Florida couple's retirement outlook jumped by $1.6 million with a few fixes — and their 'safe withdrawal' income will be more than they earn today

Mason and Becca don’t want to just get by. They want to live the “rich life” Sethi espouses, with enough for an $800,000 dream home with a pool and a comfortable retirement. They’d also love to set their son up for life at 18 with a nest egg.

Sethi had some good news. Their commitment to changing their ways now will pay off huge dividends in the future — increasing their projected retirement savings by $1.6 million so they can withdraw $188,000 a year in their golden years. That’s nearly $30,000 more than they make working full-time.

“You clearly want a big rich life. and the age you are now — young, upwardly mobile with your income — I'm like, take advantage of it,” Sethi told them, noting that they should do all they can now as they may face heavier financial burdens in the future.

But he warned Mason and Becca that it won’t be easy. Here’s what he said they need to change.

Deal with red flags to build green in the bank

At first glance, Mason and Becca seem to be well off with a net worth of $326,567. Not only do they pull in $159,000 a year in their jobs but they’ve got $100,000 from the sale of a former home in the bank. They’re renting a furnished apartment.

Every month, they deposit $1,000 into a high-yield savings account to build their savings, which currently stand at $125,300 (including the proceeds of their home sale). They invest $200 a month and Mason contributes to a 401(k) at work. They have $204,867 in investments. Mason also deposits $380 a month into a Health Savings Account (HSA).

But outside of that, the couple doesn’t know what to do with their money.

Mason is experimenting with day trading. He started with $1,000 and is down to $800, something Sethi said demonstrates how much a gamble it is. Mason was also considering opening up a videogame arcade in their condo building to bring in “passive income.”

Sethi warned that Mason’s idea of “passive” income indicates a lack of understanding of how much work goes into building wealth.

The couple have been doing their best to pay down debt, but admitted they tend to swipe credit cards to pay for what they want — makeup, clothes, date nights, entertainment — and pay for it later, which is how they racked up $50,000 debt a few years back.

In the past three years, they’ve managed to whittle that down to $13,600, but Mason and Becca are afraid it will creep back up if they don’t get a handle on their finances.

“It's not something that we ever want to go back to since we're so close to the end of it,” Mason said.

Sethi said Mason and Becca’s lack of a plan, including their tendency to throw things on credit, is a big red flag. They have a broad sense of what they want — dream home, vacations, a nest egg for their son, comfortable retirement — but haven’t crunched the numbers.

Sethi said if they want to live a rich life, they have to get realistic and do some calculations. He helped them do just that.

Get realistic about wealth and you could end up wealthy

Sethi told the couple that without changing any of their habits (maintaining their current discipline around saving, investments and paying down debt) they are on track to retire with a $3.1 million nest egg.

That’s more than double the $1.4 million most Americans think they’ll need to retire comfortably, according to Northwestern Mutual. They could safely withdraw $126,000 a year in retirement.

“It’s not bad,” Sethi acknowledged. “Honestly, it’s not bad.”

But there are some caveats. With a lower income, they’d have to cut back their current lifestyle. They might be able to buy a home, but it won’t be their dream home. Leaving money for their son is out of the question.

Becca and Mason don’t want the status quo. They want the “rich life.” So Sethi worked with them on how to get there. First he pointed out places to cut back on monthly expenses.

One instant win? Pay off their $13,600 debt with their $124,000 in savings, leaving plenty in the bank. They could cut back (but not cut out) meal delivery, clothes, makeup, subscriptions like Audible and more.

That could free up an extra $1,000 to invest in retirement accounts every month