How Long Will My Investments Last In Retirement? - YouTube

A 10% annual payout in retirement income is doable.

In this episode, I'm going to address the question "How long will my

investments last in retirement?" Now, you wouldn't

believe how many times I've been asked that question. And of course ,it's a

function of where is your money invested. If it's in

a mattress, not very long. If it's in a bank, not much

better. If it's in the market, I don't know what

the market's going to do. So, I'm going to teach you how to create

predictable rates of return and be able to know exactly how long it will last

as long as you do. Are you ready?

So, I'm Doug Andrew and I've been a financial strategist

and helped people plan for retirements where they don't outlive their money

now for north of 46 years. My favorite vehicle by far is

the tax free bucket, i call it. I really believe that people should have

from 40 to 60 percent of the retirement income

in that bucket. Most people don't even know

what's in that bucket. Maybe they think a Roth would fit in there.

Yeah. Or municipal bonds. They're shocked when I tell them where I have

60% or more of my retirement money, what bucket

generates predictable income that will last as long as I do.

But when people ask the question, "How long will my

investments last?" I need to know more information, right?

Where is your money invested? It's pretty pathetic how many people have

a lot of money in very low yielding accounts maybe with banks or credit

unions earning 1 or 2 percent. It's not going to last very long

in there unless you have so much money that 1%

interest will cover your living cost of living needs.

And cover you if inflation doubles the cost of living every 7 to 10 years

which it will likely do. When people say, "Golly,

how long will my retirement accounts give me

income?" It's based upon the rate of return

and also what strategies are you using to have inflation work for you instead

of against you? And how are you protecting yourself from

market volatility because most people who came to me at

retirement which is totally different than for

retirement planning. They were way, way too top-heavy

in the investment bucket where they had money in yet to be taxed

IRAs and 401Ks in the market. And I would go, "What are you thinking?

You should not have your money in the market due to

that volatility. A broker dealer will not allow their advisors, their asset

managers to show predictable income out of a portfolio of money in

mutual funds in the market. Usually at best at 4-percent payout."

Pretty pathetic that every million, they will only recommend you take out

40,000 a year? 4%? And that's not tax

free in most situations. It's a tax deferred IRA or

401K. You're not netting 40. You're only

netting maybe 27,000 thousand to 30,000 in most

people's tax brackets. And they charge you 1% on the

million if you subtracted the fee from that.

You're only netting maybe 2%. That's pretty pathetic.

That's like having your money in a bank earning 1 or 2 percent and I would

not recommend that. I have shown people how to predictably

earn between 7 to 10 percent average.

Meaning some years, I've earned 16%, 25%.

There was one year i earned 55%, another year

41 point something. Yeah, there are the real banner years but

when I made money in those years, if the next year or 2 the market went down

I didn't lose the 55% I made the year before.

See, most people if they have a banner year when they make money,

they lose it in future years when the market corrects or comes down.

What I like to do is lock in my gains anytime I make money so I don't ever

lose in the future the money i made in the past.

And that's called lock in and reset which is the subject of another

educational video on this channel if you search that. But I want you to

understand that there is what I call a tax and

inflation power curve that erodes away most people's

retirement nest eggs sooner than later. Let me explain that for you.

So, when people say, "How long will my investments last?'

Well, I don't know enough. If it's in the market, usually

DalBar who studies market behavior says that you should assume no more than

about 3.49% because people buy and sell at the wrong

times. If they bought and held, they might earn

9 and net 6. Most people they only earn about

3.5% and that's why the financial services industry

has that 4-percent rule is what they call it. You're only supposed to take out

4% a year because they don't want to be sued for

you out living your money. Well, I have been earning 7 to 10

percent. Where? Well, I want to make sure that whatever

strategy I use wherever i want my serious cash,

I want it to eliminate three big dangers. Now,

these three dangers that erode away most people's money or

cause them to outlive their money before they run out of money before they do.

Taxes, the negative impact of taxes because

they didn't realize that if they pull out let's say

90,000 a year. Let's say they have 1 million

dollar nest egg, and they say, "Oh! No, I've been earning 9%."

9% would be 90,000. They pull out 90,000,

they're only netting 60,000 because a third of it goes out the

window in taxes. And they're only netting 60(thousand). Well, they

may say, "If we tighten our belt, 60,000 a year,

5000 a month, we think we can make it." And then they forget about inflation.

Well, inflation has been averaging almost 10 percent

people say, "No, that's not what I've heard." Well, that's because the government

changes the way they report inflation. See, they now have the right to say, "We

will compare the cost of beef from one year to next. But we

choose if we want to compare Filet Mignon,

we can change it to comparing it to hamburger the next year instead of

filet mignon to filet mignon." Really? Yep. Medical costs, health care costs,

they're through the roof. So, the actual cost of living is

different than the annual inflation rate that

sometimes the government throws out there in a number of 3

or 4 or 5 percent. No. Some costs are going up 10, 15 and 20

percent. You cannot be rowing upstream at the

rate of 1, 2 or 3, 3 ½ miles an hour and the current of

inflation is coming down at six seven or 8.

You're going backwards. So, you need to earn a rate of return that's equal

to or greater than the inflation rate. So, what I've always done is linked my

returns to inflation. To the things that inflate.

So, inflation which I don't like any more than you probably do. But it doesn't hurt

me, it helps me. If inflation goes to 5, I've usually

earned at least 10 or more. If inflation is 10, I earn 15. If it goes

to 20, I earn 25. Because I link my returns to the things

that inflate by using indexing. You wouldn't believe how many

financial advisors have no clue how to do that.

They think i'm talking about indexed funds. No.

Index funds means your money's at risk in the market. And when the market goes

down you lose. Indexing my money's not in the market. I

get credits when the market goes up. But when

the market goes down, I don't lose because my money is not in the market.

And so, this is what has given me the average returns of 7 to 10 percent

tax-free. Even though some years, I've earned 16 and

25 and 55 percent by using multipliers which we teach about in other

educational videos. Here's the key: Are you wanting your

money in a tax deferred, in other words, yet-to-be

-taxed account the rest of your life? You want to

eliminate taxes, you want to get the taxes over and done with and convert to

tax-free. You want to have inflation work for you

instead of against you. And then number 3, you want to protect yourself from

market volatility. That's why I use indexing. So, when the

market goes down, I don't lose. When the market goes up, I

make money. And so, generally, in a 10-year period,

in any 10-year period since the great depression, there will be 7

up years compared to 3 down years. In the decade, the worst decade since the

great depression, 2000 to 2010 even going to 2012,

there were 5 down years compared to 5 up years.

And I averaged 7.23% in that worst decade using indexing.

By adding a second strategy that we teach on this channel,

rebalancing, I was able to increase my return to 10.07%

in the worst decade. And I've been earning an average of 10

net cash on cash tax free for the last 27 plus years.

The key message here is that you want to create a strategy so that your

investments will last as long as you do. That if

inflation doubles the cost of living every 7 to 10 years,

your income will stay with that. You will be able to have the same

purchasing power. You'll be tax free instead of having to pay tax

forever on your IRA, 401K distributions. And you want to protect yourself from

market volatility. So, eliminate the dangers of taxes, inflation and market

volatility. How do you do that? Would you like to

learn? This is why i am so passionate about

education because you can't be aware of something you're

not aware of. You don't know what you don't know.

So, this is why I've written 11 books. This book is 300 pages and you'll be

blown away. It's actually two books in one. See, you

flip it over and you got this side. This is 14 chapters with all kinds of

charts and graphs and explanations about one of my favorite vehicles.

A max-funded, indexed-universal life insurance contract

where I have averaged in excess of 10 internal rates of return cash on cash

after all fees and costs for the last 27 years.

And most people, most financial advisors don't have a clue how to do this.

So, I wrote my 11th book and i call it The Laser

Fund because it eliminates those 3 dangers --taxes, inflation and market

volatility. And it shows you how to convert to tax

free have inflation work for you instead of against you.

And eliminate the dangers of market volatility.

And your money is liquid, safe and earns predictable rates of return.

It's liquid assets safely earning returns. Which spells the acronym LASER.

So, I call it The Laser Fund. Now, if you like to learn by stories, you flip the

book over. This is 12 chapters on this side with 62 actual client

stories of how this is used not only for retirement

but emergency funds, college funding, real estate management, working capital,

for business estate planning, on and on and on.

If you want to use your whole brain, your left brain and your right brain,

read the whole book. But I'll pay for the book.

I'll buy the book. You claim your free copy by going to

laserfund.com. Laserfund.com. You simply pay $5.95 shipping and

handling. I'll fire out a free copy to you and there's options there to get

the audio and video if you like to listen and

learn and watch and learn. But it all begins

with you empowering yourself. It's time you took ownership for your own

retirement so you don't outlive your money.