3 Simple Steps to Ensure Your Portfolio Can Support Your Retirement

Video Description

John and Jane have saved diligently and planned meticulously, but uncertainty looms. Can they retire? Can they maintain their desired lifestyle without the fear of financial ruin? These questions drive the discussion as we stress-test their retirement plan. Step 1: We start with the "rough draft" of their financial plan, which outlines their goals, assets, and income sources. It's a snapshot of their current financial landscape, a starting point from which we can chart their retirement journey. Next, we discuss their retirement lifestyle, monthly expenses, and aspirations for travel and leisure, which helps us understand what retirement means to them and guides our planning process. Step 2: With their goals and financial details, we move on to the next step: cash flow analysis. This is where we see how their income stacks up against their expenses throughout retirement. As we crunch the numbers, patterns begin to emerge, driven by milestones like paying off their mortgage and the start of their Social Security benefits. But perhaps most importantly, we confront the reality of their withdrawal rate. At first glance, withdrawing nearly 9% of their portfolio in the first year of retirement seems unsustainable. But as we delve deeper into the projections, we see how expenses decrease, income sources kick in, and the trajectory of their portfolio begins to stabilize. Yet, uncertainty still lingers. What if the market takes a nosedive? What about inflation? What if healthcare costs skyrocket? Step 3: That's where the Monte Carlo analysis comes in. By running thousands of simulations, we gain insight into the probability of success and the severity of failure. We explore the impact of potential risks, from Social Security cuts to higher taxes to unexpected healthcare expenses. And we consider the flip side, the potential windfalls that could bolster their financial security. Retirement planning isn't just about numbers. It's about peace of mind, the confidence to embrace the next chapter of life without fear or regret. And as we wrap up our discussions with John and Jane, we’re reminded of the power of preparation, the freedom that comes from knowing that no matter what the future holds, they're ready to face it head-on. ======================= Learn the tips & strategies to get the most out of life with your money. Get started today → https://www.rootfinancialpartners.com/ Get access to the retirement software I use in this video and more → https://retirement-planning-academy.mykajabi.com/rpa 🔔 Make sure to subscribe here to be notified for future videos! https://www.youtube.com/channel/UCBNdQfS-fzODmYb8Hkr4egA?sub_confirmation=1 _ _ 👥 Make sure to connect with us on all socials below → https://beacons.ai/rootfinancialpartners ⏱Timestamps:⏱ 0:00 - Step 1: Rough draft financial plan 4:27 - Step 2: Assessing cash flow 8:37 - Graphing the cash flow 9:53 - Step 3: Stress testing 12:22 - Straight line projection 14:51 - Probability of success 19:24 - Other potential stressors Other videos we think you'll like: About Root: https://www.youtube.com/watch?v=ZPy7Qlmemy8&t=1s Worried about retirement? Start here: https://www.youtube.com/watch?v=c1dCo73XTw4&t=1s -- Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation. The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal. Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements. Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.