Retire at 60 with $1M? What To Expect

so what does it look like if you're 60 years old and you've got a million dollars in your retirement accounts what can you expect the first couple years take a walk with me and let's talk about this before we go though I want to point out behind me there's this tree uh with some shoes in it the local community that I'm visiting there's a tradition here and if you stay to the end I'll I'll tell you what the rumor is as to how that all got started so getting back to our topic at hand retiring with a million dollars you're 60 years old uh you know one of the challenges you're going to have at least here in the U.S is you know uh Health Care insurance is typically provided by our employers and getting Health Care insurance is is probably job number one in that situation uh and you can you can look and and get onto the platforms the health exchange platforms uh and see what type of insurance you can get and what that's going to cost and it's going to depend on your specific situation uh as to what it can cost unfortunately in the U.S even on the exchange even on the government exchange health care costs are very very high of course if if you were working with a company uh Cobra is an option for the first 18 months so that's going to be a piece of it is is healthcare insurance the next piece is you know how much money can you plan on taking out if you have a million dollar portfolio uh and you're 60 years old so the rule of thumb is is four percent um and and that's based on a couple factors that's important for you to know um the gentleman that came up with the the four percent rule is a gentleman by the name of Bill bengan uh and and he did a lot of statistical studying using techniques uh called Monte Carlo simulations and others and his question was how much can you take out every year and and not have the fear of uh running out of money before you run out of life super important but it's important for you to know that that study was based on about a 30-year lifespan so if you're 60 years old you know you may you have a better shot of of needing this money for more than 30 years than if somebody was 65. um so that's a limitation on the four percent rule but I think it can start off thinking about it in the ballpark there now it's it's not this is not Financial advice um I don't know your specific situation I just want to quickly see if I can show you this bubbling brook here behind me so that's that's the noise that you're hearing this is just a beautiful location I'm at today again I don't know your situation uh you should definitely talk with the fee only financial advisor uh before you pull the plug in decide to retire at 60 because you want to have certainty you want to have it well I should say as much clarity as possible and you want to make sure that your numbers are right so what does the income look like you know I I think you can start off looking at about four percent maybe you want to be a little more conservative because you have a longer time that you're going to be in retirement um so that's another thing that you need to to look at is your cash flows we talked about uh your uh Health Care insurance costs and and how to get that into place and then what is your Investment Portfolio look like right I mean you have a long-term time Horizon and a lot of a lot of financial advisors would tell you you know oh you need to be fairly conservative as uh when you enter retirement and the the argument for that is you know this is your nest egg and once you quit working it's likely that it would be difficult to find another job uh that would pay you what you're getting paid now um right you've probably been doing what you're doing for a while unless you have a super specialty you're an attorney with a specialty or a physician with a specialty but if you're a general manager at a company week it can be difficult to get that job back if if you work where your job is physically demanding I can certainly see why you'd want to retire earlier right it's it's one thing to go to work and sit at a desk all day it's another thing to to be in a job that's physically demanding that requires a lot out of you physically and you may just not want to go back so you want to make sure you get the numbers right you know and and we can make as humans we can make a lot of things work right I mean if somebody said this is what my budget is you know you could you can probably have a really enjoyable retirement with that if somebody said Gee your retirement's this number plus twenty thousand dollars you could probably have a lot of uh fun with that as well and of course the challenge is somebody says this is your retirement but it's going to be five thousand dollars less a year or ten thousand dollars less a year then things can get tight right um but you still have flexibility there's still Adventures that you can have uh you know I don't talk about this much in my channel but people do live over move overseas where the cost of living is lower uh and that can be an adventure for you until you decide to start taking social security uh and get that extra boost in income and on the topic of Social Security that's another thing that you're going to have to think through is when do you want to start taking social security uh uh and and that's something that you really need to talk to a specialist on to make the decision that's that's right for you uh if if the decision if it came down for me the decision of gee if I took social security early and you can start at 62. uh if I took social security early I could retire now uh but if I don't take Social Security and I wait then I won't be able to retire you know that would for me personally I don't know your situation but for me personally that would be very tempting because you know uh we we live on our our uh adventures and our experiences and our relationships and yes every year that you don't take Social Security that payment goes up but I think there's a lot to be said for being able to get off out of the Rat Race uh and and taking the stress that often comes with work getting rid of that uh when you can when it makes sense for you now if you love what you do you know this video is about what does life look like if you retire at 60. but if you love what you do and you really enjoy it and you're skipping to work every day maybe don't retire at 60. but if you do retire at 60 you do have that decision what are you going to what when are you going to start to take Social Security so that's something else that needs to be on your mind obviously if you take Social Security early then that's an extra cash flow that comes in that's going to be helpful but in the later years you're going to have less money but you'll have more memories you'll have more Adventures you might be healthier here you can take in general you're retiring five years sooner than when a lot of people in the United States retire you can use that period to uh to stay healthy or to repair your health to really work on that so that that could be a trade-off worth worth taking right once your health is gone at our age it's hard to get it back so maintaining your health is job number one so we talked about what kind of cash flows we talked about health care also at 65 for most people like Medicare kicks in so you've got a a five-year kind of Gap there I mentioned Cobra will cover the first 18 months of that Cobra tends to be expensive you're paying the full cost in the past year employer was paying some of that cost so uh that's the the in health insurance side of things uh and then what does your portfolio look like what how should you have that invested and I don't know your specific situation but you know you're looking at you probably need to plan for at least 30 years unless unless you've got a health situation I hope you don't uh so that's a long period of time and with a long period of time you can you can write out the volatility that's often Associated uh with having stocks I just want to show you this bubbly Brook here I'm going to have a seat here and finish up this video so those are those are the major components again I mentioned earlier that bengan's study the four where the four percent rule comes from that is based on a fairly aggressive portfolio anywhere from 50 to 70 percent uh exposure to stocks uh and exchange traded funds tools that are going to be fairly volatile and for sure if you're 70 in the stock market you're going to feel that volatility so just thinking you know just just telling yourself that you need 70 percent you know because of the four percent rule that is not the way to make your asset allocation the way to make your asset allocation is thinking through in the scary days you know if you're going to be retired 30 years it's likely that you're you're going to have some pretty negative down days I don't have a crystal ball but I wouldn't be surprised if we have at least a year that's down 20 percent during the financial crisis the market was down almost 60 percent could something like that happen again uh could something like that move the market like covet where it was the fastest 30 percent decrease in the market history could some like that happen again yeah I think it could again I don't have a crystal ball so those are the major things that I think you need to think about I do think you know it's highly likely I don't know your situation but you know being able to retire oftentimes once people go through that unknown and they transition from this world that they've known for 30 or 40 years which is the Work World once they transition to the other side and see what retirement's like way more often than not people are like I wish I had done this sooner so I definitely think it's it's worth your time exploring and seeing if it's a if it's an alternative that makes sense for you and if it is then double checking your math again I would encourage you to work with the only financial advisor just to make sure your numbers are correct uh okay I want to close the video with talking about uh that shoe tree that was at the beginning of the video so the rumor is so this was a mining town back in the day before it became a ski resort town uh and the rumor is that the miners did that just as a as a way to celebrate kind of the end of the winter they have long hard Winters here uh even harder before they had you know natural gas plumbed into every home on you know they had to uh had wood fires to keep themselves warm they were down in the mines all day it was dark when they came home from work so to celebrate they they threw their shoes up in the trees another rumor frankly nobody knows for sure but another rumor is in the 70s one summer evening when it was just a beautiful day there were some young people in in the park that's right near that tree uh enjoying some wine and enjoying some time with their friends and they spontaneously decided hey let's make a work of art here out of the tree and let's throw our shoes uh up and you know over the years the city has tried to say well gee this is an ice War we should clean this up we should take it down but the locals keep throwing their shoes up in the tree and I understand that the shoes are donated here locally so it does have a and at least a lower impact ecologically so that's the story of the shoe tree I hope you found this video helpful if you did do me a favor hit the like button it really does help other people find this channel find people like yourself that videos like this can help uh leave me a comment I do read the comments I find them super motivational I'm really grateful for the positive community that we're building in in the comments section so take a second hit the like button leave a comment or as the younger YouTubers would say thumbs for likes and and subs for love and until next time I'm a soul encouraging you to take full advantage of the Youth of your senior years remember you're only young once use this time wisely

Channel: Azul

Views: 83,170

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Id: u2pyEwW3jd0

Length: 12min 35sec (755 seconds)

Published: Tue Mar 21 2023