Hey there, I just started a job in a school district in California. Calpers offers both 403b and 457, if I could only choose 1 for now, which should I go for?

Looks like you need to do more fact check as apparently you are enable to evenb properly read the data and texts you are displaying on the screen, misquoting everything from returs to expenses. This definitely di not inspire confidence about anuthing you said....

It's recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 20% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.

Bad idea to collect at 62. I know too many people who had to go back to work for one reason or another, but we’re limited to only making $21k/yr due to pulling before their full retirement. Be careful.

Home, auto insurance, and property taxes has gone up nearly 40% in past 2 years. Obviously not a 3% projected inflation rate.

Great video. Thank you!!

What's with a large number of KZfaq financial advisors getting in lock step the past few months saying that people can annually spend much more of their retirement assets than the historically recommended 4%? It's just plain weird. It's as if one of these guys says something and the others follow like sheep. And what's with pressuring people to spend more than they need to spend? Do you think Warren Buffet is going to annuitize his assets so that he exits the world with zero money left? Consider planning for a long life unless 100% of people in your family reliably drop dead at early ages. We've known a number of people who have outlived their assets simply by living longer than they thought they would. Some of them ended up being financially supported by their children but others lived in abject poverty in their later years. I suggest watching the Ben Felix KZfaq video titled "The 2.7% Rule for Retirement Spending".

I’m 55 from southeastern Ohio but worked overseas all my life. I have savings of $1,000,000 and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire comfortably, or do I need some sort of money management?

You make a good point about using social security distributions to reduce withdrawals from other accounts when they are down, but from a long term planning perspective there are a couple of issues. First, life expectancy at 65 is significantly higher than at birth and even higher at 75 (the older you get, the longer you can expect to live.) Don’t be using 75 years as life expectancy for retirement planning. Second, and most importantly, what happens in your scenario when the retiree lives past 70? Getting to 70 is easy. Your example retiree could have the 1.4 million just sitting in cash and likely not out live it. Run your spreadsheets (better yet, use simulation) to 85 or 90 and tell me what the delta is then.

my philosophy is if youll need SS , because you didnt save well for retirement , delay as long as possible ... if you dont need it to survive , take it at 62 and make sure you get as much as possible and leave your investments to your kids ... only two things are certain in this life .... 1. you will die .... 2. you cant leave your SS to your kids

In my case, I spend many years overseas….i do not have the 35 years necessary. I get a 40 percent penalty for early. Not for me

What???

Just spend most of your money at the beginning of your retirement, who knows what happens after 10 years.

Financial planning is like navigation. If you know where you are and where you want to go, navigation isn't such a great problem. It's when you don't know the two points that it's difficult...

But, correct me if I am wrong, if I start getting my Social Security at 62, won't I be penalized if I am still working a full time job?

We are retired for 3 and 5 years. I agree with some general principles, but most of these plans are flawed. The fact is that we have quite variable spending wants and needs in almost every year of retirement. This is because of changes in inflows of income, and outflows of spending. The only way we were able to get more realistic numbers was to model every year going forward to age 90. Obviously the early years are more predictable than the later. What is also obvious is that we don’t need nearly as much money as we thought from our portfolio when we consider the later years. I’m firmly convinced that those with assets tend to overestimate needs and do not account for variability in wants and needs. I think many advisers and software programs do the same. Rarely mentioned is that a large proportion of retirees have no substantial portfolio, or only own their home. Both our moms are still alive at 88. They both don’t spend much money, and manage with only modest SS income. Certainly in old age having a lot of money is not necessary and does not tend to improve lifestyle the way it does at early ages. The myth of most needing expensive LTC is also constantly pushed. While it is possible to spend a lot, the “need” is not that prevalent. Older people without assets are usually well taken care of even with minimal assets. I worked extensively in the LTC industry in Florida before I retired, so my opinions are based on a lot of cases and personal observations. My point is to be more flexible and realistic. Also remember that one half of retirees die before age 83/84, some well before that. The average retirement does not last anywhere near 30 years.

Supporting materials can be downloaded here - please make sure to download by clicking FILE - Make a Copy OR FILE - Download (XLSX) docs.google.com/spreadsheets/d/1-f2MALEhwqJcNAojCIiVLODYsa6tKUEK_BcdCda97tM/edit?usp=drive_link

Why do so many people work jobs in they hate and can't wait to retire? I imagine the daily stress and frustration affects your health.

Wow, holy pecs! Smart and fit! are you married?

Thanks Eric for another very informative video!

Sign 1: You are a Multi Millionaire and have a bunch of F*** Y** Money…. I learned that on the Joe Rogan Podcast

claim early ? Yea, when your broke and need the money because you lacked the self discipline to save for the rainy day !

IMHO, your spread sheet does not allow for retiring early. If someone is retiring early, (Say 60) they likely have 1 or 2 SS benchmarks. For instance, if my wife and I retire at 60 and the wait 2 years top take hers, then 5 years to take mine, your simple spread formula does not allow for those figures. In other words, we have THREE "required portfolio incomes". 1 at 60 (This would be the highest), then a reduced one at 62 (the first needed - my wifes new SS income), then our final one at 65 (this would be the lowest). Make sense?

I don't think you really spend enough time on that first spreadsheet you put up. If they wanted to spend $72,000 per year how does that correlate to the $106,000 in expenses or 12,000 goals? I don't understand what your columns are representing.

If you are including social security then both husband and wife need to be at least 62 years old.

The problem with dividend ETFs closer to retirement is that they will drop as much as VTI without the upside. Instead, I dropped my VTI to 60% and bought VMFXX as a bulwark to market drops. I would love to hear your thoughts on what did not decrease in 2008 and 2020 as stable investments for my 40%, especially as interest rates decrease

The reason mortality effects people who retire earlier is many people who retire early do so due to health issues.

I see a person's salary as a marker for requiered retirement income. The problem is that no one knows how much of my income was actually being spent and how much save.

I am not taking mine until FRA which is 67 for me. I am over 62, still work, and I don't want my SSA payment reduced based on my earnings.

The guardrail system has multiple “rules” to follow as well! If I need $3,500 a month in addition to my fixed income sources (and deducting my “normal” expenses), am I ok with a $300,000 portfolio, I mean the market has done well the past couple of years, or will you impose a “rule” to advise that the upper guardrail is set too high? What “rule” would you set for my lower guardrail? Not really looking for an answer, just pointing out that your system is more based on which way the wind blows, and likely the “center” of your system is around 4% anyway, isn’t it?

I think there's some selection bias with the whole "not running out of money" statistics. I'm not surprised that people who have saved for retirement are more likely to monitor their investments and their spending and make appropriate adjustments. People unlikely to do those things probably had no retirement savings to start with, meaning they don't impact those statistics.

We just don't know when we're going to die, so our best bet is to start getting social security at 62.

The Google Doc link isn't working.

What do you think about dividend ETFs such as VIG, or does VTI provide sufficient dividends?

10 minutes in to your Loss Recovery Rule section - that is a terrible example for a well diversified portfolio. When you have a bear market when indices are down 20%+ you CANNOT/SHOULD NOT be using average market returns to calculate duration to recover. That is absolute nonsense. By far, the largest gains in the market historically, come right after the bottom. If you need an example, look no further than the Covid decline of 30%+ which required less than 2 months to go back to all time highs. So, I don't people should take your claim strategy at 62 too seriously. This is bad advice. Where am I wrong?

The way I look at it is if you can wait until 70, then it's a much higher annuity for life, inflation adjusted. With the current bull market, it's easy to keep withdrawing without much reduction of the portfolio or even growth. If there's a long term downturn, then I'd start to think twice.

This is the best video on this subject I’ve seen. Most of these videos don’t even mention sequence of return risks. The other thing is if you’re planning to pull more than the necessities because you can afford to you can always cut back a bit if you need to and SS helps enable this.

Sarasota Tim believes 62 is the ideal age for most, as most people never reach the age they believe they will die at.

While I agree, I think he made it overly complex with the tables and scenarios. I can give you a simple test to ponder. I am currently at this point. I am 66 and will stop work/retire at 67 1/2 (Dec 2025). I will be eligible for full SS at 66 and 8 months (next March 2025). SSA only increases yearly in Jan. No complex compounding interest math, just simple math, If I start my full SS in March of 2025 and bank it (as I am still working) with no interest for 10 months I will have $x.00 Then I look at the amount increased SSA will offer in Jan 2026 if I waited that extra 10 months to start. It is $y.00. (I use $x.00 and $y.00 because the same break even is the same even if you insert your numbers.) Here is the simple math. banking my SSA for 10 months vs the extra increase is a 12.5 year break even. This means if I live long enough to collect SS past 12.5 years, then I win. If I die within 12.5 years of delaying my SS, the SSA wins. This is validated by the number I have heard the SSA increases 8% each year you delay. It just so happens that 8% into 100% is 12.5. I feel young and healthy at 66 and expect to be fine at 67 1/2 when I retire but the 12.5 year break even point puts me at 80 years old. If, God willing, I live well into my 80's I should have delayed my SS. But even from this video it states the average age of dying for a male is 74. I have been noticing so many people dying at 75, 76 77 etc. I talk of collecting at 66 and 8 months vs 67, but the math and break even is the same of waiting to 68, 69 or 70. It is a 12.5 year break even. If you wait until you are 70 you need to ask your self if you will live to 82.5 ?

If you are 60, probably you will live until 85, then you are at the losing end if you claim SS at 62. I think this video assumes everyone dies at 70 😅

Media sources IDEALIZE every F ing thing. Better develop a good GUT FEEL. AND, get used to living on the basics unless you are Trust Fund Baby.

Seems smart to reduce risk. There are enough variables to make this a personalized decision, and it may make no effective difference for some, but I see value in taking early

If Trump gets in what happens if it goes away like he wants to take it away our Social Security. Where all that money go?

Thanks for the comparison. One bit of feedback on the video recording. The shadow from your mini-blinds was really distracting. Consider avoiding this in the future.

I had initially planned to retire at 62, work part-time, and save money, but the impact of high prices on various goods and services has significantly disrupted my retirement plan. I'm worried about whether those who experienced the 2008 financial crisis had it easier than I currently am. The volatility of the stock market is a concern as my income has decreased, and I fear that I won't be able to contribute as much as before, potentially jeopardizing my retirement savings.

Re. being forced to retire early, "Be Prepared." I've known many who were forced to retire and I didn't want that for me. I prepared financially, then decided I was ready mentally, then I hung around a bit longer to get the next bonus. Always better to leave on your terms. Maybe delay social security if: * portfolio is sufficient that higher early withdrawals do no harm * market is doing well In addition I'd consider: * spouse won't need the longevity insurance (the old age security in OASDI) * 8% annual increase in withdrawal for equal safety requires an 8% annual increase in nest age, will you get that if you claim earlier?

Great video. My first, of yours. Just subscribed. Well done overall. And I never heard of the "Retirement Smile."

By taking SS at 62 instead of 67, that's $$ one *doesn't* have to take out of one's IRA, thus the IRA $$ can grow tax-free. Win #1. If the IRA $$ not taken out grows at a mere 5%, the break-even isn't until age *87* (rather than the typical "76" cited). (The break-even between 62 & 70 is age 91.) At 6%, between 62 & 67, it's age 93. At 7% I'll be long dead. I'll take my chances. Win #2. Only 85% of the social security $$ are taxed for most. Could be less for some. And SS isn't taxed in most states (including mine). As compared to IRA withdrawals being 100% taxed at the Federal level and by most states in a reduced form. Win #3 for fed taxes in the early retirement years, bonus for state taxes. Since my taxable income is thus less, it gives one a little more $$ leeway for the Roth conversion. Win #4. IRMAA isn't affected, as the MAGI is the same. Draw. SS will need some changes by 2033 to remain solvent. I'll take the bird in the hand, thanks. Theoretical Win #5. The big one: As Peak Financial points out, taking less money out of the IRA *especially* early in retirement, solves the Bengen 4%/guardrails rules in spades. HUGE Win #6. As long as my spouse waits until 67 to take the spousal benefit, it's still half of what I *would* have received at 67. My taking early doesn't affect the spousal benefit. Semi-win, perhaps call it a draw at best. Present day $$ are worth more than future $$. Win #7. Bonus: Theoretical lost opportunity cost in one's early retirement years. Only "loss" I can find is the survivor's benefit is lower. The wins outweigh that my a *lot* of $$ in my estimation, unless one dies in their early 60s. But the $$ saved tax-wise, Roth-wise, risk-wise, growth-wise, seem to outweigh this in my estimation. Am I missing anything? At worst, as a compromise, one can evaluate the financial landscape while in retirement and if growth is good at age 62, wait. If market is tanking, then take SS. Re-evaluate every 6 months or so. This can manage & mitigate the sequence of returns risk as it occurs. Great video.

Very good explanation. Great details. Like others have said it would be nice to see up to age 85. Thanks for all your hard work.

Good stuff. Remember, even if you decided to delay your Social Security to say…. 67 or 70, if you retire at age 62 and you believe you’re gonna have sequence of return risks or that the market is going to stay down, you can always start Social Security at any point between age 62 and 70. Said a bit differently, my strategy will be to retire around 62, delay Social Security until 67 , but if the market turns down material, I’ll probably, then start claiming SSI earlier in order to protect my investments