I’m 61 with $1.7M How Much Can I Spend in Retirement?

James analyzes Robin’s retirement plan to determine if she can retire at age 62 and maintain her desired lifestyle. Robin has $1.7 million in investments, a $40,000 annual pension, Social Security benefits, and home equity. Her retirement goals include $5,000 per month for living expenses, $10,000 annually for travel through 2040, and preparing for healthcare and long-term care costs.

The analysis examines her income sources, projected expenses, and portfolio sustainability. Using cash flow projections and Monte Carlo simulations, James evaluates Robin’s financial outlook, testing her plan against market fluctuations. With a 78% probability of success, her plan emphasizes the importance of balancing financial security with enjoying retirement.

This case study offers valuable insights for anyone approaching retirement. It highlights key principles, including how to evaluate income and expenses, plan for inflation and unexpected costs, and create a sustainable withdrawal strategy. Whether planning for travel, healthcare, or major purchases, Robin’s journey illustrates how proper planning can provide clarity and confidence for a secure retirement.

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⏱Timestamps:⏱
0:00 - Robin's retirement goals
3:45 - Income in retirement
5:51 - Retirement analysis - cash flows
7:56 - Expenses and taxes
11:25 - Portfolio analysis
14:46 - Monte Carlo, severity of failure
17:12 - Further testing and confirming