I'm 68 with $1.5 Million: Is it Enough to Spend $10,000/Month in Retirement?

Casey Weade: You have $1.5 million saved for retirement and you want to spend $10,000 a month. Can you make it happen? Well, today we're going to do just that. Hey, this is Casey Weade, CEO and founder here at Howard Bailey Financial, also a certified financial planner/practitioner. Today, we are here to answer the question, can you retire on $1.5 million, spend $10,000 a month? We're going to be doing financial planning with you live right now.

We're going to go through several different steps. I'm going to share with you the current situation. Then we're going to take a look at the goals that this couple came to us with. We're going to take a dive into their portfolio. We're going to take a look at where they're at today, how they're invested. We're going to run some stress tests. What happens in a worst-case scenario? What happens if we get another rate hike? What happens if we have a financial crisis, et cetera? We want to stress test that portfolio and then we're going to take it a step further.

We're going to go from there to taking a look at their current scenario, maximizing their Social Security benefits. I think what you're going to find very interesting is the software is going to show us that we should be delaying those benefits. We're going to show you why you should probably be taking your Social Security early and we're going to prove that out as well before we jump into some tax planning.

We're going to show you how we saved this couple well into the seven figures in taxes over their lifetime. We'll wrap it up with a little income planning to provide them a little bit more confidence in spending in retirement as we implement some risk reduction strategies. Let's get into the case.

Today, we are working with Bob and Diane [unintelligible 00:01:38]. They are 68 and 64 years old. They have assets currently of $1.5 million. Now, they came to us with a little bit more than $1.5 million. It was here as we labeled it qualified, that Q stands for qualified. That is about $1.5 million total, but it's 99.9% in their 401(k), in tax-deferred portion of their 401(k). This was a couple had a pretty good joint income for most of their lives.

However, Diane wasn't working, Bob was working, which is like many of the families we worked with. We have one of the spouses either made substantially more than the other or brought in all the income for family. That's going to create some unique planning opportunities when it comes to Social Security. Then we also are going to have to consider the taxes, because they have had such a high income that they've been deferring everything into the tax-deferred portion of that 401(k), creating some pretty serious tax issues for them that we're going to be addressing.

They also have pretty good Social Security though. Because they were creating so much income, or Bob had such a good income, their Social Security benefits are pretty good. We're going to see them hovering around $6,000 a month between the two of them. Even though Diane wasn't working, she gets to file on Bob's earnings record as we've talked about before on the channel. If you've watched some of our Social Security videos, kind of understand how that works. We'll take a deeper dive into it in a moment.

Overall, they want to spend about $9,500 a month which doesn't seem like much, but that is after tax. They want to spend $9,500 a month after tax and we have to concern ourselves with Social Security taxes. Keep in mind, the $1.5 million, I'm going to say it again, it's all tax-deferred. All those distributions are going to be taxed, so if they take out $4,000 they're not going to be netting $4,000 without some really good tax planning, which we're going to show you.

Now, what were their goals? Now, they wanted to retire in about six months. This is one thing I would say is always get ahead of the planning. Luckily, the market's been treating them pretty good, so they're in a good position to still retire in six months but you want to get ahead of this. One of the biggest planning opportunities they've missed out on is some tax planning opportunities that they had over the last several years, and that's largely due to the Trump tax cuts.

We have the TCJA which has put us in one of the lowest tax rate environments in history. They haven't been taking advantage of it, because again, been stuffing all that money into the tax-deferred portion of their 401(k). They want security and spending. They want to spend $9,500 a month plus inflation. We have not only taxes to consider ourselves with to get that $9,500 a month after tax, but we also have inflation.

They want that income to increase year after year. Some of the families we worked with, they want to front-load that income. They want to have income in the first 10 or 15 years of retirement to be higher then lower later. We have different spending patterns that people will want to follow. In general, most retirees aren't going to experience much of an impact of inflation simply because their expenses will decrease over time as their lifestyle changes.

However, not everybody wants to plan that way. That's why we call it personal financial planning because it's personal. It has to be unique to you. We have to have really good conversations and I have all of the information in order to make the right decision for yourself. Now, Bob here was really set on accumulating $2 million in assets. He always had it in his head he'd have $2 million when he stepped into retirement. This was just a scorecard number for him.

I have to get to that $2 million number. Many retirees have a number like this. You might have a number of $500,000, $5 million, $20 million. Whatever that number is, is that a number that you arrived at mathematically, with astute planning or was it a number that just felt good, or a number that you saw on TV, or a number you saw when you logged into your 401(k) retirement planning calculator? I would strongly urge you to let go of that number if it wasn't mathematically sound.

We're going to show you why here in just a minute because Bob and Diane they don't need $2 million. We're going to get them retired on $1.5 million roughly. They were also pretty concerned about taxes. They knew what they had done most of their life, taking those tax deductions and putting the money in the 401(k). They knew they had some potential issues as they were going to be stepping into retirement. They wanted to mitigate some of that risk throughout their working lives.

They were also very concerned about taxes. You can see that because they were putting money in a 401(k). They were getting their taxes done every single year, and in order to keep their tax bill down that's why they were making that move. Now, we need to do some work. They also were a little concerned about market risk and they've been investing for a long time.

They're 65, 68 years old and that means they've been investing for the last 30, 40 years. They've seen some bad stuff happen. Now, it's been really positive for the last several years. They've enjoyed seeing that 401(k) really explode in value, turning them into millionaires. They also know how quickly it can go south. They experienced the financial crisis. They experienced the tech bubble bursting.

They know that they are going to have to make some changes when they step into retirement, if not before that, to mitigate any risk over the next six months. That's what we're going to do for them. Let's go ahead and take a look at their existing portfolio.

The first thing we're going to look at here is a Morningstar snapshot. Our partnership with Morningstar allows us to break these portfolios open, and look at all of your individual holdings. As we're going through this, if you see anything that raises a question you want to know more about, just drop a question right there in the comment section and I'll be sure to answer each and every question that you drop in there. Let's take a look at this portfolio. We have $1.5 million in here. We're looking at a portfolio that's almost exclusively stock. We're looking at a portfolio that's about 95% equity or 95% stocks.

There's a couple of things I want to point out. First, I want to go over here to this performance. I think what should stand out to you is just how similar this red line tracks against the blue line. That blue line is the S&P 500, the red line is Bob and Diane's portfolio here. We can see, hey, the last 10 years they're averaging about 9.98%. They are underperforming the S&P 500 ever so slightly. That's going to be due to cost, that's going to be due to how they're diversified as well. They have some international equities in there.

That's not so important. What I really want to point out is just how closely it is tracking the index from a risk standpoint. We measure risk, financially speaking, in terms of standard deviation. Their 10-year standard deviation is about 15%. The S&P 500 is about a 15%. They're taking on the same level of risk as the S&P 500. The returns are really pretty much tracking whatever the S&P 500 is doing. It's just trailing a little bit.

We're going to see how that's actually even closer to what the S&P 500 is doing in just a moment. Another thing I want to point out on this page before we move on is this stock sector analysis that's over here. The reason I want to point this out is because we're seeing more and more individuals that are allocating their 401(k)s and other investments over to the S&P 500, buying S&P 500 index funds.

In doing so, they're becoming ever more concentrated in a handful of equities, or at least a handful of sectors. That is largely due to what's been known as the Magnificent Seven, the explosion of value we've seen in tech over the last couple of years. We can see here, that if we look at all these sectors, they're about 25% allocated to technology. Now, that's helped them out quite a bit. That's helped them keep track with the S&P 500 over the last couple of years.

I do want to emphasize, there's some additional risks that's being taken. Anytime we're less diversified, that means we're taking on more risk. This is a concentration that you might liken to what was seen during the '90s as those equities that were allocated to tech or tech companies that were in different ETFs and mutual funds. They grew so rapidly in value that many investors were under-diversified. They were over-allocated to those tech sectors.

That's something we want to emphasize for them as we start doing some of their actual investment implementation. We want to emphasize risk reduction and one of those areas of risk reduction, is going to be creating greater diversification across the portfolio. I also want to take a look at something known as their standard deviation curve here. This curve that we're looking at, shows us what their average return should be. We see the same standard deviation, we saw a moment ago with risk level of about 15%, and we're seeing 10-year-average returns about 9.9%.

Same thing, we're really seeing in that Morningstar snapshot, average rates return in line with what we would expect from the S&P 500. Now, I want to take a look at another piece of software that shows us a different, and really I think a more palatable way to understand risk in this portfolio. Now we are inside of one of our tools that we will use when you visit with us. We're analyzing their portfolio from a risk perspective, different angle.

Here, as I mentioned, one of the things that I think is unique about this tool is, it's going to assign us a risk number between 1 and 99, 99 being as risky as we could possibly be, 1 being principal protected. We can see that their portfolio is coming in at a risk number of 77. As we walk them through a questionnaire, a risk questionnaire, they assign themselves a number of a 55. They currently are taking on a little bit more risk than what they're comfortable with.

Then we want to start stress testing that portfolio. We can see that their average rate of return, right in line with what we've seen, about 9% annual dividends of 1.5%. Now, we really need to start stress-testing this portfolio against what we've seen in the past. I think it really brings to light just how aligned they are with the S&P 500, even though they own 30 different mutual funds. With those 30 different mutual funds that they have, their risk level is actually a little bit higher than the S&P 500 SPDR ETF.

If we went through a 2013 bull market, the SPDR ETF would be about 32% up. They'd have $500,000 gain that year. In their portfolio, they'd be up about 31.7%, even taking on a little bit more risk than the S&P 500. Now, if we continue on down, what if we had the 2008 bear market during that period of time, January 1st, 2008 through December 31st of 2008, the stock market was down 36.8%. They would've been down $572,000 roughly, and their portfolio would be down $595,000, a little bit more than the S&P 500. The full financial crisis would take them down around $852,000 from their current $1.5 million.

I think the first question we have to ask ourselves, because we see this all the time, what kind of value are we getting with our investment managers? I think what we can see here is, we have someone that's invested in their 401(k), they're allocating across different funds, and they're hoping that they're creating some type of value. They're not. They're really over-diversified and they're not creating that value. They're over-diversified. They're owning everything. Then they're also highly concentrated in the S&P 500. I know that that sounds a little funny to say, they're over-diversified and under-diversified, but the thing is, they own 30 different mutual funds.

If we went back to that Morningstar snapshot, we would see that's about 15,000 different stocks. They have a lot of different stuff. We don't need all of that stuff in order to be truly diversified. Owning all of that stuff is not benefiting them. Now, they're also under-diversified because there's a lot of portfolio overlap. A lot of those mutual funds that they think they're gaining diversification and they own the same stocks. That's why there's so many holdings. That's why there's 15,000 stocks in the portfolio because there is so much portfolio overlap, and they end up owning a lot of the same stuff.

As we see, being over-concentrated in S&P 500, over-concentrated in tech sectors and they have nothing that is really creating less risk, there's nothing that they're doing today that's going to drive that number down from the 77 they currently have, down to the 55 that they want to have. Now, we're going to take a look at their current scenario. We're going to use some of our financial planning software that we leverage here in-house to take a look at some projections, and where they're going to be over time. We're going to uncover some challenges as well as we start talking about Social Security and taxes here.

We have Bob, who is currently 68 and eight months. He wants to retire at 69 and six months, January of 2025. He's currently planning on taking those Social Security benefits as soon as he steps into retirement. That is 69 and six months and 65 for Diane. Diane is going to be filing for spousal benefits. You cannot file for those spousal benefits until your earner, or the worker's record you're filing against actually files. Once Bob files, then Diane can file, that's their strategy. We want to run a Social Security analysis and see, is that the best strategy for them? We'll come right back to that after we walk through a couple more tabs here.

I want to highlight some of the dollars. These are the different accounts they have. Of course, we said they have about $8,600 in a Roth IRA. They have a couple of brokerage accounts totaling about $200,000 and most of their life savings is in that 401(k) of a little over $1.3 million. Now, I have to plug a rate of return in here, and I want to use a rate of return that's fairly similar and very fair to what they've been achieving.

We're using rate of return of 9.9%. That is the historical return of the S&P 500, and we can see that their returns very closely mirror that. That might actually be a little high, it might be a little low depending on what timeframe that you're looking at. If you want to know where we got that 9.9%, you can check out a link in the show notes to an article that'll walk you through that historical return of the S&P 500, and why we're actually using that number here.

Then their expenses. They want to spend $9,500 a month after taxes, and we're using an average inflation rate of 3%. How did we arrive at that number? Well, the current 10-year average of inflation's 2.825%, the 110-year average is 3.27%. That means when they step into retirement, they'll need about $9,700 a month. That's going to continue to increase. For them, they said, "We don't really plan on selling things downsizing. We're going to continue to maintain the lifestyle and if we don't maintain that lifestyle, we're going to start giving more money away." That's their plan.

Again, you have to make that unique to yourself. Let's take a look at where they're going to be in retirement given all of those factors. Once they're in retirement, they're going to have about $6,500 a month in Social Security income, and they're going to have expenses of about $10,000 a month. They have net monthly cash flow that's negative. They need to start pulling some income from that portfolio, which is now $1.8 million. Guess what? Bob hits his $2 million pretty quickly. He gets to that $2 million number, and it continues to rise. He's going to continue to see his portfolio grow throughout retirement.

Why are we waiting until we get $2 million when we already have enough? A question that really challenged Bob and put Diane in a position where she said, "Yep, I would love to see us go ahead and de-risk step into retirement. Why do we have to hit this $2 million?" She doesn't have that affinity for that number nearly as much as Bob does, but we can't stop there. We need to stress test this portfolio and look at the worst-case scenario.

In looking at that worst-case scenario, we are assuming, "Hey, what if they step into retirement and in that first-year retirement, we have a bad year, second year, we have a bad year, third year, we have a bad year?" We're using historical returns of the S&P 500 from 2000 through 2009. A 10-year period here, where the market went through two major stock market downturns lost about 40% of its value, during the tech bubble bursting 40% of its value in 2008. If that were to happen in 10 years, instead of having $3.4 million, they'd have about $850,000. They would be down $2.5 million, or over where they would be if they average 9.9% a year.

That's a mistake that's often made, is you'll probably use a retirement calculator online or someone projects a rate of return that they've had historically, and we forget that the reality is that the stock market doesn't grow in a linear fashion. It's not going to credit you 9.9% every single year. It's a volatile instrument. It's going to be up, it's going to be down. Even though we went through a period of time like this historically from 2000 to 2010, where we went through the lost decade as it was known, the long-term stock market average even including that period of time, still 9.9%, but as we step into retirement, we get in trouble.

While you're working, it's perfectly fine because during that period of time, Bob and Diane, they were putting money in that 401(k). When the market was down they were essentially timing the market because they bought more of the market because it was depressed in value and they put the same dollar amount in. When the market was expensive, they essentially bought less of the market, and that's called dollar cost averaging. Now they step into retirement and they start taking those dollars out. They're violating the number one rule of investments. We're supposed to buy low and sell high when the market's down. They're selling low because they're drawing that income out.

Now, would this actually happen? Would they continue drawing if we had a down market? Well, they might have to make some lifestyle adjustments. You have to ask yourself if you're going to continue to take that level of risk, are you willing to make some pretty dramatic lifestyle adjustments in a down year in the market? I know Bob and Diane here, they'd rather not do that. Bob doesn't want to go to work. Once he's quit he'd like to keep it that way.

Even if we return to that long-term average after that first 10 years, now Bob and Diane, they're running the risk of running out of money in retirement. At Diane's age, 88, they're out of money. They're essentially out of money before that because they're getting down to the last couple hundred thousand dollars instead of having $8 million. Now we can see why we need to do some planning.

Before we start doing some risk management planning to guard against this, what we want to do next is we want to go back and take a look at that Social Security analysis. We're going to take a look at Social Security, then we're going to take a look at taxes, then we're going to do risk mitigation.

We're going to take a look at Social Security by using our Social Security planning software, which will show them when the best time is to file for their Social Security benefits based on their unique situation.

What we can see here, they were planning on filing, this blue line being their filing goals, planning on filing at age 69, at age 65. The green line is what the system is recommending based on how long they told us they were going to live. They wanted to plan on an age 85 for Bob, age 90 for Diane.

Now that doesn't mean though, that that carries over to how long they want their money to last. That's another thing that I want you to keep in mind. A lot of financial planning software will give you an odds of success based on some Monte Carlo simulations or multiple thousands of different simulations of stock market historical returns but you have to plug in the input being, "How long am I going to live?" If you say, I'm only going to live to age 85 and age 90 and we plug it into that software, you might be 100% chance that you're going to be okay or 98% chance that you're never going to run out of money.

You have to ask yourself, "Well what if I live one year longer? What if I live two years longer?" When we're doing our planning, we're showing people that worst-case scenario or best-case scenario, depending on how you look at it, we're looking at Bob and Diane and going, well, what if you lived age 100? What if you live to age 100 let's go ahead and build a plan that's going to be there no matter how long you live. What if you're wrong? We want to plan against those potential eventualities of you being wrong.

The Social Security analysis, though, they want to look at from an age 85 and 90 perspective, and it's common to have those two things be different because maybe you want to play the odds when it comes to Social Security. Maybe on the other hand, you don't want to play the odds when it comes to your overall financial plan. When we look at the Social Security software, it's going to show us a strategy that's built on delaying those benefits. It's almost always going to do that. 9 times out of 10, it's going to say delay those benefits as long as possible.

Even in this scenario, it's not telling us that we should delay Diane's benefits as long as possible. It's telling us that Diane should be filing at age 67 while Bob should delay his till age 70. Why delay Bob's till age 70? Well, the software says that because Bob's planning on dying at age 85. If Bob passes away at age 85, then Diane is going to pick up the larger of those two benefits. She's going to end up picking up his benefit and losing hers. Overall we want to know what that break point is. That break point for them is going to land somewhere around 74, age 75 for Diane.

Over the long term, they're jointly going to accumulate over $100,000 in additional benefits by going ahead and not taking those benefits when they step in retirement, but delaying those benefits ever so slightly. Now, when we run our retirement scenarios with these numbers, we're assuming that they're still both alive at age 85 even all the way out to age 90. I really want to focus in on some of these early years all the way out to Bob's age 85 and run our scenarios side by side, filing early and filing late, not just looking at Social Security in a vacuum because that's a common mistake. Because it's all about how much you actually net at the end of the day when it comes to your asset level.

It's not all about the amount of income that you're going to get from just Social Security, but from all sources and the legacy that you're going to leave behind or the assets that you're going to be accumulating over time.

Let's take a look at what their scenario shows us once we maximize that Social Security. We maximize their Social Security and their 10-year balance is $3.3 million. If we go back over to our current scenario, they file early, their 10-year balance is $3.3 million. $3.374 million versus $3.303 million. They actually have a little bit more in assets in 10 years in this current scenario in filing early versus delaying those benefits for a couple of years.

Now, if we go out a little bit further, let's take a look at age 85 when Bob said he was going to pass away. At age 85, there's $4.97 million, and that's a Social Security max scenario. $4.97 million at age 85. If we go over to the other scenario, we have $5 million in change. We continue to be in a better position all the way out here. Let's go to age 90. At age 90 for Bob, assuming he lives that long, they have $6.846 million in their current scenario versus they have $6.813 million in the Social Security max scenario.

Now this is where you just have a decision for yourself to make because when it comes to Social Security, you're really just planning the odds of how long you're going to live. A lot of financial planning is built on how long you're going to live. In this scenario, we're looking at a situation where it's six and one and half a dozen the other, which one should they choose? Well, they chose to file early. They said, "We'd rather spend the government's money that's in that trust fund that we paid into for our whole lives rather than taking a risk and delaying those benefits." They're concerned Social Security might change. That's something we hear a lot from retirees today.

I think when the numbers are this close, it's completely fair for you to go ahead and file early. In some scenarios, it may not make sense but in your scenario, maybe it does. This is why we have to run these numbers. In their scenario, they're going to go ahead, they're going to take Social Security early. If they take those Social Security benefits early, now we're going to move on to our tax planning.

Moving on to our tax planning, we're going to take a look at their taxes over their lifetime. We use our software to project what their lifetime taxes are going to be. We're also going to be taking a look at this software to project what kind of tax strategy we should put in place. Now, we ran these numbers over several different periods of time, doing Roth conversions over a couple of years, doing Roth conversions over several years. We landed on a five-year number.

To get back to basics here, a Roth conversion is this. First to understand a Roth IRA, when we put the money into a Roth, we pay the taxes today, it grows tax-free and we don't have any required minimum distributions from those Roth accounts. Versus a traditional IRA, we are putting those dollars in taking a tax deduction upfront. They're growing tax-free, the tax is deferred because at some point we have to take those dollars out whether we want to or not, and that is called a required minimum distribution.

Those required minimum distributions for Bob and Diane get extraordinarily large over their lifetime, far exceeding the amount of income they actually need from those accounts. That actually happens relatively quickly. Over the long term, we're going to see their required minimum distributions. We're looking all the way out to age 100 here, accumulate to $12.6 million, $12.7 million. Their maximum RMD, their high point RMD is almost $700,000. I think what most people find so astounding is that their projected lifetime taxes are $8.5 million. They could be paying $8.5 million in taxes. They only have $1.5 million today.

Now, that taxation is coming in different forms, taxes on the RMDs, then taxes on the reinvested RMDs, along with Social Security taxes along the way. We're not even discussing yet what this is going to do to their Medicare premiums in retirement, which is potentially putting a lot of people in a position where they are paying twice the amount of Medicare premium as their neighbor. That's because in many cases, these required minimum distributions.

Their projected legacy still well over the $2 million, they wanted $13.1 million. If we do Roth conversions over 5 years, $250,000 a year for 5 years, we're going to end up with everything at the end of life in Roth IRA funds, $22 million versus $13 million, some of which is still going to be tax deferred IRA dollars for the heirs.

We've reduced that required minimum distribution to just $22,000. They have the majority of their dollars over to Roth by the time they hit that RMD age. Their projected lifetime taxes go from $8.5 million to $650,000. They almost double the legacy that they were planning on leaving behind.

We have a no-brainer here. We want to go ahead and implement this tax strategy. Once we implement this tax strategy, we want to do that same stress test again. What happens in a worst-case scenario?

Where we were running out of money in the current scenario, filing for Social Security early, not doing any Roth conversions, we were running out of money in Diane's late '80s, really arguably before that, because we're getting down to our last $200,000 pretty quickly. Now, we've pushed that red line all the way out to age 103 and 98. Now we're talking. Now we're getting someplace that's really comfortable for Bob and Diane, but what they would love to see is us completely eliminate this red line.

In order to do that, we have to start mitigating that risk of reverse dollar cost averaging in those first 10 years of retirement. Let's take a look at a potential solution. We're going to keep things really simple in this potential solution. We're going to say, let's go ahead and take some of these off the table and protect those first several years of retirement against market risk by taking about $500,000 in this scenario, setting it aside.

We arrived at this number by one, they wanted to reduce their risk score to 55. This takes their risk score to a 55. That's one of the things that was really important to them. Not only is this going to take their risk score to a 55, but we've put them in a position whereby allocating $500,000 to a principal-protected account, we pushed that red line out and eliminated it from the long-term projections.

Now, what did we use for this $500,000? In this scenario, we used Fidelity's money market fund. Would we do that if you were working with our team? No, we probably wouldn't do that if you were working with our team. We'd evaluate all the potential solutions to create some principal protection or some guarantees for some of these dollars, and then we would the one that would provide you the best security and give you the most confidence, but because we don't know you and we're here on YouTube, we have to be very general with how we talk about these numbers and returns.

In using Fidelity's money market, that's FDRXX, we're using their 10-year average return of 4.37%, bringing the overall portfolio return down to 8.12% instead of 9.9%. We knocked the return down quite a bit. Overall, the impact of that, as I stated, is going to be the elimination of that red line. Now, I want to take us back. We walked through a lot of things. We walked through the case, we walked through Social Security, we walked through tax planning, and then we talked a little bit about risk mitigation.

Let's summarize all of this up. Step one, Social Security max. What did we find? They were planning on filing at age 69 and 65. The software said, "File at age 70 and 67." The break-even point was Diane's age 75 to 76, somewhere in that range. Their cumulative benefits they would have received are increased by about $100,000, $2.446 million to $2.549 million. Is there an asset break even? Like we said, should they just look at Social Security in a vacuum? Absolutely not. When we look at their assets, they never reach a break even. What's the solution? We're going to go ahead and file for those benefits early.

Number two, tax optimization. Their high required minimum distribution went from about $700,000 to about $20,000. Their legacy dollars almost doubled. Their projected top tax bracket was 36.8%. We brought that down significantly. Their lifetime taxes, $8.5 million, went down to $650,000. What's the solution? We're doing a $250,000 annual Roth conversion for five years.

Step three, risk reduction. We were looking at the worst-case scenario and that current scenario being running out of money at age 88. Then we looked at doing Roth conversion, pushed that out to 98. Then we looked at doing some risk reduction, we pushed that out to 100 plus.

I think the asset accumulation is one of the coolest things, and I know that's not a very sophisticated word to use, but darn, it's cool. It's cool because we took them from a position of high risk. We lowered that risk and took the best-case scenario from $13.1 million at age 100 to $21.3 million, and we eliminated that red line.

What did we decide to do? We decided to principle to protect $500,000 because we did such a good job doing our tax planning and reviewing our Social Security strategy, we found that they didn't need to take on as much risk in order to hit the goals that they wanted to hit. Now, over the years, they're going to have some decisions to make. Do we get a bad year in the first year of retirement?

We don't know. Maybe we go through the first two, three, four, five years of retirement and the market performs really well. If so, we have to continue to decide where we're going to draw that income from, and maybe they want to make some adjustments. Maybe they want to increase their income a little bit over time and maybe their lifestyle changes and they want to make some other adjustments this is the importance of creating a flexible strategy so you can continue to adapt to the unknown if you'd like to go through this process get an analysis of your current Investment Portfolio take an analysis of your current Social Security strategy look at your tax strategy and income strategy visit virtually with one of our financial planners here on the Howard Bailey team just simply by giving us a call on the number on your screen for a personal financial review or check out a link in the description.