The Most Important 5 Years of Your Retirement (82%+ Get this WRONG)

0:00 5 Reasons Your First 5 Years are Most Important
0:10 #1 - The Best Time to Spend
2:22 #2 - Biggest Opportunity for Tax Savings
4:33 #3 - Build Momentum Outside of Money
7:12 #4 - The Most Important Investment Years
10:13 #5 - Your Most Influential Decisions

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Always remember, "You Don't Need More Money; You Need a Better Plan"

[captsorghum]

Yeah I'm spending the most in the first 5 years-- on Roth conversion taxes! 😂

[sirreptitious]

After 1.5 years of retirement I’ve realized it’s hard to get past the mindset that you don’t touch retirement money unless you absolutely have to. Thanks for the reminder that the reason I saved all those years is so I could use it in retirement.

[CalmerThanYouAre]

Don’t sacrifice your 50s and 60s for what “may” be higher income when you’re 87.

[bernie]

I retired 7 years ago at age 62, My wife followed 5 years ago, also at age 62. So far we have not used any of our retirement savings. The key for us was being debt free by the time we walked away from our jobs. With everything paid for, we are having no issues living on just our Social Security. It's not magic, it's just math and it's not complicated math. It's the kind of math you learned in grade school. Debt is great while you are working. It allows you to get things you want sooner. Debt in retirement will just drag you down. Work hard, pay off your debt and retire early. It's a solid plan.

[Paul-GrnHil]

This is great info. Having retired in Q1 2022 I experienced rather large paper losses on my retirement portfolio the 3 months before and following my retirement date. I did not stress out about this due to asset allocation that included 4 years of living expenses in cash. If you use the 4% rule of thumb for retirement assets, you should have 25 years of living expenses in retirement assets. If 4 of the 25 are in cash, that equates to 16% cash which is a reasonable allocation for most portfolios. For the balance, I am all in on large cap equity mutual funds. My portfolio has recovered significantly since retiring and my wife and I are enjoying our daily walks, grandkids and our upcoming cruise.

[joekuhnlovesretirement]

Best retirement show on YouTube. Practical, actionable, and 3:52 optimistic. Love the graphics. And I’m in same space.

[meredithalbion]

Thank you so much for this. "Delayed gratification" can become "never gratification" unless we are more conscious and confident in our plan.

[jpturner]

Wow.. our budgeted spending is very close to this!

Same reason you were saying !

We learned this from my mom and dad who had a great retirement, and traveled like crazy for the first six years .

[karenthompson]

Thanks for talking about the fact that you should spend the most when you are a "younger" retiree. My husband and I travel quite a bit and hope to continue as much as we can. Unfortunately our "first five year" were affected by Covid and we missed out on some of that time for traveling and are trying to make it up now.

[FirefightersFinancialToolbox]

I am headed into retirement 1 DEC. Now thankfully I will have a pension, and we have saved very aggressively our whole lives. I have very minimal fears to spend in the first 5-10 years of retirement because as a FF, we tend to die young, and I intend to enjoy those years!!!

I really enjoy your videos

[wolfy]

Great presentation! Like that you also address non-financial topics.

[pensacola]

Another terrific episode, Dave. And I would stress that it takes some time to get those " retirement sealegs". It is not intuitive for most of us.

[kristentheologus-KTechnogal]

Biggest mistake was selling a rental property AFTER going on Medicare and incurring large capital gains that skewed our income for that year resulting in more than tripling next year’s Medicare Plan B and D premiums! A nice “problem” some would say, but better planning could've avoided this! 😢

[johnw]

Thanks Eric ! Excellent video as usual. I'm almost 65 y/o and semi retired; I can relate to all this information. Actually eye opening really. Very useful / helpful, as are the comments from your subscribers here. Great channel. Makes me optimistic.. Thanks again.

[paulsackles]

Great one Eric ! Now let's see your approach to the 3 yrs Prior to retirement.

[Flyswamper]

Thanks for another great video. ;) I'm definitely in the camp that has some of the psychological tendencies being discussed, and it helps tremendously to have a solid plan that I understand!

[larryjones]

9:30: '80%+ loss in the stock market' is deceptive.

By my calculations, the top to bottom loss during the Great Depression was 67%. The top to bottom months was 34 months, with full recovery in 1936. The top to bottom capital loss was 86%, but dividends of 19% were paid out, for a Total (negative) return of 67%.

Dividends used to be much higher, than they are today.

I have a retiree friend who has a portfolio of 100% fixed income. His father lived through the Great Depression and he's terrified of owning stocks during retirement. And, he didn't understand that the press doesn't include dividends when they report how much the stock market is up or down. It's a very common mistake to not include dividends when calculating Total returns. Capital gain/loss plus dividends = Total return.

The Great Depression was bad, but the numbers thrown around (80%+ loss) are deceptive. The BIGGEST 'pain' from the Great Depression was for those who lost their jobs. As retirees, we are shielded from that pain, as we are already unemployed. We can't lose something (a job), that we don't have.

For reference, the Housing Bubble of 2007 to 2009, top to bottom loss was 57% capital loss + 5% dividends = 52% Total (negative) return.

The chance of full recovery from any stock market crash is always 100%.

[EatLeadPal]

I've been frugal my whole life. Why should I change when I retire? I'm very happy with little.

[ianollmann]

Would like to see a video about how to decide how much to scale income up and down vs. market performance.

[shea]

My interpretation is a touch different - could it be people spend less as they have less to spend? Sure, I agree with the sentiment, but it's hard to take aggregate data and attribute it to one phenomenon, when there are probably several. That said, it seems to me: Oops, we need to trim a bit to make this work.