Proper Retirement Savings Techniques with Seth Streeter | Mission Wealth Management

[Music] welcome back with all this talk about failing pension plans and an ailing Social Security System how secure will you be financially come retirement time and is it ever too early to start thinking about this and planning for it Seth streer is president of mission Wealth Management in Santa Barbara and you say start thinking about it and start saving up now because it’s never too early uh all right we all want to retire as early as possible we’ve got to be financially solving to be able to do it and we got to look at three main things here to make sure that we’re in the right track right absolutely social security number one mhm what’s going on with Social Security I mean that’s it’s concern a lot I think it’s in great shape just kidding actually it’s in the media lately Gabe every single day so Social Security is a significant concern for a number of reasons number one is the fact that current workers fund current retirees in Social Security right in 1950 there were 16 workers for every one retiree currently there’s fewer than three workers for every one wow you couple that with the fact that

people are living longer the over 80 population in the United States is the fastest growing component of the of the population growing five times faster than the national uh overall population and you look at the fact that today there’s about 28 million current retirees receiving Social Security there’ll be over 60 million retirees receiving Social Security 25 years down the road okay so if I’m banking entirely in Social Security that take care me when I retire I’ve got to think differently think twice what about uh this concept of of Pensions and 401K plans that kind of thing that’s going to protect me isn’t it well one might think that actually when you look at the overall funding of retirement it was supposed to be a three-legged stool onethird coming from Social Security one third coming from company pensions as you mentioned and onethird coming from from personal savings if you look at the trends in current pensions there are some very alarming Trends going on number one the fact that defined benefit plans are going to be a thing in the past very soon uh you just spoke recently about United Airlines PCH and

what happened and IBM a number of Pensions in fact there’s 73% fewer defined benefit pensions today than there were in 1985 73% all right so really then ultimately it’s up to me exactly it’s up to that third prong in that stool you mentioned which is I got to make sure I’m saving enough money and and planning financially now to make sure that I can take care of myself absolutely come retirement time all right so how do I know how much money I should be saving making putting what can you break it down for me sure absolutely can I mean the simple answ is is as much as possible but uh people always want to know well what really should I be saving to be on track for financial Independence and we actually put together a slide that we might referred to now that would give us kind of an idea as to what is required this and this is just realistic so I mean when I first saw this it kind of freaked me out but let we’ll put these numbers up and we’ll kind of walk through because you’ve breaking it down at age I’m not 35 yet but uh let’s talk about the 35y old making say $5,000 a year I’ve got to

save 31% of my income every month right absolutely bucks a month you need to be saving $1,200 a month if you hope to have one day at your curent at your age 65 a lifestyle of $60,000 a year after taxes okay and if I make 100,000 at age 35 I’ve got to save $1,100 a month which is 14% of your gross earnings now the older I get if we jump down to 45 uh years of age for example and this is considering you’re starting now to save exactly the numbers get a little bigger absolutely right the longer you wait the more you’re going to have to save and it’s probably not realistic for people to save 50% of their income that’s why it’s abs Ely critical that people start today at$ 45 at $100,000 there on the far right you’ve got to save 21% of your income or $1,780 a month to again live that lifestyle as if you had been making 60 Grand a year exactly and Gabe I’d like to add to this that this does assume that Social Security stays intact which we just spoke about might not be the case it’s suppos to bankrupt in 2042 it also assumes that you’re going to average a 3% inflation rate and an 8% average rate of return on investments

which also is not guaranteed uh and that graphic illust beautifully how really the later if you start thinking about retirement at age 50 thinking well I’ll retire at 64 I got 14 years that may be for a lot of people a little a little too late uh do you see people getting a little concerned I mean it’s almost like the kind of thing you don’t want to look at because the realism is a little a it’s it’s a pill that’s stuck to swallow exactly and I think the number one step for people is to actually wake up and look at the reality of the situation that if you don’t start today no one’s going to do it for you you can’t count on the government you can’t count on your employe it’s up to you to take control of your future so I would just challenge every single viewer here to take one small step Say by tomorrow you know increase your 401k by 2% pay down your credit card a little bit more than you did before open a Roth IRA uh go seek professional guidance and if you need some guidance Seth is there with Mission wealth management if you’re watching this on Sunday morning call him tomorrow Monday uh 882 2360 is the phone

number or mission wealth.com is a website Mission wealth.com and Now’s the Time SE thanks for coming in that’ll do it for our Edition of uh the coastal Business Report