That ' s a lie that ' s been repeated so usually that individuals in fact believe it. Make no'bones concerning it.We ' re paying, if you'' re obtaining a wage, if you ' re obtaining a salary, you ' re paying tax obligations, period. And profile earnings, there ' s several types that I ' ll go into, however what ' s most essential is there ' s no social protection tax.
Anybody starts telling you in different ways, it'' s since they simply put on ' t know. You function at McDonald'' s and somebody'that ' s going to run about and claim, you put on ' t pay any type of earnings taxes. Make no'bones concerning it.We ' re paying, if you'' re obtaining a wage, if you ' re getting an income, you ' re paying tax obligations, duration. And portfolio income, there ' s numerous types that I ' ll go into, yet what ' s most crucial is there ' s no social safety tax. And the long-lasting, I just informed you, if you hold something over a year, where if you do futures, 60% of it'' s treated as lasting, it ' s that long-lasting', if it ' s short term, all of these, this'one, this one, this
one,'they ' re all ordinary.They ' re all added up into your ordinary bracket.Read More
Alright, we're back with Scott Braddock from Scott Braddock financial talking about retirement planning. Let's go over what the Roth IRA does. Alright, so the Roth is unique in and of itself, so the big difference here is we're going to pay taxes on the money going into the roof, but then that roof is going to grow tax free.
You can take from it tax free and you can pass it on to your heirs tax free. And there's also no requirement of distribution at 72, so those are huge advantages. The way that I describe it to folks is you'll pay taxes on the seed as the money goes in, but you're not required to pay taxes on the harvest as that money grows and you use it in retirement. And that can kind of help you out when you're making less money because you're retired and things of that nature so you don't get hit with extra taxes. Is there a limit on how much you can put into the Roth IRA like the regular IRA? Well, there is now here. It's it depends upon your your earned income and if you're a single person and you're in more than $144,000 then then you're not allowed to contribute to the Roth and then for married couples $214,000 or more and you're not allowed to contribute to that role. But here's the tip, there is a such thing as a backdoor Roth IRA and this is where you earn too much money, so you can't contribute to the raw.
You go ahead and you contribute to an IRA and then later. You can you start to convert that IRA money over to a Roth OK, Alright, so let's talk about these questions that people are putting in. I'm turning 72 this year. Do I have to withdraw from my 401K or can I let it keep compounding? Ohh great question. So yes and no. If you're still working for your employer that offers that that exact 401K, you do not have to start taking out mandatory distributions.
However, if you have a 401K from another employer, you do have to start taking from that 401K. And of course if you're not working you do also have to start taking from that 401K at 72. OK, this next question is can he explain the different types of annuities? OK, sure, so let's just talk about the we have the traditional type of annuity, which is a straight fixed annuity very similar to a CD at the bank. It's going to guarantee you a certain interest rate and then the next one would be a variable annuity. A variable annuity is different because this one is the security product. You can invest this in what usually looks like mutual funds and then next is going to be the fixed indexed annuity. The fixed index annuity is like the fix where there's going to be guarantees.
And protection there's going to be a flooring very unlike the variable annuity. It also will offer some minimum guarantees, but it allows you to participate in the stock market up to what are known as caps. There's a limit to how much you can actually earn there, and then the last type of annuity is what we would call a single premium immediate annuity. This is where you take a chunk of money. You put it in the immediate annuity and it starts to pay you an income right away. OK, so let me ask you this.
So when you like, put into your 401K, your IRA, are you putting in and buying a new? Please. No, you're not OK now that the the over view here is that most of your money's going to be invested in stock market. If you have a 401K through your employer now, you can find annuities within those four. One case that you can contribute to as well when we're talking specifically about the 401K when it comes to eye raising rolls, those could be stocks, bonds, mutual funds. They could be fixed or variable annuities. They also could be certain types of insurance products as well, right? This person's asking what can you do if your employer does not offer 401K's and you want to lower your AGI and save for retirement. Well, absolutely here what we're going to do is look at the IRA.
That's going to be the way that you're going to be able to put some money away. Take a tax deduction, and allow that money to grow tax deferred. Now, if you're self employed, that's a little different. You can take advantage of what's known as a a set, a self-employed plan, and here you can actually put in quite a bit of money as well, just like the 401K and this next question is, at what age should you back out of the market for something more stable? Well, you know again, everybody's financial situation and their overall risk tolerance and their wishes and goals, desires and retirement are gonna be unique and different.
This is where you want to sit down with a financial professional that'll take you through a good process to figure out what's going to be right for you. It's different for everyone. However, I will say that as folks get closer to retirement, they tend to taper off the risk. They start focusing more on protection versus just growth. You know, there's two I two different phases of life, the accumulation phase, and then that distribution phase. And as you get closer to that. That's where we want to start looking at protection. Alright, we got about one minute left. This person says my company was sold. Should I move my 401K to the new company or to a Roth? Hmm, well it it really depends.
I again you wanna in this case, since we're looking at the wrath and that's gonna be a taxable event, because if your 401K is a traditional 401K in order to convert that to raise money, you gonna pay taxes. So you want to meet with the CPA on on on that one. But it depends. That's the right answer. You know really need to take a look at the options of the new employers 401K. Will they allow you to roll your old 401K into their plan? That's another good question all right now if you missed any of this or you want to get in touch with Scott.
Ask him some of these questions. You can do that by going to our website. You'll find all of this information in the two wants to know section..Read More
what income does it take to be in the top one percent of all retirees you'd think that'd be a relatively simple project to research turns out it wasn't so stick around and benefit from the work that I did to uncover these hard to find numbers let's go for a walk and talk about it and you know the first thing I want to observe is that most of us probably would not recognize could not tell by the lifestyle folks that are in the top 10 percent of all retiree income when I get to the numbers I I think you'll you'll say okay I think I would be able to recognize people that are in the top one percent I'll give you a hint it's a it's a much bigger number than than I thought it was going to be okay and and so why is that you know why wouldn't we recognize uh the folks that are in the top 10 percent and it's because like a lot of things in life you know if you look at Millionaires and millionaires lifestyle you know 70 of millionaires in America are self-made made and and most of them most of us uh got there by being you know uh careful with our money and and and being good Savers is as much as uh being fortunate and and receiving a good salary along the way okay so I'm going to start off with what these numbers look like for all Americans and this is from a large data set they say it's the largest population data set uh in the world and the organization is called ipums and this is for all Americans not just retirees so to be in the top well first let's start off with median and and this is household this is household income the median household income uh in the United States for for everybody all ages is is seventy thousand dollars to be in the top 25 you've got to make about a hundred and thirty thousand dollars to be in the top 10 you're making a little over two hundred thousand dollars that the household income a little over two hundred thousand it's two hundred and twelve thousand and to be in the top one percent you're making over five hundred thousand dollars a year now um and the number is five hundred and seventy thousand what was interesting is each of those groups from um 2021 to 2022 so this is a data set uh that they released the results of at the end of 2022.
each of those groups got a raise between 2021 and 2022. unfortunately from the median and Below on an inflation adjusted basis folks that are at the median below uh are actually making less on an inflation-adjusted basis folks that are above the median are making more in 2022 and we've heard this play out in the press okay so so those are the income levels now let's talk about savings and there's a really interesting point I wanna I wanna share with you here okay to be in the um to be in the top one percent of Savers in the United States this is the top one percent if you're between 65 and 69 75 and 79 or over 80. it's to be in the top one percent you've got to have 2.7 million dollars in what's called net worth and net worth is just take all of your assets all of your savings accounts the value if you own a house the value of your house and subtract from it the the the debt that you have on that essentially so you just take all of your assets and you subtract all your liabilities your car alone your your mortgage your credit card debt hopefully you don't have too many of the latter two uh and that's your net worth so uh if you have a net worth of 2.7 million dollars a household net worth uh in the United States you're in the top one percent what I want to point out is you know if you look at the income boy that income is really staggering right I mean the top one percent of income is 570 000 or higher and you know some people will say well you know that number seemed a little low I was expecting that top one percent income to be higher and I I agree but that's like the last person that made it into the top one percent so there's plenty of people in that category that are making a lot more money but think about this you know the the lowest income in the top one percent is almost six hundred thousand dollars right it's five hundred and seventy thousand dollars yet to be the top one percent in savings you just need two point seven million dollars or more um and what that tells me is you know as a society as a country it's no surprise we're not saving enough money and so um it's not enough to make a great salary you've got to be able to to save it but to me that was just staggering that you know essentially that top one percent you know if they were the Savers they essentially have saved um what five years worth of income uh and most of us could not retire if we had just saved five years worth of income right so that just shows just the the importance of living below your means and and saving as much as you can okay let's keep going now I'm going to break it out by decile and again this is household this is according to the Congressional research service so the the lower quintile so there's five groups the lower one-fifth the lower 20 percent of Americans are making under twenty two thousand dollars a year then the next group up from that are making you know between that twenty two thousand and forty thousand the next group up to that is is making between forty thousand and sixty five thousand um so you can see that you know eighty percent of Americans households are making less than sixty five thousand dollars a year now I haven't got to retirement that's coming up here really soon um let me get to the top quintile the top quintile households in America are a little over a hundred and ten thousand dollars let's call it a hundred and eleven thousand dollars okay so now let's get to what I finally was able to find out so I've shared a lot of info information here and I think many of you are listening to this this uh these numbers and saying you know what I'm doing okay you know it's hard to get that high high salary but if you're saving and if if you're uh spending less than you earn if you're saving that and then importantly if you're investing that remember it's not enough to just save you have to invest it you have to get compounding working for you so a lot of you I think are looking at the at least the savings number and saying yeah we're doing okay we're doing okay and I hope you are I hope you are okay so now getting on to the uh uh the the top income in retirement uh and before I get there if you're enjoying this video take a quick second and hit the like button it really does help the algorithm uh find other people that this this video uh and my videos can help okay so um I'm gonna break this out the top 10 percent the top five percent and the top one percent so people 65 to 69.
Now this is people that are working and not working top ten percent is two hundred thousand top five percent is two hundred and sixty thousand top one percent is essentially one million dollars okay so that's 65 to 69 and now for people 70 to 74 numbers come down a little bit top 10 percent is a hundred and seventy thousand dollars top five percent uh is 260. is that right yeah 265 000 and and the last number is a million dollars so retirees to be in the top one percent of all people 65 and older you need to be making a million dollars a year just to put that in perspective that rule of 25.
if that's what the uh if that's what the income is then they had they'd have to have 25 million dollars in savings by the the rule of four percent I hope you found this video helpful if you did I know you're going to like this video up here that talks about average income for retirees in America in this video down here that talks about five reasons to retire as soon as you can thanks for watching bye bye.Read More
can you have a gold individual retirement account and a roth individual retirement account the irs typically restricts you from purchasing antiques like steels in an individual retirement account however there is an exemption for certain gold assets while the irs may technically enable you to hold gold in your roth individual retirement account the custodian need to literally hold on to the gold can you hold rare-earth elements in a roth individual retirement account you can'' t hold physical precious steel in a regular private retired life account individual retirement account nonetheless there are specifically created rare-earth element individual retirement accounts that let you invest for retired life using gold palladium silver and other beneficial metals can a roth ira hold precious steels you could even consider a roth gold individual retirement account which permits you to spend your funds in rare-earth elements like gold silver platinum and palladium these investments can be smart means to secure against rising cost of living expand your retired life account and expand your total portfolio dot mar 1 2022 can i have gold in my roth ira most ira custodians won'' t permit you to have gold in their individual retirement accounts they just enable financial investments in openly traded safety and securities such as supplies bonds shared funds and perhaps choices and futures to possess gold whether in coins or bullion in an ira you need a real self-directed ira that is provided by a couple of custodians is my roth ira self-directed a self-directed individual retirement account is a sort of conventional or roth individual retirement account which indicates it allows you to save for retirement on a tax-advantaged basis and has the exact same ira payment limits the difference between self-directed and other iras is only the sorts of possessions you own in the account can you have a roth ira and a self-directed roth individual retirement account a self-directed individual retirement account styra is a pension that lets you spend in non-traditional properties such as genuine estate and rare-earth elements you can establish instira as either a traditional ira tax deductible contributions or roth individual retirement account tax-free withdrawals can you actively manage a roth individual retirement account some investors may be worried that they can'' t actively profession in a roth individual retirement account but there'' s no guideline from the irs that states you can'' t do so so you won ' t enter lawful problem if you do yet there might be some additional fees if you trade certain kinds of investments is gold a great financial investment for roth ira a gold individual retirement account frequently features greater fees than a traditional or roth ira that invests solely in stocks bonds and mutual funds a gold individual retirement account can function as a good hedge against inflation yet is likewise focused in a solitary property class for a comparison of the finest gold individual retirement account firms visit https colon reduce slash www.buldera401convesting.com goldira business slash click web link in the description belowRead More
hi there Welcome to our gold financial investment video clip series in today'' s video clip we ' ll go over a question we get from a fan can you roll a traditional individual retirement account right into a gold individual retirement account and show to you one of the most essential actions to do so appropriately a conventional IRA is a prominent tax obligation deferred pension that allows your Investments expand tax-free till you withdraw in retirement on the flip side a gold Individual retirement account is a self-directed Individual retirement account that holds rare-earth elements as Investments providing a tangible hedge throughout financial declines but can you roll over funds from a traditional individual retirement account to a gold Individual retirement account yes you can through a process recognized as a gold individual retirement account rollover to do this you first require to establish up a self-directed gold Individual retirement account with a certified custodian after that money this Ira by taking out from your conventional individual retirement account and finally choose the rare-earth elements you want to purchase but bear in mind not all rare-earth elements qualify so you require to collaborate with a dependable dealership while surrendering to a gold Individual retirement account can diversify your profile it'' s not suitable for everyone you must consider the additional expenses for storage and insurance policy the liquidity of your funds and the strict internal revenue service guidelines for the metals that can be included lastly due diligence is essential when choosing an individual retirement account custodian or valuable metal dealership changing from a typical Individual retirement account to a gold Individual retirement account can be an enticing option for those looking to safeguard or expand against economic uncertainty yet just like any investment decision it'' s vital to evaluate your own financial resources retired life objectives and run the risk of tolerance prior to making this choice take into consideration Consulting an economic advisor to guarantee this Selection lines up with your total retired life strategy thanks for seeing our video for extensive details regarding gold Investments you can check out go to raremetal blog.com or click the web link belowRead More
Transcriber: Zsófia Herczeg
Reviewer: Peter Van de Ven Everyone says you have to get ready
to retire financially. And of course you do. But what they don’t tell you
is that you also have to get ready psychologically. Who knew? But it’s important
for a couple of reasons. First, 10,000 North Americans
will retire today and every day for the next 10 to 15 years. This is a retirement tsunami. And when these folks come
crashing onto the beach, a lot of them are going to feel
like fish out of water without a clue as to what to expect. Secondly, it’s important
because there is a very good chance that you will live one third
of your life in retirement. So it’s important that you have
a heads up to the fact that there will be significant
psychological changes and challenges that come with it. I belong to a walking group
that meets early three mornings a week. Our primary goal is to put
10,000 steps on our Fitbits, and then we go for coffee
and cinnamon buns – (Laughter) more important.
(Laughter) (Applause) So as we walk, we’ve gotten into the habit
of choosing a topic for discussion. And one day, the topic was, “How do you squeeze
all that juice out of retirement?” How's that for 7:00 in the morning? So we walk and we talk, and the next day,
we go on to the next topic. But the question stayed with me because I was really having
some challenges with retirement. I was busy enough,
but I really didn’t feel that I was doing very much
that was significant or important. I was really struggling. I thought I had a pretty good idea of what success looked like
in a working career, but when it came to retirement,
it was fuzzier for me. So I decided to dig deeper. And what I discovered was
that much of the material on retirement focuses on the financial
and/or the estate side of things.
And of course, they’re both important
but just not what I was looking for. So I interviewed dozens
and dozens of retirees, and I asked them the question, “How do you squeeze
all the juice out of retirement?” What I discovered
was that there is a framework that can help make sense of it all. And that’s what I want
to share with you today. You see, there are four distinct phases that most of us move through
in retirement. And as you’ll see,
it’s not always a smooth ride. In the next few minutes, you’ll recognize
which phase you’re in if you’re retired, and if you’re not, you’ll have a better idea
of what to expect when that time comes. And best of all, you’ll know
that there is a phase four – the most gratifying,
satisfying of the four phases – and that’s where you can squeeze
all the juice out of retirement. Phase one is the vacation phase,
and that’s just what it’s like.
You wake up when you want,
you do what you want all day. And the best part
is that there is no set routine. For most people, phase one represents
their view of an ideal retirement. Relaxing, fun in the sun – freedom, baby. (Laughter) And for most folks, phase one
lasts for about a year or so, and then, strangely,
it begins to lose its luster. We begin to feel a bit bored. We actually miss our routine. Something in us seems to need one. And we ask ourselves, “Is that all there is to retirement?” Now when these thoughts and feelings
start to bubble up, you have already moved into phase two. Phase two is when we feel loss, and we feel lost. Phase two is when we lose the big five – significant losses
all associated with retirement. We lose that routine. We lose a sense of identity. We lose many of the relationships
that we had established at work. We lose a sense of purpose. And for some people,
there is a loss of power. Now, we don’t see these things coming. We didn't see these losses coming in
because they happened all at once.
It’s like, poof, gone. It’s traumatic. Phase two is also when we come
face to face with the three Ds: divorce, depression and decline – both physical and mental. The result of all of this is that we can feel
like we’ve been hit by a bus. You see, before we can
appreciate and enjoy some of the positive aspects
associated with phase three and four, you are going to, in phase two, feel fear, anxiety
and quite even depression. That’s just the way it is. So buckle up and get ready. Fortunately, at some point,
most of us say to ourselves, “Hey, I can’t go on like this.
I don’t want to spend the rest of my life, perhaps 30 years, feeling like this.” And when we do, we’ve turned the corner to phase three. Phase three is a time of trial and error. In phase three, we ask ourselves, “How can I make my life meaningful again? How can I contribute?” The answer often is to do things
that you love to do and do really well. But phase three can also deliver
some disappointment and failure. For example, I spent a couple of years
serving on a condo board until I finally got tired
of being yelled at. (Laughter) You see, one year the board decided
that we were going to plant daffodils rather than the traditional daisies. (Laughter) And we got yelled at. Go figure. I thought about law school,
thinking perhaps of becoming a paralegal.
And then I completed a program
on dispute resolution. It all went nowhere. I love to write. So I created a program
called “Getting started on your memoirs.” That program has met
with “limited success.” (Laughter) It’s been a rocky road for me too,
and I told you to buckle up. Now, I know all this can sound bad. But it’s really important to keep trying and experimenting
with different activities that’ll make you want
to get up in the morning again because if you don’t, there’s a real good chance
of slipping back into phase two, feeling like you’ve been hit by a bus.
And that is not a happy prospect. Not everyone breaks through to phase four, but those who do
are some of the happiest people I have ever met. Phase four is a time
to reinvent and rewire. But phase four involves
answering some tough questions too, like, “What’s the purpose here?
What’s my mission? How can I squeeze
all the juice out of retirement?” You see, it’s important that we find
activities that are meaningful to us and that give us a sense
of accomplishment. And my experience is that it almost always
involves service to others. Maybe it’s helping a charity
that you care about.
Maybe you’ll be like the old coots. (Laughter) (Applause) Yeah. These folks took a booth
in the local farmers market and were prepared to give their advice
based on their vast years of experience to anyone who came by. So one of their first visitors was a kid
who wanted help with his math homework (Laughter) on his tablet. (Laughter) They did the best they could. Or maybe you’ll be like my friend Bill. I met Bill a few years ago
in a 55 plus activity group. In the summer, we golf together
and walk together and bicycle together. And in the winter, we curl. But Bill had this idea that we should exercise
our brains as well. He believed that there was
a tremendous pool of expertise and experience in our group, and so he approached a number of folks and asked if they would volunteer to teach some of the things
that they love to do to others. And almost invariably, they agreed. Bill himself taught two sessions, one on iPads and one on iPhones, because we were smart enough to know
that a number of our members had been given these things
as gifts at Christmas (Laughter) by their children, and that they barely knew
how to turn them on.
The first year, we offered nine programs,
and there were 200 folks signed up. The next year, that number
expanded to 45 programs with over 700 folks participating. And the following year,
we offered over 90 programs and had 2100 registrations. Amazing. (Applause) That was Bill. Our members taught us
to play bridge and mahjong. They taught us to paint. They taught us to repair our bicycles. We tutored and mentored local school kids. We set up English-as-a-second-language
programs for newcomers. We had book clubs. We had film clubs. We even had a few golf clubs. Exhausting but exhilarating. That’s what’s possible in phase four. And do you remember the five losses
that we talked about in phase two? The loss of our routine and identity and relationships and purpose and power? In phase four, these are all recovered. It is magic to see, magic. So, I urge you to enjoy
your vacation in phase one. (Laughter) Be prepared for the losses in phase two. Experiment and try as many different
things as you can in phase three, and squeeze all the juice
out of retirement in phase four. (Applause).
if you're looking for a retirement property and finding it all a bit of a struggle we can help you we offer a personal service we're online but more importantly we're also on the end of a phone we have a free advice line and it's staffed by people who can actually help we've been on the same Journey you're on hundreds if not thousands of times with our clients so call us today on 01892 33 5330 and we'll help you get the answers you need.Read More
When someone says the word Retirement, what comes to your mind? Is it the age at which you would probably retire or is it the bank balance that you would have or the abundant time you will have to do whatever you like doing. I think it's a combination of all three. Because all these three require lots and lots of money. Yes, in today’s video we will talk about how you can retire successfully and can generate enough corpus that your lifestyle does not get affected at all. Hi, I'm Samarth, for the past 11 years, I have been working in the finance industry and I'm currently the investments lead at wint wealth. Retirement, it should essentially mean financial freedom. In today’s example we will assume that you started your job or career at 22 or 23 years of age. And as of today, your age is 30 years. For the next 20 years, we are assuming that you'll continue your active line of work, essentially meaning that you will retire by the age of 50. Wait, wait, wait! I know you might be wondering that this video was for early retirement.
See the idea is to let you know that what should be the method for retirement calculation. If you are a little aggressive on that, you might retire by 40 itself or by 45. It all depends on your consistency and your persistence. For the time being , we have calculated this on a very conservative way and hence 50 has been considered as the retirement age. So now we'll be focusing on the example and for this we will be looking at the excel sheet. By the way, this Excel sheet that you can see on the screen can be downloaded using the link in the description and also help us know in the comments if you found this Excel sheet to be useful. Infact, you can also download sheet right now and use it live while watching the video. You can change the numbers and see if it is suiting you and how it can help you to achieve your retirement.
We have assumed that your current age is 30 years. And you started your work life or your career or your job around 22 or 23 years of age. You want to retire at the age of 50 years, your life expectancy is around 80 years. Now because you have already worked for around 7-7.5 years, we are assuming that you have saved roughly two to two and a half lakh per year, so your total savings as on date would be 16 Lakh Rupees. How is this split? Majority portion of investment is done in mutual funds. I too personally, when I started my career, so majority savings (up to 80-90%) I used to do in mutual funds. And I used to split them into growth mutual funds and a small part into dividend mutual funds. After that since you are doing a job, you will contribute towards EPF. So we have assumed that this is around three lakh rupees. For emergency fund, you have kept some money into FD or bank balance, which is around two lakh rupees, and then remaining money, you have explored another debt option that is public provident fund and under this you have invested two lakh rupees.
Basis our assumption and calculation, on this entire corpus of 16 Lakh Rupees up to the age of retirement, that is for the next 20 years, you will generate 10% returns. So this 16 Lakh Rupees will get converted to 1.15 Crore Rupees. Yes, You heard it right. Believe me, if you do the savings consistently and in a discipline way, your Corpus becomes massive slowly. By the time I had completed five years in my job, I had enough money to pay for my car all in cash. But does that mean that mean, I did so? No. By the way, if you want to know if it makes sense for you to buy a car or use services like Ola and Uber, please watch this video. Now we are assuming that your monthly take home salary is one lakh rupees.
And out of this 60,000, that is 60% of your take home salary is spent by you. After that how much would be your savings? 40,000 Rupees. Now if you keep saving this monthly, consistently in a discipline way, then you can easily generate the amount of corpus such that during your retirement life, you can manage your lifestyle very easily and won’t be financially dependent on anyone. Next assumption which we have taken is that on your salary you will get an increment of around 8%. I know you might be feeling that the 8% figure is too high but you must also consider that although there might be years when you get only 5% or 7%.
I really wish you never get so low increments, but there will be years when you will switch your job or get promotion, when your increment might be 20%, 25%. During your pre retirement age, that is up to the age of 50 years we have assumed that years care, return 10% on the amount which you're investing and on the corpus, which you already have save. Then after retirement this figure drops to 7%. I know you must be thinking this is low, but considering that after retirement your priority will be to save capital and also beat inflation to maintain your lifestyle 7% is a very healthy number.
One very important assumption that we have taken is that after retirement there will be a lot of expenses that you won't be incurring. For example, your petrol and traveling expense will reduce substantially. Then it is also true that services like internet where you require a speed of 1 GB currently, will come down to 100 or 200 MBPS then. So that will reduce your expenses. And there are many other such expenses.
Okay. So we have assumed that there will be reduction of around 20% to your expenses post retirement. All these expenses have been adjusted against inflation at the rate of 6%. There are many such expenses which are incurred once or twice in our lifetime. One of them being expenses for sending your child for higher education. If on today’s date, you send your child for higher education so may be you will spend around 30-32 Lakh Rupees, to send the child at a very good institution. This we have assumed that when you will be 52 years old, this expense will occur and at that time, considering the inflation of 6%, this will be around 96 lakh rupees. Now that you have sent your child for higher education, then after he gets settled, probably he or she will get married.
Right? We have assumed that if today you got for their marriage then you will end up spending around 25 Lakh Rupees. According to your assumptions, this event will occur when you will be 60 years old. At that point of time, you will be spending around 80 Lakh Rupees. So this also has been built in, in this model. Last but not the least and definitely one of the most important is: medical expenses. As and when you age increases, simultaneously your medical needs will also probably increase. I really wish, this doesn’t happen but it is quite possible. So on a conservative basis, we have assumed that by the time you turn 65, you might end up needing a medical expense budget of around 50 lakh rupees. Right? Which up till then will be around 1.6 Crores, right. 35 years from now, it would be around 1.60 crores. So assuming all of this if you see all this calculation, then you will find that you would probably end up needing around 8.25 Crore Rupees as your Corpus so that you can retire comfortably. If you are able to generate this corpus by investing around 40% of your salary basis the following assumptions, month to month, year on year in instruments, which help you generate good returns like mutual funds and corporate bonds for the early starters, and then slowly and slowly moving towards more of conservative investments, where you can easily generate 9.5-9.7%, then you'll be able to achieve this corpus and basis this calculation, that you can see in the third sheet post retirement, you will see that even after you turn 80 years of age around around one crude Rupe, you will still be left with.
So if you save in a disciplined way, start investments, then you can easily achieve your retirement. Under this sheet, you can also put your other additional expenses basis your age. If you will see we have provided Additional 1 to Additional 8 blank spaces, as when you enter there it'll automatically get calculated and you will keep getting the results. The larger your retirement corpus, easier will be your retirement life, the more you will be able to afford to give to your family and enjoy the moments with them. This is why Savings are important. This is why retirement planning is important. And if you're worried to know how you can make your portfolio stronger and better in this video, we have discussed few revenue streams, which will help you generate passive income along with maintaining the safety of your portfolio until you meet next time. Happy Winting!
What are we doing here? What's going on?
>>What are we doing here? >>This is a super-simple game. We're fishing for advice. Give me that.
>>See, I chose the right outfit today.
Yeah. [Fishing for Advice With Financial Advisers] I know you guys are probably thinking
I'm a professional fisherman, but I'm not. I'm a financial coach. You are 50 years old and have not started
saving for retirement. What is the first thing you do? Panic! No, I'm just kidding. So, at 50 years old, that is a big
wake-up call for a lot of people, and the very first thing you do is take stock of where your money is going today, because
you are gonna need to seriously amp up your saving.
So, not everybody needs to
have some giant savings. You need to have enough to replace the amount of income
you're gonna spend in retirement. I'm gonna just cheat a little, because I'm
really embarrassed. So I would just take a minute to assess my full
financial picture and actually sit down with the numbers to take financial
inventory. So I think step 1 is just going through what are all the
accounts I have, what is everything I own, what's the value of everything I own, and
then making another list of everything that I owe. And then from there you can
be like, "OK, well, this is the money that I actually do have, and so maybe there's a
better way for me to maximize this for my retirement." I feel like 50 is the new 20 or
30, you know, still not too late.
Yeah, don't think that it's over.
Consider it like a halftime. This is where you go
into the locker room and you look at what you did in the first half and what
can be done better for the second half. You come up with a new strategy, a new game plan, and then you go out into the second half,
and you prepare to win the game. [Cheering] I have to say this is the weirdest game
I've ever played at a FinCon. You're 50 years old — I am 50 years old — and
have not started saving for retirement. What's the first thing you do? You breathe, and you don't panic, and you start now. What you should not do is
think, "Well, it's too late now, so let's just see what happens in the next 20, 30
years." Because that is going to lead to disaster.
You still have time to turn this around,
but you have to get serious about this now. So you would talk to a
financial planner, come up with a game plan of how you can reduce your spending,
how you could put extra money into savings, and how you can kind of catch up. Once you've found the money, you are gonna automate the flows into those IRAs and 401(k)s, because if you don't automate it, you're gonna force
yourself to go through this exercise again and again, but if you set it and
forget it, you will continue to make headway. All right, here we go. It’s why I got this net, man. The first thing I want you to do, I want you to take positive action.
I want you to look around this minute, right now, and make a decision on some things you're gonna change. And it might be your attitude, it might be
the way that you're spending money, it might be the way that you're even looking at money. Be positive.
You know, it's not over till it's over. You can do it, you just have to start
doing it right now. Whoops! All right, everyone, listen. Gaining
information is absolutely imperative. It keeps you aware and it keeps you motivated. So be sure to subscribe to AARP's YouTube channel. OK, come on. All right. I'm just gonna pick these
fish up. OK! [Laughter].