I'm 60 With $1 Million Dollars Can I Retire With $100K For The First 10 Years Then $75K Thereafter
In this episode, Troy Sharpe, CFP®, walks you through the process of figuring out if Tim and Jane can retire, after saving up $1 million dollars (they have $900K in a Qualified Account, an IRA and $100K in a Non Qualified Account,) with $100K in income for the first 10 years, then $75K thereafter. This case scenario walks you through the probability of their success, making it through their retirement without running out of money.
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01:00 Tim and Janes situation - retirement planning inputs
02:38 Tim and Janes spending goals in retirement
04:50 Where do you have your retirement savings, IRA, Roth IRA, Savings, Investments
08:54 Social Security Benefits breakdown for Tim and Jane
10:54 Tim and Janes net worth breakdown
11:10 Asset Allocation of Portfolio Step 1 Retirement 360
11:51 Monte Carlo simulation results for successful retirement
13:38 Looking at one of the Monte Carlo Trial Simulations
14:51 Sequence of Returns Risk example
17:02 Risk Tolerance of Tim and Jane
17:28 Taking a look at Social Security and When to Take it
19:48 Visual display of Base Spending with Go-Go spending plan
21:38 Modifying the parameters to increase chances of retiring successfully
30:15 Closing Remarks
Working with a CFP® professional can be an important step toward reaching your financial goals. Not only do these advisors meet rigorous education and experience requirements, but they are also held to some of the highest ethical and professional standards in the industry.
CFP® professionals must master nearly 100 integrated financial planning topics, including:
- Investment planning
- Tax planning
- Retirement planning
- Estate planning
- Insurance planning
- Financial management
In addition to completing a comprehensive financial planning curriculum approved by the CFP Board, or equivalent academic coursework, CFP® professionals are required to complete continuing education coursework, including a CFP Board approved code of ethics course, to ensure their competence in financial planning.
CFP® candidates must pass a comprehensive 6-hour CFP® Certification Examination that tests their ability to apply financial planning knowledge in an integrated format. The exam is notoriously difficult and only 64% of people who took the exam in 2017 passed. Based on regular research of what planners do, the exam covers:
Establishing and defining the Client-Planner relationship
Gathering information necessary to fulfill the engagement
Analyzing and evaluating the client’s current financial status
Monitoring the recommendations
Practicing within professional and regulatory standards
CFP® professionals must have a minimum of three years experience in the personal financial planning process prior to earning the right to use the CFP® certification marks. As a result, CFP® practitioners possess financial counseling skills in addition to financial planning knowledge.
As a final step to certification, CFP® practitioners agree to abide by a strict code of professional conduct, known as CFP Board’s Code of Ethics and Professional Responsibility, that sets forth their ethical responsibilities to the public, clients and employers. CFP Board also performs a background check during this process, and each individual must disclose any investigations or legal proceedings related to their professional or business conduct.
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