One other point. Try to be dept free. No mortgage, no car payments no rotating cc bills. For some this is difficult to achieve but if you make it a goal 5 -7 years before you retire, almost everyone can get there.

quote:

Originally posted by architect:

(Speculative) I may not live as long as I would otherwise due to the wear and tear of trying to keep up with a younger woman.

that's a nice problem to have !

plus she can take care of ya in 'old age' !

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quote:

Originally posted by old rugged cross:
Vanguard says they run 10k market scenario's and run the age out to 100. That is overkill. Especially on age. But that is just to be safe I suppose.

I think in retirement your major spending years will be to 75. I am talking about large purchases, traveling etc.
At think at age 75 if you owned your home had 50% of your assets left and had your SS you would be in high cotton. I think most would still have more than that is my guess.
The part that get lost in these threads is many people live simply. own their own home have a couple hundred grand in assets, get $1200 in ss and can live on that $1200 a month. They can live comfortably for, well, forever!
Not everyone needs a ton of $!

This is especially true if one retires to an affordable area that still is a nice place to live where there are plenty of fun things to do so that expensive travel trips are not frequent. I told wife we can't afford to stay here and pay $1000+ a month just for property taxes that goes up significantly every year.

I am fairly frugal and don't need a lot to live on considering more normal living expenses. My wife on the other hand likes to spend a little money, though not at crazy levels, and I told here that is fine when you are working but when we are both retired that will need to scale back a bit.

Another thought is why is "never touching the principal" part of the equation?

Isn't using it the reason you amassed it of over your life to begin with?

I mean seriously. That is why you have it. Spending it, not "blowing it" mind you over your retirement is your reward .

quote:

Originally posted by old rugged cross:
Another thought is why is "never touching the principal" part of the equation?

Definitely not part of my plan. I will spend it down.

quote:

Originally posted by old rugged cross:
Another thought is why is "never touching the principal" part of the equation?

.

because that's how you end up eating cat food at 83

of course individual amounts / scenarios could vary greatly

(I never want to be a burden to my children that's for sure...)

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OR

Someone, maybe someone you intended. Probably not and much younger and less in need will blow it on Lord who know's what.

When you could of used it to enhance your life or maybe do good with it at your discretion while you were alive. You cannot take it with you!

Just say'in

quote:

Originally posted by old rugged cross:
Vanguard says they run 10k market scenario's and run the age out to 100. That is overkill. Especially on age. But that is just to be safe I suppose.

I think in retirement your major spending years will be to 75. I am talking about large purchases, traveling etc.
At think at age 75 if you owned your home had 50% of your assets left and had your SS you would be in high cotton. I think most would still have more than that is my guess.
The part that get lost in these threads is many people live simply. own their own home have a couple hundred grand in assets, get $1200 in ss and can live on that $1200 a month. They can live comfortably for, well, forever!
Not everyone needs a ton of $!

And that works great as long as that $1,200 in SS is there (which it won’t be forever, the trustees say the trust funds will be empty in less than 20 years if I remember correctly) and folk don’t develop an expensive medical condition. That sorta thing is kinda hard to plan for...

quote:

Originally posted by old rugged cross:
OR

.... You cannot take it with you!

no argument there...

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'quote"

that works great as long as that $1,200 in SS is there (which it won’t be forever, the trustees say the trust funds will be empty in less than 20 years if I remember correctly) and folk don’t develop an expensive medical condition. That sorta thing is kinda hard to plan for...


Yes, but in that scenario the home ownership and the nest egg will be sufficient to live it out.

I would hate to have ignored this and be thinking I can live a good retirement life counting on the gov. to support me.


Illness and or death will end up getting us all. Just a matter of how and when.

You can plan, worry, obsess, etc. about that aspect. The reality is we will deal with it at that time when it is upon us. Or our loved ones will. One can hope in the later that you prepared for your departure well for them. Until then, carry on and enjoy every moment.

I'm currently 40. My financial planner is running scenario's out to 90yo for me, 92 yo for my wife, based on current income, our planned expenses (indexed for inflation), planned retirement age, current retirement and expenses savings plan. Currently, we are on track with >95% of scenarios being successful. I suggest you talk with a Certified Financial Planner to come up with a plan and determine the likelyhood of success.

There’s an app Personal Capital. You just plug in your stats like age. You can either manually put in your assets and debts or connect your accounts electronically. Then it has a retirement projection that runs simulations that projects your average scenario and your bottom 5% (worst case meaning 95% of the time you would be above the line.

As far as longevity, you can take the available actuarial tables that project how old you’ll live be to based on how old you are now. Then you have to adjust plus or minus based on your family’s history.

quote:

Originally posted by barndg00:
I'm currently 40. My financial planner is running scenario's out to 90yo for me, 92 yo for my wife, based on current income, our planned expenses (indexed for inflation), planned retirement age, current retirement and expenses savings plan. Currently, we are on track with >95% of scenarios being successful. I suggest you talk with a Certified Financial Planner to come up with a plan and determine the likelyhood of success.

As I noted in my OP, that has been done. My question was directed more at the validity of using 90 as a financial target. SSA projects my lifespan at 82, not 90, so there is already a safety margin built in. Could I live to 90? I suppose I could, but if I’m thinking I’ll beat the odds, why not 100? I also understand nursing home costs. My father spent 3 years in one. Your savings become almost irrelevant. Whatever you have (or half if a spouse is still alive) will be gone very quickly.

quote:

Originally posted by Sig209:
i plan for a withdrawal rate less than appreciation

so if you're theoretical investment returns are 5% / year based on the investment mix - never withdraw more than 4% annually

in theory you should never run out - plus you would have 'some' SS to supplement

can't get overly fixated on it because the markets will surprise us sometimes

just do some basic math and live within the conservative plan

--------------------------------------------

You left out one very important component of the equation....inflation

If you figure a conservative 2% inflation rate your actual buying power will decrease each year. I myself have figured a 3% inflation rate and have run our projections out to 90 for me and 94 for my wife. We should never have to touch our principle..theoretically...

quote:

Originally posted by smlsig:
If you figure a conservative 2% inflation rate your actual buying power will decrease each year. I myself have figured a 3% inflation rate and have run our projections out to 90 for me and 94 for my wife. We should never have to touch our principle..theoretically...

Every study I've read shows a pretty dramatic decline in spending past about age 75. I seriously doubt that most of us will be increasing our budgets 3% per year out to 90.

quote:

Originally posted by MNSIG:

quote:

Originally posted by smlsig:
If you figure a conservative 2% inflation rate your actual buying power will decrease each year. I myself have figured a 3% inflation rate and have run our projections out to 90 for me and 94 for my wife. We should never have to touch our principle..theoretically...

Every study I've read shows a pretty dramatic decline in spending past about age 75. I seriously doubt that most of us will be increasing our budgets 3% per year out to 90.

While your discretionary spending “may” decrease past 75 your medical/retirement home expenses will increase....

quote:

Originally posted by smlsig:

While your discretionary spending “may” decrease past 75 your medical/retirement home expenses will increase....

Total spending decreases according to this article.


https://www.kitces.com/blog/ag...g-needs-by-category/

I'm 71, the wife is 68. We both retired at 62. Both of us get SS and we both have Medicare A and B with a supplemental. We paid the farm off about 8 years ago. There was not that much left there but we wanted gone nonetheless. The wife gets small pension. When I started our financial planning forty years ago, I figured we would both live until 90.

We are doing OK, the wife is a spender, especially on the daughter (single mom) and our granddaughter. Me, Used to be but have cut back dramatically a few years ago. Seldom buy guns or knives lately. I just simply don't need anymore. We have spent some bucks on redoing the floors in the house and upgrading some old furniture but that is about it. I think we will be OK barring some catastrophe.

Do take a look at the age of your parents when they died and any older siblings. And obviously your current medical condition.

Here is a link to a Monte Carlo simulation that takes into inflation and many other factors.

quote:

Originally posted by MNSIG:

Every study I've read shows a pretty dramatic decline in spending past about age 75. I seriously doubt that most of us will be increasing our budgets 3% per year out to 90.

that's a very good point

healthy 60 - 75 it's a 'see the world mentality' then that tapers off dramatically as travelling gets more challenging / potentially unsafe (falls, pneumonia, etc) -- personal observations.

after that its a more nesting mindset... of course there are exceptions

the older folks I know are very active locally but they aren't raring to head off to New Zealand anymore

they have a more 'value-minded' focus

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