How Much Do I Need To Retire? Dave Ramsey Answers … But Be Careful!

How Much Do I Need To Retire? Dave Ramsey Answers … But Be Careful!

How much do I need to retire? is a common question that I hear, and it’s a really important one. 

Recently, I was reading a blog from popular financial person Dave Ramsey, and he was weighing in on the subject of retirement. I think Dave helps so many people when it comes to debt elimination and figuring out the baby steps in saving. He does great work there, but when it comes to retirement planning, in my opinion, you might want to think twice about implementing some of the advice that he gives. I’m going to go over it with you today and why you might want to be careful and what you can do instead to put yourself in a better position

First of all, realistically, you don’t want to implement anybody’s advice without meeting with them and considering your specific situation. I would much prefer doing that versus listening to someone on YouTube, or somewhere else, on what you should be doing with your money. So, talk to someone that you trust. 

Anyway, as I was looking at Dave’s blog and what he thought about this, he says that if you’re able to live on 8% of your nest egg, and if your mutual funds can do 12%, you’ll have 4% to cover inflation. Okay; that makes sense – if you want to live on 40K, he says, you need $500,000 in the bank. So, take your total nest egg and divide it by 0.08 to get that number you’ll need to live on each month.

This is, in my opinion, a little bit risky. And here’s why: 

The Sequence of Return Risk

What this means is that someone who retires in 2007 and someone who retires in 2010 are going to have drastically different outcomes of their retirement. If they were taking the same amount and their investments did the same thing, the outcomes, because of the withdrawal rates, have a big difference. 

Applying this to our example: if you’ve got 500K and you’re taking out 40K, an 8% withdrawal, and you’re averaging 12% somehow, but let’s say it’s 2007 and then the financial crisis happens. What if the investments, because you’re invested aggressively, get cut in half but you still need 40K to live? Now you’re taking out 16% and that could really crash a plan, so that’s something to be careful about. 

Aggressive Investments

Regarding this idea of the 12% rate of return on mutual funds, if you’re achieving that sort of return, my thought is that you’d have to be invested pretty aggressively. Many people who are in retirement don’t feel comfortable taking that sort of risk and going along with the rollercoaster that comes with investing in equities – especially looking at 2020 and what happened in March – because there’s fluctuations that happen. 

People in retirement don’t always want to do that, so a lot of times we’ll bring up the three-bucket strategy as a possible retirement withdrawal strategy. 

Unexpected Expenses

Let’s look at an example of a 500K nest egg to start that first year in 2020. And in this scenario, achieving a 12% return and taking out 8%, that plan looks successful and you’re actually growing your assets in retirement; fantastic.

But what if you were off by 5K of expenses; what if you really needed 45K per year instead of 40? That’s a big difference that drastically impacts your plan. And what if you were right: you needed 40K a year. But what if instead of 12% you only got 10%, how does that impact the plan? Those are just a couple of reasons why you might want to be careful when planning and make sure that you talk with a professional to map it out and think of all the different scenarios. 

And if this isn’t the best way, then what is a good way to go?

  1. Decide how much you need each month
  2. Estimate how much you might be having come in from social security and other pensions, other guaranteed income sources, and then subtract that from the monthly amount in step one
  3. Take the number from step one and minus the number from step two, and then divide that number by 0.04, which is a more reasonable 4% withdrawal rate

But again, this is still basic. The 4% withdrawal rate isn’t bulletproof, it’s an opinion, it’s a financial withdrawal strategy out there. I recommend meeting with someone and specifically looking over your scenarios, just yours and not anybody else’s. A lot really depends on the money that you have invested and the withdrawal rate that you’re using. 

As advisors, we’ve helped hundreds of people plan retirement, and we know that the more specific you can get in your plan, the more peace of mind you’ll have in retirement. If you’re interested in more peace of mind, reach out to me and I can help create your streamlined retirement blueprint, or I can give you The Perfect Retirement Plan that can help walk you through steps to take for your own retirement plan. 

Planning For Every Scenario in Retirement

Your retirement plan is not valuable, but the continual process of planning is, so step one is to create a flexible, adaptable retirement plan, not a static one. 

What I mean by adaptable is a successful and secure retirement plan with investable assets each year until well into your nineties, as with the example shown in the video. 

Now we know that life isn’t static and you and I both know that things change, life changes. So your plan should be able to change too and to adapt on the fly. 

Now, what if the unexpected happens; an additional expense that we didn’t plan for? How does that impact a decision made today or next year? How does that impact the long-term plan? 

Let’s say that you sell your business earlier than planned and you retire early. How does that impact the long-term plan? 

Or you’ve got a family, you’ve got grandkids, you want to take them on vacations while you still can. How does that impact if you were to spend $20,000 per year to go to the lake house or go to North Carolina, whatever it may be. 

So there’s all these different things and things we don’t even know that are going to happen yet. 

The main point is that when life changes, let’s change the plan. And if we have an idea of what could come, let’s see what sort of impact that has on the long-term plan. So I hope that gave you a good picture of how to create a plan that’s flexible and that’s adaptable.

Five Mini Plans In Every One Retirement Plan

Five Mini Plans In Every One Retirement Plan

These 5 mini-plans make up every successful retirement plan. A retirement plan is not something to take lightly. What you put away now, and where you put it, can greatly impact how much security you will have later on in life when you are looking to retire. When developing a retirement plan, there are a lot of aspects to consider. What will your income look like? How will taxes play into it? What happens if later on in life you face medical complications. There is no way of knowing these things ahead of time, but there are plenty of ways to plan for them so that when the time comes, you will be able to face surprises down the road with some peace of mind. There are five mini plans that we include in an overall retirement plan to help round the plan out and cover all necessary bases.

  1. Income Plan

This plan is important to ensure that when you are ready to retire, you can count on a reasonable and stable income to cover your month to month expenses. There are a variety of  components to this plan including, but not limited to: social security, maximization, spousal planning, and investment income. This plan is foundational to retirement, as it ensures that you will be able to maintain a comfortable lifestyle, even when you are no longer actively working.

2. Investment Plan

All our investment plans are based on your Income Plan. The two work in unison. 

The traditional retirement planning industry commonly decides how to invest your money based on your “risk tolerance”. We think this a deeply flawed approach that leads to higher than needed worry during major market corrections. 

Instead, if we can find the right cashflow needed from investments, we can map out the next 10 years need and design the income plan so you don’t market fluctuations do not affect your income plan. 

3. Tax Plan

Whether you are retired or not, you better believe that you will owe your dues to Uncle Sam. However, it is important to plan for this, and to ensure that you will never end up paying more than needed in your taxes. There are a variety of strategies that we can implement in this plan from withdrawal strategies to Roth conversion strategies.

4. Healthcare Plan

This is the less glamorous, but unfortunately common, side of retirement. Healthcare costs tend to rise pretty consistently upon retirement, and therefore, a healthcare plan is an essential aspect of an overall retirement plan. There are a variety of factors that will impact your healthcare plan. One of the main factors people face is medicare planning in addition to any supplemental and long-term planning.

5. Legacy/Charitable Plan

This is the part of the plan that most people prefer not to think about, however, it is a part that requires thorough consideration. When a person passes away, their money and assets will have to go somewhere. It could end up at any of these three places: to their heirs, to a charity, or to the government. It is important to put consideration into where you would like for your own assets to go, and to set up a plan to ensure that your wishes are granted when that time comes. In addition to estate planning, is the wealth transfer plan. This plan simply alerts those who will be receiving assets upon your death so that they can be prepared to receive it when the day comes. 

There are a variety of essential parts to a retirement plan, and at times this can seem overwhelming. If you are looking to increase security upon retirement, our team of experienced financial advisers is happy to help you develop a plan that best fits your unique needs, income, and interests. Contact Streamline Financial Services today, to meet our team and learn more about our unique approach to each of these essential mini plans. 

Three Common Myths About Planning for Retirement

Three Common Myths About Planning for Retirement

The thought of retirement tends to bring people peace and hope throughout their entire career. The thought of planning for retirement, on the other hand, tends to be overwhelming. The idea of lining up finances to get you to that point can seem like such a burden. However, we have found over the years that the most common problem that many people face when considering retirement, is they listen to all of the myths floating around out there. 

Before you get into the thick of the planning, it is important to first address and debunk a few of these derailing myths. 

Planning for Retirement is Complicated

Time and time again people overcomplicate their retirement plans. The truth is, your retirement plan should be simple enough that you completely understand it, and know how to best follow it. Otherwise, there is no way that it could possibly be effective. You are the main focus of your own plan. If your plan is designed to be overly complicated, it will not only be impossible for you to see benefit, but it may also be impossible for you to truly reap the intended benefits.

At Streamline Financial, we make it our mission to ensure that your plan is one that you can follow. We won’t help you to create a plan that only makes sense to us. Instead, we work to simplify the process for you so that you have a clear idea of the direction of your own future.

The Plan Must Be Extensive

Another common misconception that people believe about a retirement plan is that it has to be extensive. Many believe that in order to be prepared, they must dig into the tedious details, know exactly what they will want to spend money on every day for the rest of retirement, and budget for these specific expenses. However, what many don’t realize is a retirement plan does not need to be fifty pages long to be effective. In a sense, we have found that it is much easier to abide by the plan if you keep it short and simple, touching on the important things in a tangible way. In fact, we have found that most effective plans are only one page long

Your Retirement Plan Has No Room for Change

Lives are constantly changing. Your job may change, your family might change, and your overall retirement plan might change as a result of these other factors. Many people don’t understand that an effective retirement plan leaves room for this change. You are not locked into any restriction set in place. Your retirement plan can shift and grow as you do.

If you are hoping to plan for retirement soon, but feel overwhelmed by the complexity of it all, learn more about our effective one-page retirement plan. We are happy to work with you to debunk the myths and help you to create the retirement plan that works best for your unique lifestyle. Contact Streamline Financial Services today to begin planning for your retirement.

Four Questions to Test Your Retirement Readiness During Turbulent Times

Four Questions to Test Your Retirement Readiness During Turbulent Times

There are so many unknowns when it comes to the impact this pandemic is going to have on our economy, the stock market, and your individual financial plan.

Here are four questions to find out your investment-in-retirement readiness:

Question One

Do you have enough money set aside so that you won’t have to sell any portion of your portfolio to pay for your lifestyle expenses? One retirement withdrawal strategy that our clients use is called the three-bucket strategy.

Question Two

Have you recently reviewed to see that your portfolio is properly diversified, given the current circumstances of what’s going on?

Question Three

Are you certain that your fear or worry around future market losses will not cause you to sell your investments if things were to decline again?

Question Four

Do you have a written plan in place that you continually update? Especially during times like what we’re going through now, do you have something that you can continually update every year, to make sure that you’re still on track? 

If you answered no to any of these questions, and you’re a client, then please give us a call so that we can talk and review your plan.

If you’re not a client, then read through or listen to the questions again, and then think what “would I have to do so that I can answer yes to all four of these questions?” or bring it up to your advisor.

If you don’t want to do either of those things, then I welcome you to our website, See if there’s a time slot available; we’ve got 15 minutes slots available throughout the week. I, or one of our advisors, would be glad to talk you through these questions.

Two Reasons Not To Worry if the Market Goes Down

Two Reasons Not To Worry if the Market Goes Down

When we look at our investment accounts, it can seem so unpredictable these last few months, and really this whole year. They go up and they go down, there’s big swings in the market, there’s an upcoming election, and it just seems like a lot of uncertainty out there. And you might be wondering if you’re doing the right thing.

A lot of people are thinking that as they’re seeing these ups and downs in their accounts.

But one thing we know is that markets and account values, they do go down. It’s inevitable and it’s normal, but what’s important is what you do during those times when things don’t feel as good.

So I’m going to go over two reasons why smart investors and retirees don’t worry when the markets go down. And then I’m going to share how we help clients achieve this sort of peace and comfort in their investments and their plans. If you can achieve these two things, then it’s going to help you feel better during scary times, and it’s going to help deliver a peace of mind with your finances.

And just so you know, it’s normal when you turn on the news to feel a sense of worry or anxiety. We know that this is the way that the news wants people to feel because what keeps our attention is not the good news. And the media does a good job of doing this. Also the financial media does a good job of doing that; they’re having us second-guess our finances and wonder, “are we really doing the right thing with our financial plans?” And they’re playing a game that smart investors don’t have to play. Successful retirees don’t have to play that game.

Here are two reasons why smart investors don’t worry when the markets go down.


They’re not invested the same way as the numbers that they see on the news. Back in March, we were seeing headlines about how the Dow was down 2000 or 3000 points, and the S & P was down 35 percent. Yet we know that we’re not taking on the full risk of what the markets are doing and the plans that we’re creating. And why is that? It’s because we’re diversified. We’re not just in one sector or one country or one asset class, but we’re really in a balanced mix.

And that mix is all based on the investor and their income plan. Now the Callan chart is an example of, and the case for, diversification. This is showing key indices and what they’ve done each year back to 2000, and we can see things like large cap, small cap, real estate, emerging market equities, and things like that, high yield bonds, and even cash. And as you can see, it really depends on the year. There’s never a clear top performer, and there’s never a clear bottom performer, but really it depends. And what this table highlights is the uncertainty inherent in capital markets.

Having a balanced and right mix for you is key. There’s really not one investment account that fits everyone. Personal Finances is more personal than it is finances. So it really depends on you, the individual.


Their investment plan is built on their income plan as well. So what this means is that before every investment plan that we build, we know what sort of income the client needs each year, and then we make sure that we have enough in their conservative bucket. Now that conservative bucket is considered the safe money that doesn’t get affected by these big market swings that we saw, and hopefully we’ll see in the future. This is so important because if we know that somebody needs a hundred thousand dollars a year and they have 500,000 in the safe bucket, then this gives them five years worth of withdrawals. And that allows our clients to feel better because they know that they can let those investments that are going up and down stay invested, and they don’t have to worry about selling them when it is a down period.

If you’d like to get a better idea of how your plan is set up, and if it’s right for you, then you can head over to for a free planning session. I’d love to talk with you and go over your plan. And if you have a friend who brought up concerns or they’re thinking about the economy or the elections or their investments, then please share this video with them. And hopefully it could start helping them think proactively about what to do during these interesting times.