Great video! I was planning on retiring at 90 and after watching this now it’s 95. Thanks James! 😊

Simple, clear and valuable perspective. My dad retired at 65 and passed away at 71. Wish he retired earlier and spent more time enjoying the fruits of his labor.

I'd argue never put off retiring. You never know when your dance is over. The likelihood of living 30 years after retirement is far and few. Remember, if you do get that 30 years and you last until into your 90s... your monthly spending is basically nil. Sure there are medical expenses, living etc... but you literally spend a fraction of what you were spending 25 years prior. Retire now.

It really is important to spend more early in retirement! During our first 18 years, we drove to all of the lower 48 states at least once, visited Hawaii and Alaska on cruises, visited at least 15 countries (many for several weeks or more). Honestly, I wish we would have even travelled more early on because I now realize we will probably be leaving a lot of money on the table. Fortunately, we are hoping to have at least 7 more years of active travel.

This is the most complete and articulate explanation of planning for retirement income I have heard. Great job James!

I've watched many personal finance videos and read many book, but this is the first time I have seen a withdrawal strategy explain this way...Phenomenal!!

Expenses don’t drop. Cars break, kids overdose, the roof gets hit by a microburst, you break your ankle, melanoma develops. Expenses always go up. Therefore your planning needs to be ultra conservative, even if you think you’re comfortable.

What a great video! Very clear, concise and easy to understand!

Excellent posts James! Keep up the great work.

Kudos to you James for your thorough and easy to understand explantion of withdrawal analysis based on needs and functions. I have listened to countless hours of the years and also read many books and none have come close to doing it as clearly and easy to follow as you have done here. Thanks you for sharing your insights. Larry, Central Valley, Ca

Finally. Nice description of changing financial needs and how to approach. Most presenters on YT don't address this huge component.

Yet again, sensible, practical information well presented.

Very interesting concept. You always create thoughtful and helpful videos. Well done!

Very interesting and makes sense! Thank you!!

Great feedback. Appreciate the thoughtful advice. It helps me wrap my head around my investments.

Great video! So easy to understand. Thank you!

Great description of the bucket system and how it can be implemented. Thank you!

Wonderful video full of great information! Love your ideas about three seperate phases and the funding of them.

super helpful illustration of how to spend a portfolio! we have struggled with this a little, even though I'm sure we have plenty. our financial advisors never explained it this well!

Great video …. This is EXACTLY how I have mine set up … it’s all in what years I’ll need it

Very well presented and clearly explained. Thanks so much for this video. This is one of the best videos on KZfaq that I have come across that explains a planned strategy to portfolio withdrawal. Planning to retire December this year,

Great video! Thank you

Excellent explanation James!

Great info!!

Thank you my friend for clear explanation. Of course, I subscribe and refer to my friends to watch your videos if they care about retirement. Again, thank you and best wishes.

Great video! 🤯really helped clear up a lot of my concerns

You are Great Teacher and Excellent knowledge.

Very well done!

Very good explanation of retirement withdrawal!!! I have shared this with several friends. Don't forget the rise of medical in later life.

Great Video!

Congratulations for such a high quality content and chanel!! Could you make a video about the bucket strategy? How to implement it well? Possible flaws it may have...etc. Thanks so much!

I thought I could retire at 70, but now I am planning to retire at 62, thank you James! Best retirement analysis ever!!!

You are brilliant!

Hey James, thanks for your great videos! Your Toastmasters training is serving you well, as your presentations are clear, concise, and memorable! I’m 2 1/2 away from retirement at 65, and I’ve always thought that finance is as simple or as complex as you want to make it. The reason there are so many rules of thumb is because most people don’t want to spend their time in the minutia, but enjoying life. If following a rule of thumb gets them in the ballpark, they’re satisfied. I like the way you bring nuance to the 4% rule of thumb to bring more understanding of the actual mechanics of transitioning through the stages of your later life. My plan is more aggressive than most, because I look at most of the value in my portfolio will be there for over 10 years. For me, that portion should be stock heavy (I use S&P 500 index funds to avoid bad choices and it’s hard for investors to beat over the long term). Now that interest rates have risen from years at basically 0%, I’m looking at CDs and Treasuries for near term stability, meaning not having to sell the index fund after a crash (for me, five years seems a reasonable time). I also don’t have a fixed view of what my expenses will be. In other words, I’m not set on an expensive lifestyle. I love tent camping (though when I age a few more years, that may change😊) and staying at hostels. This is not because I can’t afford a hotel, but because you meet interesting people there. Big hotels seem sterile and somewhat lifeless to me, in comparison. I’ve also tried to avoid anything that is not low maintenance. This means, for instance, no pools or boats. So, while I’ll try to do as well as I can with my portfolio, I will also be flexible in terms of what my “needs” are. Thanks again!

I have complained FOREVER about retirement calculators being unable to compensate for variable withdrawls/expenses. This is the first video I've seen that tackles the issue, nice job! I retired at 56-1/2, withdrawing 8% for the first 5 years. Guess what? My account balance was higher after those five years. Only taking out 4% now, which I believe is VERY conservative. I converted $180k to my Roth the past two years ($36k taxes) and took the fed induced market hit and still the account is only down $90k. Seven more years until 70 and I begin Social Security. By then, I expect to have at least 20% more in retirement than I started with and S.S. will more than cover my living expenses. All without a financial advisor.

This is colloquially called the "retirement spending smile". Higher spending typically occurs during the early years of retirement, after which it goes down. Later on spending goes up again as healthcare costs start to increase.

I like your approach to retirement dollars. Sensible, works well.

These are the same thoughts I have built into my spreadsheets for retirement. I'm glad we think alike in this way. I have variable withdraw rates, but the big unknown is retirement portfolio interest rate. In that sense, I am keeping everything fluid and adjustable,

Thank you! You really explained the "3 Bucket Method" well and gave me a clearer understanding how to manage it. I'm retiring in 24 days and feel more comfortable that we are financially ready!

Good job! It might be worth mentioning retirement age as many retirees under the age of 65 also need to factor in insurance sources. ACA has some pretty strict guidelines, therefore having a good amount of cash in an after tax account comes in handy.

James, another excellent video! If you have not done one already, could you do a video that shows the value of having 2-3 years of living expenses outside retirement when you first retire? I think this is a GREAT strategy for so many reasons, but I am sure you will be able to communicate it VERY clearly.

Excellent video! Fantastic detailed explanations to what I knew in a broad way. The 2nd example definitely has made me think. And I'm not even a 4%-er.

Great easy to understand presentation! Your examples are typical choice examples that don’t consider inflation and age 62 vs 67 or 70 money math, much. @ $2500/mo social security taken at 62-1/2 (60 months) = $150,000. Invested in an index or ETF, or spend. Just a factor to consider. New to your channel. Thanks!

very good video

OMG , thank you for share this plan to help me to decide free time after 30yrs work . thank agan

What scares me, as that I age, there may come the day when I don't understand so well anymore how to play this. At some point (if you live to be 80 or 90+) that you cannot keep up mentally or possibly with the changes in technology, how to deal so well with finances. At that point a simple plan of money coming in every month would be logical and appreciated. The sad fact is that our faculties slow down also - not everyone of course - there are exceptional 94 year olds, but what if I'm not one of them!

Your living expenses won't go down as you age they will go up and by a lot. The older you get the more you will spend on medical care. You might be spending a few thousand having fun when you first retire but later you will be spending tens of thousands on medical bills. You should never retire with any large bills like auto/home loans or credit card bills. Work a few more years and get all your debts paid off. If you have a really old car work a few more months and get your self a used car that is only a few years old. That old car may need lots of repairs years down the road and you can push the repairs down the road a lot if you got a newer used car.

Solid video. Looking at 1.5 years to go for early SSN. I only wish that I jumped back in after the 2020 crash. Your videos still give me hope. Many thanks.

A good system, but there is also a 4th tranche where needs are higher because you are paying assisted living expenses.

The error with the 4% rule is that you die with your entire nest egg. The goal is to enjoy your early retirement years and die with nothing.

I think it's best to analyze your spending going into retirement so you have an idea of what you need per month and annually. Adjust that total for new costs (Medicare) and off-loaded expenses (for example, gas money to travel to work each day) Once you have an idea of the hard costs of living for your household, it makes it much easier to see how your retirement income stacks up.

What would this example look like if my portfolio is generating enough dividends to cover my income needs beginning in year 5 and beyond?

@james conole or anyone in the group :) what tools do you use to manage and keep your portfolio organized if you have investments in different locations? I just want a clear picture of where things are monthly from all sources. Thanks!

people in sweden and Japan dont have that much but still have nice way of living.

Excellent view of what is likely to happen in a well planned retirement. I've lived the first seven years of my retirement. Everyone's plan and retirement is unique. With a 55/45 portfolio my value is +17% over those first seven years. Do what you can about tax diversification before you begin SS. after starting SS, there's not much you can do about taxes. Also know, you can take it with you, so enjoy the fruits of your hard work while you're still able.

I will probably do 8-10% the first 3-5 years and then drop down after that as I age and expenses go down. Overall average is 6.5%. I will adapt if i see a big problem. This all happens slowly.

what about increased taxes due to RMD creep, and late life medical expense increases, such as long-term care?

by saying that taking 4% out of the portfolio of 50% bonds and 50% us stocks does that saying to sell both equally? and do we have to keep sell the us stocks if the market is on bad condition?

This is JUST what I needed to see! We're planning our spending now. I've also been pondering that if a portfolio is increasing more than 4% per year, on average, you won't actually spend it down over 30 years. Could you add the link at the end for the next video that you mentioned because I really need to see it?

What do you think of JEPI with 10 percent of retirement money to generate income to live on?

Never wait, we've all got friends and family who sadly passed well before their time. What advice would they give you ? All the very best everyone.

Dangerous thinking of needing less money as you get older. Healthcare increases as you get older

Life expectancy is subjective. Counting down from 67 or 62, I’d rather add 5 or 10 years to my retirement for my life expectancy. That will always be 5 or 10 years added to my life expectancy. Even though I’m financially educated, my retirement is much more than money.

You still need to withdraw in such a way that you are meeting your RMD requirements

How about inflation? Your analysis assumes there is no increase in cost of living which is totally unrealistic

How should this plan be adjusted to plan for Long Term Care expenses? Even with a LTC insurance plan, only a portion of those expenses are covered by the plan.

Retirement shouldn't be viewed as a one-off event, but as an ongoing process. My working career hasn't been predictable thirty years out. I'm surprised that anyone would expect me to be able to concretely plan my retirement thirty years out.

I suspect if you ran a Monte Carlo simulation against this strategy factoring in sequence of returns and inflation your probability of success will be at best 50%. Your first bucket of cash won't keep up with inflation, since interest rates basically trail inflation. So to sustain that level of spending adjusted for inflation you will have to dip into one of your other buckets. Also look at the bond market in 2022, with double digit losses, how many years will it take to recover those losses adjusted for inflation? Bonds aren't necessarily as "safe" as they have been for the last 40 years.

If I could do it over, I think I would invest in growth stocks from years 20-40, then switch to building a quality dividend portfolio in a ROTH IRA from age 40-62. I think that would give me a decent income in retirement without ever running out of money.

Another factor is the growth of your portfolio. What if your portfolio grows at 5% one year, 12% another year, 16% in another year, maybe -6% in a bad year, 24% in a good year.... your returns can be larger than your yearly expenses. Unless you live a rock-n-roll lifestyle, it will take decades to go through all of your funds especially when you add in Social Security money. I'm retired and I need less than $19,000/year to cover my expenses. The key is to eliminate all of your debts and keep your expenses low. You will find retirement is very doable. Who is spending $40K plus per year in retirement? That is a lot of money unless you are retiring in debt.

2.30’ why would anyone wait till 70 to take SS if he retires at 65?

Do you have any videos for single people?

This may be overly optimistic - it doesn’t take into account the liklihood of increasing expenses later in retirement due to increased medical expenses and possible long-term care. We all may end up in Assisted Living - and I, for one, do not want to base my decision on price. (Still believe though- don’t put off retirement if you don’t need to, unless you really love your job)

Phase #4 of Retirement: Assisted living at $7,800/month; dementia care will be more. Hope your spouse or children take care of this phase as if you have run out of money the government assistance will not be pretty.

Hi James- Is it a good or bad idea to pay off the mortgage using money from one's portfolio?

What happens if you get a debilitating disease requiring round the clock nursing care and all your money gets eaten up?

RMD's start at around 4% and go up from there every year to almost 9% per year by age 90. It does a number on the 4% rule.

Most retirees don’t belong to your example of retiree’s retirement income. Most people don’t even fall in your assessment that people have 70k in income. Why don’t you make a sample of people making only 50-60 K per year in income and base your retirement calculations based on that.

Inflation will requite you to take more out of your portfolio. Cost of living doubles every 8 years or so. If you need 40 K a year, in 8 years you will need 80 K in real dollars. just to maintain that 40 K lifestyle.

Good point: As you age, your expenses likely will drop.

The greatest challege now to those retirement formulas is when inflation runs away and destroy the value of your savings.

That sounds fine until the health care monster shows up just when you expect your expenses to go down :-(

Get out as soon as you can. Live now, not in you 70's - 80's. Travel. Go see the country. Go see the world. Retire as soon as you can.

Where are the RMD requirements?

Spend it all, leave nothing.

What happens if you have a fat IRAs that you can’t do Roth because you don’t have the cash to do it. My plan is to die was zero I wanna start at 60 y/o so RMDs at 74 y/o don’t kill us.

Why would anyone ever spend more in a year than their investments earn? I understand the fantasy of “Dying Broke”, but imagine the stress of trying to catch the home run drive just before it hits a child in the head. 🤦‍♂️

The 4% rule is an old outdated strategy

Many of these guys just repeat what they’ve read. Why don’t you ask real successful retirees? Real retirees have much more dynamic withdrawal strategies. We coordinate our portfolio’s withdrawal rate with our other retirement income sources and our changing expenses.

Why did the book character throw a party in their imaginary world? Because they wanted to invite readers to experience the 'fictionalicious' fun! 🎈 Share your most memorable book characters...

$40k from social security? 😅😂😂😮😅😅😂 Explain how you get that!

wear a dress shirt if giving financial advice