Let me walk you through what I’d do if I were in this situation specifically, what Becky (a hypothetical retiree) should consider when facing this exact scenario.

Becky’s Retirement Setup

Becky is 62, with a $1 million 401(k) portfolio and plans to spend $5,000 per month, or $60,000 annually, adjusted for 3% inflation. She doesn’t want to claim Social Security until age 67, so her investments need to fund her lifestyle entirely until then.

The problem? Becky’s entire portfolio is invested in U.S. large-cap growth stocks with an assumed return of 8.5%. That’s great in theory, but what happens if the market crashes during her first few retirement years?

The Withdrawal Crunch

During the five-year pre-Social Security gap, Becky’s portfolio will need to fund all her expenses potentially requiring 6.5% to 8% annual withdrawals. That’s well above the safe withdrawal range, especially in volatile markets.

Here’s the good news: once Becky turns 67 and starts Social Security, her need for portfolio withdrawals drops significantly from 8% to just 3.2% by age 68.

But surviving those first five years without sabotaging the entire retirement plan is the real test.

Why Early Market Losses Can Ruin Retirement

If Becky’s portfolio takes a major hit during those early years, her withdrawal percentage goes up. That’s the danger of sequence of returns risk the idea that losing money early in retirement is much worse than losing money later.

Bear markets typically last between 2.5 and 5 years. That means Becky could easily run into trouble if she doesn’t have a more stable, diversified portfolio to weather that period.

The Right Portfolio Shift: From Growth to Balance

To handle that five-year window, Becky needs around $380,000 to cover her expenses. Some of that say $80,000 might come from dividends (assuming a conservative 1.6% yield after a 20% dividend cut). But that still leaves $300,000 that needs to be safe from market swings.

That’s why I’d recommend shifting her portfolio to a 70/30 mix 70% in stocks, 30% in high-quality, short-term bonds. This gives her some growth, but also a layer of protection to draw from during market dips.

What Does This Do to Her Long-Term Plan?

Yes, moving from 100% stocks to 70/30 slightly lowers potential long-term growth. But here’s the trade-off: it increases her probability of retirement success. Her current all-stock plan has a 73% success rate. With the adjusted portfolio, that number climbs and her plan becomes much more resilient.

Once Becky hits 67 and her withdrawal rate drops, she can consider reallocating for more growth if her financial picture looks strong. But early on, stability matters more than potential.

Key Takeaways for Anyone Retiring Before Social Security

If you’re retiring before claiming Social Security, here’s what you need to know:

• Calculate your pre-Social Security gap and make sure you have a stable source of funds to cover it.
• Adjust your portfolio allocation to reduce risk during early retirement.
• Use short-term bonds or cash reserves to avoid selling stocks in a down market.
• Revisit your plan once Social Security kicks in and your withdrawal rate drops.

Retirement isn’t about hitting a perfect number it’s about creating a strategy that holds up when the market doesn’t. For Becky and for anyone else looking to retire before collecting benefits that means making smart portfolio moves now to protect your future freedom.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

The post How I’d Invest Before Taking Social Security: Portfolio Strategies for Early Retirees appeared first on ROI TV.

1. Safe Withdrawal Rate Planning for a High-Net-Worth Couple

A couple aged 58 and 56, with $4.3 million in assets, plans to retire in 2025 and spend $165,000 annually—including $65,000 on discretionary items like vacations. Their portfolio includes $2.6 million in deferred accounts, $1.6 million in taxable investments, and $325,000 in rental property equity.

Joe and Big Al crunched the numbers: a safe withdrawal rate supports $175,000 annually for 35 years, and even $225,000 in the first decade. But market risk looms large. The couple is advised to:

• Develop a diversified investment strategy
• Incorporate Roth conversions early for tax control
• Plan distributions to avoid spikes in ACA premiums

2. Using Roth Conversions After Moving to a Tax-Free State

James Bond—yes, really—asked if moving to a tax-free state like Texas or Nevada to do Roth conversions is legit. With $5.6 million in assets, he’d save serious money avoiding California’s income tax.

Big Al confirmed the move works—but only if it’s genuine. Change your driver’s license, voter registration, and spend at least 183 days there. Anything less could trigger an audit and retroactive tax bills.

3. Single Dad’s Retirement on a Lean Budget

A 54-year-old single father in San Francisco hopes to retire at 62. With $620,000 in investments, $3,000 in monthly rental income, and an $800 monthly parental pension, his goal of spending $72,000 annually is doable.

With smart investing, his portfolio could hit $1 million by 62. Adding in a $25,000 pension at 65 and $3,100 in monthly Social Security at 70, his strategy is conservative, flexible, and aligned with his lifestyle.

4. Stress-Free Career Planning at 45

Rob, 39, wants to scale back his high-stress job in six years, with an eye on early retirement in his 50s. His net worth is $1.8 million, and he saves $60,000 annually.

Big Al projected Rob could grow his portfolio to $2.3 million by 45 and $4.1 million by 55 at 6% returns. The advice? Keep saving, keep investing, and stay open to pivoting into lower-stress work when the time is right.

5. Managing Capital Gains on a Home Sale

A Fremont homeowner was concerned about exceeding the $500,000 capital gains exclusion. With a $300,000 purchase price and a $1.2 million sale value, taxes were inevitable.

After deductions, they face roughly $67,000 in federal and state taxes. Still, they walk away with massive equity and are reminded that the temporary spike in Medicare premiums is manageable given their financial windfall.

6. Pension vs. Lump Sum: What’s the Better Bet?

A 61-year-old with $3 million in liquid assets asked if he should take a $520,000 lump sum or a $38,000 per year pension.

Joe and Big Al found the pension’s net present value was comparable to the lump sum at common discount rates. The choice boils down to:

• Take the pension to preserve liquid assets while waiting for Social Security
• Take the lump sum if you want investment control or to leave a legacy

7. Real Estate Concentration vs. Retirement Account Diversification

Lloyd Christmas (no relation to Dumb & Dumber), a business owner with $7.3 million, prefers commercial real estate and isn’t a fan of retirement accounts.

While his strategy has worked so far, Joe and Big Al warned that market downturns could wipe out income. They advised:

• Opening Roth accounts for long-term tax-free income
• Creating a balanced mix of real estate and paper assets
• Stress-testing his strategy against worst-case scenarios

Final Takeaway: Customize Everything

No two retirement plans are alike. Whether you’re managing $600,000 or $6 million, the key is thoughtful strategy. That means managing taxes proactively, preparing for market downturns, and being honest about your lifestyle needs. With the right plan—and the right team—you can design a retirement that fits your future, not just your finances.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

The post Real-Life Strategies for Taxes, Withdrawals, and Wealth Building appeared first on ROI TV.

As someone who lives and breathes personal finance, I think it’s time we take a deeper look at what’s driving this increase and how to make sense of it in your own retirement planning.

Retirement Savings Goals Are Rising Fast
The $1.46 million goal is a response to several trends: people are living longer, healthcare costs are rising, inflation has eaten into purchasing power, and a safe withdrawal rate today is more conservative than it was in the past. All of that makes it harder for retirees to stretch their money across a 20- to 30-year retirement.

What Should You Save Each Month?
Let’s break down what it takes to hit $1.46 million by age 65, depending on when you start and your annual rate of return:

• Start at age 20: $572/month at 6%, $315/month at 8%, $170/month at 10%
• Start at age 30: $1,100/month at 6%, $450/month at 10%
• Start at age 40: $2,200/month at 6%, $1,200/month at 10%
  Clearly, the earlier you start, the better. Compound interest does the heavy lifting when you give it time to work.

What the Market Tells Us
Historically, the S&P 500 has delivered a 10% annualized return, but actual returns vary by decade. If you started investing:

• In 1979, you’d need $195/month to hit $1.46 million—about $737/month today after adjusting for inflation.
• In 1989, it’d take $532/month, or about $1,500/month in today’s dollars.
• In 1999, it jumps to $1,257/month, or around $2,600/month today.
  Planning for the full range of outcomes is crucial because market returns aren’t guaranteed, especially over shorter time frames.

What Does Retirement Actually Cost?
The good news is that most people don’t spend $1.46 million in retirement. The median household spending for retirees is about $64,000 a year. If you had a $1.46 million portfolio and used a 4% withdrawal rate, you’d generate around $58,400 per year—just short of the median. That’s where Social Security fills the gap.

For a couple getting $3,000/month in Social Security, you only need to cover about $2,400/month with your own savings. That requires a portfolio of roughly $720,000—not $1.46 million.

When You Claim Social Security Matters
Let’s look at how the age you claim Social Security affects the savings you’ll need:

• Claim at 62: You’ll receive about $1,200/month per person. That leaves a $3,000/month gap, requiring a $900,000 portfolio.
• Claim at 70: Benefits increase to $2,000/month each, reducing the gap to $1,400/month. You’d only need $420,000 saved to bridge that gap.
  So yes, delaying Social Security can significantly reduce the savings burden.

How to Plan Realistically
The most important step? Start with your actual retirement expenses—not a random target from a national survey. Then build your plan around that number, factoring in Social Security and potential healthcare costs. Most retirees don’t have a million dollars saved and still manage to live comfortably. The key is to plan smart, save consistently, and adjust as needed.

Final Thoughts
Forget the hype. You don’t need a round number or a million-dollar portfolio to retire well. What you need is a plan that fits your life, your values, and your goals. Start early if you can. Be consistent. Use your resources wisely. And always remember—financial peace of mind is the real goal, not just the biggest number in your bank account.

Let me know what your retirement number is in the comments. I’d love to hear how you’re planning your future.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post Is $1.46 Million Enough to Retire? What You Really Need Based on Your Age, Lifestyle, and Social Security appeared first on ROI TV.