How Much Can I Spend in Retirement? (husband, benefits, family)
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I was in an unusual situation. Due to may chronic lower back pain, I couldn't bear to work any longer when I turned age 48 and since civil service was offering early retirement to those with 25 yrs of service at any age. I had 30 yrs of service at age 48 and so I took their offer and retired at age 49 with a small intial meager civil service retirement pension until my other pensions kicked in at age 60 (Reserves Military Pay) and at age 62 (my meager Social Security pension, which WEP affected the amount down to 1/5th - peanuts, just for gas or beer money).
Anyway, to make a long story short, after I retired at age 49, we could no longer afford to live and retire in N. California. So we immediately moved overseas to the Philippines, our roots and mainly due to the low cost of living at the time of our arrival.
After an 11 and 13 yr wait, all of my other pensions kicked in at age 60 and 62 and the COLAs from all those yrs helped a great deal increasing my net worth. We are now doing great and still enjoying our retirement lifestyle here. We've decided to stay here for good and have no plans returning to the U.S. anytime soon or ever, since we are now both permanent residents of the Philippines, but we are still both U.S. citizens.
So, my answer to the OP, is that it's all relative depending where one lives and depending on the cost of living.
So, my answer to the OP, is that it's all relative depending where one lives and depending on the cost of living.
I agree with that - this is one of my favorite quotes:
“The amount of money you have has got nothing to do with what you earn. People earning a million dollars a year can have no money. People earning $35,000 a year can be quite well off. It’s not what you earn, it’s what you spend.” ― Paul Clitheroe
Once I fell into the "spending matters" camp, I completely changed my focus from asset growth to meeting expenses. So I built up a very detailed expense list and created short, medium and long term budgets. Then I focused on bonds and dividend paying stocks to cover my anticipated expenses - so for me there is no 4% rule or pre-selected withdrawal rate - I simply ensure my expenses are lower than my investment income, whatever that might be.
There are obviously dangers with that approach - as with any other. Dividend cuts really hurt, low interest rates hurt, but as I have a carefully set out budget I know immediately if there is going to be a shortfall so I can cut expenses in plenty of time. So far there have been a few dividend cuts, but many more companies have increased dividends so it has been a wash and is working for me.
you average life expectancy is well off for 65 year old's . average life expectancy is very different when you calculate from birth rather then from older ages as well as different if a couple with two bets in the race .. a 90 year old couple still has a 47% chance one of them will still be alive . that is very different then looking at singles from birth . we have been adding 1 more year of life every 4 years since 2000.
an 85 year old woman has a 54% chance of being alive , an 85 year old man 42% and an 85 year old couple a whopping 73% chance one of them will be alive since you have two horses in the race and either can out live the other . don't forget that average life expectancy only means that is the 50% point where you stand as much chance dying as living and going on .
there is an excellent chance if a couple one of you will go on to enjoy that extra money at age 85 . in fact we don't see a drop below the 50% point for a couple until age 90 today where there is a 47% chance one of you will be alive . .
as far as both being the same risk , they both carry risk but different risk .
you either are betting on markets and rates taking financial risk or betting on your longevity . take your pick , which one are you more comfortable betting on ?
i am more comfortable with the odds one of us will be alive to enjoy a 70% bigger ss check and be less market dependent vs betting the ranch on the markets or rates .
True on life expectancy from the aspect from 65yo and up but yes, it's all a risk in the end, playing the averages. My dad and my uncle passed the magic 65 healthy for many years after and in their low 70's/high 60's, boom, they got diagnosed with something serious and both died, one at 76 and the other at 70. I remember my dad citing the exact numbers you did on the after 65yo life expectancy more than a few times. But yes, it's a game of odds in the end. They were very happy they took their SSN at 62 in their circumstance of course. The other philosophy they had was when they were younger in retirement, they were able to enjoy the extra money while they were more active, were interested in buying more material things, etc. In one's 80's, I've noticed my relatives honestly aren't traveling much at all/if at all, bought most of the material things they wanted and don't see money as a thing to "enjoy" as they did when they were more active in their 60's. For many, physically and often mentally, it's tough/impossible for people in their 80's to enjoy money in such a manner. My mom is comfortable money wise in her early 80's but besides going out to lunch once a week, she tells me she can't think of anything else she needs in life material wise to enjoy besides spending it on a home repair or 2 as that comes up and saving the vast majority of it. She's content on the material side of things/lived that all out and was like that even in her 70's. Physically her walking is very bad so travel is not an option.
In any case, it's a personal choice for sure and as you say, what one is more comfortable with is the key. I'm far away from collecting ssn but I'll weigh out all the factors when the time arrives. But I'm playing close attention to many factors in the short game of life and 62 sound more appealing to me on many factors but I'll keep an open mind when that time comes.
there really is no playing the averages at all . as humans things can only work out as we think or it doesn't. averages only mean something to insurers . they can tell us each year how many people will die .
but they can't tell us who so we need to plan like it is us or our spouse that will live or face the consequences of being wrong .
dead is dead , game over . the more serious problem can be what if you or your spouse live
there really is no playing the averages at all . as humans things can only work out as we think or it doesn't. averages only mean something to insurers . they can tell us each year how many people will die .
but they can't tell us who so we need to plan like it is us or our spouse that will live or face the consequences of being wrong .
dead is dead , game over . the more serious problem can be what if you or your spouse live
Put another way: life is binary. The outcome at any given point for an individual is either 1 (alive) or 0 (dead). No averages there!
exactly . folks like to mention averages all the time but they really have no bearing . someone has to be on the opposite side of the statistic no matter what the odds and it might just be you
Yep, at best an educated guess and what each of us is most comfortable with in the end is the right answer.
As for stats/averages, of course much of living/dying is binary/we aren't an "average", but we have to rely on some general guideline in life. If lifespan was a complete secret for the human race, we could live to 2 or 90 and we were in the dark about that, that would be a mess to try to plan any aspect of life. At least we have a general guild-line of what to expect....same for the markets and other aspects of life....not guaranteed, just a guild-line. That helps.
traditional retirement planning calls for going at least out to 90 for a man and 95 for a woman regardless of what you think .
if anyone thinks it is rough working at 62 or finding a job try it at 80 or 85 .
alternatives could be planning to 80-85 and add a longevity insurance policy .it is basically a very cheap annuity that kicks in very late in life if you live that long .
exactly . folks like to mention averages all the time but they really have no bearing . someone has to be on the opposite side of the statistic no matter what the odds and it might just be you
Sure, but there are good predictors. My dad lived to age 85. My mother is about to turn 84. I've always had excellent health care, don't smoke, and live an active lifestyle The odds are fairly high that I make it into my 80's. Everybody has to do their own longevity assessment. My numbers are going to be different from yours.
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