My Honest Advice To Anyone Retiring With $2M+

My Honest Advice To Anyone Retiring With $2M+

Work with Taylor: https://www.demarsfinancial.com/start-here

Retiring with $2 million or more can create incredible opportunities—but it also comes with important financial decisions that can have a lasting impact on your lifestyle, taxes, and legacy. If you're thinking about retiring with 2 million or wondering how to retire with 2 million, this episode walks through the key decisions Taylor believes matter most before and after retirement.

He explains how to build a sustainable 2 million retirement strategy by creating a reliable retirement income plan and focusing on smart retirement income planning. You'll learn how to structure your retirement paycheck, think through retirement spending, and understand how much to retire with confidence based on your own goals rather than someone else's expectations.

He also covers advanced planning topics that can make a meaningful difference over time, including retirement tax planning, the ideal withdrawal order retirement strategy, making the most of the Roth conversion window, and avoiding unnecessary taxes and penalties. He'll discuss social security timing, how the survivor benefit social security rules work, ways to avoid the IRMAA  Medicare surcharge, and what to know about the ACA subsidy cliff if it applies to your situation.

Beyond taxes and investments, he talks about sequence of returns risk, why retirement coordination is so important, evaluating a pension election, handling deferred compensation, and understanding the go go slow go no go years framework so your financial plan matches how retirement typically evolves over time. He also explains why giving yourself permission to spend retirement savings can be just as important as building wealth in the first place.

Whether you're planning a high net worth retirement or simply want a smarter approach to protecting and enjoying your savings, this video will help you make more informed decisions and avoid common retirement mistakes.

Timestamps:
00:00 - Intro
01:00 - Advice 1: Your Math Isn't The Problem Anymore
04:23 - Advice 2: Nobody Around You Is Built For This Moment
08:03 - Advice 3: You Money Must Work As One System
12:10 - Advice 4: The First 3 Years Are Everything
16:03 - Advice 5: Your Biggest Threat Is Looking Back At You

Resources:

Website:  https://www.demarsfinancial.com/

Phone: (509) 536-9556

Schedule an introduction call with Taylor: https://bit.ly/demarspodcast

Check out Taylor's YouTube Channel: https://www.youtube.com/@TaylorMadeRetirement

Taylor's Newsletter: https://demars-financial-group.kit.com/827c64fe0e

Disclaimer: Since we don't know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Demars Financial Group, LLC or its members cannot be held liable for any use or misuse of this content. Advisory services offered through Demars Financial Group LLC, a Registered Investment Advisor. Demars Financial Group is not affiliated with LPL Financial.

Transcript

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SPEAKER_01 0:00

Today's content is pulled from Taylor's YouTube channel. If you want to watch the video version or catch more great content, subscribe by clicking the link in today's show description. Welcome to Taylor Made Retirement, where we explore what it takes to build a retirement that works for your money and your life with third generation certified financial planner Taylor DeMars.

SPEAKER_00 0:28

If you save $2 million or more for retirement, you've already done something that most people in this country will never do. You were disciplined for 30 plus years, maxing out your contributions, and staying the course when the market dropped 40% without panicking. And right now, you're sitting on a number that by almost any standard says you've won. So here's my honest advice to you, and I mean this. The hard part isn't behind you, it's right in front of your face. And the reason I say so is simple. Almost nobody in your life right now is going to tell you the truth about what happens next. My name is Taylor Damaris. I'm a third generation retirement planner and tax strategist. And our firm has helped hundreds of people with 2 million or more make the transition into and through retirement since my grandpa started the business in 1975. And I keep seeing the same thing. Smart, successful people who did everything right for 30 years are making mistakes in retirement that have nothing to do with how much they've saved. And those mistakes aren't random, they're predictable. They come from a place that might surprise you. So today I'm going to share five pieces of honest advice that I would give you if you were sitting across from me right now with nothing between us. And the first one I think every person with 2 million or more needs to hear before anything else, because once you see it, it changes how you think about every other decision you're about to make. I'll tell you an example with a client couple I worked with recently. I'll call them Greg and Diane. He's 59 and she's 57. He was a program manager at a defense contractor, and she ran operations at a regional medical group. Together, they had saved just over 3.2 million between their 401k, 403B, an IRA they had on the side, and a cash in savings. On our first call, the first thing that Greg said was something I hear nearly every week. It was something to the tune of, I'd run every calculator on the internet. And some days I think we're just fine. And other days, I'm up until 2 a.m. running the numbers over and over again. Because he had done the Monte Carlo projections, used Bolden retirement planning software, and even built his own custom spreadsheet with more tabs than I could count. But it wasn't enough to help him pull the trigger. On Diane's side, she just wanted one thing, which is to stop being a passenger in a plan that only lived in Greg's head. So seeing their situation, I could see why Greg was stuck, but it wasn't for the reason he thought. Because the math had been solved for years. With over 3.2 million, a paid-off home, and pensions and Social Security yet to come, the question of do we have enough stopped being a live one a long time ago. But no one had told him that. And I think there's a specific reason why, which I'll get to in a minute. But the real problem Greg was facing was never the number. It was the fact that their money was across six different accounts with six different sets of tax rules, and there was no single system that funnel it into one format of how it would become their paycheck once his salary stopped. He didn't know which account to pull from first, or how pulling from this account would affect the taxes on the other ones. On top of that, he didn't know how Diane's income would look like heaven forbid something happens to him. He was unsure about Roth conversions, if he should be converting up into the six figures every year, or whether doing nothing at all would be better for their lifestyle, to not trip up ACA subsidy consequences or Irma penalties. And unfortunately, no calculator on the internet is going to give all those questions as precisely as you want, because they're not just math problems, they're coordination problems. What we did for their situation is what I think would be helpful for you to hear. We actually barely touch their investments, we just changed the wiring underneath. Which account pays them first, what gets converted while the tax brackets are still wide open, and importantly, where the first three years of income sits between cash and short-term savings and bonds in case a bad market comes, so it doesn't touch their paycheck. Their ideal retirement wanted north of $10,000 a month to spend. And while their financials said they could with Elbed Room to spare, starting right after his last paycheck, that $3.2 million had continued to sit there in front of him. Once we were able to build out his retirement readiness roadmap, he felt confident to get his notice to leave in last fall. And that's the first piece of honest advice I'll tell you. If you've already saved $2 million or more, the odds are the math already works. The reason you don't feel confident isn't because the number's wrong, it's just that nobody's put the pieces together to show you what happens once the paycheck stops. Most of our clients spend 30 plus years putting money into their accounts, and you probably got very good at that as well. However, turning those accounts into reliable monthly income paychecks for the rest of your life is a different skill, and most of the tools and people around you weren't built for it. But it raises a fair question. If the math has been there for years, why hasn't anybody told you? Let's start with your employer. You're likely a proven productive employee. Your employer doesn't benefit from you leaving. Nobody's going to pull you aside by the water cooler and say, you know what? You've got enough. Go ahead and pull the trigger and enjoy your life. That conversation isn't in their best interest, so it frankly doesn't happen. I wouldn't call it evil, it's just how a business works. Now, let's talk about your financial advisor if you have one. And I want to be fair here because most advisors aren't bad people. And many people do real good work for their clients. But if you look at how most of those relationships are built, they have a percentage of the assets they manage that they get paid on, meaning their revenue rises when your portfolio rises. The moment you retire and you start living on that balance, their fee base is likely to start shrinking. So when the advice is you're doing great, stay the course, that might feel like sound advice in the moment for someone still climbing the mountain. But if you've already reached the top and nobody told you to stay the course, it stops sounding like advice and sounding like the default answer built with a toolkit for a different question. I can't tell you how many people I've sat across from and they said, we've been with our advisor for 15 years, and he's taken us as far as he can. Every time I ask about retirement income or the tax strategy, what happens to my wife if I go first, I get the same answer, something to the tune of, you're fine. As you know, you're fine is not a plan. It's more of a placeholder for the conversation nobody has had with you quite yet. Now, I want to stop and be honest about something because it would be convenient to skip this part. For ongoing relationships, I get paid this way as well. So when I tell you I have the industry has a blind spot, I'm standing and calling it from the inside. Most of this industry asks you to get married before you have a chance to date. Move over your investment assets first, and then you get to find out and experience what the planning relationship's like. We run it the other way on purpose. Education first, so you know your options and why before anybody talks about moving a dollar under someone's management. But frankly, we're not a fit for all people because my job on a first call is not to keep anyone anxious, but to help people understand the truth about where they stand, even if it means you've been ready for a while. So, one more thing, because if you're the one who found this video for your household, it's part of for you. For most couples, one person carries the whole plan on their shoulders. You run the spreadsheet, you know where all the financials are. And part of what makes a real plan is that it stops litting in just your head. Because heaven forbid something happens to you, your wife or husband isn't left decoding your spreadsheet tabs in the worst season of their life. The plan can keep working when you can't. So for a lot of couples I sit with, that lands harder than any single tax strategy. Because someone is able to look at their plan objectively, look under their hood, be a devil's advocate for those things that may just be an echo chamber in your head, and then you can finally breathe. And now there's a third thing that might keep you working, and it's the financial media. Think about the retirement headlines you scroll past every day. Tell me which one do you think gets the most clicks? Something saying, you're probably on track, just relax, or why two million dollars might not be enough to retire? Fear will win that contest every time because it keeps you watching, clicking, and selling ads for the publication. A fearful viewer is a loyal viewer. And I wouldn't call this villainous, it's more complex than that. But in short, you can see how there's no one in your circle that's meant to tap you on the shoulder and say, hey, you've been ready to pull the trigger for a while now, and the risk is no longer running out of money, but burning years you'll never get back, solving a problem that's already taken care of. That's the honest answer for why nobody's told you. And it's the second thing I'd share. Once you see it, you'll understand why so many people with $2 million or more work two, three, or even five more years than they ever had to. But even before you see that system around you wasn't built for this moment, there's a structural, fundamental reason that this transition feels more complicated than anything you've handled up until this point. I'll give an example of what I see when couples approach us with significant retirement savings and talking for the first time. They might have a 411 with their current employer, call it one and a half million, an old IRA rolled over from a couple jobs ago, maybe a 403B, maybe a pension, or even a joint brokerage account that they've been feeding on the side. Let's call it that they have 80 grand in savings as well. Depending on their family, they might have some additional family business interests or an inheritance sitting on the side they just don't know what to do with yet. And all these accounts, for 30 plus years, every one of these accounts were operating on their own. They didn't need to talk to each other. You put these buckets out in the rain, and your job is just to let them sit and fill up. But the day you retire, that changes. The way one client put it to me was something to the effect of I used to fund my portfolio with my paycheck, but now that I'm retired, my paycheck needs to come from my portfolio. Now, those six or seven buckets you're looking at have to feed one pipe, one paycheck, ideally every month and on time. And this is what catches many smart savers off guard because these decisions stop being independent. I'll give you an example. I had a client, I'll call him Steve, who spent his career in IT and he retired at 62 with just under 3 million, most of it in tax-deferred accounts. His wife Pam started her Social Security right at 62, but because they're under age 65, they weren't on Medicare yet, so their insurance came from the government marketplace. As you know, there are certain subsidy opportunities as long as your income is under a certain threshold. In their first year of retirement, they needed around $160,000 to live on. Steve wanted it to be simple, just take it from one account, one withdrawal, and be done. So his instinct, which made sense, was to pull all from the 401k, where most of the money was. But here's what that one decision set off. Pulling that much money from pre-tax funds pushed them into a higher tax bracket than they never needed to visit. That same income dragged 85% of pay on Social Security onto the tax return with it. And then the kicker, it shoved their taxable income past the line where health insurance premiums from the government marketplace come in to save the day. As you know, in 2026, that line is a cliff, no longer a graduated tiering slope. $1 over the threshold, and your subsidies can go to zero. For Steve and Pan's situation, that meant $15,000 to $20,000 of subsidy support gone every year. That one withdrawal decision that felt obvious turned into three separate bills that Steve never saw coming. And here's the part that stays with me. The mistake was never the $160,000. Their plan could afford it. The mistake was simply where the funds came from. It's the same spending funded mostly out of a brokerage account that could keep the reported income low. In their case, it could keep most of paying Social Security off the tax return, as well as their health insurance subsidy plan intact. I'm talking the same lifestyle, same trips, grocery bill, but tens of thousands of dollars of difference from nothing but the order that you can pull the money out. Now, if you've got a half million save for retirement, a small miss like that stings and you move on. But with substantial savings, a small mistake becomes a big problem. Compound that over a 30-year retirement, and that's how six figures quietly leaks out of someone's plan. Personally, I call it the complexity premium. It's that price tag that comes with saving well. Retirement at this level, I think of as a Rubik's Cube. Every twist you make solves one side, but it can change two others. And the more you've saved, the bigger every twist gets. The way that we frame it for clients is in three tax buckets and a paycheck. First, there's money that the RS has already taxed, then there's the money that's waiting to tax, and then the money that it can never touch again. Translated to how that affects their funds, want to make sure that they have their pantry of emergency savings, then a bond bunker to take care of years' worth of withdrawal needs, if but when the market drops, and then also the rest of it to be saved up for long-term growth. That's my third piece of honest advice. Your money has to work in one system now, not figure out along the way. Now, real quick, if you're watching this and you're within a few years of retirement with 2 million or more saved, what I describe might sound a lot like your situation. And the link in the description is where you can book a call with me to see whether your plan has this coordination built in and whether you've been solving the right problem all along. Now back to the video. Think about what happens in the first three years after you stop working. At some point, you might claim Social Security. And for a married couple, that's really two decisions, not one. Because the timing of one spouse's benefit sets the survivor benefit for whoever lives on if something happens. Get the order wrong and you can leave money on the table for a very long time. Not your money, but your spouse's money. And unfortunately, the years that they're alone. Now, if you've got a pension and there's an election, and many times it's a permanent decision. And of the monthly options, the biggest number is the one that's going to mean nothing is left for your spouse after you're gone. Whatever your decision, you'll sign that form once and you'll live with it for the next 25 or 30 plus years. If part of your pay went into a deferred compensation plan, chances are you're locked out on its payment schedule years ago on a form you might barely remember signing. That income lands when the form says it does, and it doesn't care if it stacks on a bad tax year or not. Then of course there's healthcare. Retire before 65, and Medicare isn't there yet, so you're likely looking at living on Cobra or the government marketplace plan. We already talked about that cliff that caught Stephen Pam off guard because the way that you structure your income in these early years depends on whether you can qualify for that help that could be worth 15, 20, 25 grand a year, depending on your situation. And then there's what I think is the single most viable window in your entire financial life, which is this gap between the day that you retire and when Social Security as well as required minimum distributions start to push your income back up. Those years are usually somewhere between two and seven years long, depending on your situation. And this is when your taxable income could be the lowest it will be for the rest of your life. That's the golden window to be chipping away at this tax bill that's hiding inside your most expensive free tax accounts. Moving dollars into the tax-free Roth bucket while your tax brackets are wide open is an opportunity to capture rates you might not see again. Once the window closes, it doesn't come back. Because by the time you hit your mid-70s, RMDs are likely pushing your income up, your tax bracket is higher, and every dollar you move is going to cost even more. Here's another wrinkle that may catch you off guard. Medicare premiums look backwards. The premium you pay starting at 65 is based on the income you show at 63. So those early Roth conversion opportunities are also going to write your Medicare bill two years in advance. So here's what makes that timing part so difficult. These decisions don't wind up in single file and wait their turn. It's more like a busy intersection with no stoplights. They land all at the same time. The pension election is due while you're working, Social Security is imminently likely around the corner. You're trying to price out your healthcare premiums while also trying to decide which account is going to pay you and how much to convert in Roth conversions without tripping up unnecessarily into the next tax bracket, much less handing you a Medicare surcharge two years from now. As I mentioned, every one of these decisions is going to impact and move the others because they all flow through to your modified adjusted gross income and your tax bill. I've had people come to me after making one or two or more of these decisions on their own, and they were reasonable, defensible choices. But when we modeled out what a coordinated version might have looked like for their situation, the net benefit to their situation sometimes could have been six figures over the course of their retirement. Not necessarily because they chose badly, but because when you're looking at a $2 million plus pot for retirement, there's no such thing as making a decision in isolation. And these first three years in front of you are when most of the permanent decisions get made. That's the fourth thing I tell you. Saying I'll figure it out as I go can work at a smaller scale where the stakes are lower and the choices are fewer. In the range you're looking at today, figuring out as you go is how you leak six figures quietly without a single alarm cover going off. So far, everything we've talked about is external. You're your advisor, your employer, your accounts you save, the tax rules, the timing for Roth conversions. But this fifth risk is internal, and it's the one that most successful savers never see coming. I'll admit this is the advice that's hardest to hear, but it's the most important thing I'll say in this video. The person most likely to sabotage your retirement is the same one who built it. I'll give you an example. You spent 30 years building habits that made you very good at stacking wealth. Save first, spend what's left, and wait, watching that number climb and feeling good about it. Then you watch a dip and you're gonna feel that knot in your stomach. Those instincts built the wealth you're looking at today and are the reason you're watching this video instead of a video about catching up. But retirement asks you to run every one of those instincts in reverse. It asks you to watch the number go down on purpose. It feels like raiding the piggy bank. And for a lot of people, it doesn't feel like retirement. It feels taboo, almost like you're undoing your life's work. I had a client I'll call Carol. She's 63 now. She ran HR for a large firm for almost 30 years, and her husband retired the same spring with a little over 3.6 million. Again, by any measure, they had won the financial game. After we built their plan, it showed that they could spend 14 grand a month, travel included, and still leave something behind for their kids. But after all the explanations, Carol looked at me in the eye and said, I hear you, I just don't actually think we can do that. They were limiting themselves to only one big trip a year, which was meaning flying some more domestic flying coach. However, going to Portugal flying business class had been on their list for a decade, yet somehow every year got kicked to the next year. And on top of that, she said she still won't turn up her heat in the winter because she's trying to save those pennies. In her head, she's still watching the gas bill, despite having $3.6 million saved on the balance sheet. It took a couple more meetings and a spending plan sorted into needs, wants, and wishes before Carol finally gave herself that permission to book the Portugal trip. But here's the thing, she's not an anomaly. I see people all the time who have saved significantly for retirement. It's just that discipline that becomes the handcuffs between them and the wall to actually use it. The quiet tragedy is that the years that you spend waiting to retire aren't sitting still. You've likely heard before the saying of the go-go slogo no-go years. This trip to Portugal is a different trip at 63 than it is at 73. At 63, you're likely walking 10 miles a day through rough cobblestone in Lisbon and finding the small fishing villages that nobody told you about. At 73, I say this with love because I've seen it happen. Many times they're just sitting in a golf cart on shorter tour days because the body gets a stronger vote. At 83, the trip may not happen at all. One client, I'll call him Frank, was 64, spending his entire career as an engineer with over 4 million saved, telling himself, I'll just do one more year because he kept getting incentive packages. But the plan didn't need another year. We were trying to get him every angle possible. Until one afternoon, sitting right about where you would be, something in him let go. He said something to the tune of, I've been working since I was 12 years old running newspaper routes. To die and leave all this behind is ridiculous. He gave his notice within two months. Nobody handed Frank a new spreadsheet that day. He had seen all the numbers, but what changed in his mind was that he was able to say out loud what that money was for. I share that with you because it's the most honest thing I feel like I can share. You didn't save this money to be afraid of it, but so that at some point you could trade it for the life you've been waiting for all along. The bucketless trips, seeing grandkids, the slow Tuesday mornings that belong to just you. And the hardest part of that isn't the math. Odds are the financials work. The hardest part is giving yourself permission to stop being the person, just building the wealth and start being the person who lives on it. It's a real mindset shift. It doesn't happen just because you filled the retirement paperwork. It takes deliberate thought. And for most people, it might take an objective third party outside your own head who can look about your own situation and tell you to use straight instead of letting your 30-year instincts telling you to keep running the show. That's my honest advice if you're looking at retiring and have saved 2 million or more. But knowing these five truths and actually knowing whether you're ready to make the call to retire are two different things. That's why I made this video right here to walk you through the five specific questions that will help you determine whether retirement is actually a decision that's going to hold or whether there's still a gap that you haven't addressed yet. Thanks for watching, and I'll see you in the next video.