Mike, Pete, Damien discussed on Pete the Planner


Dame next question comes from a reader I don't know if we need a name or not make up a name or even a thought yeah let's let's can I pick so go right ahead how about the school of Mike dear Pete and Damien good day mates last genre I would like to first and foremost thank you for your podcast it's very refreshing to found a fun and interesting but it is funny and entertaining while still being informative are it's a day mom obviously the funny and entertaining and informative what are you I'm buying the one in disagreement with you I think hi and the funny and inform the flow I enjoy the dynamic that you both have with one another and can literally envisioned Damon Damien rolling his eyes multiple times throughout the show and some of your comments okay and moved on Mike keep up the great work blah blah blah I'm thirty three years old making around a hundred grid and twenty five thousand dollars in Cincinnati Ohio area can't talk sizzle make for good radio my wife is a stay at home mother and we have two children we currently have around a hundred and ten thousand dollars that's US dollars the Miller notes in a retirement accounts which is all taxes prepaid currently I'm saving around twenty five percent of my gross income maxing out my work or off for one K. as well as maxing out to Roth IRA is set up for my wife and me self the question is in regards to attempting to figure out our percentage of income needed in retirement in my mind we will enter retirement with no doubt including a mortgage which currently amounts to about fifteen percent of our gross income in addition retirement savings eats up around twenty five percent of our gross income currently I will need to pay much in the way of income taxes and retirement because we're besting try tax prepaid in Rafah vehicles so in my mind that would be in our family assuming the same standard of living could a live on fifty percent of our income or last says this is what we're living on now is fifty percent an acceptable number for Kathleen in our retirement savings needs or my missing something next advance for answer my question and I look forward to hearing your answer Mike Jamie wow all this guy I like Mike I wanna be like Mike okay so on the surface a lot of times in retirement planning they throw just all sorts of numbers when it comes to how much of your income what you need in retirement based on what your you know your career in for me and the number that I always remember hearing was eighty percent to that the number that you always worked with yeah I think that was a standard for a long time for a for most people just to have something to shoot at eighty percent so roughly what most people live on now after their their income taxes are taken out so eighty percent of what your salary is is roughly what you live on and I always had a problem with that with the more I got into financial planning and I really felt if you do it right if you attack the problem from both sides both the supply in the mud of money and the demand for money you could really get down to around sixty percent pretty easily by eliminating your mortgage what our man Mike here takes you to a completely different level by focusing on Ralph vehicles because he just gets tax completely out of the way which means he's not going to have to pay tax at retirement yeah it's an interesting little twist by making sure that very able is taken out of the equation in the future and taking care of it now so if you don't have to think about that take that consideration and then thank goodness you you might be on to something here Mike so we always talk about in our world how much from asat standpoint you know how old your assets and then what's the distribution rate off of this but on some level day missing are clear last week about maybe there's some idea about how much of your current income you're actively saving in thus eliminating that a money from your expenses now in how that might be a better measure all together of someone's financial fitness which is why I like our term power percentage for regular listeners they know the power percentages how we display the of fission sea of our income no matter what our income is dean could we actually be right here for a moment really I had to read the article twice and I sent you because it seems like we were right on top of something end end ahead of somebody else as well let's make sure we point that out is in addition so I think there's something to this we we focus on something a little bit more in control in the now the necessarily something that we aren't sure we're gonna have a an idea of the future I see the phrase a lot in the cute little turn of phrase that follows it but I believe people who retire successfully will be able to do so because they don't need a lot of money as opposed to people who think they're gonna be able to retire because they have a lot of money and I think with what we're talking about your game we're talking about in the moment this guy's thirty three years old he's decided he wants to create a scenario in which his glide path of career income is smooth then there's no increase of income need heading toward retirement hit retirement and then dive off the cliff because you consume so much money me a lifestyle yeah I mean if you really think about it there is one variable that we can all control for the most part when we get to retirement okay let me guess that's okay hold on sit again sounds like a rental are we doing riddles possibly okay yes I want to be I want to win alright ladies and gentleman there is one very that we can control as we enter into retirement for the win what is it our demand for income you know how much money do we need to deliver one inside of retirement there's lots of stuff that we aren't going to have control over that's inflation and rates of return and audit all that other stuff of with the money that we've accumulated however we can control the demand for money how much money do we need to live on for the month of month week to week year to year basis and that can have a huge determining factor well not only on our sanity but to our success in retirement it's interesting to think that we spend decades trying to cumulate money and we don't have much of an operative strategy built around our demand for money it is interesting oftentimes we focus on more income more income more income with a little bit of savings on the side but maybe what we should be doing is focusing more on the the spending side of the ledger and saving side of the ledger then the just the accumulation as well I like the idea of though sometimes we look at how people strategies for retirement they say well it's really about what investments I happen truly about the fees I pay and it's really about so all these things that you kinda can't control well that you can choose obviously what adviser you want in the fees you pay that person but damn it it's is you know successes in a person's personal reach it's not all these factors that they can't control they can control their demand for many sure can I let you in on a little secret please do if you're a well allocated portfolio the actual investments that you choose assuming they fit the each of the the the types of investments you're trying to account for the actual investments themselves don't count on that don't matter all that much so you don't need to spend a whole lot of time trying to find the absolute perfect investment for that that specific area in your portfolio find one that works make sure it's still maintaining itself for a year after year but don't don't stress yourself out over making sure you've got the absolute best investment are you suggesting people eat sensibly and work on a regular basis yes yeah I is a ground breaking I will know I just did it always comes back to that doesn't it like we'd like to woods this apple help you choose for everyone relax they give you got to focus on the standard behaviors and I don't know I wish you were more complicated than that but what's so complicated but it's difficult to execute a simple plan sometimes and I hate it because it has to their behavior in human nature but it's a reality game coming up after the break talk about job losses the holiday season between people lose their jobs sorry bro I don't come up with these things that's just the way it's come to be in the last two decades so job loss around the holidays what to do how to pick up the pieces what's next on the path when a show on the planner I wasn't prepared to be a care giver to mom well over a year ago we realized she couldn't take care of herself without our help well be there for her no idea how hard it would be and just what I would need to know things I never thought of like how to improve her mood and even for me ways to stay positive luckily I found the caregiving resource center from a a RP had articles about the basics that got.

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