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This week on the Pete the Planner Show, Pete and Damian meet their technical problems face to face! Oh, and they also respond to questions from our listeners.
Remember: In the first six months of 2021, we’re going to make over five families’ financial lives, LIVE on the air! WE’RE GIVING AWAY FIVE FREE HEY MONEY, MEMBERSHIPS to walk with them across six months telling their stories about their struggles in personal finances. Check us out!
No time to listen? BUMMER. Here’s some of what happened and when:
MAILBAG QUESTION 1: [4:45]
- “I’m trying to estimate how much I’d be able to spend each year in retirement based on my current savings. I have about $1.5M saved in pre-tax accounts. Since they’re in pre-tax accounts and I’d owe about 1/3 in income taxes, I’d really only have about $1M after taxes. Thinking of a safe withdrawal rate, how do we best understand what’s mine each year vs Uncle Sam’s?”
- Damian: You can use a daily simple retirement calculator, but he estimates 1/3 going toward taxes and that might be true long-term. However his tax bracket may be lower based on how much he is taking out to support himself in those first years. The pinch comes from the required minimum distributions as you get older; the amount of money you have to take out every year gets larger.
- Pete: Let’s say he’s two years away from retirement. He’d receive $4,227.54 per month based on 2% inflation and 4% withdrawal rate and a 25% tax-rate.
- The personal finance space struggles to talk in realistic terms. We all have to consider the full scenario with taxes and inflation.
- Damian: Unless you’ve saved in Roth, after-tax vehicles.
BUY QUALITY VS. BUY CHEAP – SHOULD I REALLY SPEND A LOT ON THAT?: [16:15]
- There are certain things in life that you are better off spending a lot of money on in order to get something that lasts a long time. There are other areas where you’re told to spend a lot of money…should you?
- Pete: You should not spend a lot on – The best pair of bluetooth headphones I’ve ever owned were about $19 from Amazon.
- Damian: You should spend a lot on – Great shoes. That’s something to enjoy.
- Pete: You should spend a lot on – A very nice grill. But the other side of this is properly maintaining the things you do spend good money on.
- Damian: You should spend a lot on – A comfortable mattress to get the best sleep you can.
- Pete: You should spend a lot on – Really good wine.
- From the audience: You should spend a lot on – Fitness and health.
There’s so much more in the full show! — click PLAY below for the full show.
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Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.