Retirement Review: I’m 58 Years Old With $1.4 Million, Can I Retire?

by MOINSBD

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Troy Sharpe, CFP®, recently read an article online where a 58-year-old man with $1.4 million saved up asked if he had enough to retire. He had $700,000 in a 401(k) account and $700,000 in a non-qualified account.

In this episode, Troy looks at 1,000 different scenarios looking at the probability of successfully retiring without running out of money, given the current economic situation.

The analysis is part of what we at Oak Harvest call a Retirement 360 plan, a customized solution aimed squarely at your retirement needs.

Retirement 360 Plan

Instead of trying to fit you into a box, Oak Harvest builds the box around you. So, no two plans are exactly alike. We tailor investments, income, tax-reduction, safety, long-term care and legacy solutions around your retirement vision and goals.

It starts with a discussion about your retirement vision. A retirement vision is the most critical element of a Retirement 360 plan because it allows us to clearly identify specific goals, allowing our team to get to the root of what is important to you.

Once those goals are identified, we explore and educate you on the strategies that can make your vision your reality.

When the appropriate strategies are agreed upon, it’s time to discuss which tools are appropriate to complete the plan. Stocks, bonds, CDs, annuities and mutual funds are nothing more than financial tools that can be used inside your Oak Harvest Retirement Plan to accomplish your vision and goals.

As independent fiduciaries, we don’t care which tools are used. We care only that the best tools to accomplish the job are implemented.

When your Oak Harvest Retirement 360 Plan is complete, you have a clear financial path that can help provide peace of mind. We will build each component that you may need for your specific circumstance:
– You will have in front of you a simple, easy-to-understand retirement income plan.
– You will have an investment strategy appropriately fitting your investment objectives and risk profile.
– You will have a Social Security strategy that’s designed to maximize your life savings — not just your Social Security benefits.
– You will have a long-term care strategy that’s designed to maximize and protect your retirement against future medical costs.
– Your legacy desires will be addressed by a CERTIFIED FINANCIAL PLANNER™ professional who coordinates and works with attorneys who draft the appropriate legal tools, if needed.

Once complete, your Oak Harvest Retirement Plan flows into a monitoring process where adjustments can be made when the investment, tax or legal landscape change. It’s reviewed frequently with you by your dedicated team, which includes your advisor, the investment team, and our services team.

Should you consider building a customized Retirement 360 Plan that goes beyond allocating funds to truly fit your needs and your retirement vision? Call us at (877) 404-0177 and schedule a free consultation about you and your situation.

#buildingwealth #retirementplanning #retirementincome

48 comments

Slim Pickens July 4, 2021 - 12:54 PM

Obamacare subsidies will likely pay 100% of your health insurance premiums if your annual income is $60k. That's with a high deductible plan. Highly unlikely you're going to spend $23k/year on health related expenses. Max out of pocket on most plans is well under $10k.

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Slim Pickens July 4, 2021 - 1:09 PM

$86k annual withdraw at year 1, increase that withdraw by 2%/year (inflation rate), your withdraw at year 20 will need to be $125k. How is this guy coming up with $186k?

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Steam Engines USA July 4, 2021 - 2:34 PM

I would just invest the 1.4 million in a diversity of companies who pay at least an 8% dividend annually. So, Every 3 months I receive a dividend investment payment for $28,000. $112,000 per year or $9,333.00 monthly. Taking your 1.4 million and essentially living off of those principal funds until they run out is stupid!

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Jason Marchi July 4, 2021 - 4:51 PM

Anyone with more than $200,000 should not have annuities. The place to invest $1.4 million (for the dividends) is common and preferred stocks in well-managed companies that provide goods or services people NEED or won't give up. $1,400,000 earning an annual dividend of 5% grosses $70,000 a year. I'm getting 6% average. Taxes on dividends are much lower than taxes on earned income.

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guy capilli July 5, 2021 - 2:02 PM

Annuities have the highest cost to the client. No wonder why he is waving the flag for annuities. Just follow the money!!!

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David Smith July 6, 2021 - 2:07 AM

If you can’t you will never have enough no matter what .

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Peter Clarke July 6, 2021 - 10:34 PM

You have 1.4 million dollars and you don't know if you can retire? SMH

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Bob Bob July 7, 2021 - 11:17 AM

Ffs yes of course you can ,but if u want a yacht then no you cant

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Lance Teodecki July 8, 2021 - 8:50 PM

Nope

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Lance Teodecki July 8, 2021 - 8:51 PM

Burn the house and live in RV
Then yes

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Dave Foster July 9, 2021 - 2:55 AM

For 15 years, I worked for big tech companies as a Data Engineer. Recently I moved to public sector for better job security as I am becoming more "greyer" than typical younger engineers in tech companies. I'll stay here for about 10 years then retire, I would receive DBPP pension $1,500/ month for life. That's about $347K worth of deposit into annutiy if someone without DBPP pension like myself would seek for 1,500/ monthly annuity.

Which is the reason why I always take my DBPP pension into account when I calculate my nest egg (outside my home). My nest egg is around $1.1M at age 40s (plus my home about $400K). If $1.4M is all they got as a "couple", I'd be cautious especially if they live in expensive cities like NYC, SF or Toronto. If single, he'd be fine with $1.4M nest egg

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Mei Bing July 15, 2021 - 3:33 PM

Great analytical tools for planning!

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Kenneth Triebold July 16, 2021 - 2:24 PM

The answer to this question is quite simple. If you can continue to grow your net worth by a rate that beats inflation while retired, then, yes, you can retire.

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Vegas Noonan July 17, 2021 - 7:33 AM

No, look @ inflation thats gonna b like $100 in todays money 10 yrs f now

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MrDkgio July 18, 2021 - 4:27 PM

I lost faith when he said inflation is 2% anyone who giving financial advice cannot truly believe that, then 6-8 % increase in Medicare costs……

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jerry joe holland July 20, 2021 - 5:53 PM

Very Easy to keep a great lifestyle. Leave the USA for a better life with a fraction of the cost!

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Dreamfire52 July 20, 2021 - 6:37 PM

I'm 53 and have no desire to "retire"

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Mark Mathosian July 21, 2021 - 7:51 AM

No more 2% inflation, at least double that or even more.

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Michael de Marillac July 21, 2021 - 9:49 AM

$60,000 USD is very comfortable for Australian's who own their own home, as rent is a major expense, but medicine is heavily subsidised, just a few dollars and we get free medical/dental/hospital but same service/doctors (except you get to pick the doctor) if you go private so not worth paying for additional coverage unless you like private rooms.

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Jeffrey Higel July 21, 2021 - 8:42 PM

Why couldn't you is my question.

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Michael T July 22, 2021 - 1:04 AM

This is a great tool. What is it called, and where can i "buy" it please ?

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Delt257 July 22, 2021 - 10:06 PM

SS is my annuity….ask yourself why would an insurance company take your money and promise you X% per year…because they know they can beat it in the market. So can you.

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Topher D July 23, 2021 - 12:34 AM

Best to move to Portugal or Panama or another country with excellent affordable health care. The US system will invariably bankrupt you .

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Joe Barker July 25, 2021 - 11:45 AM

If you have a financial advisor that wants you to buy annuities- RUN don’t walk to find another advisor because the first guy is looking to line his pockets and not yours

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Sundevil July 25, 2021 - 3:22 PM

Life longevity is speculation. Occupation, genetics, nagging wife, bad habits could have this guy dead at 59….

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Bret Campos July 25, 2021 - 10:23 PM

He lost me when he pitched annuities. Term life insurance is the way to go.

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Progressive23 August 1, 2021 - 2:23 AM

If you withdraw less than 4% per year from you're retirment account the account will continue to grow. If you withdraw 4% the value of the account will remain the same if you withdraw more than 4% the value of the account will drop. 1.4 million times 4% = 56k per year. 56k + social security + medicare is a pretty good living. However at 58 you don't get social security or medicare you could probably still retire but you'd have to be alittle more frugal. You could probably live decently if you moved to a small town with a lower cost of living. Hopefully you'd get an Obamacare subsidy because the high cost of health insurance would make it alot tougher to get by. My dad had to retire at 63 his company closed and obamacare would have cost him 2k a month. Fortunately his company extended cobra coverage until he was old enough to get medicare.

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Jay Tee August 2, 2021 - 6:09 AM

So in other words, If you want to succeed in retirement, just don't retire. Or at the very least, bench your retirement based on American SS policy, which is awesome (not).

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Love Reconciled August 2, 2021 - 7:13 PM

The person is exactly where I am in age and assets. However, we can comfortably live on less than $1,800 a month. We do not have a mortgage or any debt. We have healthcare through Obamacare and our premium is zero and no co-pay for preventative care. Even living on $1,800 we can save each month, because our monthly expenses are so inexpensive. It really depends on two things: a) having zero debt, b) what lifestyle the person has created. Even in retirement still live below your means.

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Monica Mantilla August 4, 2021 - 3:57 PM

Great video and incredibly valuable information. People hear the word annuity and run away. HOWEVER, they are great vehicles for those who want the peace of mind of a guaranteed income stream NOT dependent on market conditions.

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Steven Scott August 5, 2021 - 2:56 AM

No – assuming you spend like the average American.

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Thomas Maduro August 23, 2021 - 5:32 PM

Bluffing ofcourse you can retire with a million paying yourself 3000 dollar a month

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Jose Duran August 23, 2021 - 10:03 PM

Thank you for the videos.

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Liberty Springs August 26, 2021 - 9:43 PM

I wouldn't trust this annuity plans where they may go bankrupt

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Larry Troy August 28, 2021 - 1:37 PM

That title is stupis.. 1.4 M. Yes. duuuuu..

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Peter Wakeman August 28, 2021 - 9:17 PM

Free emergency health in New Zealand and United Kingdom free doctors visit …. is the USA going to go for free health care without need for health insurance?

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Scott Solomonson August 30, 2021 - 10:01 PM

I’m in my mid-50’s and completely enjoy my physically demanding career of landscaping. I want to work as long as I can because I really really enjoy it. Currently, debt free with and business keeps growing. I’m just concerned I will be bored about 10:00 A.M. on the very first day of retirement after I read the paper, go for a walk and finish reading the newspaper, I know I will need to reinvent myself because I put my heart and soul in my career.

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mahno730 September 2, 2021 - 3:38 AM

Chances of both of them living till 90 are very slim. Also, when you don't have large income health insurance isn't expensive because of the obamacare.

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RedSox Fan September 3, 2021 - 11:18 AM

Good advice based on this use case.

Anyone can retire at anytime. Lots of variables and risks. No matter how you crunch it, there are factors that circle back to nothing more than luck. Some are forced to work well past the average age and some continue to work because they like what they do. I am aiming for the middle. I’ll keep working but only when and as I want to with no dependency on work based income.

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Chris September 3, 2021 - 7:23 PM

If you die with more saved than you started with you're doing retirement wrong. The reality is that your quality of life will dramatically diminish after 85 (likely even earlier) and as a result your expenses should also go down. Have a plan and enjoy yourself, you only live once.

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John Buck September 3, 2021 - 10:16 PM

My lordy inflation is disgusting…

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D Y September 4, 2021 - 4:10 PM

No.

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Bilbo Riches September 6, 2021 - 4:13 PM

We are puttin your retirment money into and joint investment account… And… its gone.

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Dan Salas September 7, 2021 - 5:59 PM

Delaying SS to Full Retirement Age increases the sample couple’s probably of success from 86% at 62 to 97% at FRA because it means the couple would work the additional 4.5 yrs, which means they will continue to grow their savings (assuming they stay employed) and not dip into them and increase their retirement account balance. What the model does not take into account is, the couple’s stress level from working will continue for 4.5 yrs as well as delaying their ability to get better fit (job stress, over-eating, not much exercise, etc) which may adversely contribute to a shorter lifespan, IMHO. In addition, I’m not clear if the model takes into account that as we age into our mid to late 70’s and into 80’s our level of day to day spending will decline.. go out to eat less, take less trips, stay at home more, etc. so the original $60k base year living cost can potentially decline. 🙂

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bill smith September 8, 2021 - 3:13 AM

if you have 1.4 million, and asking financial questions, you are seeking attention. Kind of sad

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Dane Moll September 11, 2021 - 4:00 AM

I’m surprised that equity in a home or property weren’t included as I believe that would help if included in assets. The other item is that as a person ages their spending would naturally taper off a bit.

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Barb T. September 12, 2021 - 5:38 PM

All you need to do is read the obituary daily.

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MrCodboss September 12, 2021 - 10:34 PM

You lost me at 2% inflation

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