It’s Sunday, which means...It’s recap time! This week, we looked at whether or not $1 million is going to be enough for a comfortable retirement. Perhaps not surprisingly, the answer to that question depends on a lot of factors - primarily your other income sources, your income needs, taxes, how long you’ll live, and how your portfolio is invested. 

In each episode this week, we looked at each of these factors in more details to help you determine how much is enough for retirement. Maybe it’s around $1 million. Maybe it’s much more, maybe it’s much less. 

Hopefully, I gave you some useful tools this week to determine how much is enough in your situation. 

Tomorrow, we are starting a brand new theme that’s a continuation of this week’s theme: how to become a millionaire. I’ll talk about the habits and traits of millionaires that can help you better manage your money and make better decisions. 

And if you haven’t already, be sure to check out my YouTube channel - True North Retirement, where I cover a wide variety of retirement planning topics - everything from whether or not you should pay off your mortgage before you retire to understanding the lifetime gift tax exclusion to inherited IRA rule changes for 2020. 

That’s it for this week! Thanks for listening and I hope you have a blessed Sunday! 

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about whether or not $1 million is going to be enough for a comfortable retirement.

Today, let’s look at your investment portfolio and how that influences whether or not $1 million will be enough for you in retirement. 

Earlier this week, we looked at the 4% rule for retirement withdrawals - which provides a ballpark estimate of income that your portfolio can provide. Take 4% x your portfolio value and that tells you what you can withdraw in year 1 of retirement. So if you do the math, $1 million can provide about $40,000 in retirement income. 

But there is an important assumption built into this rule - and that is that you have a well-diversified portfolio that holds approximately 60% in stocks and 40% in bonds. 

What if your portfolio has a much higher allocation to stocks or a much lower allocation to stocks? Well, then the 4% rule doesn’t work as well. 

The problem with too much in stocks is that the bad years can be really bad with too much in stocks and take years to recover, which was the case in 2008-2009. So you may have to significantly cut your withdrawals, at least temporarily in economic and stock market downturns to protect the longevity of your portfolio and make sure your money will last in retirement. 

The problem with too little in stocks is that you have really no hope in keeping up with inflation. Especially these days with savings accounts, money markets, and bonds paying abysmal rates of interest. Over a 20-30+ year retirement, inflation is the silent killer that will eat away at your portfolio, so you’ll have to withdraw more each year just to keep up and maintain your same standard of living. If you don’t have enough in stocks to provide for the growth necessary to keep up with inflation, you may have no hope for maintaining a comfortable lifestyle in retirement. 

So the bottom line here is that $1 million can provide about $40,000 of income in year one in retirement, but usually only if you have a well-balanced portfolio of somewhere between 50-70% in stocks. 

That’s it for today, thanks for listening. Tomorrow, we’re going to recap the week and I’m gonna give you a little taste of next week’s theme.

My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about whether or not $1 million is going to be enough for a comfortable retirement.

Today’s topic is another important consideration when determining if $1 million is enough for retirement - your health and longevity. 

If you are 60 years old, healthy with no underlying health conditions, you don’t smoke, and your parents and grandparents all lived into their 90s, you have some special considerations for ensuring your money can last in retirement. 

When calculating how far your retirement nest egg will last in retirement, you’ll need to assume that you’ll live to be 90 or even longer. It would be disastrous to only plan to live until you’re 80, spend like you’ll live until age 80, then run out of money before you run out of years and have to rely on social security alone and the financial support of your family for your basic needs.  

When you retire in your 60s and live until age 85 or 90, inflation will have a significant impact on your portfolio. You may start out spending $70,000 or $80,000 a year in retirement, but because of inflation, you could very easily spend more than twice that amount by the end of your life because of inflation, so you’ll need a portfolio that can support higher withdrawals over time because of inflation. And that’s what I’ll be talking about tomorrow. 

Before you go though, I encourage you to take me up on a free offer just for my loyal listeners - the Retirement Success Forecaster. Using data from a simple questionnaire, I’ll be able to tell you if you’re on track for retirement, and if not, what adjustments you can make today to live the retirement you envision.  

Getting a customized retirement forecast is easy. Just send me an email - [email protected]. I’ll send you the forecaster to complete, and once you send it back to me, you’ll receive your personalized results - for free!

The forecaster will help you answer with a lot more clarity, the big question we’re tackling this week, which is do you have enough for a comfortable retirement when you consider your portfolio size, your income needs, taxes, inflation, etc. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about whether or not $1 million is going to be enough for a comfortable retirement.

Today, we’re covering everyone’s favorite subject - taxes. So far this week we’ve looked at how $1 million in retirement can provide about $40,000 income in retirement in year one of retirement, and how you can combine that income with your other income sources to determine if that will be enough for a comfortable retirement. 

But I haven’t yet talked about the impact of taxes, and it makes a big difference. 

When you’re planning for retirement and adding up your income sources, you’ll want to use the after-tax figure. Especially when you’re trying to match up those income sources with your lifestyle and spending goals in retirement. 

So you’ll need to know the impact on taxes. And this can vary widely from person to person and from portfolio to portfolio. 

For example, if your $1 million portfolio is invested in a Roth IRA, you won’t owe any taxes on those withdrawals. If it’s invested in a taxable account like a joint account or a trust, you’ll pay capital gains on what you sell to generate that $40,000 withdrawal, and if you have everything in a Traditional IRA or 401k, you can expect to pay income taxes on every penny you withdraw from that account. 

Chances are your portfolio is invested in some combination of these accounts, which means that there will be taxes to consider - likely in the 10-30% range - before you arrive at your net after-tax amount. So your million dollar portfolio may provide even less income for you in retirement after taxes are taken out - instead of $40,000, you may end up with $30,000 or $35,000 after Uncle Sam is finished with you. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about whether or not $1 million is going to be enough for a comfortable retirement.

Yesterday, we determined from the 4% rule for retirement withdrawals, that $1 million in retirement can provide about $40,000 in income in year one of retirement. 

Today, we need to take the next step in figuring out if $1million is enough in retirement by looking at your other income sources in retirement and your income needs.

If you’re like most Americans, $40,000 from a million dollar portfolio will not provide for your lifestyle in retirement.

The average retiree lives off of about $65-70,000 in retirement, so we already have a shortfall. Depending on how much you want to travel and how much you enjoy eating grass-fed beef, you may need more or less than that. 

The good news is for most of you, you’ll have other sources of income, namely Social security. You may also have a pension or some other source of income in retirement like a rental property. It’s important to add up these other income sources to estimate your total income stream in retirement. 

Let’s say after combining your $1 million portfolio with your other income sources, you can generate $70,000 a year in income. Next, you’ll need to figure out if that’s enough. 

Based on your desired lifestyle and spending, can you live off of $70,000 a year or whatever that number ends up being? I can’t emphasize enough that you’ll want to do this exercise starting in the last 10-15 years before retirement, a repeat the exercise annually so you can course-correct when necessary before you get to the end of your working years.

That’s it for today. Tomorrow I’m going to talk about taxes, which I have so far left out of our discussion this week, but it’s an essential component to determining how far $1 million will take you in retirement. 

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about whether or not $1 million is going to be enough for a comfortable retirement.

Today, we’re diving into the key question of the week, which is how far will $1 million stretch in retirement. In other words, how does $1 million saved for retirement translate into income for you. 

To make things simple, I’m going to assume you retire sometime in your mid-60s, you have a diversified portfolio with about 60-70% in stocks, and you decide to withdraw 4% from your portfolio.

You may have heard of the 4% rule for retirement withdrawals, which essentially multiplies 4% by your retirement nest egg to give you an easy, back of the envelope withdrawal strategy for retirement. It’s a far from perfect method for calculating your withdrawals, but it’s a good starting point, so to keep things simple, I’ll use that figure.

If you apply the 4% rule to $1 million retirement nest egg - 4% x $1 million = $40,000/year in retirement income. 

If on the day you retire, you have $1 million and you apply the 4% rule for your withdrawals and take out $40,000 that first year from your portfolio, you have a reasonably high chance of success in not outliving your money in retirement. 

The good news is that you can also apply this 4% rule to whatever your retirement nest egg balance is. Just take 4% X your balance, to figure out a ballpark income figure that will provide for you in retirement, which you can then use as a jumping off point to do some additional planning. 

That’s it for today. Tomorrow I’ll be discussing how to combine your portfolio income with your other sources of income in retirement to determine if you’ll have enough for a comfortable retirement. 

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

Welcome to a new week and a new theme here on the One Minute Retirement Tip! 

This week’s theme: Is $1 million enough for retirement? 

According to TD Ameritrade’s 2019 Retirement Pulse Survey, 58% of Americans surveyed think that $1 million will be enough for retirement? 

A million dollars is still a lot of money, and while $1 millon would have been more than enough for retirement for the vast majority of Americans 20 years ago, that’s not the case today. 

Which begs the question...Is $1 million saved for retirement going to be enough for you? Maybe it will, maybe it won’t. Maybe you’ll need much more than that to live a comfortable retirement. Maybe you’ll need much less. 

The answer depends mostly on your retirement spending & your other income sources. 

So this week I’ll be diving into how far you can stretch $1 million in retirement, to help you determine how much is enough in retirement for you. 

That’s it for today. But before you go...you probably know someone who is close to retirement and could benefit from listening to this podcast. If so, please share this podcast with them and encourage them to check it out by adding it to their flash briefing in Alexa or subscribing wherever they listen to podcasts!

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

It’s Sunday, which means...It’s recap time! This week, I covered 5 essential things you’ll want to do in your last year before retirement to help set yourself up for success once you transition to the other side. 

Here’s what we covered in each episode this week: 

• Calculate If You Have Enough To Retire - this is the essential first step and must do item
• Next, I talked about why you’ll want to Prioritize Debt Reduction Over Saving More As You Approach Retirement
• How to figure out what health care will cost
• Why you’ll need to track your spending and experiment with living like you’re already retired
• And lastly, how you can establish a routine in retirement that will help you overcome the all-too-common boredom and depression that can sometimes set in once you retire

Hopefully after listening to the One Minute Retirement Tip this week, you have a roadmap and a checklist for a few of the most important things you’ll want to take care of before you collect your gold watch and sail off into the sunset. 

Tomorrow, we are starting a brand new theme: Is $1 million enough for retirement?

A million dollars is still a lot of money, and while $1 millon would have been more than enough for retirement for the vast majority of Americans 20 years ago, that’s not the case today. 

So next week, I’ll talk about how far $1 million will take you in retirement, and how to calculate for yourself how much is enough. 

And if you haven’t already, be sure to check out my YouTube channel - True North Retirement, where I cover a wide variety of retirement planning topics - everything from whether or not you should pay off your mortgage before you retire to understanding the lifetime gift tax exclusion to inherited IRA rule changes for 2020. 

That’s it for this week! Thanks for listening and I hope you have a blessed Sunday! 

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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>>> Subscribe on iTunes: https://apple.co/2DI2LSP

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about something that many pre-retirees don’t consider before they retire, which is how will you spend your time in retirement? 

Many people are blind-sided by unexpected feelings of boredom and depression once the initial few honeymoon months of retirement pass. 

There is well-documented research suggesting that retirement for many of us isn’t all that it’s cracked up to be. There is purpose and meaning in work, especially if you like what you do for work, so you’ll want to have a game plan for finding meaning and purpose in new things after you transition into retirement. 

A number of years ago, my dad and business partner brought in a psychologist to speak to a group of our clients who were soon-to-be retiring and newly retired. This speaker shared some insight into how to find fulfillment in retirement. 

One of her primary suggestions was to keep half of your time structured. Maybe you play golf every Tuesday, or take care of your grandkids on Wednesdays, or have coffee with your best friend every Friday morning, or volunteer once a week. 

Whatever those activities are that are important to you, it’s important to have about ½ of your time during the day structured. This has many benefits and helps to stave off boredom and depression, because the structure helps you keep a similar routine to when you were working, as well as give you something to look forward to each week. 

That’s it for today, thanks for listening. Tomorrow, we’re going to recap the week and I’m gonna give you a little taste of next week’s theme.

My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about the 4th item on your 1 year from retirement checklist - live like you’re retired. 

Here’s what I mean by this: Let’s say that you are exactly 1 year from retirement today. What you’ll want to do for the next 3 months is track your spending. You don’t need to limit or cut back on your spending, but you’ll need to know exactly what’s going out of your wallet every single month. 

Too many people have no idea how much they spend every month, but when you retire, knowing your spending is absolutely critical to understanding if you have the income and the assets to support your lifestyle in retirement. 

So you’ll want to track for the first 3 months. Tracking for a few months will help you average out your expenses to get a more accurate picture of what you actually spend. 

Then, once you have that 3 month average, you can use that to figure out whether or not your income sources and assets can provide the income you’ll need to sustain that spending. 

Most retirees cut back and end up only needing 60-80% of their income once they retire, so you should use this exercise to determine how your expenses will change in retirement. You might spend less on gas and parking if you’re commuting to work, but you might spend more on travel and home improvement projects now that you have the time and you’re retired. 

And then for those last 9 months, keep tracking your spending, cut out what you don’t want or don’t need or can’t afford, and ideally, try to as much as possible live like you’re already retired to see if that lifestyle is sustainable. 

If it’s not, at least you found out if you’ll need to work longer or work part time, before you transitioned into retirement. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast