This is What a Real $3.2M Retirement Portfolio Looks Like

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Published 2024-01-20

Have you ever found yourself at a crossroads, wondering how to determine the perfect mix for your retirement portfolio? The questions can be overwhelming. What stocks should I own? What bonds should be in my portfolio? Where should I allocate them? In this video I walk through a real-life example to shed light on the steps taken to guide one couple through this intricate process.

Meet Todd and Katie
Todd, 66, and Katie, 63, approached us with a $3.2 million portfolio, seeking guidance on allocation. Despite diligent saving and investing, they felt uncertain about their financial security in retirement.

Building a Foundation: Goals and Income
With a retirement goal of $8,500 per month, including healthcare and travel expenses, Todd and Katie aimed for an additional $20,000 annually. Analyzing income streams, we considered Todd's Social Security and Katie's with a spousal benefit.

Understanding Cash Flows and Expenses
We broke down living costs, housing, healthcare, and travel expenses. Long-term care costs were factored in to ensure financial support for unforeseen circumstances.

Portfolio and Account Allocation Strategy
Determining the annual portfolio draw, we planned to source $600,000 from their taxable account for flexibility in tax-related strategies. Our recommendations focused on allocation strategy, ensuring each investment served a specific role.

Diversified Portfolio
Crafting a well-diversified portfolio for stability, we recommended conservative investments for the initial years. Emphasizing diversification even within their Roth IRA, we aimed to balance growth potential.

Addressing Current Investments
Shifting from predominantly large U.S. stocks to an 80-20 portfolio (80% growth, 20% stability) aimed to balance growth and risk mitigation.

Todd and Katie's journey exemplifies the intricate yet rewarding process of crafting a retirement portfolio. By aligning investments with goals, addressing income streams, and strategically diversifying, we aimed to ensure they could enjoy a secure and fulfilling retirement.

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⏱Timestamps:⏱
0:00 - Todd and Katie’s portfolio
2:05 - About them and their goals
4:28 - Income and cash flows
8:55 - Considering tax strategy and markets
14:17 - James’s recommendation
18:25 - Strategically allocated funds
22:08 - Dream big

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All Comments (21)

@jonathanduncan2665 4 months ago

Nobody, and I mean nobody on YouTube is this generous with their financial information. Thank you!
@chrismarion4385 3 months ago

I’ve watched a lot of videos on this subject and studied for many years - this is by far the most detailed and straight forward instruction I’ve seen. Outstanding job!
@xDustin 1 month ago

LOVE your videos. It’s the only place I can find these real, rubber-meets-the-road examples of the generalized advice that I can find EVERYWHERE else.
@myjessiedance 4 months ago

Love James presentation! Clear, concise, make a lot of sense. Thank you ❤
@dallison1961 4 months ago

Another great video that explains the basic concepts and pointing out the weighting issue with the index funds. I also like how you moved them into specific bond funds to address their short and medium term spending needs in case there is a market correction. I share the concern raised in the comments about the capital gains tax hit when reallocating the taxable account into bonds along with the interest generated in the taxable account.
@clarkmeredith2034 3 months ago

Thanks , James. Your communication is clear, detailed and understandable.
@RichardJewkes 2 months ago

James, I love watching your videos. They are very informative and helpful!
@garethwalters2909 4 months ago

Love this James, so interesting to understand getting the right portfolio split as you approach retirement. Please keep going with these real life examples, they're great and so well explained!
@mattchang4694 4 months ago

Really enjoy this type of case study videos!
@karinstucchio 4 months ago

This was super helpful. Thank you!
@dannycamardelle2592 4 months ago

Thanks for sharing a real world example in such detail!
@GuttersMN 1 month ago

Watching this video has completely changed our approach to our financial planning process. Thanks!
@vamsiallada8855 4 months ago

This was amazing!! Really enjoyed how you systematically went through the process. So extremely helpful! Thank you for all your valuable insight. You have a heart of a teacher and it is greatly appreciated.
@ravipad6268 1 month ago

You are awesome dude!! I know quite a bit but you answered questions that I was looking for "a long time". THANK YOU!!
@jrizzle141 21 days ago

Holy cow this was such an incredible video, props man. I love it.
@rzhang3039 3 months ago

Another great video, as you always do. Thank you, James!
@sarahsunsetpark 4 months ago

Thanks James. I love seeing these real life portfolio examples! I hope more people find your retirement videos!
@pandabearoceanpark 4 months ago

Very help explanation. Thank you!
@ericvoorhees1176 21 days ago

Awesome! Thanks for all the great information.
@frankb1 4 months ago

James you are a good teacher