a down market so when we look here this is a standard 60 40 portfolio 600 000 stocks 400 000 in bonds has a risk number on a scale of 1 to 99 of 54.
now in isolation that means absolutely nothing to you but when we start to break it down into percentages and also or I should say more importantly dollars over a six month period your standard 60 40 portfolio has the potential to lose a hundred thousand dollars with a million invested this is a statistical quantitative analysis of volatility of this portfolio going back many years now over a 12-month period that means you could lose two hundred and twelve thousand dollars mathematically speaking is that a comfortable level of risk for you if you have a million dollars it's not for me to answer that's for you to answer that's your willingness to take risk so over a 12-month period mathematically you should expect to lose at some point in time up to twenty percent you could lose more of course this is a 95 probability or what we call two standard deviations but we have what we want to achieve here is a more optimal level of risk for an expected return so we have asymmetry here where the possible upside mathematically speaking is 15.92 percent over a six month period so we do have some asymmetry here but when we look a little bit deeper the annual range midpoint is 5.27 so this would be the expected return kind of moving forward with a two percent dividend this GPA this is a pretty cool feature of this software it's designed to help you understand what we call risk adjusted returns and this is this concept is kind of what I'm talking about here they've developed this GPA and a 4.3 would be most Optimum now not every portfolio that fits your particular needs is going to be a 4.3 we're not necessarily trying to achieve that but the higher we can get to that it means we have more expected return for the For Less risk so the question really becomes are you comfortable with this range of expected outcome if not this is too aggressive of a portfolio for you but instead of just focusing on like most people do the upside we need to focus more on this downside in having a plan that is optimized or having an investment strategy that's optimized for your happy place number two I want you to start to look at all of your investment choices in retirement for what they actually are now this is much different than in the accumulation phase in the retirement phase your financial investments all the various choices out there they're really nothing more than tools tools that are used to accomplish a certain objective similar to ingredients in a recipe if you have too much sugar or too much salt or not enough herbs or spices is it may not come out the way you want it to taste we want to use the appropriate tools to accomplish the objectives that you have in retirement stocks for example they aren't used to accumulate anymore stocks are designed to help keep you ahead of inflation so you can generate income that lasts as long as you do now in the accumulation phase that's exactly what stocks are designed to do they're designed to give you the best opportunity historically speaking to accumulate a larger and larger Nest Egg of course that assumes that you save enough money but in retirement you are no longer accumulating you are Distributing so stocks are used to help keep you ahead of inflation now the downside to stocks you could lose a lot of money especially if you get too aggressive or if you invest in things that don't perform well now does that make stocks bad because you could lose a whole bunch of money no they're just a tool and once you understand how to use that tool in conjunction with other tools now you can actually construct whatever project that you're building or have a retirement plan that provides you the income you need to maintain your standard of living the number three key for a happier retirement I want you to accept that you're in the distribution phase don't expect your accounts to continue to grow each and every single year this may seem like common sense but in reality and in practice it's much harder for many people to do now you've seen your accounts hopefully grow grow grow you've been putting money in the market has performed well over most years in the past even when the market performed poorly you are still putting money into your 401k getting that match hopefully saving money elsewhere now that you're in the retirement phase you're putting a lot of stress on your portfolio through distributions now I'm not saying your accounts can't still continue to accumulate especially if we have consecutive years in the market that that does really really well but what I'm saying is don't expect it you are in the distribution phase that means you're probably taking three percent four percent five percent out when we have years where the market is also down your portfolio is down you're digging a bigger hole than you were in the accumulation phase that means that hole is harder and harder to climb out of this is why the allocation of your Investments is so important and not taking too much risk you don't want to dig such a big hole that you can never get out but at the same time you need a certain level of risk to achieve a return that can give you a Secure Retirement so mentally let's not look at our accounts every single year and say oh man they're not going up they're not increasing in value I'm going to run out I need to stop spending my money now actually if you look at it appropriately you should not expect your accounts to continue to appreciate every single year in retirement that very May well happen but if it doesn't if you're just staying level or even going down a little bit it's okay you just need to have a plan monitor your progress with respect to your goals and stay on top of it number four I want you to understand the value of secure income in retirement the more secure income you have the less you have to withdraw from your portfolio and the less emotionally you're impacted by the stock market ups and downs by political goings on by economic slow Downs if you don't have to withdraw large percentages from your Investments because you're living on passive income from Real Estate from Social Security from annuities from a pension but the point is the more income you have coming in from multiple different places that is independent of the stock market going up typically the happier you'll be in retirement also I don't want you to underestimate the power of Social Security as part of your overall retirement income plan now I hear a lot of people making comments on some of the Social Security videos that we do and also just day to day having conversations with clients that Social Security seems to be an extremely underestimated part of retirement many people want to take it early and that may be the case maybe it makes sense for you to take it early but if a husband and wife have combined Social Security of 60 000 a year and you live let's say 25 years that's 600 000 1.2 1.5 million dollars of retirement income and for many of you watch watching this your Social Security is going to be a lot more than sixty thousand dollars per year so we're talking anywhere from one million to possibly over three million dollars of retirement income for a married couple for someone who's single Social Security you can just basically cut that in half so it's a significant part don't underestimate the power of secure sources of income in retirement and also don't underestimate how valuable deferring Social Security could potentially be if you're going to live past age 80 81 or so number five I would like you to stop looking at short-term outcomes whether your portfolio is up or down whether you pull too much out whether you had an unforeseen expense and you had to spend x amount of dollars I'd like you to start looking at these short-term outcomes of things that happen to you or decisions that you've made as nothing more than bumps in the road don't get too high don't get too low retirement is a very long and windy and arduous Journey this is why it's so important to have a plan and stay connected to that because when you have visibility into the future and you're looking at things not in the short term lens but over a 20 25 30 year time frame you can see a lot of times how actually unimportant these short-term events are so don't get too high don't get too low understand that these are bumps in the road in the short term but if you have a plan these bumps in the road have been accounted for next time the Market's down and your portfolio is down 10 or 12 or 15 or more say you know what I have a plan I expected this to happen this is not a surprise and retirement is a very long journey this is nothing more than a bump in the road the number six key to a happier retirement and I know this is going to be virtually impossible for many of you watching but the number six key probably the number one is to not look at your accounts more than once a month I would prefer it once a quarter so I know some of you right now are saying Troy that's impossible I look at it every single day I need to know what my stocks are doing what my accounts are doing how am I ever going to know if I'm going to be okay well there are numerous studies on this I encourage you to look some of them up the more frequently you look at your accounts typically the worst performance you'll have over long periods of time but the person who looks at it every single day over a long period of time I think it's 25 or 30 years averages somewhere around two to three percent per year the person who looks at it once a month averages somewhere around four to five the person who looks at it once a year averages somewhere around six to seven and the person who never looks at it has averaged around 10 or 11 percent and it makes sense because we are emotional beings when we see that something isn't going right we want to Tinker we want to make adjustments this typically leads to holding on to bad Investments maybe a little bit too long or getting rid of good Investments that just haven't really had the Catalyst that maybe you were expecting and selling them too soon or we're selling our winners and cutting our losers without giving them a chance to really perform well whatever the situation may be Studies have proven this over and over again the more frequently you look at your portfolio the worse you should expect to do so instead of discussing strategy and execution in today's video hopefully today's content helps shift your perspective just a little bit with the goal of helping you to have a happier retirement [Music] foreign [Music]
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