◆ Gems
Ep 36How to Retire at 65 with $4.3 MILLION
1:10

Retirement & taxes · 1:10

You made 100%, then lost 50%. Your 'average' return is 25%, and you have exactly what you started with.

It only takes two or three negative years out of 15 years to blow up your whole plan.

Isaac Goldsmith

Ep 36Oct 24, 2022

How to Retire at 65 with $4.3 MILLION

with Isaac Goldsmith

There will be people who can will help you out to make a wedding. There aren't going to be people to help you out to make retirement.

Isaac Goldsmith

More moments · 5

1:31
The market averaged 14% for 30 years, and you still would have run out of money in 15
0:41
Why every $1 million you save only buys you $30,000 a year in retirement
0:52
People will help you make a wedding. Nobody will help you make retirement.
0:41
$1,000 a month starting at 35 turns into over $2 million
1:28
There are no tricks. Take 5% as play money and get it out of your system.

Try this · top 3

Quotes

“For every million dollars only brings in $30,000 of income.”

Isaac Goldsmith (under the safe 3% withdrawal rule)

“It only takes two or three negative years out of 15 years to blow up your whole plan.”

Isaac Goldsmith

“You only have one shot at retirement.”

Isaac Goldsmith

“Never let the tax decide the investment decision.”

Isaac Goldsmith

“Everyone's a fighter until they get hit in the face.”

Isaac Goldsmith (quoting Mike Tyson on risk tolerance)

Takeaways

  1. 1 $1,000 a month from age 25 to 65 at a 9% return grows to about $4.3 million. From age 35 for 30 years at 10%, it's a little over $2 million.
  2. 2 Retirements now last about 30 years, not 20. The shift from pensions to 401(k)s moved the risk onto workers.
  3. 3 His ABCs of wealth: Asset protection (insurance, wills, emergency fund), Building wealth, then Creating income.
  4. 4 Sequence of returns matters. Retiring in 1970 and withdrawing 10% a year would have run out of money in 15 years, even though the market averaged about 14%.
  5. 5 Historical simulations show that withdrawing no more than about 3% a year almost never runs out of money. That means about $30,000 a year per million saved.
  6. 6 Being paid off the books or through parsonage lowers Social Security later. Waiting until 70 raises the benefit.
  7. 7 Pre-tax accounts defer tax rather than eliminate it. Withdrawals and required distributions are taxed as income, so they help only if your retirement tax bracket is lower.
  8. 8 Marrying off a child costs about $50,000 or more even at a basic level. Families earning $150,000-200,000 struggle to save for both weddings and retirement.
  9. 9 Annuities pay guaranteed lifetime income but keep the principal. Paired with permanent life insurance, they can raise retirement income while protecting a spouse. He says never put all your money in one.
  10. 10 About 85% of professional managers fail to beat index funds over 15 years. Individual investors often underperform by panic-selling in crashes.
  11. 11 When interest rates rise, existing bonds lose value. I-bonds are a good fit for money needed in two to three years.

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