96. The Number; How do you know you’re financially ready to retire?

One of the more frequently discussed topics when it comes to retirement planning is the idea of the “number”, or what’s the amount that you need to have saved and invested in order to finally transition into a life of financial independence? That’s the topic that Vince discusses on this episode of CFO at Home with Dennis Schlegal, co-founder of the wealth management group, Emeritus Wealth.

Key Takeaways

• As you approach retirement, it’s not so much how much you have saved, it’s the amount of monthly income you need. 
• • What rate of return do you need generate your desired income
  • A different perspective/strategy is needed to generate income than to create your nestegg. 
• Annuities
• • Typically offered by insurance companies
  • You give your money to the insurance company in exchange for an income stream; either immediately or at some point in the future
  • Some annuities offer an immediate stream of income in exchange for a initial lump sum payment, others offer a death benefit
  • With an annuity, the insurance company assumes sequence of return risk
• Safe withdrawal rate - the amount that you can pull from your retirement account savings safely (with exhausting the account). 
• • A 4% withdrawal rate is successful roughly 90% of the time based on Monte Carlo simulations

Resources

• Vanguard Nest Egg Calculator 

Ways to contact

• Emeritus Wealth 
• Emeritus Wealth - Facebook
• Dennis Schlegal Emeritus Wealth - LinkedIn 

Contact the Host - vince@thecfoathome.com