Q&A: Spend $500k at a 4% Rate (And Much More) Example
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We’ll address that question, and more importantly, fiddle around with some numbers to illustrate some essential concepts for retirement income planning.
We’ll look at how earnings on your retirement savings can help stretch your assets. Plus, we’ll see how inflation, market crashes, and adjustments to your spending might look in a simplified model.
The amount you withdraw from savings can supplement income from Social Security and other sources. But it’s important for that money to last for the rest of your life. The amount you spend affects how long your money will last, but investment returns and inflation are also important.
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Related Videos:
Retirement Spending Reality: https://www.youtube.com/watch?v=dzVep2dJQDw
Do Rules of Thumb Work? https://www.youtube.com/watch?v=lZe2iEsguzk
CHAPTERS:
0:38 Question on Spending 4% of $500,000
1:56 Add Some Earnings
4:28 Market Losses and Spending Adjustments
7:04 Spending Patterns (Go-Go, Slow-Go, No-Go & Spending Smile)
Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.
IMPORTANT:
It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. “Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
Тэги:
#4%_rule #retirement_spending #retirement_planning #financial_planning #500k_retirement #guardrails #cfp #financial_advisor #investing_in_retirement #adjust_spending #market_losses #retirement_reality #retirees #how_to_retireКомментарии:
Excellent demonstration. Time to pull out the spreadsheet and make something similar. Looks like a fun way to predict potential outcomes. Thank you.
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Very clear explanations - Thanks!
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Outstanding vid, Justin; thank you!
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at 5% return on $500,000 wouldnt you get $25,000 return not $24,000 the first year?
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Wonder how many folks are on the 'pile under the mattress' plan , not earning any interest or gains anywhere . i heard someone ask that if their tokens were 'in cold storage if would stay at that price , right?' . thanks for doing 500k while most vids are talking 7 digits which is scary far away
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Now I understand . Thank You
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What software do you use which allows you to test future tax returns?
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Thank you valuable information
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As always, clear, concise and relatable content. Thank you Justin for the time and effort in making these videos.
Sincerely, A Grateful Viewer
What software do you use?
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If
You have $500K and even average a 5-6% return which is kinda low, you will have money left over a 30yr return. A rate of a 8% return average you would be rallying good cause your taking out 4-5%, plus inflation could be 2% on average you definitely have money left over
Wait a minute. My understanding of the 4% rule is totally different. I thought the idea was to NOT to take a fixed amount based on 4% in year one, but rather to take 4% of the principle, whatever that is, each year. When the market is up, you take more, when it's down, you take less.
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The thing that always puzzles me about these types of videos is this: anyone who was disciplined enough to earn a good living, spend less than they make, and build up a sizable retirement nest egg, is very well-acquainted with living on a BUDGET. Investment advisors never want to talk about budgets, because it undermines their efforts to encourage you to put more "Assets Under Management", or AUM, which is how they make money off your money. This video/channel isn't as bad about it as most of them are, but there still wasn't one mention of the word "budget". He did say something about tightening the belt, but then immediately mentioned how they want you to spend as much as possible in retirement, which is the antithesis of following a budget. He then goes on to make the process more complicated than it needs to be, hopefully encouraging folks to enlist his services to sort it all out for them.
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Great Job, Justin! Thank you for using Average Joe amounts!
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Inflation is high is far higher than four percent.
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I want to keep my money where there is zero risk and is immediately available.
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My 401k stands at 500k this week. Very intuitive explanation. It shows factors to be considered easily.
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How can I get my hands on that excel spreadsheet?
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Thanks as always for your content.
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love love love your videos
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$20k a year and 3% inflation??
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i'm in my mid 50s - retired at 44, I don't plan on living another 30 years. living until mid 80s isn't realistic for most people. from what i've seen over the last 20 years, I have seen most people die either in their mid 60s or late 70s. I know what statistics say and all, but the reality is that most die well before 80.
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Really good financial teaching !! Thanks!
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