Can I Retire From the Railroad with $1 Million?Tier 1 Tier 2 Video Retirement Financial Planning
How much money do you need for a great railroad retirement.
Welcome everyone to another edition of the Highball Advisors railroad retirement whiteboard. My name is John McNamara of Highball Advisors. And today we're going to talk about, you know, your nest egg for retirement, how much money you're going to need for retirement. So a million dollars, right? I saw a great Dave Ramsey article. I like Dave Ramsey. You know, it gives it very folksy, really great for people who are struggling to build a budget and build for retirement, you know, a lot of really good tips there. So I saw this one article that he did on say, can I retire with a million dollars? Right. And I said, wow, a million dollars. That's great. But you know, when you drill down to it, it's, it's not as much as you think.
So what I thought is why don't we bring this to railroaders? Because like I always say, railroads are different about the retirement, right? So the Dave Ramsey folks, social security is probably the most guaranteed retirement income source. However, railroaders you'll have your tier one tier two and possible pension, but we'll get into that. So talk, going back to the Dave Ramsey article, you said the average American spends about $66,000 per year in retirement, you know, $5,500 a month. So that's kind of an interesting baseline. So what they're very concerned about is you got to take your nest egg and that's got to fill in the gaps after social security. And you know, there's a lot of variables, right? You don't know, nobody knows where the stock market is going, despite what they might say on TV, but nobody knows. So you have, you have to factor in the the rate of return of those investments.
You Have got to factor in your withdrawal rate, how much money are you going to take out every year out of this nest egg to help fill in the gaps? And then finally inflation. I mean, I could just be a killer and we're seeing that lately inflation. So we're having a spike. I don't know if it continues or not. So those are variables in that, in the proposition of retiring on a million dollars so I thought that was really interesting, but I said, let's look at it from a railroaders perspective and see give you some ideas on how you can
Go figure out what you might need in railroad retirement.
So the first thing to do is get a number, right? Understand, well, what is, what does my retirement look like? How much am I going to need to spend? You know, maybe my house is paid off. So maybe I don't have a mortgage payment. I just have to do property taxes. Right. maybe I like to travel maybe I might have some health issues, I don't know. Right. So you figure out, get that number that's important thing. Right? So then you have that and then you can understand, well, where are my income sources from, right. Unlike just social security, right? You'll have tier one, you'll have tier two, right. Which is great. And possibly some might even have a pension. So that might be three sources of retirement income. And for a lot of people that might even cover their whole, all their expenses, however what's left over is what you're going to need to build that nest egg, right?
How much you're going to need to fill in the gaps of your number. Right. And then going back to that nest egg, as we were saying, okay, now we've got to bring in the investments again, right? The rate of return investments, how much do we have to withdraw down? And then the inflation again, right? Those are unknowns, as I say. So as so much, we can get guaranteed in our number we're in better shape. And then the nest egg will just be a variable. Won't be as important for, as the social security people is. So I hope you found this helpful start the process, you know, maybe just get a little piece of pen and paper, sit down for 15, 20 minutes and just figure out that number and just kind of back into everything. So I hope you found this helpful reach out to me.
You know, we can go through the boarding for retirement process, you know, if you're closing in on retirement and that might be something of interest to you because you really have, have that number going into retirement. I can't imagine if you don't have it what that would look like, but do that. Please subscribe to my YouTube channel. That's great. Click on the bell below to get the latest videos. We'll notify you and it keeps sharing those videos. I'm getting a lot of great comments and feedback. So I appreciate that. So everyone until next time, please stay safe, stay on track and take care so long. BYE.
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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved.from Highball Advisors, and all rights are reserved.