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Episode 246: Episode 246: Why the Roth IRA Is NOT Enough (Graham Stephan Is Wrong!)

July 19, 2023

July 19, 2023; Duration: 09:06

There are a number of popular finance YouTube personalities like Graham Stephan talking about how you can be a millionaire by simply contributing $18 a day into a Roth IRA, but that doesn’t tell the whole story. Not only is that advice too simple, it doesn’t take into account the value of a million dollars thirty years in the future. Inflation will approximately reduce the spending power of that million into $250,000. The 4% Rule says that if you constrain yourself to only taking 4% of your day one retirement balance, adjusted for inflation as income, you have an 86% chance of your money lasting through your life expectancy. When you crunch the numbers, this would mean surviving on $10,000 a year in today’s dollars in retirement. You have to be much more aggressive with your investing and saving as a 30 year old person. Instead of just fully funding your Roth IRA as a 30 year old, you could also befully funding your Roth 401(k). By investing $82 a day, your final balance after thirty y…

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