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I am 74 and have recently begun to withdraw some from some my retirement savings (mutual funds). I based this withdrawal rate on age 90 with no increase in principal as in share values increasing. Other than RMD's, I have not touched my IRA's yet. As I age I will be faced with withdrawing more (no need to leave any of it) or extending my age expectation. Either way I am fortunate as I can easily live within my means and with being single, I only have myself to consider.
So the lesson learned? The older you are the older you'll be with you being not you but the masses.
Interesting how that works, isn't it? There is some interesting science and stats behind that.
Take some 18 year old young buck. Chance of that person dying from gunshot / baseball bat / wrapped around tree / alcohol poisoning / STD / cumulative life style impacts / etc is significant.
Now take a 90 year old. In most cases, most of the above are N/A, other than some really weird black swan scenarios. The other stuff is actually low rate of occurrence compared with controllable / behavioral items. The wrench in the works is dementia, which can make a person "young and dumb" again in a bad way.
Some here are very numerical and analytical in their retirement planning. You use cost-of-living, rate of return and life expectancy assumptions in the analysis you do. Whether you use a website calculator, one of a planning professional you employ, or your own spreadsheets/napkins, these and other assumptions are necessary to do the math.
If this is you, what is your life expectancy assumption?
I'll go first. I use age 95 years. I don't have family history to support this life expectancy but I feel comfortable when using 95 years in my math.
Years ago I recall seeing a financial planning company's advertisement; I thought it was very clever. It had a photo of an older man in a business suit with hands in his pocket with a caption reading something like this: "Well off at 65 and broke at 80."
Infinity.
Our invested assets (mostly real estate) pay enough so that we have some left over each month. So for right now we are not drawing down our capital at all. As far as we can see, that will go on for another 15 years or so, and then we'll begin to sell off the real estate. I'll be 85 then and I may not feel like fooling with it anymore.
But then we WILL begin to use up our assets.
But I don't like spending money; not a big vacationer.
I used 95 but I don't expect to get anywhere close to that. I am not a fan of living to a ripe old age and have no problem with taking an early exit. But I won't go before my wife or our dog so it is in their hands to some degree. Bottom line, while financially our worst case scenario is 95, I am thinking 85 is more like it.
Infinity.
...... I'll be 85 then....
But I don't like spending money; not a big vacationer.
I'm 58 and am already tired of fooling around with real estate. People that have income properties love to say how they are practically ATMs. Nothing is farther from the truth. My family has always had income property and it was always a PITA. I broke that trend until recenty, and it is still a PITA. Give me dividends, annuities and taxable income any day of the week!
And I LOVE spending money. And vacationing! ..I see no point in just collecting it so someone else can blow it after I'm gone.
You must not see the oldest woman alive, she only eats eggs now. She is 120, looks reasonably healthy.
In our circle of relative, there is one grandma died at age 104. No dementia, nothing.
She eats more than just eggs but she does eat a lot of them.
This is a great read! Echoes my sentiments exactly. I don't think we can count on living longer than our parents....my grandparents lived to late 90's but both my parents passed at 87. All were non-smoker, non-drinker, active....no dementia, healthy weight.
You may all live to 100 but what will your quality of life be? As the article addresses. I too would stop diagnostic tests and so forth, at 75, if not before. Kind of already have since not much of that is available here, and reduced income.
I like the Native Americans of times past who walked into the woods to freeze when they were no longer a productive member of society. Too much of a burden on family.
Having said that, I think our financial planner used the age of 90. I like 75....
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