Retirement Made Simple is a channel dedicated to helping 1,000,000 people have they knowledge they need to retire without worry.
Retirement Made Simple is hosted by Kevin Lum, CFP® who runs Foundry Financial, LLC based in Los Angeles.
This channel is purely for educational purposes and nothing we say should be taken as financial or educational advice.
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Sorry to say but this video doesn't sound like great financial advice. With the US debt continuing to climb, de-dollarization, inflation - it is not safe to spend without a significant reserve to keep up with the poor monetary and excess spending by the government.
The problem is the fear of running out of money is greater than the fear of not using it to its fullest potential.
Often a solid financial plan with a strong contingency plan will help with that.
Yup... you are 100% correct. 1) We live below our means and always have (unlike millenials) 2) Status MEANS NOTHING... unlike Millenials 3) Saved 20%+ of all earnings... unlike millenials 4) eliminated all debt ASAP before retirement 5) COntinue to live Frugally while receiving Social Security... BUT played the Spousal Benefit timing and collected before FRA.... 4% rule is garbage. We assess how much monthly and spend accordingly. This is common sense.
Thank you 🙏
Rick Edelman on DC radio for decades said NEVER do roth conversion because tax laws change and never give taxes when not required.
It’s better to take social security at 62 and let your investments grow instead of withdrawing from them.
It is not that simple...and I see it as a "it depends". If most of your investments are in a tax deferred account (401k, TIRA) and those accounts are substantial, it probably will be better to draw on those tax deferred accounts (or do Roth conversions each year), so that when you do start taking S.S. later, your tax liability will be less. Remember, your S.S. may be subject to Federal Income taxes, which will increase your taxable income, and if you are pulling from your tax deferred accounts, which are larger because they have grown, you might have a large tax liability. But it depends on your financial situation. One size does not fit all when it comes to income taxes.
If you draw SS @ 62 then you can only make round 20k wo affecting your SS, Most folks I know make much more than that at age 62, a better plan is to wait til FRA to draw, so you won’t be dinged on your SS, plus you will be on Medicare and won’t have to pay medical insurance premiums, there are other reason to wait, such as spousal SS benefits and survivor benefits! To me those far outweigh drawing SS at age 62. I would only draw SS at age 62 if your health is declining or you quit work and you have a higher earning spouse still working!
@@markkile8215 I am in total agreement and I think that make sense for most people. And if you do stop working early, you can draw down your 401K or TIRA account(s), so that when you do start drawing S.S., your RMDs will be smaller, which will keep you in a lower tax bracket. Or spread out Roth conversions so your tax deferred accounts will result in smaller RMDs. It is a case by case scenario, though, so it depends on each person's own financial situation.
2.8% 🎉
This is a great video. Sitting along side my fear of not having enough in retirement is the fear of being overly focused on savings and building wealth and missing out of living while I was young enough to live. My wife and I have enjoyed our trips and though we took them without taking on debt, the expenses did stunt the growth in retirement assets. I don't regret them especially since my wife has already started pulling back on some of here hobbies because of health. Won't get those times back. There's got to be a balance.
Thanks, Kevin ... your explanations and reasoning provided solid information for good decision making
Yeah its me. But, I think you are missing something. Spending is just not something I need or want to do. I take all the vacations I want to. (about 6 a year) I do what I want, live where I want, gift what I think is reasonable. drive 2 nice cars. But still only am able to spend less than 2%. So I know the portfolio will grow. I accept it. I am not going to change from someone who has for over 40 years, lived below my means. To someone who has a goal of spending money. Yeah, I might add a first class ticket once in a while, (but probably not.) No I am not going to buy a boat, or a silly expensive car. (yeah I will continue, as long as health allows to go to nice places and experience nice things.) And if people are wondering how. Simple, besides living below my income. I invested. From my 20s. And when I received a bonus from work. I Didn't spend it. I saved and invested it. I bet a lot of readers of this, make more $$ than I ever did. (I think my top was around $140K, and many many years it was below $100K. (The first one was $10.5, although I suspect in todays dollars that is likely close to $60K) Also about 15 years ago, I came to realize my portfolio was making more than I was. So I let it. And continue tp let it do that, and lived on less than my salary. And yeah among other things I did have roommates in my 20s. And for those who think mortgage interest rates are high now. I bought my first condo at an 18.5% mortgage. One thing that I tell people. That Charlie Munger saying is true. That first $100K is the hardest And you should do Anything you can (legally) to get there at as young an age as possible)
I had a two prong message. Someone people need to spend more, but others - like you - need to give your money a purpose. Meaning, you need a plan for what you plan to do with it - so you can be strategic, especially from a tax perspective.
@@foundryfinancial LOL, I didnt watch it all until I wrote the comment. You are right. I am aware of DAFs and likely will do some to combine with IRA conversions. It was a good video. If you lived near me, would love to talk over a beer. (my treat 🙂)
@@buyerclub2what general area are you in?
I'm the youngest of the Boomers (born in 1964). I never felt like a Boomer and have recently found out about the Jones Generation and it fits how I've always felt. GenJones is roughly Boomers from say 1954 to the first year of Xers in 1965. Look it up, it's fascinating! So I'm going to be 60 next month in July. Planning on retirement in 2 years at 62. Currently the wife is already retired at 63 and drawing SS. Not a huge dollar figure, but an amount that's helpful for the finances. I'll earn around 115k this year. Only the past 2 years have I ever surpassed the 100k threshold, so I don't feel like I'm wealthy. Our roughly 300k house still has around 45k owed on it and may be nearly paid off before I retire in 2 yrs. We have a net worth of around 1.165 million and 915k of that is in 401k\IRA with the rest being home equity. So I'm thinking we're going to be ok to comfortable in retirement. But I am striving to get that 915k over the million dollar position within 2 yrs or I just won't retire until I do. We live within our means. Not to the point of being frugal, but things have to be within our finances or they don't happen.
TBH I was nervous to hear the list. It boils down to self discipline. I'm still working on #4, but I feel a lot better about retiring. Thanks Kevin!
Thank you for what you do and sharing all these valuable info.
Hey Boomers, if you are money hoarders and you have no plans what to do with your money when you die, you can leave it all to me! 😂
Aaah, what have you done for us lately?😅
This is helpful. There is a lot of fear mongering out there, and overly simplistic rules of thumb like the 4% rule can create a lot of unnecessary anxiety.
Great video and really spot on...thanks!
Thanks, Mike!
That's exactly it--switching from accumulation to spending is a difficult transition. It's especially true when financially comfortable due to many years of living below one's means. I've always enjoyed traveling, but I now do so at a higher level. Good info and makes sense. 👍 Haha, just continued watching, "yep, that's me". 😊
Thanks!
@foundryfinancial I've watched a lot of videos about retirement financial strategies, but this one is spot on!! Thanks for pointing this out.
Nice video. I would add to the fixed income interest from savings accounts and dividends from taxable investment accouts. For instance, if my savings account pays $100 per month and my taxable account dividends is paying approximately $400 per month, then that is $500 per month in fixed income. Not a lot in this example, but it can become a lot in some cases.
I retired. At the age of 55.. I sold my house in california move to tennessee. Sold it for 940,000. I had 400,000 In equity. I purchased a house in tennessee on eight acres. Fifty five hundred square feet And a large shop 640,000. I put down 300,000 Finance the rest at 2.5% Interest. In 2020. My payment is only 1500 per month With taxes and insurance. I also had 1.1 Million dollars in my 401K account I started a ROBBS account To start my own business which is real estate investment. I withdrew all the money. Fully legal. I purchased 4 houses In tennessee. Each one 200,000 And I get 1800 per month for each house. 7200 per mo total. I also have a small welding business that I do for fun. I work maybe 15 hours per week. And I only do what I want to do. I get. About 2500 per mo from it. I live the best life i've ever had
please talk about GROWTH. And continuing to prospering. After leaving our career secure job
WHEN the dollar dies and it WILL, ALL of your money DIES also....
healthcare-- when people decide to support a legal drug dealer who doesnt cure you of anything. your grandparents are rolling over in their graves at how we weakminded we have become
Thanks! Could you confirm if spouse passed away, survival spouse could use married filing jointly for total three years on filing taxes?
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
I have a big problem with pleasure but what does that mean?
Retired 6 times in 73 years.
Move it in small increments per year. In retirement, then you can raise the level of the increments remembering you need to wait 5 years for each conversion. Sometimes you may be able to do it without paying taxes at all. Also your chain of dividends from previous conversions can cover any taxes you have on this year's conversion if you are 59 1/2 plus. If you put that money into a diversified portfolio of BDCs and covered call ETFs such as CION and SPYI, you can generate dividends greater than 10% and just spend them, remembering to reinvest 10% of your dividends back into your BDCs and SPYI to make up for inflation. You also should have qualified dividends in brokerage accounts to take advantage of qualified dividends' long term capital gains. I really should have been a financial planner.
I'm getting tired of reading all the obituaries of folks I knew that passed away in their sixties.
Where is the software I can put my numbers to try ?
You have done a Very good summary of the exact thoughts and fears there
I am glad I listened to this. Now I am seriously considering whether I am ready to take an early retirement
Dear Kevin, thank you for your videos! ❤ KZread KEEPS UNSUBSCRIBING us from your channel. Please reach out to KZread and ask why? KZread Feedback is being ignored from people who are not professional bloggers.
Life begins at 70🎉❤❤
My husband has a small fishing boat. He spends more time fixing it than fishing from it. I do not tell him to sell it, he will make that decision when he's ready. If I pressure him to sell it, he will hold that against me.
OK, I'm just gonna tell you what I did then ask my question. . . I worked 2 full time jobs and one part time job for almost 50 years. My wife and I raised 3 kids, bought a condemned house (officially unfit for human habitation); I rebuilt the home in my "spare" time; I paid for my wife and I to go to college at night; we worked different shifts in a factory so one of us would be with the kids at all times; we never bought a new car, never took a fancy vacation, and just worked until we were physically exhausted. Now we are 68 and we've managed to have a retirement income that is $175,000 annually, this includes our two soc sec pensions and four separate pensions that we've earned. Question: did we do good or did we squander our youth? We have some major mobility issues now, but we enjoy life, we own our home, we own our used cars, we have no debt, I mean zero debt. We can buy what we want, do what we want, but we want very little. I'm sure we missed some great ops for life experiences, but we kept tomorrow in our sights. So, did we F up or not?
Bridging. In my opinion, if your financial situation is $800,000 in investments you can take SS at 62 & be able to tie up $600,000 of it to gain interest/dividends. If your financial situation is $150,000 you will probably be better off to use that to delay SS until 70
Can't retire till 68 for full pension Take s.s or wait till 70
Nice to know what the average pensions are. It's amazing to see how much of taxpayer's money are funding the government workers for doing nothing.
My wife's been trying to get me to buy a boat. I'm never going to. I'm trying to simply my life, not make it more complicated. Slip fees are sooooo pricey now and they need constant care and feeding. RVs? too many horror stories. Since Thor bought all the manufacturers, the quality has gone to sheet.
Unless you have a time line of at least 10 years out, it just takes too long to make up that lost compounding factor of those tax dollars no longer growing!
I made this mistake. My 2k a month from social security is taxable so it is not 2k. It is around $1500. If you take out of Ira it is also taxable. 1/3 go to uncle sam.
Excellent retirement assessment. Should be viewed by folks in their 40’s
Problems of western countries. As the corrupt politicians are screwing their debt and tax slaves like no tomorrow.
I am interested in your offer
I retired at 26 when I started working in government. I have travel, enjoy nature, I’m jacked and I have enjoyed beautiful women. At 52; I’m ready to enter the workforce
How can 50k be the average when so many baby boomers have no retirement savings at all?
if 1000 = 1000 reg taxable income +850 social security taxable income what % are you paying? How about 22% bracket?
Even Fed tax free the money may bump up the taxes on your social security check and your Medicare part B, Yes, No ? And as you mention some states DO have a cap gain tax
Health care is crazy in the US
The word “ instruction “ is misspelled at the beginning of the video. Maybe there needs to be an instruction manual on how to spell instruction.
Well my wife and I want to cruise the country. Paying for motels everywhere would cost a small fortune. Our plan is to buy a small used van camper. Not a huge class A that costs $500,000. We already own a 30 ft camper, truck, boat and 2 cars. We will be selling all but one car which should cover most of it.