Overcome the RETIREMENT Income DEATH SPIRAL

Are you worried about outliving your retirement savings? In this video, we dive deep into the concept of the Retirement Income Death Spiral and what it means for your financial future. Learn about the common mistakes to avoid and strategies to ensure that your retirement funds last throughout your golden years.

Why Watch This Video?

-Discover Critical Pitfalls: We explore the biggest risks that can deplete your retirement income faster than expected.

-Learn Effective Strategies: Get actionable advice on how to manage your retirement funds wisely to avoid falling into the income death spiral.

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*ABOUT ME*

I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission — pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money — so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!

📅 *THE BASICS OF RETIREMENT PLANNING*

Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.

Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.

Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.

Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund — especially if you have an employer retirement plan that matches any portion of your contributions.

Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.

Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.

❣ *SPONSORED* No, this video was not sponsored.

⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome

[foundryfinancial]

I misspoke around 7:30. The math is right but I said negative 8 for year five. It’s positive. My editor just copied me and didn’t catch it.

- Year 1: +5%
- Year 2: -3%
- Year 3: +10%
- Year 4: -7%
- Year 5: +8%

The sum of positive changes = 5% + 10% + 8% = 23%
The sum of negative changes = 3% + 7% = 10%

So, MoRo = 10% / 23% ≈ 0.435 or 43.5%

[chrisforker]

There’s also a lot of data that shows that spending decreases over time. Most people spend less as they get older. Less travel, less buying new things etc.

Yes, there’s inflation, but the lack of spending more than offsets.

[Data_on_trail]

It works very much like compounding interest / gains ... only in reverse. Anyone wo has built their own portfolio from scratch should recognize this process. Thanks for this version of an explanation. The Chaos Theory bit is not as well grounded, imo. It's really just arithmetic, Jr HS stuff really, but over a very long period of time. Very small adjustments, early on, solve to problem completely.

[billradich]

The MoRo mitigation concept seems to be sort of a 'guardrails with market memory' approach. I always appreciate seeing a formal method like this tested across different time periods. Thanks!

[robskully]

I solved this problem by not taking my SS until I turned 70 plus since I love my job I have no plans on retiring anytime soon :-)

[callmeishmaelk]

Live small, even before retirement, pay off your mortgage any any other debts, and then when you do retire only spend the interest or the inflation adjusted gains on the principal, don't spend the principal. Use it as the basis of a perpetual money machine.

[tomj]

My plan is the ability to pull back spending to below social security along with a bucket strategy. Besides, our wonderfully frugal lifestyle doesn't cost much anyway and I'm not concerned about maximizing our spending.

[Sylvan_dB]

With 5% withdrawal and 1.5% fees, the model portfolios in the paper are effectively taking out 6.5%. That's a lot.

[cpa]

Thanks for explaining it so clearly. Math is not my forte but I get the concept.

[PorscheSpeedster-kznc]

Thank you for this video. Rob Berger just covered it also. People must be concerned for a significant depression/recession.

[joking]

Ramsey is not doing people any favors by recommending that they pull 8% a year from their retirement funds. He may be rich enough to do it himself but most are not in his position. Be careful folks and don't heed his advice.

[johnnyretires]

The best withdrawal rate is the “I live in the real world withdrawal rate”

[stephenlandrum]

If you ran the same set up but used the guardrails strategy would it have worked out the same?

[Sylvan_dB]

“How did you go bankrupt?” Bill asked.
“Two ways, ” Mike said. “Gradually and then suddenly.”

(Hemingway novel)

[KevinInPhoenix]

Retiring with $1 million in 1957 is the same as retiring with $11.16 million today. Not attainable for most people. Pulling $50 thousand a year in 1957 is $557, 914 today. Who needs that much income? Adding 3% a year to your withdrawal rate is clearly insane. If inflation is high then just go without an increase in the withdrawal rate for a few years. A bit of "belt tightening" in retirement will not kill you. The real "death spiral" is the constant increase in the withdrawal rate.

[davidgreen]

Adding a portion of your assets in a FIA to increase your guaranteed income is insurance for this.

[matjul]

How is this different from sequence of return risk ? Ty

[rolandconnor]

Didn't even watch video, but have the answer. Do what I am doing, work into your late 70s.

[FirefightersFinancialToolbox]

If you do your homework, and know these numbers, and watch the market you can draw 4-4.5 % without a problem if you stay vigiliant. Yes the early 70's were THE WORST possible time to retire (beacuse of losses and the inflation being wosre than any other time in US history.) Cherry picking will always cause the worst You are making this too hard for most people to understand. sorry

[williamwatson]

Wait til everyone watches Greg Foss talk about the "debt spiral" #Bitcoin