How much money do you need to retire

Link to join StockHub free investing discord server: –~–

How much money do you need to retire this is a question everyone faces at some point in their life because everybody wants to retire someday the question is how much do you need today i’m going to go ahead and share with you guys how much exactly you need but more like what kind of goals you should have when you’re about to retire and what type of assets you should

Have already acquired in your life i can’t wait to share this with you guys today good day subscribers thank you so much for joining me today on the financial education channel so today we’re talking about how much money do you need to retire how much money do you need to retire so today i’m going to walk through with you guys how much money you need but the exact

Plan so i’m not just going to share with you guys a finite amount of money like a lot of times on commercials and whatnot for financial programs and whatnot fidelity or whoever they’ll run these commercials to say oh you need a million dollars to retire 1.2 million dollars in 2000 or whatever i’m going to share with you guys amounts of money you want to have in

Each category of assets so it’s going to be much more into detail than just oh you need a million dollars to retire bye-bye now we’re going to go into detail today so for this video we’re going to assume you want to live a normal retirement so comfortable nice you can take trips and things like that but not like going to france every other week or monaco or you

Know beijing or you know all those crazy stuff just normal amount of trips maybe one every couple months you know three for real vacations a year you know taking little trips to see your grandkids things like that that you want to do in retirement not something crazy but also not a lifestyle that’s so plain-jane you never get to do anything so we’re going for the

Normal nice retirement plan so let me erase all this here and for the sake of the video we are going to go ahead and we’re going to assume your retirement ages age 65 so um now for my generation people in their 20s i mean 65 might be super young in the future you know 65 is a nice retirement age now but um you know for my generation if everybody’s living to be a

Hundred or 110 or whatever it might be like you probably don’t retire until you’re 80 or whatever so but for the sake of this video we’re going to go ahead and do retirement age of 65 i seriously need to get like a big gray sir because this little teeny eraser it drives me nuts on this board it drives me crazy i need to like go to staples and get a big one anyways

Sixty-five retirement age that’s the age so first things first by that age you’re going to want to own a home outright that you were probably living in while you’re raising your kids and whatnot and then you continue to live in that home when they went off to college and then maybe they move back in for a little bit amount of time until they found a job and then

They went out and about and then you still probably continued living in that home until your retirement so what you want to have is a home that’s worth at least $300,000 that’s the goal $300,000 and i’m going to do everything based off today’s numbers just to keep it simple because if i’m doing my retirement age at 65 which is like you know almost four years from

See also  5 Stocks Growing Massively!

Now who knows what the dollars have you’re worth so we’re going to keep everything in today’s terms just to keep the video simple so you need to have a house that’s worth at least $300,000 now when you’re going to go ahead and retire you’re going to go ahead and sell this house you’re going to put on the market as long as the housing markets okay at that time and

You’re going to go ahead and downsize because that four five six bedroom house or whatever you had when you had all those kids and whatnot you probably don’t need that today you need to just go ahead and downsize and that’s what you’re going to want to do because you want to keep it simple you don’t want to take care of all those extra bedrooms and all that extra

Space and dust and clean and you know the whole thing the yard work it’s insane so you’re going to want to go ahead and buy a home that’s 200,000 maybe you stay in the same state you’ve been living in maybe you go out to arizona and retire in sun city or out in nevada or florida or one of those states that’s nice to retire in maybe that’s the decision you make

But don’t matter what you’re going to want to find a house around 200,000 so basically you’re going to end up booking about 100k profit here so 100k and that is going to go straight into your savings category it’s not going to go anywhere else it’s not going to go into stocks anything like that is going to go straight into your savings so 100k boom straight there

Now there’s going to be something that i suggest you acquire as soon as your retirement um starts and this might sound a little funny because i don’t usually suggest buying a new car but at this age i suggest you buy a brand spanking new car so go out and spend 40k so you can take that out of this category if you would like so then you basically have 60k going

Into your savings so that’s going straight into your savings category now the reason i suggest buying a nice car is because one you deserve it his retirement time you deserve to have a nice car that’s brand-new and mainly because you’re 65 you don’t want to worry about it and also it’s going to be all under warranty you’re not going to have to worry about bills

Coming in or the engine going out that something’s happening with the transmission and flooding money out for some car you’ve owned for 10 last 10 15 years or whatnot you wanted to keep it simple you want to be able to take trips road trips and whatnot without having to worry about that car so that’s the plan there so this 60k is going to savings now i want you

To have in your savings and when i say savings i mean like cash savings or in a savings account type savings i want you to have a minimum of 100k already in there so if you have 100k you have another 60 k here you’re basically going to end up with 160,000 in savings my handwriting is horrible just so you guys know you probably already know that so you got 100 and

Cain 160 k in savings right now now as far as your 401k you wouldn’t want to have a minimum of $500,000 in that 401k so you worked you know your whole career and whatnot you put money away every week or every you know two weeks whenever you got your paycheck into that 401k so you want to have a minimum of five hundred thousand in 401k 401k so basically so far what

We have for assets we got a two hundred thousand dollar home we own okay that’s owned outright you don’t pay mortgage on that nothing just your homeowners insurance and that’s about it you got 500k in a 401k you had 160 thousand and basically cash savings the last piece of this that i want you to have come retirement time is a minimum of two hundred and fifty

See also  6 Awkward Money Questions With Hank Green | The Financial Diet

Thousand in stocks so and if you don’t know how to invest in stocks and you’re not comfortable with that you’re probably going to want to find somebody that knows a lot of crap about stocks that way they can tell you where to invest and whatnot but i suggest you are the one that’s actually doing the trades and whatnot and not just having someone else control it

And taking money out of the pipe so hopefully you can find a friend or something that really knows their stuff about stocks so 250k in stocks so why 250,000 in stocks and why is this amount kind of low because a lot of people say all you need a million dollars or whatnot in your 401k well i’d suggest putting a little less toward 401k your whole career and taking

That money you could have been putting in your 401k into investing in stocks doing it yourself because you don’t get any fees taken out when you do it yourself where is this way you get fees and a lot of times you can pick better stocks and what they pick for you and here here they’re just going to pick you an index she was going to automatically get whatever

The index makes that year so if the index goes up 5% you go up 5% of index goes down 10% you’re going to go down 10% that’s the way it works for 401k so now we have $250,000 in stocks you have a $200,000 home you own you have a $40,000 car but we’re not going to count x this kind of a liability we have one hundred and sixty thousand in cash savings you have five

Hundred thousand 401k so let’s just erase this number here and then let’s go ahead and erase these numbers so we can just kind of keep track of everything we got here so now at this point your bills are going to be very low you have no mortgage because your house is paid for you have no car bill because your car is paid for so your biggest bill is really going to

Be probably health insurance maybe that’s five hundred six hundred dollars a month for you and your spouse total maybe it’s seven hundred i don’t know it’s obviously depend on a lot of health factors went up but that’s your biggest bill that’s your biggest bill by far car insurance is gonna be super cheap because car insurance is super cheap for anybody that’s

Older i know my parents are in their 50s and the rates they pay or like sick low like i’m like oh my gosh i wish i could pay that kind of price so the bills are gonna be very minuscule you’ll have your electric bill water bill things like that but let’s say your bills or i would say $1,500 a month so $1,500 a month times uh so let’s say ten months that were at

Fifteen thousand you had another three thousand onto that so eighteen thousand dollars is what you have in bills per year so now you need to make eighteen thousand or take it out of somewhere every year because those eighteen thousand and bills need to be paid what the reason i have you 250 k up here in stocks is let’s say you’d get just 10% a year so between

Dividends and you know what the shares go up let’s say you just get that 10% a year that’s $25,000 per year then you pay your taxes on that that’s twenty thousand you could be making can go straight toward the bills so your bills are already covered by just what you’re making an income from stocks because you get if you get 10% a year and 250,000 its 25,000 you take

See also  Elizabeth Holmes Insanity Defense

That 25,000 out every year you get taxed on it you have 20,000 left you still got 2,000 extra at the end of the day and maybe you you know have little things here and there you buy and whatnot so that maybe it could be what the 2,000 goes toward now you still have the 500,000 your 401 k you still have your home of course and you still have 160,000 in savings so

What you can do is slowly take out of your 401 k to go do all that fun stuff so maybe you budget i’m gonna budget five to ten thousand dollars a year on vacations or whatever to go on cruises or go on trips or whatnot it can come straight out of this 401 k area so that way this 250 k can always stay here and this one is still gonna stay relatively stagnant because

You’re still going to be making money on this it’s not like that money is just five hundred thousand that’s it you’re still going to be making percentages on this money here so the little bits of money you’re taking or whatever a year it’s gonna probably come right back to you because you’re going to be making percentages on that money maybe it’s five percent maybe

It’s eight percent maybe it’s seven percent somewhere around there but on five hundred thousand that’s enough to cover so you can do ten thousand dollars worth of vacations a year you’re going to pay all your bills and whatnot and you still will always be in a revolving door of beautifulness you still going to always have this hundred and sixty thousand down here

Is five hundred k is basically never going to move your 250 k in stocks is basically never going to move in your house value hopefully that appreciates a little bit over time so you’re really protecting you’re really in a nice situation a very nice situation and then if you want to even take out a little bit more because you you know you want to take it even an

Extra trip or a more elaborate trip you can still do that because you’re not going to live forever i mean we’re all going to die someday so you know you’re just in a beautiful revolving door and that’s how it’s done making percentages on your money through stocks on your your own account and on your 401k and it just pays for everything itself so that is how it’s

Done guys that is what you basically need to retire and if we add up these amounts here 250 k + 200 k in a house that’s 450 160 so we’ll just say it’s 150 for easy today easy sake that’s 600 thousand that’s 1.1 million so it’s basically 1.1 million dollars in different kinds of assets on what you could live a very very comfortable retirement very comfortable

Retirement i mean we could all dream about that type of retirement where you can take all these trips and spend $15,000 a year on vacations are you kidding me drive a brand new car living a comfortable house and whatnot that is the life so i hope you guys enjoyed this video today on how much money you need to retire thank you so much for watching if you haven’t

Subscribed you may want to we talk so much about personal finance videos like this i talked a little bit about the stock market and a little bit about business so thanks for watching guys and have a great day

Transcribed from video
How much money do you need to retire By Financial Education

Scroll to top