How much do I need to retire with £20k/£40k/£60k per year?

A 100 year backtest using global stock market data to find out how much you ACTUALLY need to retire.

The 4% rule is used across the world as a guide to understand how much you need to retire. But it fails. A lot.

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DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (while James does run a financial planning business, he does not provide advice through this Youtube Channel, which is not affiliated with his employer).

0:00 The Problem
2:10 The 4% Rule
2:59 My Study - £20k per year
4:46 Why the 4% rules fails
7:53 How much do we actually need?
11:33 GIA VS Pension
12:04 Testing other variables

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[JamesShack]

Watch the other video's in this series:

[clarkeysam]

Nice video, and what I've taken away from it is that retirement is closer to most people than they think. A part 2 would be nice to say to reach those £20k figures, how much you'd need to add to your pension per month from say ages 20, 25, 30, 35.

[kentloar]

This is quite possibly the best analysis on "How much do I need to retire" I've ever seen. Great job!

[andrewlindsay]

We have paid our mortgage off and have no debt, we were surprised at how little we need to live on .We have decided to cut out expenses cars and holidays .We have a good lifestyle and spend less than £400 a week and we are out of the Rat Race at 55 . Our biggest regret is not finishing work earlier.Great video but sadly not many couples are both alive at 72 think it's only 1 in 3 .Get out while you can 👍 We both take £200 on a drawdown pension.

[craigmckinlay]

Great video and actually underlines that the 4% rule probably does work for my plan - 40 year retirement, 100% equities in global stocks all in pension wrapper plus a couple years in cash. State pension kicking in at 68. Only downside is that 40 years is longer than most but back up plan is equity release on main residence or downsize as mortgage is now paid off.

[Raymondjohn]

Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.

[Allsystemsaredown]

Hi James, this is fantastic. Straight to the point and it's incredibly clearly presented. I love the snappy editing too!

[phildobson]

The quality of content, delivery, and usefulness of these videos is exceptional. Thank you, James. I'm very glad I've found you 🙏

[jimcurry]

This is an excellent video. Everything is explained clearly and succinctly. Our plan is to work part time during the early “Go Go Years” to help offset the higher spending during that time.

No one in my family has lived to 95 years old, so I’m not figuring that in my modeling. Once I hit 80 I can’t see myself spending $5K per year on vacations or spending as much on things like food, liquor and clothing.

As a Plan B, if we see failure looming on the horizon we will downsize our house and get something smaller and less costly.

[addisonwillow]

My growth of 401k is 2.74% in the past year. In this environment does investing under a brokerage with a custodian outperform a 401k? should I seek a pro to grow my funds on brokerage acct or still hold? I have 5 years to retirement. Happy to discuss.

[RuchiV]

Great video and glad you mentioned the difference between the 4% rule working for the S&P but not global equities. The S&P has had a great return in recent years, but whether America will continue to be the dominant economy over the next 30+ years.. Who knows

[bumblebee]

Brilliant video! Thoroughly explained and not too long. Unfortunately people don't look at this early enough or just give up. If you have a target and stick to a plan you will make it. I consider myself very lucky but still wish we had been taught all this at school

[arunmenon]

Another great video James and broken down in simple to understand terms 🙏

[gerryking]

I’m not sure how I found you James, I think you might have been recommended by Pete Matthew’s? However it was, I’m pleased I did, this video couldn’t be more timely and appreciated by me. For such young shoulders you have a very wise head. Well done!

[glynnlebrocq]

James - good summary but would be useful to factor in property downsize and also how to establish a trust for dependants.

[metal_loz]

Great video, thanks James. Really appreciate your content!

[michaelhaardt]

You nailed it, early drawdown phases are the problem. A fixed bond ratio is not the answer, but a variable cash position of e.g. 20%, possibly as short term treasury bonds, is: Invest after a heavy dip of the market and sell it again after the market came back up. That lowers the overall gain due to mostly not being fully invested, but reduces drawdown in bad years.

[mikewy]

That is one way impressive video. Super clear, fantastically well presented. Very sensible breakdown of options / parameters.

[DerickPaulB]

Great video, but perhaps use 60 as the main example retirement age (55 is probably not the norm.) The single biggest unknown variable is (obviously) how long you will live!
We've recently had friends die quite young (late 50s/early 60s!), so it makes you think about doing it earlier and you really need the bulk of the money in the first 10 years of retirement (assuming 60), whilst you can still travel and be active in sport (although some people still keep fit and agile into their 80s).
Plus, you may not get a choice when to retire, my friend was made Redundant at 62, so he retired then!

[sulek]

These are the best explained set of video’s I have seen on this subject 👍