How Much to Invest by Every Age to Retire Rich

Описание: Here’s how much you really need to invest at each stage of life to retire a millionaire.

Retire a Millionaire Spreadsheet: https://www.mikeandbrit.com/-retire-a...

Original Video:    • How Much You NEED to Invest by Every Age t...  

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There are two reasons we’re focusing on ONE million dollars in this video, as opposed to half a million or 2 million:
1) $1,000,000 is the amount of money we think most people in society would probably classify as being “rich.” So if you have a million dollars to your name, we think it’s reasonable to assume you would generally be considered “rich.”

2) By using the 5% rule, $1,000,000 invested in a good index fund would effectively give you the ability to retire on the median full time U.S. income, without having to have any job whatsoever. This is because, if you’re unfamiliar with the 5% rule, it basically states that you can withdraw 5% of your investment portfolio every year, without ever worrying about running out of money. Since the median income for full time employees is about $985/week (or about $51,000/year), this means you could effectively recreate the median income by having $1,000,000 invested in a good index fund, and withdrawing 5% of that ($50,000) every year. Without ever worrying about running out of money.

Unfortunately it seems a lot of people in the U.S. aren't anywhere close to having a net worth of one million dollars by retirement. The Federal Reserve released a study in 2019 revealing that over half of Americans ages 55 and up don’t even have a net worth of $300,000. Using the 5% rule on this number yields an annual income of only %15,000. Not nearly enough to live on.

In calculating how much money you need to invest by every age, to retire with one million dollars, it's important to remember a few things:

1. When it comes to the stock market, nobody knows the future and all we can do is just make an educated guess on what the future may look like based upon history. BUT it has been true that in spite of all the historic market crashes and ups and downs, the stock market has ALWAYS gone up over long periods of time.

2. Different sectors of the market go up at different rates, so this video is focused on the S&P 500, which is an index of the 500 largest companies in the U.S. by market cap, and is pretty much the gold standard for measuring market performance.

3. The rates at which the S&P 500 has gone up over time vary depending on what year you start at, but since its inception in 1926, the S&P 500 has returned an average of about 10.2% per year, which is the rate we’ll be using for the calculations in video.

4. We’re using a retirement age of 59.5. The actual retirement age varies by state, and according to SoFi is 64 in the U.S. overall, but we’re using 59.5 because this is the age you can start withdrawing from many different types of retirement accounts without penalty (Roth IRA, 401k, etc).

0:00 - Why We're Making this Video Again
1:20 - Intro
2:04 - The 5% Rule of Investing
3:02 - Compound Interest
4:12 - Your Net Worth by Retirement
5:28 - How Much Money to Invest (by age) to Retire a Millionaire

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