Key Points:

• Retirement needs vary by location and income sources.
• A million dollars is solid, but conservative investments are key.
• Include home value and other assets in retirement planning.
• One of the best ways to protect yourself in a downturn is high-quality dividend stocks. Smart money is scooping up these two dividend legends before word gets out.

Doug and Lee discuss the complexities of retirement planning, focusing on the significance of having a million dollars saved. They emphasize that the value of this amount depends on various factors such as location, Social Security benefits, and other assets. They caution against taking significant risks with investments at retirement age, advocating instead for safer options like bonds to ensure stable income. Additionally, they highlight the potential benefits of selling a home to increase retirement funds, stressing the importance of considering all assets and income sources when planning for retirement.

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Edited Video Transcript:

We talk about retirement a lot.

You and I are retirement age.

A lot of the people who go to twenty four seven Wall Street are not young.

Absolutely.

One of the questions that I’m asked all the time is how much money do I need to retire?

And there are a whole bunch of answers to that.

Number one, where do you live?

If you retire with a million dollars in Mississippi, it’s different from retiring with a million dollars in Massachusetts.

Right.

How much Social Security?

Just the fact that I have a million dollars doesn’t answer that question.

No, not at all.

It has to do with how much other income I have.

So I’ll throw this question to you.

What does it mean that I have a million dollars when I retire?

Well, ostensibly, it means you had a good career.

Because if you have a million put away, that means you made substantial money for years because you know, you’re paying taxes, paying mortgages, paying kids from college.

You know, it’s not like if you have a million in the bank in some way, shape or form, that means you’ve done extremely well.

And because you’ve done well, and depending on how long you worked, if you held off on taking your Social Security until you’re sixty seven or eight, and even some folks can wait till they’re seventy, but there’s no advantage.

You know, just a loan from your Social Security, if you wait that long, you’re probably getting three to thirty-five hundred a month.

And then if let’s just say that that million dollars is in, let’s say it’s in five percent municipal bonds, triple A rated municipal bonds.

Well, then you’re going to generate, you know, fifty thousand dollars a year in tax-free income.

Plus the additional, let’s say it’s three grand a month, additional thirty-six thousand a year in Social Security income.

And this doesn’t count whether your wife has money or just saying it’s an individual’s one million.

I mean, that alone is almost ninety thousand dollars a year.

And that’s assuming that probably you either have a close to paid for home or a paid for home.

So a million in the bank is a good sign.

But again, like you said, you know, you can’t be taking huge risks at that juncture with your million.

Because if we had the kind of market crash we’ve had in oh seven, oh eight or in two thousand, you could see your million.

If it was in an old sixty-forty portfolio of sixty percent stock, forty percent bonds, you could get absolutely hammered.

So a lot of it depends on what you do with it.

Well, I’m going to give people a piece of advice.

If you get to And you have a million dollars.

Don’t put any of it in stocks.

Zero.

You can get four and a half, five percent right now.

And the risk of the corpus getting killed is virtually zero.

Right.

And you don’t have time.

I mean, it took a while for the markets to rally off the oh seven, oh eight lows.

And it took a while.

It took three, four years just to get back to even.

And you don’t have that time when you’re seventy years old.

And plus, you want that consistent passive income, which is something we always talk about at twenty four seven.

How critical that is to reinforce Social Security, because not many people can live on their Social Security.

It’s just not really enough.

No.

And I think the other thing, once you get to be seventy and you’ve got a million dollars and let’s use your math, eighty, ninety thousand dollars.

You’re also still sitting in a home that you may have owned for thirty or forty years.

Maybe that home is completely paid off.

Right.

When you have a million dollars, you then also have to ask yourself, what do you want to do with your home, particularly if it’s no, you don’t have to stay in it, it’s too big, whatever that is.

Because a lot of Americans, depending on where they live, can increase that million dollars by at least fifty percent by selling a typical home.

The average price of a home right now in the United States, I think is four hundred and forty-six thousand dollars.

Right.

Right.

So I would never say a million dollars.

I’d say it’s a million dollars.

What’s it invested in?

Right.

Where do you live?

Right.

What other assets do you have?

You’ve got to take all those things and knit them together.

When you talk about what kind of retirement income you’re going to have after seventy.

Well, and it’s interesting.

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