How to Accomplish Your Retirement Goals - Even Without a Fat Wallet - 546

Summary

Your Money, Your Wealth – Episode 546

“How to Accomplish Your Retirement Goals – Even Without a Fat Wallet”

Date: September 9, 2025
Hosts: Joe Anderson, CFP® & Alan Clopine, CPA (“Big Al”)
Theme: Realistic, actionable retirement strategies for “not-so-fat wallets” – listener spitballs and candid advice, with a dose of fun

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Episode Overview

This episode is for anyone worried they’re not “wealthy enough” to retire comfortably. Joe and Big Al review real listener scenarios from those with less than (or around) a million in savings—single and married, from their 30s to early 60s—and discuss whether and how retirement dreams can become reality. The hosts break down numbers, correct common misconceptions, and inject humor and practical optimism into the often stressful topic of retirement planning.

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Key Discussion Points & Insights

1. Joe and Masako in Washington: Near Retirement on Modest Savings

[00:36–08:17]

• Profile: Joe (59, electrician, $125-130k/year), Masako (65, retired); $333k in 401(k) ($60k Roth); $509k rollover IRA; $53k Roth IRA; wife’s $26k IRA; $50k bank savings; paid-off home/land ($850k); no current debt.
• Income Streams: Multiple pensions and Social Security totaling ~$96k/year projected at retirement, starting at age 62–63.
• Spending: $4,500–5,000/month ($60k/year) now; want to increase to $7–8k/month ($100k/year) in retirement for travel (especially to Okinawa) and grandkids.

Joe’s and Big Al’s Take:

• These folks exemplify doing “enough” even without a super-sized wallet. Their fixed income could cover their projected spending, even with some splurging.
  • Quote [05:27], Joe: “Yeah, I think Joe’s in a really good spot.”
  • Quote [05:48], Big Al: “Anyone that has $900,000 plus is doing fantastic. Most have far less.”
• With the mortgage paid off and conservative spending, they have both security and flexibility.
• Even if they overspend and dig into savings, their robust base income offers a strong safety net.
  • Quote [07:01], Joe: “They could probably spend $150–160k the first years, have fun, and then just dial back if needed.”

Actionable Advice:

• Start Roth conversions in retirement if lower-income years allow, but watch tax implications.

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2. Reid in Indiana: Can Younger Savers Hit Big Retirement Goals?

[09:20–15:55]

• Profile: Reid, early 30s; $100k in Roths, $100k in 401(k)/403(b); $100k mortgage balance, $200k expected savings this year; annual household income $100k. Want to spend $150k/year (in today’s dollars) in retirement at 65. Unsure about Social Security amounts.

Discussion & Calculation:

• Joe and Big Al stress the daunting effect of inflation over 32 years:
  • Today’s $150k/year = ~$386k/year in future dollars (assuming 3% inflation).
  • Need $6.5M in assets to safely withdraw such an amount, even factoring in projected Social Security.
  • Quote [11:16], Joe: “That’s a giant number… The real impact of inflation is crazy!”
• At a $21k annual savings rate and 7% return, they project ~$4.1M by 65, which (at a 4% withdrawal) = $165k/year (future dollars), or ~$64k in today’s dollars. With Social Security, this is about two-thirds of the target spend.
  • Quote [14:24], Big Al: “If you save 20% of your income, you’ll probably live on at least what you spend now—in the future.”

Actionable Advice:

• Regularly update retirement projections—so much changes over decades.
• Keep up the strong savings rate; diversify investments over time.
• Maintain high equity allocation in youth, reduce risk as wealth grows.

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3. Mr. & Mrs. Buckeye in Ohio: Early Retirement Feasibility Check

[16:32–27:38]

• Profile: Married, early 40s; combined income ~$165k; frugal lifestyle, consistent savers. Savings: him ($200k 401k, $220k Roth), her ($110k 401k, $160k Roth), HSA ($18k), brokerage ($40k), 529 plans, $52k cash. $82k mortgage left (4%, to be paid in 10 years). Expect to inherit ~$15k/year and eventual lump sum.
• Savings Rate: 35–40% of income, including match.
• Annual spending: $85k now (~$60k projected for retirement).

Analysis:

• With current $800k+ in retirement assets and robust ongoing savings, at 7% return, they could have $3.1M at 55.
• “Bridge years” to Social Security are the sticking point—will need to draw ~$1M down before SS kicks in if retiring at 55.
  • Quote [22:57], Joe: “It gets scary with that long of a bridge… pulling out a third of that portfolio before Social Security.”
• Conservative Plan: Work part-time or “semi-retire” to lower withdrawal rate/risk during the bridge years.
  • Quote [24:41], Big Al: “It’s a little more tight than I would like at 55. I’d probably have a part-time job to cover some potential gap.”
• 90/10 equity/bond mix is fine now, but should shift gradually as retirement edges closer.

Actionable Advice:

• Don’t commit to Social Security ages/plans until closer to decision time: market conditions matter.
• Adjust asset allocation to lower risk tolerance as withdrawal phase begins.

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4. Old MacDonald in Maine: Minimalist Spending, Big Savings, and Overseas Dreams

[29:25–37:32]

• Profile: 43, delivery driver; saving 63%(!) of income, maxing 401(k) & Roth IRA; $50k rollover IRA, house paid off ($400k, now rental). Spends just $20–24k/year; wants out soon—maybe to Thailand with girlfriend after being worn down by the "grind."
• Future plans: possibly sell everything and move abroad for a low-cost retirement.

Hosts’ Analysis:

• Saving ~63% of income is powerful—on path to $1.3M in 10 years (with sale of home and compounding).
• Conservative withdrawal rate (3%) yields $39k/year—more than enough to sustain a $24k/year lifestyle, especially in Thailand (cost: $700–2,000/month for a single person).
  • Quote [34:10], Andi Last (re: Thailand): “A single person can expect to spend between $700 and $2,000 per month. $2,000 a month, Old MacDonald, here you go!”
• Hosts encourage considering a career pivot for fulfillment, not just financial escape.
  • Quote [35:21], Big Al: “Sometimes a little pivot on a career gives you all kinds of new energy. That may be the best thing I can tell you.”

Actionable Advice:

• Before drastic moves, try a new career or part-time transition—diversify what makes life meaningful, not just what you earn or spend.

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5. Kurt “Kanchi” in Pennsylvania: High Earner, Ambitious Saver, Aggressive Roth Plans

[37:41–49:02]

• Profile: 35, single; 100% commission sales ($400–500k/year); $960k brokerage, $350k 401(k), $90k Roth; $700k home equity, $22k HSA, child’s 529 plan; contributes ~$175k/year to retirement; wants to retire at 45 and live on $75k/year.

Special Q: Should he Roth convert his entire $350k 401(k) now using brokerage cash—despite a ~35% tax hit up front—since in 30+ years it could be worth $3.5M, making today’s tax a "bargain"?

Big Al & Joe’s Caution:

• No—don’t pay 35% federal tax on the whole lump sum now, especially while earning top-tier income; this rarely makes sense.
  • Quote [44:16], Joe: “I would not convert 100% of your retirement account and pay 35% tax.”
  • Quote [44:34], Big Al: “You’re mixing apples and oranges with present-value tax and future-value growth.”
• Saving rate and early asset accumulation are phenomenal—but present spending may be much higher than projected $75k/yr in retirement (current income vs. planned outflows don’t add up).
  • Quote [46:41], Joe: “If you’re making $500,000…and saving 200, where’s the rest going? Are you really ready to drop to $75,000 a year?”
  • Quote [47:06], Big Al: “He could probably spend $100,000 in today’s dollars, but that’s half of maybe what he’s currently spending.”
• Recalculate your real spending before assuming an ultra-early retirement on a vastly reduced budget.

Actionable Advice:

• Don’t rush Roth conversions in high-tax years. Be patient; examine tax brackets, future plans.
• Model true future annual expenses—test comfort with downsizing spending.
• Consider part-time or less stressful roles, not just full FIRE.

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Notable Quotes & Moments

• [07:51], Big Al (on retirement readiness): “The only caveat is the relationship between what you’ve saved and your fixed income to what you spend. It’s the same mathematics.”
• [15:08], Joe (on planning): “Financial planning isn’t a one-and-done process… things pivot all the time.”
• [24:57], Joe (on risk and early retirement): “I try to think worst-case scenario. If I had to pull a third of my money out before Social Security, I’d be nervous.”
• [34:10], Andi (on Thailand): “A single person can expect to spend between $700 and $2,000 per month.”
• [35:21], Big Al (on midlife burnout): “Sometimes a little pivot on a career gives you all kinds of new energy again.”
• [44:16], Joe (on Roth moves): “I would not convert 100% and pay 35% tax.”

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Timestamps for Important Segments

• 00:36: Joe and Masako, Washington State – Savers with strong pensions; can they retire and travel?
• 09:20: Reid, Indiana – Aggressive young saver, inflation, and realistic goals
• 16:32: Mr. Buckeye, Ohio – Early retirement, high savings, bridge withdrawals
• 29:25: Old MacDonald, Maine – Frugal, minimalist, considering expat life, career burnout
• 37:41: Kurt/Kanchi, Pennsylvania – Super high earner, Roth conversion debate, analysis of true retirement readiness

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Episode Tone & Takeaways

• The hosts’ banter keeps things light, relatable, and approachable—even as they lay out detailed math and sometimes hard truths.
• Big Picture Lesson: It’s not all about “a fat wallet”—flexible plans, strong savings habits, and realistic spending are the heart of a satisfying retirement.
• Practical Optimism: Most callers are doing better than they think; success depends less on net worth than on the mindful balance between income, savings, and actual needs.
• Hosts’ Style: “Spitball” analysis—candid, numbers-focused, with a sense of humor about life and personal finance.

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For more detailed spitballs, calculators, and tools, visit YourMoneyYourWealth.com and check the episode description. Special resources this week for solo/single retirement planning are also available.

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Transcript

[Andi Last]

We heard your feedback. And today on youn Money, you, Wealth Podcast, 546, Joe and Big Al are spitballing retirement for the not so fat wallets. Joe and Masako in Washington State and Reid in Indiana have less than a million saved. Can they still accomplish their retirement goals in their 60s? Mr. Buckeye in Ohio and Old MacDonald in Maine have less than a million saved. And Curt in Pennsylvania has less than 1.5 million saved. Can they retire early in their 40s and 50s? I'm executive producer Andi Last, and here are the hosts of youf Money, you, Joe Welf, Joe Anderson, cfp, and Big Al Clopine, cpa.

[Joe Anderson]

Okay, we got Joe from Washington State. He goes. Hello, Andy. Joe now. Hope all's well. Been watching all your videos, podcasts, and downloading white papers for the past few months. Totally addicted to learning from you guys. Super great job. Sepai. So he must be a Marine. So I occasionally have a Coors Light, but mostly Asian teaspoon. All right, that's Big Al. You like Asian teas?

[Big Al Clopine]

No.

[Joe Anderson]

Oh, you like teas, though?

[Big Al Clopine]

Not really.

[Joe Anderson]

You don't like tea?

[Big Al Clopine]

No, no.

[Joe Anderson]

What are you drinking right now? Isn't that tea or is that coffee? What is that, water?

[Big Al Clopine]

Oh, okay. I mean, I will drink tea, but I. I'm a little bit like Ted Lasso. It's like. I don't really like it. Do you like it? You like tea?

[Joe Anderson]

Tea?

[Big Al Clopine]

Yeah. You like iced tea?

[Joe Anderson]

Yeah, I like iced tea.

[Big Al Clopine]

Yeah, I love chai tea.

[Andi Last]

That's my drink of choice.

[Big Al Clopine]

Okay.

[Joe Anderson]

John Daly.

[Big Al Clopine]

Got it. Not John Daly. Okay, got it.

[Joe Anderson]

No, I do like an Arnold Palmer.

[Big Al Clopine]

But do you ever drink a Lipton?

[Joe Anderson]

No.

[Big Al Clopine]

No.

[Joe Anderson]

Like a green tea or.

[Big Al Clopine]

Yeah, that's when. When you say tea, that's what I'm thinking of.

[Joe Anderson]

Okay. So I occasionally drink a Coors Light, mostly Asian teas as I'm a diabetic now and my wife has her daily. One beer.

[Big Al Clopine]

Tim.

[Joe Anderson]

We are not your typical wealthy customer. That's normal on your show, but have done okay and need your opinion. It sounds like we're on the right track. Okay. I'm almost 59. She is 65 and retired. I currently make 125,000 to $130,000 a year as an electrician. I have a work 401, currently at $333,000 with 60,000 of that in a Roth, Ira or Roth. And I max my contributions of $31,000 a year, plus the employer contributes one dollar for one up to 8%. Wow. One to one up to eight. That's a good match.

[Big Al Clopine]

That's a great match.

[Joe Anderson]

I also have a previous work 401, that I moved into, an IRA, which is currently $509,000, and a separate Roth IRA, currently 53, that I now max at $8,000 a year. Wife has a small IRA of 26,000. Okay, wow. Very good.

[Big Al Clopine]

There's plenty here.

[Joe Anderson]

Plenty here. Planning on retiring at 62. 63, max. I have a pension at 63 of $3,500 a month and another $475 a month. Social Security for wife will be $830 a month. Starting this year, my Social Security will be $2,700 a month. At age 63, another small pension for me. No. Survivorship starts at 65 at $500 a month.

[Big Al Clopine]

So just to add that up, that's about 96,000 a year.

[Joe Anderson]

Yeah. And I bet he doesn't spend anywhere near them.

[Big Al Clopine]

We'll find out.

[Joe Anderson]

Okay. Our land and home is paid out. You know, I never heard someone say that.

[Big Al Clopine]

Our land and home.

[Joe Anderson]

My land and my home.

[Big Al Clopine]

I got the land paid out, but the home.

[Joe Anderson]

Don't forget about it. Fully leveraged to the hilt. Unless he's got some land next to him. But it's paid off. It's worth $850,000. No current debt. He said that twice. He's.

[Big Al Clopine]

He is. Yeah. He's serious. Yeah.

[Joe Anderson]

He is stoked.

[Big Al Clopine]

Yep. Yep.

[Joe Anderson]

We spent about 4,500 to $5,000 a month. So you spend $60,000 a year, and you make $96,000 of fixed income.

[Big Al Clopine]

Yeah. So far. So this is looking all right.

[Joe Anderson]

It looks real good. Depending on if we travel to Okanawa.

[Big Al Clopine]

Yep.

[Joe Anderson]

Oh, my God. I. That was a total guess.

[Big Al Clopine]

Yeah. You got it.

[Joe Anderson]

I know.

[Big Al Clopine]

You killed it.

[Joe Anderson]

I was like, oh, I'm nervous.

[Big Al Clopine]

Isn't that where Mikey Martin went?

[Joe Anderson]

I just.

[Big Al Clopine]

Okanawa.

[Joe Anderson]

Yeah.

[Big Al Clopine]

That's. What. That's why you know it. You've heard it before?

[Joe Anderson]

Well, I. I just. I guess, like.

[Big Al Clopine]

Or you're an expert at Japanese pronunciation.

[Joe Anderson]

Just wait.

[Big Al Clopine]

Yeah, More.

[Joe Anderson]

More to come.

[Big Al Clopine]

Okay.

[Joe Anderson]

Okay. He's going to travel to Okinawa that year. We have about $50,000 also in the bank. In retirement, we would like to maybe spend seven to $8,000 a month enjoying our time with our granddaughters and visiting Okinawa one to two times a year to see the family there. Okay, question.

[Big Al Clopine]

Yeah. So now, by the way, now we're wanting to spend 84 to 96,000.

[Joe Anderson]

Okay. Call it 100 grand.

[Big Al Clopine]

Yeah, call it 100.

[Joe Anderson]

All right. Question, in your opinion, does it look like we can accomplish this? I want to start Roth conversions when. Conversions when in retirement, if it makes sense. Love you guys. Thanks for all you do. To us little people, never little people. No. P.S. hope all the advisors at Pure are as knowledgeable as you two, as we are planning to hire. Oh, interesting.

[Big Al Clopine]

Very good.

[Joe Anderson]

I didn't mean to read that little commercial there.

[Big Al Clopine]

Yeah.

[Joe Anderson]

But. Well, very good. So, yeah, I think Joe's in a really good spot.

[Big Al Clopine]

Yeah. When your fixed income is, call it $100,000 and your spending is 80,000 to $100,000 and you got, call it $900,000 and you're going to be adding to it for a few more years. Yeah. You're in a great spot. Nothing really to worry about.

[Joe Anderson]

Yeah. He's got $1 million close to it.

[Big Al Clopine]

Yeah. I mean, it's maybe $100,000 in Roth, maybe $800,000 tax deferred and, you know, 50,000 plus in savings.

[Joe Anderson]

Yeah, Yeah. I think they're in great shape. Even if they burned through a lot of the retirement accounts, let's say over the next 10 to 15 years.

[Big Al Clopine]

Have fun.

[Joe Anderson]

Right? Just go. They go to Okinawa several times.

[Big Al Clopine]

Yeah. Maybe. Maybe three or four times.

[Joe Anderson]

Maybe four or five. And. Yeah. I'm going to Korea.

[Big Al Clopine]

No way.

[Joe Anderson]

I think so. They're gonna have to drug me. I guess that's the plan.

[Big Al Clopine]

Did you handle one of those flight?

[Joe Anderson]

I don't think so, no.

[Big Al Clopine]

Yeah, yeah.

[Joe Anderson]

No, I can barely fly to Minnesota.

[Big Al Clopine]

I know.

[Joe Anderson]

So, yeah, that would.

[Big Al Clopine]

Okay.

[Joe Anderson]

But what I was saying is that let's say if Joe kind of. They spend a little bit too much money, it's all right. They got $96,000 of fixed income.

[Big Al Clopine]

Yeah. No matter what happens.

[Joe Anderson]

Yeah, I think.

[Big Al Clopine]

And if you're spending 100 or 120 and you need to tone it down to 90, you got 96,000. Oh, that works.

[Joe Anderson]

Right. So, I mean, they could probably spend 150 to $160,000 for, you know, their first several years in retirement, have a little bit of fun and stuff and.

[Big Al Clopine]

You know, and by the way, I, I would say anyone that has $900,000 plus is doing fantastic. I mean, what's the average 401k? Like 200,000?

[Joe Anderson]

Yeah, a couple hundred thousand. 200 some thousand dollars.

[Big Al Clopine]

And that's with people that have 401s. If you average all the people, it's less. Less than a hundred thousand. I mean, so you, you have a couple hundred thousand, three hundred thousand, five hundred, eight hundred thousand. You are doing fantastic now. Now, the only caveat is the relationship between what you've saved and your fixed income to what you spend. Right. If you can get by on less, it doesn't really matter how much you have. It's the same mathematics.

[Joe Anderson]

But you got to know your audience, too. Now, let's say if someone doesn't have. They don't listen to this podcast, so they're not going to write in.

[Big Al Clopine]

Well, yeah, it's funny. We answer questions of people that write in. We don't make them up.

[Joe Anderson]

Don't make them up.

[Big Al Clopine]

Joe and Al. I've got about $18 in a SEP IRA. Should I roll that? Should I convert that? No, we don't get those letters. So we just read what you send us.

[Joe Anderson]

Yeah, we got read, read, read. Yeah, I haven't read that.

[Big Al Clopine]

Yeah, I used to have a. I knew a Reed when I was in. In elementary school, so that was a while ago.

[Joe Anderson]

That was. Do you have any Marshalls and Wesley's?

[Big Al Clopine]

No, but my grandfather's first name was Marshall, and so my. My brother Todd, his middle name is Marshall, and my son Ryan, his middle name is Marshall also.

[Joe Anderson]

Yeah, my nephew's name is Marshall.

[Big Al Clopine]

Oh, okay.

[Joe Anderson]

Look at that.

[Big Al Clopine]

Very cool.

[Joe Anderson]

What about Richard and this guy's Reed? You think that name's Dad?

[Big Al Clopine]

I don't him Richard much. I've got a brother Richard, but I.

[Joe Anderson]

You call him Dick Rich?

[Big Al Clopine]

No. Well, we grew up calling him Rich, but now he wants Richard.

[Joe Anderson]

Oh, God.

[Andi Last]

We have a Rick that works for us.

[Joe Anderson]

Is that Richard?

[Andi Last]

I would assume Rick in our biz dev department? I would assume his name is Richard.

[Big Al Clopine]

No.

[Joe Anderson]

I don't know. I haven't really found.

[Big Al Clopine]

It's not too common anymore.

[Joe Anderson]

Okay, well, let's get Back to Reed. $100,000 in Roth IRAs. $100,000. 401, 403. $100,000 left on the house for $200,000 saving. About $21,000 a year into retirement, maxing out Roths at $14,000 saving at this rate. Are we on track to retire at age 65 if we want to be able to spend $150,000 a year in current dollars. My wife and I, we are 100% invested in the market and we have other savings for kids, college, future cards, et cetera, so that our only debt will be the mortgage, God willing. Thanks for your time. Update that, I forgot to add. I'm not sure how to calculate how much Social Security we will have in retirement, but we won't have any other sources of Fixed income. I work full time, and my wife works part time. Combined income, $100,000. All right, let's see what we can do for Reed. So for those of you at home, you can teach a little teaching moment here.

[Big Al Clopine]

Little teaching moment. Okay, I've done a little calculation, but let's see what you come up with.

[Joe Anderson]

So let's say he's 33 years old and he wants to retire. Full retirement age. What did he say?

[Big Al Clopine]

Yeah, 65. I got 32 years.

[Joe Anderson]

Thank you. Thank you.

[Big Al Clopine]

Just for the simple math part.

[Joe Anderson]

Got it. So $150,000. That's. He wants to spend that today's dollar today. This is going to be a big number.

[Big Al Clopine]

It's a big number.

[Joe Anderson]

It's a giant number. 30. So let's say I'm going to use 3% inflation.

[Big Al Clopine]

Yeah, that's what I did, too.

[Joe Anderson]

So $150,000 today, and in 32 years from now, it's going to be $386,000.

[Big Al Clopine]

It's a big number. And I did it the other direction, but I like your calculation. So you continue.

[Joe Anderson]

So 300.

[Big Al Clopine]

That's a big number.

[Joe Anderson]

That's giant.

[Big Al Clopine]

So you got to divide that by 4%.

[Joe Anderson]

Well, let's give him some Social Security.

[Big Al Clopine]

Okay, let's give them.

[Joe Anderson]

All right, so I'm going to 100 grand. Well, it's got to be more than that. If he's making $100,000. Let's say, I'm guessing his Social Security benefit is, I don't know, $35,000 in today's dollars. And his wife is probably maybe half that. Yeah, if she works part time.

[Big Al Clopine]

Yeah, yeah, that. That's. That's what I guess, too. All right, 30. 36. Actually 3,000.

[Joe Anderson]

Wow. So look at that.

[Big Al Clopine]

Just off first.

[Joe Anderson]

First time off the cuff. All right, so, okay, so we got $50,000. That's today's dollars. All right, so we got 32 years there. What do you want to do? What was it? Social Security just came out with their inflation rate. Yeah, 2%.

[Big Al Clopine]

2%. Go with. Go with that.

[Joe Anderson]

All right.

[Big Al Clopine]

Yeah.

[Joe Anderson]

Okay, there we go. 32. 2%. And then, so that's going to be worth 94. So 100 grand.

[Big Al Clopine]

Yeah, that's what I figured.

[Joe Anderson]

All right, so still a huge number.

[Big Al Clopine]

Still a couple hundred thousand divided by 4%.

[Joe Anderson]

4. Let's see. He needs 6 million something. 6.5.

[Big Al Clopine]

Yep. And I compute you'll get to 4 based upon these numbers.

[Joe Anderson]

So. But you think about it. 32 years from now is a long time.

[Big Al Clopine]

There's no way that this is going to be a story. That's the hard part about this, is when you do a calculate, I mean, three years is going to be a completely different story.

[Joe Anderson]

I mean, you could probably think about it this way. I don't know. Can you even remember 32 years ago?

[Big Al Clopine]

Hardly. I had a three year old.

[Joe Anderson]

So at 30, like, what was your mortgage payment or rent payment or car payment? You know what I mean? So it's like we run these numbers and it's like there's no way it's going to be $350,000.

[Big Al Clopine]

Right.

[Joe Anderson]

But we're running it at three and a half percent inflation. I mean, that's the true impact of inflation here. It's crazy.

[Big Al Clopine]

Yeah, that's right.

[Joe Anderson]

Because time goes by so fast.

[Big Al Clopine]

Right, right.

[Joe Anderson]

And so anyway, so $6.5 million, if he's got $250,000 today, or 200,000, he's saving 21,000.

[Big Al Clopine]

Yeah. So I did that math. So a couple hundred Thousand now saves 21,000 a year. 32 years at 7%, he ends up with about 4.1 million. So. So I took that number, Joe. So this is the way and the different way of calculating the same thing. So I said, well, okay, 4.1 million. You could take about 4% of that. So that's about 165,000 in future dollars. What is that in today's dollars? I did a 3% inflation rate to get it back to today's dollars. That's about 64 grand. And then I said, all right, Social Security, let's just say three grand a month. I just. Because I have no idea. So that's 100 grand. He wants 150. So he's based upon these numbers alone, he's two thirds of the way there.

[Joe Anderson]

Yep. Yeah. Okay. So I think he's close. We're running straight line be it numbers.

[Big Al Clopine]

Which will never happen.

[Joe Anderson]

I don't know if you're saving. He's saving 21% of his income.

[Big Al Clopine]

Yeah.

[Joe Anderson]

I think Reid is going to be just fine.

[Big Al Clopine]

Yeah, well, and see, that's the thing. I mean, so Joe, we tell people, try to save 20%, and I think you can sort of. Quick rule of thumb, if you can save 20% of your income by the time you retire, depending upon how long you do it, you'll probably be able to spend at least as much as what you're already spending. And that's what I just calculated. 100,000 is what he's spending. And that's what I said he could spend in the future.

[Joe Anderson]

Yeah. And that's what he's making.

[Big Al Clopine]

Yeah. Now if he wants to spend a little bit more than that in the future, then you got to save a little bit more than 20% and you know, know. So I think that's. So Reid, over time will probably save more and more and this will be great.

[Joe Anderson]

Yeah. Inflation could be higher, it could be lower the rate of return on the overall investment market. Who knows what's going to happen there?

[Big Al Clopine]

Right.

[Joe Anderson]

So again, I think, you know, as you think about planning and this is an ongoing process that you want to make sure that you're updating and looking at on an ongoing basis because things pivot all the time. So I like that he's 100% in, you know, VTI and VOO, you know, really inexpensive stock ETFs.

[Big Al Clopine]

Right.

[Joe Anderson]

So I don't mind that. I think as the wealth increases, you probably want to diversify more. You can kind of cut that pie a little bit differently to take advantage of different parts of the overall market.

[Big Al Clopine]

Right.

[Joe Anderson]

But no, I think, Reed, you're doing things right. Just keep saving what you're saving and, you know, good things will happen from a financial standpoint. But you know, finances, money's not everything, El.

[Big Al Clopine]

No, I know, it's. It does help there.

[Andi Last]

It does help. So have you given our financial Blueprint tool a try yet? It is a free and self guided way to calculate the likelihood that you'll have a successful retirement. Click or tap the financial blueprint link in the episode description. Input your current cash flow, your assets and your projected retirement spending and it will output a detailed report with three different scenarios that map out your possibilities with actionable steps to take now to achieve your financial goals in the future. Get your financial blueprint for retirement. Click or tap the link in the episode description to get started.

[Joe Anderson]

Let's go to Mr. Buckeye. Got a lot of interesting names that come through now.

[Big Al Clopine]

Yeah.

[Joe Anderson]

All right. He goes, hey, Joe, Big Al. Andy. Discovered the show a little bit over a year ago. Really enjoy listening to the new episodes while taking an evening walk in our small town in Ohio. Not only do you provide very useful advice, but your friendly banter makes it quite entertaining. Well, thank you, sir. I'm 42, wife's 41. We have an 11 year old daughter and 9 year old son. We drive a 2006 Toyota Prius. A 2009 Toyota Sienna van. Prius?

[Big Al Clopine]

Yes.

[Joe Anderson]

Still make them?

[Big Al Clopine]

They do.

[Joe Anderson]

All right. That was the first of the electric vehicles, Right?

[Big Al Clopine]

First of the hybrids.

[Joe Anderson]

Got it. Okay. Little drink of choice here. My wife is a white winer or a margarita. I enjoy red wine in old fashioned. Okay, here's the specifics. My wife makes $80,000 a year. I make $85,000 a year. We have smaller salaries than most of your listeners but have saved consistently since college and are content to live below our means. All our retirement accounts are invested in low cost index funds and are combined to growth S&P 500 dividend, international REITs and small amount of bonds. 401. Wife has $110,000. I have 200. This year I had an option of start putting my portion of the 401 in the Roth employer contributes to the traditional 401 Roth IRA. Wife has $160,000. I have $220,000 man HSA $18,000. I fully fund $4,300 annually to my HSA. All the money is invested and I don't plan on touching it. We currently use cash from our savings to pay all medical costs. Oh my God. This is long.

[Big Al Clopine]

Oh, you got a whole nother page.

[Joe Anderson]

Okay, Mr. Buckeye, take a deep breath. This is a long ass walk.

[Big Al Clopine]

This. He may have to do it.

[Joe Anderson]

You might have to do some stretches here. Brokerage $40,000. He's got a 529 plan of 53,000. We can't. He's going to contribute $2,500 per kid there. We got cash of 52,000. Our only debt is $82,000 on a mortgage at 4% which will be paid off in 10 years. Current value is 325. We both fully fund $7,000 into our Roth IRAs every year. For our 401 I contribute 6% and my employer matches 7 while my wife both contributes to get the match to 6. Currently with an employer match around 35 to 40% of income. With matches we save around 35 to 40% of income. Our current annual expenses are around $85,000. All right, expected 60,000 in today's dollars for retirement. My parents just started gifting my siblings and I each $15,000 per year and I will continue and we'll continue this going forward as an early inheritance instead of just lump sum after they're not around. They're both 72 years old in pretty good health. So I expect this to continue for quite a while. After they pass, I expect still get a couple hundred thousand dollars Social Security. I pulled these numbers for myself. I didn't do it for my wife but assume hers would be similar to mine. So they're Going to get about $22,000 at $62,000 or $32,000 or $40,000. I'm interested in potentially using the Rule of 55 to tap into my 401. At this point, my wife would be interested in early retirement as well, but isn't set on a specific age. At age 55, my kids would just be finishing up college. If that's the route they decide. Here's the questions. My God. How long did that take?

[Big Al Clopine]

It took a while.

[Joe Anderson]

I need a drink of water.

[Big Al Clopine]

I think that's the show. We'll answer the question. Next show.

[Joe Anderson]

Well, that's all we got time for, folks. We'll see you again next week. Do you think it's realistic, given my scenario, or is it just a dream? If not, what age do you think is more feasible? I'm also not against working part time, so. Al, I'm sure you did some homework here.

[Big Al Clopine]

I did.

[Joe Anderson]

All right. What about Mr. Buckeye here?

[Big Al Clopine]

Well, okay, so based upon how much he's saving as a percentage, and I know the gross, I could calculate it. So got $800,000 to start, $60,000 of savings per year, 13 years, 7% ends up with about $3,100,000.

[Joe Anderson]

Okay, so to recap, what you just said is that he's got $800,000 totally saved. He's 42 years old, wife is 41.

[Big Al Clopine]

Yep.

[Joe Anderson]

All right.

[Big Al Clopine]

And maybe he wants to retire at 55, 13 years from now, 7%. Add $60,000 a year, you get $3,100,000.

[Joe Anderson]

So he potentially could have $3,100,000 in his accounts when he turns his desired retirement age.

[Big Al Clopine]

Yeah. Keeping that same savings and at a 7% rate of return. So there's some caveats here, of course. And so retiring early. I just said 3% distribution, just to throw out a number. That'd be $93,000 he could get from the portfolio. And then you look at. He wants to spend $60,000 in retirement. So he says. I just said inflation, 3%. 13 year. It comes out to $88,000. So, yeah, it's close, but it looks. It looks pretty good.

[Joe Anderson]

So he wants to retire at 55. And so at age 55, his living expenses is going to be 88. Or call it $90,000.

[Big Al Clopine]

Call it $90,000. And he could. He could get about. If he takes 3% of his portfolio, it'd be 90, 95.

[Joe Anderson]

So 0.03. He would need $3 million at 3% at that point.

[Big Al Clopine]

Yeah, that's what I got. So I think that looks pretty good.

[Joe Anderson]

So he just has to bridge the gap until Social Security for 10 years.

[Big Al Clopine]

That's right.

[Joe Anderson]

So if you look at it from assuming no growth in the overall portfolio. Right. You got, he's going to retire at 55, 65, 67, waits until full retirement age. You know what gets scary with that long of a bridge is that the total dollars that he would have to pull out from his retirement date till his Social Security date would be over a million dollars.

[Big Al Clopine]

Yeah.

[Joe Anderson]

So if you think of it, man, you start retirement with 3 million and you know that you're going to have to pull a third out of that.

[Big Al Clopine]

But that's a, that's no growth.

[Joe Anderson]

I know, but you're, you say that and I disagree with you.

[Big Al Clopine]

And I totally disagree with you. That's why I keep saying it. How, how could you. I mean we, everything we do, we include a growth rate except for this.

[Joe Anderson]

But that's a true dollar figure.

[Big Al Clopine]

I agree. And that's assuming no growth, which is.

[Joe Anderson]

Think that that could happen. You retire at 55 years old.

[Big Al Clopine]

I think it totally could have, I think you could have a negative 10% like, like we did in the, in.

[Joe Anderson]

The last decade saying what is the total dollar figure that needs to come from the portfolio is a million dollars.

[Big Al Clopine]

I agree with that.

[Joe Anderson]

Right.

[Big Al Clopine]

Yeah.

[Joe Anderson]

So that's if I look at. All right. You got to pull a million dollars. If it were me and I had $3 million and I had to pull a third of that total balance out, assuming no growth.

[Big Al Clopine]

Okay.

[Joe Anderson]

To me that would make me pause.

[Big Al Clopine]

Okay, so now I finally agree with your statement. Then the reason why I would pause is not that calculation just because it's too, it's too close. I'd rather have a part time job, eliminate some of the risk.

[Joe Anderson]

I try to think of worst case scenario.

[Big Al Clopine]

Yes, agreed.

[Joe Anderson]

If it's a worst case scenario, it's like, okay, I'm not going to have, let's just assume zero over 10 years or 12 years. That's pretty bad.

[Big Al Clopine]

That's pretty bad. It's happened and it could be worse.

[Joe Anderson]

It could be a lot worse. Right. So that, I mean, maybe the worst case scenario is a 20% loss, maybe 50%. Yeah, I don't know about that. I don't think over a 12 year time period on average. You know, I think you're right. You got to, I mean most you're always going to look at. All right. Assumed growth rate of. But probability standpoint.

[Big Al Clopine]

Yeah. So.

[Joe Anderson]

But if I'm looking at worst case scenario I'm going to look at it that way. If it were me.

[Big Al Clopine]

Yeah. And, and I come up with the same conclusion for a different reason. My, my reason is it's just, it's a little more tight than I would like at age 55. Not. And, and so I would probably have a part time job to sort of COVID some potential gap.

[Joe Anderson]

Yeah, I think he's close. He's doing a good job.

[Big Al Clopine]

I think so too. Well, that was the first question. What's. Oh, second question.

[Joe Anderson]

He's got a Roth ira.

[Big Al Clopine]

All right, let's see. He wants to bridge the gap.

[Joe Anderson]

He helped bridge the gap. I plan to see, look at this. Like I've already read this.

[Big Al Clopine]

Yeah.

[Joe Anderson]

To help bridge the gap, I plan to prior. We already, we already prioritize savings into a brokerage account until we're able to take Social Security. Ineligible for Medicare. Most times it makes sense to hold off and take it Social Security as long as possible. But if waiting to retire is the main goal, is it unwise to think about taking one, at least one of us taking it at 62?

[Big Al Clopine]

Yeah. And I'm okay with that.

[Joe Anderson]

I think so too. I would much rather probably do that if you have that long of a bridge. But you would make that decision at 62 depending on what the market value is of your portfolio.

[Big Al Clopine]

Not right now.

[Joe Anderson]

Yeah, yeah.

[Big Al Clopine]

When you're 42, you know what, in 20 years.

[Joe Anderson]

20 years you're claiming Social Security whether.

[Big Al Clopine]

You want to or not, right?

[Joe Anderson]

Yeah, we're writing this down.

[Big Al Clopine]

Yeah.

[Joe Anderson]

All right. Currently with our highest risk tolerance and still being on the younger side, we are heavily invested in equities. 90 10. I'm curious on your thoughts. Would you dial it back? He's got 10, 12. What did we say? He's got 12 years. 13 years.

[Big Al Clopine]

13 years. I would stay the course maybe, I don't know, five years ahead, maybe start getting some more bonds in there. Maybe.

[Joe Anderson]

Yeah. I don't know. 90 10, if I'm, if I'm looking at it.

[Big Al Clopine]

If, I mean you could, you could come down to 80 or 70% and then somebody 30.

[Joe Anderson]

I probably like a little bit more. Given the fact that you need the portfolio in 10 years. 9010 is fine. But he's young, so it's like in 10 years, if he still doesn't want to pull the trigger. It's not like he's 65 years old. And like I'm totally burnt.

[Big Al Clopine]

Right. Yeah, yeah, I know.

[Joe Anderson]

Right.

[Big Al Clopine]

I mean, and part of this, I mean, at least I'm thinking about myself. I might Keep it that way. If I was going to be okay with a part time job, so I didn't really have to use the portfolio that much. And then you could keep a higher allocation. But you're right, you get to less than 10 years, certainly less than five years. You want to tone it down because you're going to need access to that capital. And what if we have a prolonged downturn and your stocks are all down? You'll pull money out at the wrong time and never. It'd be hard to recover.

[Joe Anderson]

Yeah. He wouldn't retire then.

[Big Al Clopine]

Yeah. You have to keep working. Right. So, and, and to keep working when the stock market is down is not necessarily easy.

[Joe Anderson]

Yeah. Okay. Appreciate your time and response. Keep up the good work. All right. Looking forward to listening for many more years. Right, Big Al, Take care.

[Big Al Clopine]

That's right.

[Joe Anderson]

I don't think they listen to many more years. I think they get totally burnt out listening to this garbage for like six months.

[Big Al Clopine]

How many years do we have on podcasts, Andy?

[Andi Last]

Since 2016 is when it started officially.

[Big Al Clopine]

That's like a new list. They'd be good for life, don't you think?

[Andi Last]

Well, interestingly, the YMYW podcast survey, I think the vast majority of people who have filled it out have said that they've listened for one to five years. Anything more than that just drops dramatically.

[Big Al Clopine]

It doesn't happen. Right.

[Joe Anderson]

I don't think there's anyone that's listening to the show for more than five years. And I think the number of people that would actually stick with us for.

[Big Al Clopine]

Longer than six months is pretty low too.

[Joe Anderson]

Yeah, because it's like, all right, it's the same stuff.

[Big Al Clopine]

Right? Right, Right.

[Joe Anderson]

Trust me, I know. I read the questions and then the.

[Big Al Clopine]

Same questions over and over again. We probably have one guy just out.

[Joe Anderson]

There, just rinse and repeat.

[Andi Last]

Joe and Masako and Reed and his wife and Mr. And Mrs. Buckeye have laid out their retirement plans. But what happens when you're single? Like Old MacDonald and Konshaha and Kurt, whose spitballs are coming up shortly. Watch Going solo, navigating your financial future. Single this week on YMYW tv. Learn how to create a budget and manage debt and map out your solo retirement journey. Joe and Big Al have specific tips and strategies for singles in every generation around emergency savings, Social Security, saving for retirement, including catch up contributions, and managing your investment portfolio during market downturns. Check it out and download the companion Going Solo guide. You'll find the links in the episode description. And if you're not single, why not share the episode and the guide with someone who is.

[Joe Anderson]

All right, we got Old MacDonald. That's what my kid calls McDonald's.

[Big Al Clopine]

Old McDonald's. Old McDonald's. Well, sure. That's what he knows.

[Joe Anderson]

Yeah, because he had a farm. All right, here we go. Hey, you Money or Wealth Crew? Love listening to the podcast while I'm driving around delivering medical supplies and prescriptions in a pos whitish GMC box truck all day.

[Big Al Clopine]

I wonder what that stands for.

[Joe Anderson]

Pos. That's a piece of.

[Big Al Clopine]

I know what it sounds, Matt.

[Joe Anderson]

Old McDonald, man. Just cruising around getting little prescriptions. Medical supplies.

[Big Al Clopine]

Yeah.

[Joe Anderson]

All right. After commuting 45 minutes from the Williwax of. What is that?

[Andi Last]

Lymington, Maine, I think.

[Joe Anderson]

Lymington.

[Andi Last]

Lymington.

[Joe Anderson]

Lymington, Maine.

[Andi Last]

Do you know what the williwacks are? I had to look that one up.

[Joe Anderson]

No, after commuting 45 minutes from the Williwacks.

[Andi Last]

It's like the boondocks or out in the woods.

[Joe Anderson]

Boondock.

[Andi Last]

I had never heard the term williwax before.

[Big Al Clopine]

Okay, maybe that's an East Coast.

[Joe Anderson]

It's a Mainer.

[Big Al Clopine]

East coast thing. Yeah, Maine. Exactly. Yeah. Okay.

[Joe Anderson]

Little Willy wax.

[Big Al Clopine]

Yeah.

[Joe Anderson]

Cool. I think I might have to use that.

[Big Al Clopine]

Yeah.

[Joe Anderson]

My 2021 Racer Red Ford Ranger. That's a car.

[Big Al Clopine]

Now you're talking.

[Joe Anderson]

Yeah. I had a Ford Ranger. It's enough to drive anyone crazy. And maybe it has. I have to thank you for keeping me sane while I'm doing this. I'm 43 years old and need to. And new to all this financial planning stuff and love how you guys approach it. Around six months ago, started saving about 63% of my gross income. Wow, that's a lot. We just said 20.

[Big Al Clopine]

Yeah.

[Joe Anderson]

He goes. Old McDonald goes, bullshit. I'm going 63%.

[Big Al Clopine]

60 is not even good enough. Let's do 63.

[Joe Anderson]

He's maxing out my 401 in the Roth IRA. I have $50,000 in a rollover IRA and my house is paid off, and it's worth about 400. After moving in with my girlfriend, I started renting it out for $30,000 a year. But so far, all of that has gone right back into the house. I spend $20,000, $24,000 a year. Old McDonald's splurging.

[Big Al Clopine]

Could you get by on two grand a month, Al?

[Joe Anderson]

I have two children.

[Big Al Clopine]

One grand for each.

[Andi Last]

And you live in California.

[Big Al Clopine]

I don't.

[Joe Anderson]

I don't think so.

[Big Al Clopine]

I guess there are property taxes.

[Joe Anderson]

Yeah.

[Big Al Clopine]

There's gasoline. Oh, yeah. There's A home mortgage and get some clothes, insurance. Yep.

[Joe Anderson]

I'm trying to retire as soon as possible because I've had enough.

[Big Al Clopine]

Okay.

[Joe Anderson]

I just want to work the land and develop my chainsaw sculpture skills. I was planning on retiring about 10, 11 years from now, but after using your easy retirement tool, I think I can. But it'll be close and I know if I can make it that long. Before I snap, I was thinking of selling my house and investing it. Winning the lottery, starting a life of crime. Or maybe even marrying a sugar mama. Or my sugar mama. After a two week stint in Thailand, we are very seriously considering selling everything and moving there. No kids ever.

[Big Al Clopine]

Okay.

[Joe Anderson]

Any ideas or thoughts what else I might do to stop the grind on my soul? That white truck is killing this guy.

[Big Al Clopine]

He just doesn't want it. He wants to do the Ford Ranger.

[Joe Anderson]

It's just killing him. By the way, I used to drink bottom shelf vodka straight out of the bottle. Just rubber bottle. Oh my God. This guy's awesome.

[Big Al Clopine]

Yes.

[Joe Anderson]

So these days I just look forward to a nice dark roast. My girlfriend has two cats. A squirrel, bees, and an old man that sits around all day, her father. Eieio. Thank you for your time, little McDonald. Okay, that's pretty witty.

[Big Al Clopine]

Yeah, it's pretty good.

[Joe Anderson]

So he wants to go to Thailand. Have you been in Thailand now?

[Big Al Clopine]

No, it's actually. I might do that. Might go next year?

[Joe Anderson]

No, I might go next week.

[Big Al Clopine]

February or March is kind of the plan right now.

[Joe Anderson]

Got it. Okay. No, never been to Thailand. Pretty inexpensive though.

[Big Al Clopine]

Yeah, that's what I heard.

[Joe Anderson]

24,000 a year probably could go a long way.

[Big Al Clopine]

Yeah, you probably need a little more than that.

[Joe Anderson]

But can we do a little calculator some. What's the average cost of living in Thailand?

[Andi Last]

Sure, let's find out. Cost of living Thailand.

[Joe Anderson]

I would say it's pretty reasonable.

[Big Al Clopine]

It could be.

[Andi Last]

Okay, so according to Google AI, it says a single person can expect to spend between 700 and $2,000 per month. While a family of four might spend 1500 to 3500 monthly, depending on lifestyle and location.

[Joe Anderson]

Look at that. 2000amonth. Old MacDonald. Here you go.

[Big Al Clopine]

So I. You know what, Old MacDonald? You forgot to tell us how much you're saving. So it's hard to do a calculation. I know you're 63%, but I don't know what your gross is, but here's what I did. I did a little calculation.

[Joe Anderson]

Hold on, I think I.

[Big Al Clopine]

Let me see. He didn't say. No, no. While I talk, you try to find It. So you got 50,000 to start with. I'm just saying you're saving 50,000 a year, 7% interest rate, 10 years, you end up with $800,000. Pretty good. You sell your house, it's worth $400,000 now. I just said $500,000 in the future. Now you got $1,300,000. You retire early, maybe, say, 3% of that. You could live off $39,000 if you live in Thailand. We just found out. You probably can do it. But, Joe, I can relate. At age 43, I really was ready for a change, too. And I'll tell you what I did, is I had a CPA practice, and I started to think about selling it and trying something new and different, and I started working on building a new career, and I got into financial planning, wealth management, and that actually has propelled me to where I'm at.

[Joe Anderson]

And you're welcome.

[Big Al Clopine]

And you should be grateful to the.

[Joe Anderson]

Man sitting next to you.

[Big Al Clopine]

So here's what I would say is sometimes when you do a little pivot on a career, you get all kinds of new energy again. So that's maybe one of the best. Best things I can tell you. However, Thailand sounds tempting, I gotta say.

[Joe Anderson]

He's making $63,000 a year.

[Big Al Clopine]

No, he isn't.

[Joe Anderson]

I'm sure he is.

[Big Al Clopine]

He's saving 63% of his gross.

[Joe Anderson]

I know. Divide that into the. Your max 401k contribution in Roth IRA.

[Big Al Clopine]

I know, but he's. He's eventually gonna have money coming from his rental, so I. I don't know. It's hard to know.

[Joe Anderson]

Okay, so he's making 100. Maybe he's saving 63%. We know how much he's saving.

[Big Al Clopine]

I know. We know a percentage. We don't know the total.

[Joe Anderson]

Yes. Well, I know what the max contribution is for a 401.

[Big Al Clopine]

I know, but the thing is, I think he's got extra money coming from his rental eventually. After he starts fixing it up. After he stops fixing it up.

[Joe Anderson]

But I think that's what he's saying anyway.

[Big Al Clopine]

But what if he's saving 30, so now he's got 600 instead of 800. The numbers are pretty close. So he could spend about 35k. If we go with your numbers.

[Joe Anderson]

Yeah.

[Big Al Clopine]

Give or. Give or take.

[Joe Anderson]

And he wants to spend 24,000. Yeah, I think he's in good shape. 43 years old.

[Big Al Clopine]

Yep.

[Joe Anderson]

I don't know. That's. He's got a long way to go, though.

[Big Al Clopine]

Yeah.

[Joe Anderson]

I mean, I don't know. Let's say you go to Thailand. You move.

[Big Al Clopine]

Yeah, it.

[Joe Anderson]

I mean, you could afford Thailand because what, 2000amonth is what the number is.

[Andi Last]

2000Amonth for a single person. He is talking about taking the sugar mama with him.

[Joe Anderson]

Well, yeah, Sugar mama probably makes we learn that she's got the house, got the old man in there.

[Andi Last]

That's right.

[Big Al Clopine]

Maybe she doesn't want to go.

[Joe Anderson]

Oh, she's going.

[Big Al Clopine]

I don't know.

[Joe Anderson]

I think they're both ready to go. And then you. You're there and then you hate it.

[Big Al Clopine]

Yeah. And then it's. How do you come back?

[Joe Anderson]

How do you come back?

[Big Al Clopine]

Can't even hardly afford the plane ticket.

[Joe Anderson]

Right. Oh, so. I don't know. Maybe. Well, they spent a couple weeks there.

[Big Al Clopine]

Are you going back to my suggestion? Think about a new career.

[Joe Anderson]

I like that. Alf. I wasn't really paying attention.

[Big Al Clopine]

I know you weren't. You were looking for the gross income.

[Joe Anderson]

All right, we got Kuhn Shakat Khan.

[Andi Last]

Konshahakan.

[Joe Anderson]

Konshahken.

[Andi Last]

Konshahken. It's a town in Pennsylvania. So this is.

[Big Al Clopine]

Yep. Yeah, so I. Andy, I looked that one up. I'm sure you did too. That's not a straightforward. So Google. AI said K a a n Khan. S h u h ha h a a kin k I n Done it.

[Joe Anderson]

Kancha Hakan.

[Andi Last]

I actually have a friend that lives in Conshohocken, so. I knew it.

[Big Al Clopine]

Well, you already know then you don't have to look it up.

[Andi Last]

But he. He actually shortens it to Kanchi Kurt, so that helps.

[Big Al Clopine]

Okay.

[Joe Anderson]

Okay. All right. So we got Good Afternoon Joe and Big Al. I'm. I'm from cocking chalk. If my desk overloads the. Where is this?

[Big Al Clopine]

It overlooks.

[Andi Last]

It overlooks the Schuylkill River.

[Joe Anderson]

The Schuylkill River. That's Schuylkill outside of Philadelphia.

[Big Al Clopine]

Yep.

[Joe Anderson]

I listen on the treadmill and in the car. I drive a 17 Toyota Corolla and I drink Kona Big Wave. That's your beer, isn't it? Big Al?

[Big Al Clopine]

You know, that was my favorite beer for a long time. And like. Like most beers eventually get tired of it and then you move on.

[Joe Anderson]

Like most beers. Who are you speaking of?

[Big Al Clopine]

Well, at least myself. So I. Yeah, so I did that again. I did that with alesmith394. Love that beer. And now I can't even drink it.

[Joe Anderson]

Wow.

[Big Al Clopine]

Don't know.

[Joe Anderson]

All right, well, Concac And Kurt, he's 35 and makes about 400 to $500,000 annually in 100% commission. Sales position.

[Big Al Clopine]

Wow. Successful.

[Andi Last]

Very good sales guy.

[Joe Anderson]

Yep. He's just jamming on the phones. I wonder how many dials he makes a day.

[Big Al Clopine]

Probably a lot.

[Joe Anderson]

You know, I wonder if he's got like a little post it note on his phone that says next.

[Andi Last]

How many dials did you do at the most when you were in the dialing business, Joe?

[Joe Anderson]

A lot. Couple hundred.

[Andi Last]

In a day?

[Joe Anderson]

In a day.

[Big Al Clopine]

Wow.

[Joe Anderson]

Yeah.

[Andi Last]

Wanna buy? No.

[Big Al Clopine]

Click. Or half of them. Your mom?

[Joe Anderson]

No, it was the white pages. It was all sorts of different. Yeah. I mean, that's how you started out in this business.

[Big Al Clopine]

Yeah. I didn't have to do that.

[Joe Anderson]

No, you didn't. You're welcome again.

[Big Al Clopine]

Yeah. Oh, are you implying I'm writing on your coattails?

[Joe Anderson]

Dude, my back is so sore over the last 20 some years, but no. Yeah, it's. It's a hard grind, you know?

[Big Al Clopine]

Yeah.

[Joe Anderson]

But if you're good, you can make three or 400. I wasn't that good, but I had two phones. You had two phones and.

[Big Al Clopine]

Oh, wow.

[Andi Last]

It's like something out of a movie.

[Joe Anderson]

Yeah, but I mean, today, now the technology is crazy where you can just push a button and then it leaves a voicemail versus waiting and then you leave a voicemail. So the time.

[Big Al Clopine]

Yeah, much faster. You can do 300 now.

[Joe Anderson]

Oh, man. Much faster technology today.

[Big Al Clopine]

Okay.

[Joe Anderson]

Yeah. Then you interrupt people while they're eating. You know, you had phone clinics early in the morning and late at night, you know, we'd stop. We wouldn't stop calling people until 9 o' clock at night.

[Big Al Clopine]

Oh, no kidding. Okay.

[Andi Last]

Oh, that would piss me off so bad probably.

[Big Al Clopine]

I think I got one.

[Joe Anderson]

Remember those days? It's like. Yeah. But then the do not call list came about and.

[Big Al Clopine]

Yeah. Kind of changed that.

[Joe Anderson]

Yeah.

[Big Al Clopine]

Yeah.

[Joe Anderson]

I have a one year old and a little lady that makes $50,000 a year. But I'm single. So now counting on the roommate's assets into retirement. Oh, I wonder.

[Andi Last]

Wow. The roommate.

[Joe Anderson]

He's calling her roommate.

[Big Al Clopine]

I bet not.

[Joe Anderson]

All right, I have $960,000 in a brokerage account, $700,000 in home equity, $350,000 traditional 401, 90,000. Roth 35,000, HSA, $22,000. And a 529 plan for the cock. A shocking, kid.

[Big Al Clopine]

You're in the ballpark.

[Joe Anderson]

Yeah. Total a bit over two sticks. Two sticks.

[Andi Last]

Two million.

[Joe Anderson]

All right. You said total liquid assets. One million four hundred. Oh, he's counting his home equity.

[Big Al Clopine]

No, he's got deferred $350,000. Brokerage, $960,000. Roth $90,000. I think we counted the HSA, probably.

[Joe Anderson]

Yeah. That's $35,000. That's 1,400,000. All right. Also, the $700,000 home equity will be paid off in the rental in Florida of $5,000. Social Security at age 70 will be $2,800. At 62, likely to wait.

[Big Al Clopine]

All right.

[Joe Anderson]

Considering my age. Please spitball on converting my entire traditional 401 to Roth ASAP. I could use the brokerage to fund the 35 to 40% tax bill. I envision this $350,000 in my traditional to soon become $3,500,000 in 30 to 35 years. Let's say I pay $135,000 on the conversion of $350,000. That's only 3,600,000% of the $3,500,000 that this money eventually becomes. Around age 65 to 70. I want to retire at 45 and spend $75,000 per year. I'm currently contributing about $175,000 per year to retirement. Mostly just want to know when I can retire with my current savings rate and my spending. Want to appreciate the spitball your esteemed viewpoints as my go go years are fast approaching and I'm fighting the urge to fire Kakashak and Kirk.

[Andi Last]

That's actually pretty darn good for you, Joe Conshohocken. Kakashokin. Yeah. Almost the same thing.

[Big Al Clopine]

Yeah. Very close. I agree. Yeah. Without even looking it up like Andy and I did. Well, you already knew. You already knew, so.

[Joe Anderson]

All right. This guy's doing quite hurt. He's got two sticks. I haven't heard 2 million called two sticks before, but I think I'm going to start using that, you know, vocab.

[Big Al Clopine]

How many sticks?

[Joe Anderson]

Several sticks. A lot of toothpicks.

[Big Al Clopine]

Yeah. A lot of toothpicks.

[Joe Anderson]

Yeah. I don't know about sticks.

[Big Al Clopine]

Yep. How many toothpicks do you have?

[Joe Anderson]

Yeah, that's a new pickup line. How many sticks you got?

[Big Al Clopine]

Yeah.

[Joe Anderson]

Okay, so I don't know. He's got some creative math going on. I think he just wants to convert and make himself think that the math is going to work out. There's so many different assumptions. I would not convert 100% of your retirement account and pay 35% tax.

[Big Al Clopine]

Yeah. With the bracket he's in single.

[Joe Anderson]

Yeah.

[Big Al Clopine]

That's the highest tax rate.

[Joe Anderson]

Yeah, I get it. And he's like, okay, well, at age 60, it's going to be $3.5 million. I pay $130,000 in tax today if I use the future value of. Of what? That. But he's using the present value of the tax in the future value of the dollar.

[Big Al Clopine]

I know, that's, that's why you're mixing apples and oranges.

[Joe Anderson]

So you've got to take the $160,000 and assume the same rate that you are. You're going to find that that tax rate is 35%.

[Big Al Clopine]

Yeah, well, I guess what he's thinking is he'll leave it. You know, there's nothing coming out of the 401k that becomes a Roth. So that all grows. Right. And then it's just coming out of the brokerage account, which maybe he's was going to spend anyway on a car or two.

[Joe Anderson]

So he's got $350,000 in the 401, wants to convert that. I would not do that. He's in a commission based business. He makes a ton of money. He's 35. He wants to retire at 45. So he's got two sticks. But I'm going to take out the home equity. So I'm going to call it a stick and a half.

[Big Al Clopine]

That's a stick and a half is right.

[Joe Anderson]

All right. And he saves 100,000 and some odd thousand dollars a year.

[Big Al Clopine]

Right?

[Joe Anderson]

Or.

[Big Al Clopine]

Yeah, yeah. So here's the math. So he's got $1,400,000 right now over the next 10 years, saving $175,000, which is a lot, but that's what you said. You're saving 7%. That's $5,200,000, Joe. And you retire at 45. Let's just be conservative. 2.5% distribution rate, maybe more, but let's just say that. So that's $130,000. And he wants to spend in. In today's $75 inflation, 3%, 10 years, that's 100K. So he's golden. It looks fine from a numbers standpoint.

[Joe Anderson]

Yep. So if he can spend $75,000, but where's the money going today? Let's say he makes $500,000, saves 100,000. That's 400,000, saves 200,000. Okay, 500,000 minus 200,000 is 300,000 plus tax. I know, let me finish. Another $100,000 in tax.

[Big Al Clopine]

I know what you're saying.

[Joe Anderson]

It's 200,000.

[Big Al Clopine]

Yeah, I get it. Yeah.

[Joe Anderson]

Because he's spending 75. Well, he's saying, where's the other 125 going?

[Big Al Clopine]

Well, he says, I'm just using his numbers. He says he wants to retire at 45 and spend $75,000 a year. But I agree he's spending more than right now.

[Joe Anderson]

So at 35, you're spending.

[Big Al Clopine]

Call it 200.

[Joe Anderson]

200 grand. That's what it looks like to me. And then at age 45, it's like, yeah, I'm going to slow down. I'm going to spend 75. The numbers don't jive.

[Big Al Clopine]

Yeah. Well. So based upon my quick math, he could probably spend 100 in today's dollars, but that's half of maybe what he's currently spending.

[Joe Anderson]

If you're making $500,000 a year, four to five, that's a ton of dough.

[Big Al Clopine]

It is.

[Joe Anderson]

You don't have. You probably have stress of your job because he's on the phone all day making up 400 aisles or whatever he's doing. He's trying to get these new jobs and get these people placed, but he doesn't necessarily have financial worry. You know what I mean?

[Big Al Clopine]

No.

[Joe Anderson]

Let's say if something came up and.

[Big Al Clopine]

Well, but I think part of this.

[Joe Anderson]

The furnace blows out and he needs to spend $40,000 to do that. He's not gonna.

[Big Al Clopine]

Don't even think about it.

[Joe Anderson]

Yeah, he's not even gon. He's just going to cut a check.

[Big Al Clopine]

He's got a million in a brokerage.

[Joe Anderson]

Account, but now he's retired at 45. And then that same bill comes around. That's a little bit more stressful because now you're on a fixed income.

[Big Al Clopine]

But here's what I think. At age 35, you start getting kind of burned out and you think, maybe I can do this 10 more years. So you just want to have a little peace of mind. Could I retire at 45 and spend less? And the answer is yes. When you get there, are you going to want that? Maybe, maybe not. But it's a little bit of peace of mind to know, Joe, that you could. That's what I think.

[Joe Anderson]

Yeah. I don't know. He's got a one year old.

[Big Al Clopine]

Yeah, I know.

[Joe Anderson]

With his roommate.

[Big Al Clopine]

Yeah, I get it. Yeah.

[Joe Anderson]

So, yeah, $75,000. One year old is now 11.

[Big Al Clopine]

That includes college and health insurance.

[Joe Anderson]

Eleven year old.

[Big Al Clopine]

I mean, college fund.

[Joe Anderson]

Yeah. I don't know. Might have to rework your numbers here.

[Big Al Clopine]

A little tricky.

[Joe Anderson]

I don't know. Why don't you just do something that's not as yet stressful?

[Big Al Clopine]

Yeah. Yeah.

[Joe Anderson]

He's doing a hell of a job. Two sticks at 35, I didn't have two sticks at 35.

[Big Al Clopine]

Big Al me neither.

[Joe Anderson]

Still looking.

[Big Al Clopine]

Do you have any toothpicks?

[Joe Anderson]

I'm still looking for him.

[Big Al Clopine]

We probably had probably had half a toothpick.

[Joe Anderson]

Oh my God. Yeah.

[Andi Last]

Next week, Joe and Big Al Spitball on inherited IRA rules for Dolly, those five year Roth withdrawal rules for Peggy Hill, a strategy to maximize capital gains for Jeff and Dallas whether Skipper's retirement payout is the killer deal he thinks it is, and HSA versus HRA for Larry in Rhode Island. Your Money, your Wealth is your Podcast. If you enjoy ymyw, tell your friends and help us reach more listeners and viewers like you. Subscribe on YouTube to watch us do YMYW and to join the conversation in the comments. Leave your honest ratings and reviews for your Money, you, wealth in Apple Podcasts and in all the other apps that let you do that, like Amazon, Audible, Castbox, GoodPods, Pandora, Player, FM Podcast Addict, and Podchaser. We're on all of them. Your Money, you, Wealth is presented by Pure Financial Advisors. If you're worried about outliving your savings and wondering if you're on track for retirement, you probably don't want to rely entirely on a spitball from Joe and Big Al. For peace of mind, sit down face to face with one of the experienced professionals on Joe and Big Al's team at Pure. You can do it from home via Zoom or in person at one of our 13 offices nationwide. We're in Southern California, Sacramento, Seattle, Salt Lake City, Denver, Phoenix, Chicago and Nashville. A financial assessment with Pure is free, just like us Spitball, but the Pure team will take a deep dive into where you are now, where you want to be in the future, and the smart ways to get you there, tailored to you and your needs, not the entire podcast audience. Click or tap the free financial assessment link in the episode description to book Yours or call 888-994-6257. Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this podcast and does not represent that the securities or services discussed are suitable for any investor. As rules and regulations change, podcast content may become outdated. Investors are advised not to rely on any information contained in the podcast in the process of making a full and informed investment decision.