Total spending decreases according to this article.


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

Thank you for posting this. An interesting article that mirrors what we've seen in our older family members.

Silent

quote:

Obviously, everyone's actual number is different depending on spending habits. What I'm really looking at is how far/what age you project out to. I've had a CFP run conservative numbers for investment returns (5%) and it comes back with a bit of surplus at age 90. What's magic about 90? Yes, there is a 25% chance of a person living to 90, but that means a 75% chance you don't. Even less likely that both individuals in a married couple make it that long. Are you really THAT screwed/safe if you plan for 90 and live to 88 or 92? I'd imagine things take quite a few ups and downs in those 30 years and adjustments are made on the fly. Short of working to a very old age and having enough to never touch the principal, I'm not sure you can really be sure.

So in re-reading this I am wondering a few things.

The age thing is pretty well hashed out I would say.

I really wonder about the performance of the portfolio over the duration.

In a conservative mix is a 5% return annually realistic? I think not myself. In my mind it is more likely for the portfolio to lose principle over a 20 year period vs make money. Add in inflation and maybe 15-20% of the portfolio could disappear over that period without taking in to account any distribution's.

The last ten plus years the stock market has been unbelievably positive. So I think using that as a benchmark going forward is a big mistake.

It would be unnerving in retirement to watch your portfolio shrink 20% over 15-20 years in the principal due to market performance.

I know this is a negative outlook and hope the opposite will happen, but remember the ole "plan for the worst and hope for the best."

Wondering what your thoughts are about this.

I feel pretty good about 5%. The report showed numerous historical scenarios. Inflation is built into the spending side, not subtracted from the returns.

My retirement plan is winning the lottery.

Apparently I did something wrong somewhere along the way.

quote:

Inflation is built into the spending side, not subtracted from the returns.

Yeah, but the spending money comes from drawing on the the portfolio and earnings, if there are any

^^^^

Not sure I understand. The projections show the principle drawdown over time. Good and bad years are factored in to the average.

quote:

Originally posted by Silent:
Total spending decreases according to this article.

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

Thank you for posting this. An interesting article that mirrors what we've seen in our older family members.
Silent[/QUOTE]

quote:

Not sure I understand. The projections show the principle drawdown over time. Good and bad years are factored in to the average.

ok, got it. That sounds reasonable.

When you decide to retire do you intend to be completely debt free? No housing expense, car paymentt. etc?

quote:

Originally posted by old rugged cross:
When you decide to retire do you intend to be completely debt free? No housing expense, car paymentt. etc?

I have been for several years. House is paid off and I've paid cash for the balances on car trades. My budget includes an expenditure for replacing vehicles every 5 years up to age 75. Beyond that, it seems like most people stick with what they have due to familiarity and don't put on many miles.

It seems like everyone’s scenario is a little different which is what one would expect.

Most major financial institutions/brokerage houses have financial software that you can use for free.
Here’s the one for Fidelity which I am a client of although you don’t have to be a client to use.

https://www.fidelity.com/calcu...lanning-and-guidance