I’m Single with $1.5 Million. How Much Can I Spend in Retirement?

Рет қаралды 28,108

Күн бұрын

Retirement planning can be a complex endeavor, and for single individuals, there are unique considerations that come into play. Today I dive into a real client case study to explore the nuances of retirement planning for singles and unveil important tips to consider along the way.
Meet Jeremy, a 59-year-old single individual with no children, who approached us with genuine concerns about his retirement future. He witnessed his father's premature passing at 62, leaving behind unfulfilled retirement dreams, while his mother, who lived until 93, struggled financially towards the end of her life.
Jeremy's dual fears of outliving his money and missing out on life experiences shaped his retirement goals and financial concerns. Here's how we addressed them:
Understanding Goals and Financial Landscape: Jeremy aimed to work until 70. We analyzed his expenses, including projected retirement health costs and long-term care expenses, to tailor a comprehensive plan. Jeremy's monthly expenses and anticipated travel goals provided a clear picture of his financial needs.
Optimizing Income Sources: Maximizing Social Security benefits was crucial for Jeremy's financial security. By delaying benefits until age 70, Jeremy ensured a higher income floor, mitigating the risk of outliving his money. We strategized his savings rates and investment allocations to align with his retirement timeline and income needs.
Projecting Retirement Cash Flows: A thorough analysis of Jeremy's retirement cash flows revealed potential shortfalls between income and expenses. We factored in inflation-adjusted expenses, healthcare costs, travel goals, and taxes to ensure a sustainable retirement income stream. Despite initial shortfalls, Jeremy's strong portfolio growth and Social Security benefits provided a solid foundation.
Balancing Risk and Enjoyment: While financial security was paramount, Jeremy's fear of missing out on life experiences was equally significant. We discussed scenarios where Jeremy could retire earlier, allowing for more extensive travel and leisure activities. Balancing financial prudence with present enjoyment became a central theme in Jeremy's retirement planning.
Shifting Mindset: Planning for Today and Tomorrow: Through ongoing discussions and scenario analyses, Jeremy experienced a mindset shift. He realized that retirement planning wasn't just about securing his future but also about living a fulfilling life today. By reevaluating his retirement age and allocating resources for current enjoyment, Jeremy embraced a more balanced approach to financial planning.
Whether you're single or married, navigating retirement planning requires careful consideration of your unique circumstances and goals. By working with a financial advisor and adopting a comprehensive approach, you can build a retirement plan that not only secures your future but also enriches your present life experiences. After all, retirement is not just about reaching a destination-it's about enjoying the journey along the way.
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⏱Timestamps:⏱
0:00 - Jeremy’s profile and concerns
2:17 - His goals and costs
5:37 - A look at income
8:04 - Retirement cash flows
11:31 - The shortfall and portfolio
14:45 - The projection
18:26 - The bigger concern
21:26 - Monitoring
23:09 - The challenge to live today
24:36 - Summary
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Пікірлер: 103

@Dannsandiego 3 ай бұрын

Thanks so much for addressing the single community. I’ve been waiting for this one.

@julhe8743 2 ай бұрын

Me too🙏

@BardWannabe 3 ай бұрын

Thanks for doing one for us single guys.

@hogroamer260 2 ай бұрын

Even us (smart) remarried folk live financially separate lives!

@jameschaves5723 2 ай бұрын

I guess I’ve watched too many videos because I immediately said “you have enough, don’t work until 70”. Excellent video, almost identical situation except I’m DONE at 55. No way am I working to 70!!

@ppw8716 Ай бұрын

Agree

@EverydayisFriday-bw7bt 2 ай бұрын

This great James! Please include more single, child-less videos if you can. Not everyone has a spouse, children, and/or bringing in $150,000+ salaries.

@davidfolts5893 3 ай бұрын

James Conole is the most intelligent person in the room; his content is a tightly packaged bundle of valuable information.

@markb8515 3 ай бұрын

Thanks James for another great video! Being single with no children, it has a lot of good information for me. Although my numbers aren't the same, the concepts/logic you use are very helpful.

@johngill2853 3 ай бұрын

Great job But Jeremy goals don't exactly match my personal goals. I can't want to work till 70. My time is my most valuable asset

@darrellq6954 3 ай бұрын

Working to 70 isn't for me....Glad Jeremy is happy to do so.....

@MaybeLoveHate 3 ай бұрын

I could see myself working for some sort of income forever, but hopefully it will only be work I want to do haha. I see so many people who say they ""retired early"" but they are all working side income around the idea of being retired lol

@jameschaves5723 2 ай бұрын

Totally!!! Regret is a terrible thing

@hogroamer260 2 ай бұрын

He's only 59, doesn't have a clue how fast things change. Might be his health, might be the job, might be his health BECAUSE of the job! I was young and invincible once too. James is a smart man, but some things you have to experience firsthand. My advice to anyone is don't plan to work beyond 60.

@bvoyelr 3 ай бұрын

You, sir, have the patience of a saint to let clients walk through their concerns like this. I guess it helps to know from the moment a client sits down with you that you're going to deliver some really good news! I've been watching you give these case studies for like a month and when I saw a 2 million dollar portfolio with 60k per year expenses, I immediately knew he could retire yesterday, take all the trips he wants, and be fine (within reason, obviously).

@ericlee2931 2 ай бұрын

@bvoyelr, wow don't you already expect and insist on the level of attention given by John Conole? You should consider his approach the "norm" because John is paid to listen and react. Your comment seems to suggest a guy like Jermey is working for John Console, not John working for Jermey.

@johnnyboyvan 3 ай бұрын

I am single and retired at 57. I had a DB pension with several personal investments and feel utterly free. Amen 🙏 It is possible everyone, but often it depends upon what career you chose. 😊😊

@VanGoghGlobetrotter 2 ай бұрын

Thanks for doing this single person case study! Very helpful!

@user-kt2zp2jr5m 3 ай бұрын

I agree 100% with your biggest concern, James!! Time is priceless!

@dtovar2 2 ай бұрын

Thank you, James. This is one of my favorite financial planning videos. I'm single. You did a fantastic job explaining how a single person can prepare for the future.

@jamesglassford9657 3 ай бұрын

Jeremy, retire asap and enjoy while you got your health! 😊

@jameschaves5723 2 ай бұрын

Yes agree!!! Don’t live with regret

@d.c.127 2 ай бұрын

Yay, a video for us child-free singles! Now combine that with someone who hasn't saved that much...even better. 😊

@kaytee1617 3 ай бұрын

Thank you so much for addressing the single future retirees! Please do a video that elaborates on the healthcare cost exercise.

@heidikamrath1951 2 ай бұрын

Thank you for addressing the single folks and our concerns!

@julieg.5718 3 ай бұрын

This was a really well done KZfaq, the way you continued to remind us of Jeremy/case study’s twin fears, his hopes and goals for the future : very relatable, James! I’m 60, married so at first I thought this example wouldn’t be helpful in my plans to retire in 2 years. Thank you! Keep up the good content

@karltitz1725 Ай бұрын

Thank you for the commentary on planning a single man's retirement. I am similarly situated at 72 to the subject of your case study, my greatest since of safety is found in the group long term care policy I have carried since my early 50's. I know how this plays on the minds of so many of my contemporaries who do not have this coverage. It is the invoice I am happy to pay every month in exchange for the sense of well being.

@randygubka941 2 ай бұрын

Thanks, James - very good info and appreciate your easy way of articulating Jeremy's plan.

@TrentRapp 3 ай бұрын

Great content as always

@dlg5485 2 ай бұрын

Love these case studies, especially for us singles. Thanks for all the detail you include in these videos.

@amyyates8273 2 ай бұрын

This is a fantastic analysis. Thank you!

@MichaelToub 2 ай бұрын

Great Video!

@ethanmoore3421 Ай бұрын

I just found your account and am really enjoying your content, thank you!

@princessleiathemaltese5571 3 ай бұрын

You're leaps and bounds more sophisticated than most of the creators out there who are basically turning compound interest calculators into video format.

@rickyaz8640 2 ай бұрын

Has enough to live. Gear down to part time work and enjoy life. Long term care is the equity in the Condo so that’s an expense that can be zeroed out

@CampDeclan 2 ай бұрын

Thank you for expanding your range of videos to include singles. Please expand further to include my situation of having five rental properties to liquidate, for the purpose of supplementing my retirement. You rock!

@jameschaves5723 2 ай бұрын

I think he needs just a little more information. Lol

@rachaelwolf3966 2 ай бұрын

Great video. I am also happy you did a case study for the single people. Would love to see a case study for someone 45 y/o starting a fed govt job position around $110k a year. Planning to retire at 65. Retirement accounts prior to starting FERS are Individual acct $92k Rollover acct $47k Roth $19k 401k $20k from current employer to be rolled over. Planning on contributing max amount limits for tsp and Roth accounts. Thanks again.

@rachaelwolf3966 2 ай бұрын

Also have $45k Emergency fund

@jackfrost-fu7hz 3 ай бұрын

Many people who says they plan to work until 70 are government workers. The job market today is tough and many people settle for a low paying crappy job just to get healthcare, because age discrimination is a problem. My coworkers are surprised when I tell them I am a millionaire and saved money when I had a real job and I am there for the healthcare. There are probably many more people like me out there

@30-Year_Accountant 3 ай бұрын

I agree with you with one exception. Most gov workers don’t work until 70. Most gov employees retire when they can financially afford to retire which is usually between 55 and 63. I know this because I worked for the gov for 31 years as an accountant and retired at 56 (2 months ago). I also had a tax and financial advising business on the side. Gov employees carry their health insurance into retirement only paying a third of the premiums with the gov paying 2/3rds of the premiums as part of their retirement benefits. Additionally gov employees have a pension and 401k.

@hogroamer260 2 ай бұрын

I got Christian Healthcare Ministries, $257/month. Been retired since 2017 @ 56. I'm not wasting time at some crappy job for Healthcare. Better to spend those hours staying fit. Be proactive, not preventative.

@hagakuru 2 ай бұрын

audio on this one was pretty bad. thanks for the case study.

@SicilyJo 2 ай бұрын

This is so informative. Great to have a focus on singles. It would be interesting to do a case study for tax strategy and “making it last” for another 25-30 years on a single person who already has retired either at 65 or 70 (for example) with an income stream of Social Security, taken at that age of retirement (example: 65 or 70) with a pension or two. Combined, able to meet minimum monthly expenses and has more in the traditional 401(k) and IRAs with a small amount in Roth and a 40-45% portion in after-tax cash. A close relative has a somewhat similar scenario and is just “frozen” about doing any planning with the belief that the “ship has sailed” (despite my recommending your videos and other credible sources on KZfaq). I realize you do actual client scenarios for those still in the planning stages of retirement. Maybe you have an already retired client with your firm’s minimum of $2,000,000 dealing with a similar situation?

@PersianPdiddy 3 ай бұрын

Is the app that you’re using to show these examples, is that something that individuals could use as well? Or is it proprietory? BTW, really appreciate all your videos; have watched them all.

@dlg5485 2 ай бұрын

Likely proprietary, although I bet his clients get some level of access to it.

@hogroamer260 2 ай бұрын

You can pay $197 for his Retirement Planning Academy software.

@rodneylw10 2 ай бұрын

Time is important. I've taught with six older or similar age male teacher friends over the years. The first one retired-died a week after retiring, the second retired and died two years later. The third one taught as a second career and wanted to earn a pension so he taught got vested and had eleven years to go and died. The last one retired after 40 years teaching and on his first summer, passed away in bed. The remaining two are still living. One is battling cancer and the other one is doing great. I have worked 38 years and although I am 62, I believe it is about time.

@KayKay14m 2 ай бұрын

Jeremy may not be able to work until age 65, nevermind working until 70. All it takes is one inconvenient layoff and then you find yourself struggling to find work again. He should have a plan if something like that happens. For the time that Jeremy is able to work, he should reduce that mortgage. I'm assuming he has more than 6 years left on it. If so, I'd recommend additional principal payments if he is not already doing that. You should really be debt free before you decide that your working days are over.

@paulstein916 2 ай бұрын

Thanks for this thought provoking exercise. In the real life analysis with Jeremy, did you consider scenarios where he took social security before 70 and also tested lower portfolio returns? To me, 7.5% annual return is a little rich long term for a balanced type portfolio. If a 100% equity portfolio, 7.5% average annual return seems reasonable.

@jameschaves5723 2 ай бұрын

The Monte Carlo simulator runs 10,000 scenarios. It covers everything!!

@kuykendallwebfamily 3 ай бұрын

Hey James, I really need a video from you for retiring early without social security. I’m talking about retiring as early as 35 with a spouse with a combined net worth of $3-5M. Not sure what that number is when there is no social security for so long.

@fairx 2 ай бұрын

you don't need his advice. he needs yours.

@hogroamer260 2 ай бұрын

Your S.S. is based on your highest 35 years salary. If you retire at 35, your S.S. will be painfully low. But, with $3 - 5M it probably won't matter, depending on your spending habits. But, a lot can go wrong in a 65 year retirement. I'd say find a job you enjoy.

@hogroamer260 2 ай бұрын

I admire Jeremy is throwing caution to the wind, ignoring his father's early passing, and planning for a loooong life. Too many people worry about dying with a lot of money. If you're dead, you won't care!

@eastwestpicayune8200 2 ай бұрын

Very informative video. I am a recent subscriber. This one hit home. I am so pleased of a single person case study. Single and retired at 61. Trying to navigate between Obama care and converting to Roth. Should an early retiree forfeit government subsidy and just do Roth conversions? Also, I love that you dont have any ads in your video. I dont have to click on SKIP. 😂 thank you again for an informative video.

@uci812 2 ай бұрын

Thank you for the video. I was hoping you would include partial IRA Conversions between Age 65-70 and show the tax impact for the Conversions as well as the Social Security income especially when RMDs kick in and the overall future projection till age 90. Again thanks for putting out these videos.

@bigdog71717 2 ай бұрын

Great content as always. You should, however, have someone else review your videos for mistakes before posting. At 3:24 you stated "about $6100/MONTH" for healthcare costs. That made me really scratch my head for a 70 y.o. to have that high of a monthly healthcare cost. Then I looked at your model and it says annual.

@BigRed2 2 ай бұрын

Inflation should not be included in every years calculations, you really have dove deep into the details of your client and see where inflation would hit them most. If you own a home and not renting then you take out a big chunk of that inflation number off the back

@brianl.wenninghoff7696 2 ай бұрын

That's a good point.

@chrisjohnriley-ig5xv 2 ай бұрын

Any plans to do a case study like this, but where social security isn't considered/available? The case studies, although realistic, all seem to fall into the same sort of outcome - survive until social security kicks in.

@torchy187 2 ай бұрын

Great video James. If I retire at 52, besides HSA, where can I contribute to my retirement for tax breaks like a Roth or Traditional 401K?

@MB-M-zr7vr 2 ай бұрын

Thanks for all the great advice and information. Quick Question, my husband passed away two years ago, I am still working with decent salary. Am I qualified for spouse SSA benefit now I am 60 while still working? Thanks advance!

@suzannestack2592 2 ай бұрын

Same here. You can right now take your husband's SS and let yours grow til you decide to switch to it. BUT . . . for every $2 more than $22,320 you earn at your job in 2024, your SS check will be cut by $1. Once you hit full retirement age you can earn all the money you want without having your SS benefit reduced.

@tjayjefferson2474 Ай бұрын

Yes you are eligible.check out his video on just that topic.

@hogroamer260 2 ай бұрын

Advisors always used to obsess about stock/bond diversity by age. That was wrong. Now it's their equating spending to happiness. Some may have big plans to travel, but most will find it gets tiresome and travel less or shorter trips. And, it can be done enjoyably and economically. Jeremy likes hiking, that can be done very inexpensively.

@tjayjefferson2474 Ай бұрын

Thank you for the video lesson. So sad. I discovered you the day after I retired.😂🎉 Can you please give a discussion on how to determine if you should take a lump sum pension or a non-COLA monthly payment as a single person. Thanks in advance.

@mkmac9539 2 ай бұрын

I am married. But this was a really helpful video. Thanks for this one. If you get a chance, I would love a video about: - Married ages 61, 56. Want to retire June of 2025. - Current income $140,000 + $45,000 - SS age 67 for older one $3535 (thinking take at 70 - $4383) - SS age 67 for younger one $1487 (thinking take at 62; then spousal ben at age 65) - Current combined portfolio of $1,000,000 - Current saving $5500/mo all pre-tax - Desired exp in ret. $7000 to go down to $5500 after turn 77, 72 I know it is tight. Can it be done? Plan for each to live to 93.

@jonathanbaker2789 2 ай бұрын

What software are you using? Thanks

@genier7829 2 ай бұрын

I am in a similar life situation, and I have saved as much as possible on a lower income. However I am also a caregiver to my mother. She is 98, and I have been caring for her for almost nine years. Who will care for me if I also develop dementia? I cannot imagine being able to afford care for anything approaching 9 years, which is really terrifying. Forget travel, I just worry about a roof over my head, despite careful saving for years.

@ibphred 2 ай бұрын

I look kind of like Jeremy. I don't have as much money but it's more than half and I'm 10 years younger so I can certainly see myself with as much money or more at his age.. My question is, when do I need to get a financial planner? I can see the value but don't think I can afford an extra $25k right now and still keep growing my portfolio. What is available at for people in their late 40s or should I just keep managing myself?

@dtovar2 2 ай бұрын

James, can you make a video for someone who is already a Roth millionaire and still working? Does it make sense to continue to contribute to an employer sponsored 401k plan, pay off the mortgage, or beef up the brokerage account. Thank you.

@DevilsTreasure 2 ай бұрын

What planning software are you using?

@roseylumber 2 ай бұрын

I' m 50, retired a while at 45. 1 have 35% of my capital invstments in an IRA. 25% in index funds, and the balance spread across other investment acts. in cumulative of over $ 5M

@Sail562 2 ай бұрын

Yea - but both my parents and inlaws spent a lot less in retirement than they did while working. There are so many options when you have time. Go to the library to get videos, books, etc. instead of steaming. Senior centers have many options from food, extercise and social interaction that are basically free. Our community even has a senior taxi. You don't need to the expense of automobiles. Many other "senior discount" options when going to events, etc.

@mandypdx 2 ай бұрын

Not mine. But they had 20 kids/grandkids to visit and spoil… they travel a lot :)

@kerrybyers257 2 ай бұрын

American. Never married. Anxious personality……sounds like my profile! I’d travel asap….at least during your working years’ vacation weeks. 70’s is a crap shoot re: energy and the odd physical breakdown.

@Sdelgado0267 2 ай бұрын

One think we cannot buy is time. I think Jeremy is overly thinking his situation. He has no need to work until 70 unless he really wants to. But the fact that he likes to travel it leads me to believe that he will be better off retiring earlier. I am in a similar scenario currently 57 and with 1.3M my goal is to retire at 63 and do some good traveling until I am 70.

@marycarrellas4992 2 ай бұрын

James, is the software a login version or a download?

@debilish8451 2 ай бұрын

Does 4% rule include 1% (varies I know) management fees and taxes? If not, by the time you take that into consideration, it might be the 2% rule. I’m sincerely not clear on this.

@hejiranyc 2 ай бұрын

I am 54, single, no kids, and am currently in the process of selling one of my homes and expect to net just a tad bit under $1 million. Once that is done, I should have close to $2.75m between cash, investments and retirement accounts. I had been thinking of working until the age of 60, at which time I will have saved an additional $1m+ between savings, RSUs, bonus and 401(k) match. I am not assuming ANY growth of my existing holdings, although I hope there is some. So, assuming zero/minimal growth, I would still have, say, $3.5 to $4m in liquid assets (plus 2 paid off homes). Is this overkill?? Like Jeremy, I want to travel, travel, travel, and I don't want to be clipping coupons in retirement. I'm in perfect physical health and my main worry is that I want to go out and do some adventure touring while I still can and that I may be physically limited by the time I retire if I push it off too long. I am currently living on around $8K/month.

@hogroamer260 2 ай бұрын

You don't need James or software, you're all set. Keep at least $3m in an index fund, the rest in something like Schwab SWVXX for stability. You'd have over $200k yearly income before Social Security kicks in.

@Cindy-ee5ou 2 ай бұрын

Had thought that the forced distribution age is 73; the table shows 75. Does he know what we don’t? Also, reverse mortgage is not mentioned. Can a 90 yo use that strategy to be funded while alive?

@eastwestpicayune8200 2 ай бұрын

I'm no expert, but I believe people born after 1960 RMD starts at 75.

@carol5763 2 ай бұрын

For those born after 1960, the age will be 75.

@vinyl1Earthlink 2 ай бұрын

The savings rate seems a little low. If Jeremy is worried, he could put the max in the 401K, put the max in the Roth, and still do after-tax savings. If he can live on $65K in retirement, why not live on $65K now while still working, and not having time to spend money. If Jeremy saved intensely for another 6 years, he might be able to increase his net worth by 50% or more. My savings rate in my 50s was north of 50%, and since I retired at age 61, I needed to do that.

@tjrothausen 2 ай бұрын

Appreciate this video but it could have been half the length. Lots of repetition of his name and fears 10s of times. May not watch more because i saw the outcome 15 minutes before you got to it. Sad for me because I do like your content.

@MKF1205 2 ай бұрын

What gives you the impression that current generations of children will take care of their elder parents?

@MikeLOldham 2 ай бұрын

Sweetie, don’t be an idiot.

@jdollar5852 2 ай бұрын

There's a very simple solution for single people, or married, with financial worries. Southeast Asia or Central America. Move to Vietnam, Malaysia, Thailand, or the Philippines. Move to Costa Rica, Panama, etc. For $3k a month, especially in SE Asia, you can live extremely comfortably in some very advanced places, or in the beach, or in the mountains, or in a busy urban area. By only drawing $3k per month from his account, starting this year, you would be pulling about 2% of your nest egg, assuming you sell the condo. Defer SS until 70 to max your benefits, and decide to move back to the US, or continue living abroad. Your assets should probably increase with even moderate markets. I have a friend who just moved to Panama for this reason. He has family in Georgia, so Central America is a 4 hour flight. He plans to come home 2-3 times per year. His estimated monthly expenses are under $2k. I've attended 4 funerals in the past year for friends who died of cancer. Ages 70, 65, 63, and 61. Working 11 more years so you can have money when you're 93 is not a good gamble.

@HumarAndArt8800 2 ай бұрын

Why leave $4m on the table. No reason to retire at 65. Retire now and travel.

@fairx 2 ай бұрын

i don't think it's normal for someone with that net worth to have half a mil in after tax funds. but maybe I'm wrong on that. :)

@danlopez.3592 2 ай бұрын

I couldn’t imagine not having children to watch grow as I age.

@CorvetteGuy3033 2 ай бұрын

hey, great job missing the entire point of this viideo!

@RockBottom4 3 ай бұрын

A 70 year old named Jeremy seems weird. Let's call him Jerry instead.

@rickyaz8640 2 ай бұрын

Jeremy Clarkson agrees. Jeremy Irons disagrees.

@jameschaves5723 2 ай бұрын

Funny enough I thought the same thing

@hogroamer260 2 ай бұрын

Jeremiah is a biblical name so, been around a little more than 70 years.

@330DKNY 3 ай бұрын

Why do your video titles never match the video. The title is single with 1.5 Million, and the first slide is net worth 1.975 Million. That's nearly 25% more then what you are trying to sell with the title.

@canyonoverlook9937 2 ай бұрын

It's 1.5 in investments. The other amount is tied up in his condo so he won't be spending it.

@jqx7743 2 ай бұрын

Watch carefully. 1.95 includes equity of the house.

@hogroamer260 2 ай бұрын

Obviously, Jeremy is keeping his house. James even states, toward the end of the video, that he would have that asset if needed in later years.

@CM-sy3to 2 ай бұрын

Tell Jeremy to relax. Single men with no children die the youngest of any group. Maybe he should head to the Philippines or Indonesian and get a younger wife and raise a family.