How Much Do You ACTUALLY Need To Retire? (Big Announcement! )

Money Guy Show

The Money Guy Show announces the transformation of their popular 'Know Your Number' course into a free, interactive retirement calculator av

Key takeaways

• The new retirement calculator provides personalized insights into whether you're ahead of, behind, or on track with your financial independence goals.

Main topics

• Retirement planning
• Financial independence trajectory

Notable quotes

We made it free because we're just crazy like that.

Conclusion

The Money Guy Show is making their retirement planning tool freely available

Transcript preview

Speaker 4 (0:04) The Speaker 1 (0:05) city moves fast, but your vibe, that's different. Sharper, smoother, more alive. Speaker 4 (0:15) The new Speaker 1 (0:20) Honda City isn't just made to drive, it's made to feel. The new Honda City, all new vibe. Speaker 3 (0:34) Guys, your patience has been rewarded. I'm the worst at keeping secrets. So today we get to do the big reveal. Speaker 2 (0:42) Brian, I am so excited because this is something that frankly we've been planning to do for a while, but we come up with an idea of a thing that we want to do, but then it takes time and it takes build and it takes effort and it takes all the people in the background working. And it's been hard for us to keep this under wraps, but it is something I think I can say that we are both. So, so, so, so excited. Speaker 3 (1:04) I don't want to keep them waiting anymore. So before we give you the new thing, we have to sadly share with you that for, and first, thank you for everybody who supported us over the years. We had a course called the Know Your Number course. And sadly, we are actually taking that course away. Speaker 2 (1:23) It's going away. Speaker 3 (1:24) And here, I need to give you a little context here. The Know Your Number course, are we taking this away because it was a failure? No. Speaker 1 (1:32) The Speaker 3 (1:33) reality is biggest revenue, digital revenue generator we've ever had. This on itself is a six-figure annual business with the Know Your Number course. So you're like, why in the world are we taking this away? Speaker 2 (1:49) Bo? Why we're taking it away is that we listen to you guys and you're like, man. This is valuable. This is good. This is helpful. This answers questions that I've always had. And it gives me some actionable steps to know, okay, what should I need to be doing? What should I be changing? And you guys have said to us, it's so valuable. It's so valuable. It's so valuable. It's so helpful. So helpful. So helpful that we decided, well, we should take the course away. We should no longer. Let it be a course. We should no longer have that be something available out on the website for you to go buy. Okay. Instead. Speaker 3 (2:27) Instead, this is the thing. Look, I've often, if you think about every show, when we get the questions, it depends. We always show, it comes down to, are you ahead of the curve, behind the curve, or right where you're supposed to be with your financial walk? And it's so valuable. That's what the course is. Remember, I always, when I think about, how we want to structure everything. I wanted Millionaire Mission, the book, to kind of be tip of the spear, meaning that if you didn't know anything about money, go grab this book, and this is going to essentially mainline all that great information. But then the rest, a lot of the courses, like the Foo Course and even the Know Your Number, was to help you accelerate your journey. But so often we say, are you ahead of the curve, behind the curve, right where you're supposed to be? Instead of having course format, why don't we actually open this thing up and make it a completely free calculator on the website? And we put a lot, this thing has been months in the development because we wanted to make sure that this gave you the right motivation, the right feedback, so you could definitively answer head of the curve, behind the curve, or right where I'm supposed to be. Speaker 2 (3:33) That's exactly right. Know your number is now going to be available to everyone. So you have a question, you have a friend who has a question, you have a loved one that has a question. about where am I, where should I be, where am I going. It is going to be a free calculator along with our other calculators out there on the website. We're so excited about it. We wanted to demo it for you. We want to show you how does this work? What does it look like? So let's run through it together. Let's assume that you are someone out there and you are 25 years old, just starting out on your financial journey, and you're planning on retiring somewhere around normal retirement age at age 65. Let's say that based on what you're doing right now, you think that the level of life that you would like to live, the lifestyle you'd like to have in retirement would equate to roughly $5,000 per month in today's dollars, right? So everything we're going to do is in today's dollars. And let's assume that by now you have already saved and accumulated not $125,000. That's too much for a 25-year-old. Let's assume that you have saved and invested so far $10,000, 25 years old, first job, $10,000. And let's assume that on average, you're saving about $12,000 a year, about $1,000 a month. The question becomes, am I ahead of the curve, behind the curve, right on the curve? So you hit calculate, and what you'll see is this unbelievable output that lets you know that, hey, your retirement number, at age 65, to live the life that you want to live on your terms, the way you want to live it, is right at about $4.9 million. And guess what? Based on your inputs, you're actually on the trajectory, on the path to be able to retire a little bit early. You're actually going to hit your financial independence number at 62 years and four months, even before your 65-year-old time horizon. And we actually show that to you graphically. and visually that, hey, you're actually right where you need to be and a little bit ahead of the curve. Speaker 3 (5:39) But wait a minute, Beau. For a lot of you out there, you're realizing the typical American doesn't even start saving and investing until they're in their 30s. This is somebody starting in their 20s, and they're saving $1,000 a month. It doesn't surprise me that they're ahead of the curve. How about somebody that's more in the messy middle? All Speaker 2 (5:57) right, let's go messy middle then. Let's assume that you are... Speaker 2 (6:03) 33 years old. Let's still assume that you're planning on a standard age 65 retirement. Let's assume that you're a little bit older. So now you think that for retirement, you want to spend probably $6,000 a month. Let's assume that now that you've had some time to build, some time to save up, you've currently saved up $100,000 of investment assets. And let's assume that you're saving $18,000 a year. So Speaker 3 (6:27) about $1,500 a month. About Speaker 2 (6:28) $1 Speaker 3 (6:28) ,500 Speaker 2 (6:28) a month. When we go to calculate that, boom, your financial independence number, $4.6 million. And again, you are right on the path. You'll actually hit financial independence at 64 years and 10 months. So just slightly before your 65th birthday, we would argue you were right on track with where you want to be to be able to reach financial independence. Speaker 3 (6:50) So we've already done, we did somebody who's ahead of the curve. Now we've got somebody right on the curve. How about somebody who's actually a little behind? Maybe you didn't discover our content until you were 40 years of age. All Speaker 2 (7:00) right. So let's go and let's say that you're 40 years old, that again, you want to retire at age 65. That's only 25 years. You still want to spend $6,000 a month, but let's assume you have not saved as much as you would like to. If Speaker 3 (7:12) you Speaker 2 (7:12) only have $50,000 in an investment portfolio, but you're committed to doing this, you're going to save $24,000 a year, about $2,000 a month. basically maxing out your 401k balance, what you're going to see is that your retirement number at 65 is about $3.8 million, but you're not necessarily going to be on track to hit that. It's time for a little bit of cold water. You're not going to hit that. You're actually not going to be able to hit that financial independence number until you're 73 years old, almost 74. So what would need to happen? What would need to change? Well, if you could increase your savings by an additional $1,500 a month, you would then be able to hit your targeted, your goal retirement age. We want this to be a useful tool where you can play with the inputs. We even have an advanced mode where you can change the assumption, adjust the assumptions so that you can figure out where am I on my financial journey? What adjustments should I make to be able to be on path? Speaker 3 (8:13) Yeah. So this is guys, I hope you can tell this is going to be powerful for you to put your own information in. So I'd encourage you to go to moneyguy.com slash resources, get in there and start playing with this thing. I think it's, you know, we wanted to make sure that everybody feels like, you know, exactly where you are in this journey. So you can, cause there's no better time to make corrective adjustments to your portfolio than. ASAP, today. Now, maybe for some of you, maybe you're closer to miser versus mutant and you're way ahead of the curve. This is going to be your indicator to start living your life a little bit better. You know, the big thing, everybody, I know we've taken some flack recently, Bo, because we added Monarch and some other ads and sponsorships. But guys, I want you to know the abundance cycle is legitimate. When we took the food course, if you remember the initial version of the food course, was $250 was the entry price to get in. We was like, no, no, no, this is too valuable to kind of put a high ticket value to this. It's worth, you know, it's priceless. But let's drop the price down to $49 because I want more people to have this. It's not about necessarily the revenue or profit that we can get from this. It's helping people accelerate their journey. This is the next part of that abundance journey is that if we can give you this free tool. lets you go out there and figure out exactly where you are. You're probably going to have the opportunity now to accelerate your journey. So hopefully you'll remember when your life gets complicated, who planted the seeds. That's what we're trying to do is while your life is simple and you feel like you have it all under control, we want to give you all the tools to accelerate the journey. But when success creates complexity. We'll be there waiting for you with the porch light on. Speaker 2 (9:57) We genuinely believe that there's a better way to do money. And the more that we can equip you, the more that we can help you do money better, it's cheesy as it sounds. We feel like we are kind of making the financial world just a little bit better. So yeah, we walked away from revenue. We walked away from some economics here. But frankly, we felt like it was the right thing to do. And we felt like it was something that could be helpful to you, could be helpful. to those that you love. So if you haven't had a chance to play with it, go play with it. Moneyguide.com slash resources. Tell your friends about it. There's no cost, absolutely free. And we want this to be something that is helpful and useful for you guys. Just like how every single Tuesday at 10 a.m. Central, we show up right here to answer your questions. We want to speak to the things that you're curious about, answer the questions that are on your mind. So right now. We have the team out in the wings collecting your questions. If you have a question or there's something you want to get our take on, make sure that you get it in the chat right now so that we can load you up. With that... Crab to Director Reby, I thought you were going to say something. Well, I Speaker 3 (11:00) did. I had one more Speaker 5 (11:01) little quick thing. Look, Speaker 3 (11:04) I know when people try this, they're going to quickly realize the only thing we ask is we want your email address. Sure. So if I was somebody filling this out, I'd be like, what do they do with that email address? Are they selling that email list? No, we do not sell access. But I will tell you what you get. You get our weekly newsletter, which if you look at the open rate Speaker 2 (11:24) on that newsletter, it is. out of this world is because Speaker 3 (11:28) I'm part of it, by the way, too. Every week I look because I want to see where the team is going to pick on us because every week there's usually a little Easter egg of something where they're having a little fun at our expense, which I love, by the way. If you're not self-deprecating, you're not a good time. But it is one of those things. Go out there and check it out. We literally are trying to connect with our audience so we know who you are. Y'all know a few years ago there was this whole thing where you worried about deplatforming and all these other weird things because YouTube, podcasting. I wish that when I started this all back in 2006, I would have started collecting your email addresses. It would have saved me a lot of stress because we want to know who our audience is just in case. And also so we can just stay connected with you. So that's why we ask for email addresses. It's not to go sell it to anybody or anything like that. It's just so we're connected to our financial mutants. Speaker 2 (12:17) All right. Can I just put, before I get to the question, I just want to put one other disclaimer out there only because this hit me. Just as a thought about this, this tool is supposed to be a tool. It's supposed to be helpful. It's supposed to be a guide. It's supposed to be one of the things that you can use to help make financial decisions. This is what this tool is. This tool is not a full financial plan. This tool is not customized to your unique situation. Yeah, you can put in your variables and your stuff. We want to be as useful as possible, but don't mishear us that this is a replacement for you actually. doing the work of running the numbers and stress testing the plan to make sure that your plan is on place. This is supposed to be a spot check to let you know, am I ahead of the curve, behind the curve, right on the curve? It's not a, oh, hey, I put some numbers in there and I think they were kind of right. And it said I can retire 52 later, boss. That would not be a wise decision on your part. So make sure you don't skip the work of doing the work when it comes time for financial independence. Speaker 5 (13:15) Well stated. If you are playing with the Know Your Number calculator right now, I am excited to hear what you think. I love seeing the chatter about it. I'm really glad to see you're liking it so far. We are going to be talking about it, answering questions about it in the Moneyverse throughout the day today. So if you haven't joined already, that's our Discord server for Financial Mutants. Go to moneyguy.com slash Moneyverse. It's free to join. We'll have a thread going about Know Your Number so we can talk about what the tool, just like Beau said, should be used for, should not be used for. what kind of assumptions went into it. So yeah, if you're interested in that type of thing and want to know some more and want to talk with other mutants who are thinking about retirement and their number, please join us. We would love that. With that, let's talk about some financial questions from the chat. Are you guys ready? Oh, Speaker 2 (14:02) I'm ready. Speaker 5 (14:03) Yes, ma Speaker 2 (14:03) 'am. All Speaker 5 (14:03) right. JTillSwag says, Hey, Money Guy team. I have to imagine I'll be spending more money at 65 in retirement. Then at 85, have y'all seen the same thing with clients and how does that affect planning? Speaker 2 (14:20) Yes, yes, yes, yes, yes, yes, yes, Speaker 4 (14:22) yes. Speaker 2 (14:22) This is why we say that safe withdrawal rates are a wonderful back of the napkin planning solution. If I can draw 4.7 % at the first year of retirement, I can increase that with inflation every year in retirement. I'll be okay all the way out to age 95. That's great academically and theoretically, but practically. it looks very different. Most of our clients, most of the folks that we interact with that help cross through that threshold will have some form of a go-go retirement period, a slow-go retirement period, and then likely a no-go retirement period. But oftentimes that no-go retirement period, you replace the going with medical expenses or other costs. And so you want to make sure that you factor that out. That's why just saying, okay, 4%, that's my number, that's what I'm sticking with. I think you're doing yourself a disservice because in reality for our clients that are retired, there's a season where they might have a six, seven, 8 % withdrawal rate. Then there's another season that might have a two, three, 4 % withdrawal rate. And then there's a season where RMDs kick in and the withdrawal rate changes. It's much more dynamic than that. So it absolutely does affect the planning and affect the viability and sustainability of your plan. Speaker 3 (15:29) Yeah. I mean, for, for this, it's such an interesting thing. We have clients that, you know, always say when they become, walk through that threshold of retirement. We run scenarios every year. I mean, that's kind of what I do with a lot of my retiree clients is we are updating the scenarios every year because, and it's so fun to go through the celebration with them because in some years you're planning for a wedding, you know, a couple just got engaged, you know, you have a wedding coming up. You're always taking health checks on what's going on with their cars because they're replacing their cars. Big trips where they're taking the whole family on a big... Big trip. We model it all. And then even you take into account the market performance. So every year the variables are changing and we're kind of the dashboard to make real-time adjustments so that you don't have to feel like, you know, that what you set and that you did a 4 % safe withdrawal rate, that that is just a static thing. No. when you actually cross into retirement, it's going to be an annual. Plus, remember, we're also stacking in Roth conversions. And the planning changes through retirement. Every year, it changes how that's going. And even throughout the year, because we'll do a kind of a preliminary plan at the beginning of the year. But then at the end of the year, we'll say, hey, we can't do as many Roth conversions because you had extra income show up from this. So we make those