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:

[00:00:00] Douglas A. McIntyre: Uh, we talk about retirement a lot. You and I are retirement age. A lot of the people who go to 24 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?

[00:00:22] Douglas A. McIntyre: If you retire with a million dollars in Mississippi. It’s different from retiring with a million dollars in Massachusetts. 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.

[00:00:45] Douglas A. McIntyre: What does it mean that I have a million dollars when I retire?

[00:00:48] Lee Jackson: 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, you know, it’s not like if you have a million in the bank.

[00:01:06] Lee Jackson: 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, it’s your year 67 or eight, and even some folks can wait until they’re 70, but there’s no advantage, you know, just alone from your social security.

[00:01:28] Lee Jackson: If you wait that long, you’re probably getting three to 3, 500 a month. And then if, let’s just say that that million dollars is in. Let’s say it’s in 5 percent municipal bonds, AAA rated municipal bonds. Well, then you’re going to generate. You know, 50, 000 a year in tax free income, plus the additional, let’s say it’s three grand a month, additional 36, 000 a year in social security income.

[00:01:55] Lee Jackson: And this doesn’t count whether your wife has money or just saying it’s. An individual’s 1 million. I mean, that alone is almost $90,000 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, and you know, you, you can’t be taking huge risk at that juncture with your million.

[00:02:20] Lee Jackson: ’cause if we had the kind of market crash we’ve had in oh 7, 0 8, or in 2000, you could see your million if it was in. An old 60, 40 portfolio of 60 percent stock, 40 percent uh, bonds, you can get absolutely hammered. So a lot of it depends on, on, on what you do with it.

[00:02:39] Douglas A. McIntyre: Well, I’m going to give people a piece of advice.

[00:02:43] Douglas A. McIntyre: If you get to 70 and you have a million dollars, don’t put any of it in stocks. Zero. You can get four and a half, 5 percent right now. Uh, and the risk of the corpus getting killed. Is virtually zero,

[00:03:02] Lee Jackson: right? And you don’t have time. I mean, it took a while for the markets to rally off the 8 lows. And it took a while.

[00:03:09] Lee Jackson: It took three, four years just to get back to even, and you don’t have that time when you’re 70 years old. And plus you want that consistent passive income, which is something we always talk about at 24 seven. How critical that is to, uh, reinforce social security. Cause how many people can live on their social security?

[00:03:28] Lee Jackson: It’s just not really enough.

[00:03:32] Douglas A. McIntyre: No. And I think the other thing, once you, once you get to be 70 and you’ve got a million dollars and let’s use your math, 80, 90, 000, you’re also still sitting in a home that you may have owned for 30 or 40 years, maybe that 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?

[00:03:56] Douglas A. McIntyre: Particularly if it’s, you know, 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 50 percent by selling a typical home. The average price of a home right now in the United States, I think it’s 446, 000.

[00:04:19] Douglas A. McIntyre: 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 70.

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