Successful Retirees Track FOUR Numbers #Finance

the most successful retirees that I know they track these four numbers that’s really it we’ve been helping people retire for the last decade and a half and these four numbers these are the keys I say these are the the most important ones if we had to to sum it up and if

you’ve been thinking about your retirement more lately then you might realize that a lot of the things and some of the strategies and and tactics and and goals moving forward look a little bit different than what they were the last 30 years the last 30 years it was about

Savings rate it was about investment allocation going for maximum growth maybe and now from here on it’s more about withdrawal strategy or maybe having a plan b or maybe it’s the things like uh how do I just make sure I’m not going to pay more tax than I have to

when I’m taking money out and this can actually lead people to uh get confused you know a lot of people think this is it when we’re talking about investment retirement planning it’s about Investments but really what it really is about is all these different things

now that can lead people to believe there is a lot to manage a lot to do and true but I want to bring it back to those four key numbers to just make sure that you stay on track it’s kind of like what’s the 8020 here as we’re thinking about what to track in retirement or leading up

to retirement you know what’s the fewest amount of things we need to do in order to get the greatest result so let’s get into the first one and you might not have had to track this the last 20 to 30 years of your working life so it can be kind of hard to actually start tracking this one

I know a lot of our clients have have trouble with this leading up to retirement but I’ll give you some easy tools and easy ways to do this so it doesn’t take up too much time this is actually something that start tracking as soon as possible as you’re heading into retirement

because really the success of retirement hinges on this one number and that is you may have guessed it is fixed costs now you might not have been tracking this one over the last 30 years because you probably had more coming into the bank account than you did going out right you had a surplus each

month so you didn’t really have to maybe count pennies every month and and and know where everything was going but there’s two problems with not knowing where things are going as you get into retirement it’s either going to be you overestimate and this could lead to that uh that

quote that we hear a lot from clients or from people who are thinking about retirement and they say you know maybe I’ll just work one more year they’re overestimating expenses so you know I think I need a little bit more add to the top and just work one more year save a little bit more

the other thing I could do is if you underestimate well that that you can imagine leads to not a great first couple years if things are are off when you actually start spending the retirement Savings and that can really hurt the plan success rate so a few things as you’re

thinking about your fixed costs housing right the mortgage or rent utilities even though those go up and down we got to spend those each month Insurance right health Insurance home Insurance auto Insurance other Transportation

costs groceries these are the the essentials even Debt repayments if you’ve got Debt uh you got to do that every month and then there if there’s other essential subscriptions or recurring purchases each month and the reason why I’m stressing these

fixed costs or Essentials is because these are the the things we need to live right there the other side is the must or this is the must haves and then there’s also the the the want to haves right and when we’re planning retirement it’s nice to to differentiate those two have the

wants we want to do those but we need to have the needs first an example of the wants is say vacation expenses or maybe it’s eating out right we want to do those and and we can do those but there’s some leeway there we can we can pull back if we need to certain years or certain months

if if it was uh if we needed to do that you know it’s it’s not absolutely essential to surviving now if you agree with this and you know you got to start tracking expenses a little closer as you’re getting uh close to retirement well here’s the easy way to do it so it

doesn’t take up too much time you can either U personally in the past I’ve done it manually but there’s also things like automatic trackers like monarch money or wab which is you need a budget believe that’s an app and then there’s tiller is another one there’s a

few different ones out there that can track automatically I know well Monarch can where you can uh it’ll track all the expenses and then it’ll actually categorize it into this is groceries this was eating out this is home expenses and all of that so it makes it easy at the end of the

month to see where your money went and then you can start to make decisions around that the next number is one that I tell a recent subscriber who was wondering what’s the if I could only track one number and I only had five minutes a month uh to dedicate to my f

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finances what is the most important number to to track now that’s not really a fair question but you might agree with my answer so that thing that I told them is Net

Worth this is the big picture that gives you the the full snapshot of your overall Financial Health and it’s nice when you track this over time you kind of see where things are going right hopefully they’re they’re moving in a positive direction going up but it’s

just a good good quick snapshot to see where you’re at and and just a a refresher here Net Worth it’s what you have which is Assets then minus what you owe which is Debt or Liabilities that’s what Net

Worth is and again you can use a lot of the online track ERS and and Monarch and things like that to track Net Worth from month to month personally I like to do it uh manually and here’s here’s kind of what it looks like when I’m I’m doing it myself

here um again simple scenario here but we’ve got all of the Assets over here and it’s a spreadsheet and you’ve got all all of the accounts here on the left side and then each quarter or if it’s monthly you can see you know what the dollar amount is month to

month and then you see you see Trends happening or you see this this account maybe there’s something this is different than everything else it helps you dive in to say okay I need to focus on that for a minute and dive a little bit deeper and doing that that’s helped me just uh get a

better look get a more detailed look to where we need to be and where we want to go and this actually leads into the next number here and as we get into that number first let me know if you like this kind of CashNews.co by clicking the like or subscribe button because that just helps me know what

type of CashNews.cos you want more of so that would be really helpful now on to the third number to track that’s investment allocation there’s levels to tracking investment allocation here here and it can get pretty complex pretty quickly but to keep it simple I think just sticking to

knowing what’s cash what’s stocks what’s Bonds in each one of the accounts so if you went back to the the Net Worth tracking just knowing how each one is with stocks and cash and Bonds that gives you a little bit of a picture of

to what sort of risk you’re taking on for each one of those accounts and we’ve seen actually when we review people’s retirement plans and investment plans a lot of if they’re working with an adviser or usually with these ones here a lot of times all the allocations are

exactly the same but there is a benefit to having maybe the roths are a little bit more aggressive if we’re not using those for the longest period of time or maybe the 401K is going to be used first if we’re there’s a tax strategy to doing that so maybe that’s a little bit

more conservative so there’s different strategies there and I’ll actually show you I’ll give you a walkr of how to look at the allocation of each account pretty quickly using a free tool coming up but let’s get into the the next most important number and this is the one you

don’t hear about that often and it is the years of Safe Money balance so what does that mean it’s a way to look at your Investments not only by the risk that’s being taken but it’s actually how to equate the risk into something that’s more tangible to

you that’s directly related to your retirement Income plan and that is Income and here’s what I mean let me explain it a different way so let’s pretend it’s the second year of your retirement and things are going great you’re taking

out $5,000 per month and that’s sustainable and good so you’re taking out $60,000 per year it’s all moving along smoothly but then we enter a bare market and it’s a longer than normal bare Market well if we can look at your investment allocation in this way conservative

moderate and growth Assets so all of the different accounts that you have um all of them have some amount of cash well getting that total in here and then all of them have some sort of uh Bond allocation we getting that total as well and getting the conservative

Assets kind of lumped together or viewing them in this way to see what the total is and if we’ve got $180,000 in those Safe Money Assets if you were to say that or conservative more conservative than um than at least the the stock allocation then we can

equate and look at how many years of safety money do we have so we needed 60k a year so we’ve got about 3 years worth of withdrawals just knowing that and looking at Investments in a different way has brought peace of mind to clients actually you’ve heard this story

maybe if you’ve seen another CashNews.co client called me up March of 2020 and was really worried about what was going on and she was watching all of the account balances just go down fast right and then we looked at her conservative bucket and we saw she had seven years of withdrawals of

Investments in that safe money and you can just feel the way weight lifted off her shoulders and she felt so much better after that so when it comes to your allocation understanding what’s in each account you can either work with the retirement Specialists like the ones that

streamlined or you can check this CashNews.co here on a free tool that gives you a little bit of a deeper dive into your own allocation if you like to do it yourself it’s actually minute 4:16 of that CashNews.co and then also I put other CashNews.cos here to make your retirement the best

stage of life yet so check those out and then I’ll see you in those CashNews.cos if this was helpful please like it and then I’ll see you later take care