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Old 03-07-2017, 07:33 PM
51,957 posts, read 41,815,822 times
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Originally Posted by Rombus View Post
Like many I don't want to leave this world with a huge pile of money, having skipped many fun and enjoyable activities. It's OK to leave something for my children, of course, but not so much that I must deny myself excessively.

OTOH, for many of us, even worse than leaving a huge pile of money is running out with 5 to 10 years of life left.

It's all about balance.
Great post. We all have to make our own decisions about these things. There is no right or wrong, it's all up to our own family traditions, personalities, philosophies.

My parents for example have said they'd much rather had financial help at an earlier age than get an inheritance later and they've acted upon that by helping with college for their grandkids. (just as an example)

There are just so many variables that there is absolutely no right answer. It's your money, do what you want and live with the consequences either way.
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Old 03-07-2017, 07:51 PM
25,996 posts, read 33,010,516 times
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Originally Posted by Mathguy View Post
My parents didn't touch their 401k until forced to by the govt. rules. Then again they live very frugally and had a nice solid pension, house paid off etc.
I plan on retiring at 66.2 and I expect to be quite able to live off of my pension and SS alone, without touching my 401k until required. In my family, my parents have not helped grandkids with expenses - my parents were not able to save much more than an emergency fund for their elderly years. As it is, that will probably be decimated in the next couple of years, if they live that long.

Originally Posted by Mathguy View Post

In my family, the grandparents help with college for the grandkids and leave nice inheritances.

Me personally, I will feel like I have failed to "pay it forward" if I don't do the same.
How nice for you! In my family, my parents have not helped grand kids with expenses - my parents were not able to save much more than an emergency fund for their elderly years so they have always had a tight grip on the checkbook - and I am fine with that. As it is, their funds will probably be decimated in the next couple of years, due to caregiver costs, if they live that long.

That said, I do hope that I have a little money left at the end - I'd love to think that my boy winds up getting a bit of money when I am gone. I have no intention or desire to be a spendthrift in my retirement.
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Old 03-08-2017, 02:42 AM
71,641 posts, read 71,777,271 times
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Originally Posted by TwoByFour View Post
Just a comment on terminology, which ends up being used in different ways by people so they end up arguing in circles.

SWR = Safe withdrawal rate. It is a value determined by looking at historical data and making assumptions about a particular type of investor (65 years old), with a particular type of portfolio (50/50 - 75/25 stocks/bonds), and a specific withdrawal method (constant real dollar) and is 100% backwards looking.

SWR is mostly used for estimating how much you need to save to retire. It is an estimate. It is not a retirement plan. Nobody should withdraw the Bengen derived SWR of 4%.

What many people talk about here is really an actual withdrawal rate. That rate may be "safe" or not. Many factors go into it. But everybody should determine his own withdrawal rate using their own circumstances. For instance, a very popular withdrawal method is variable percentage (VPW).
yep , a safe withdrawal rate is different than just a draw rate .

the original bengen premise was the max draw you could take with a 50/50 portfolio and survive through the 30 years following 1966 as a start date for retirement. .

he found you could draw up to 4.15% and 1966 was the worst date ever to have retired .

the trinity study looked at it from another angle and concluded a 100% passing grade was not needed so they assigned a success rate to a few different portfolio models and then stress tested them against the worst of times .

the result wasn't quite 4% in the trinity but it was close enough . a 90% success rate is considered the min the financial industry likes to see .

the difference between bill bengen's safemax and the trinity results were bill used short term 5 year gov't bonds , the trinity used longer term corporate bonds so the max draw rate was a tad different . the trinity tested other allocations as well as 50/50 .

bengen recommended that retirees maintain a stock allocation of 50-75%. More specifically, he wrote, “I think it is appropriate to advise the client to accept a stock allocation as close to 75 percent as possible, and in no cases less than 50 percent.”

the revised trinity study which was updated in later years showed 35% equities as the min , but they did not leave nearly as big a balance and cushion .

of course this was never designed to be a life long plan .

it was only to ball park a starting point and to stress test different portfolio's under the worst conditions we ever had for comparison . .

most of us do not live year after year on an exact amount . we spend dynamically and some years are more ,some less .

we use a dynamic method right now based on portfolio value each year . that is our goal posts to stay within .

we actually don't have a budget that we watch , we just try to not over spend the portfolio . last year we did everything in our bucket list including large unexpected dental bills which we will have again this year and still came in 10k under budget .

right now i am doing some consulting work whenever i want to work so draw rate is not a concern because i actually made more than my social security would have been if i was collecting .

we drew 3.75 % last year looking at the actual numbers when combined with our other income sources . otherwise while delaying ss our draw rate would be higher if i wasn't doing the consulting while delaying ss and we would be closer to 5 % until ss kicked in .. that is why if you delay ss and keep the income stream constant all the way through retirement from start to finish , the fact ss kicks in is a non event to the draw . it just drops your draw to an acceptable lower level from the portfolio to compensate for over spending the portfolio upfront .

Last edited by mathjak107; 03-08-2017 at 03:44 AM..
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Old 03-08-2017, 07:34 AM
Location: Columbia SC
8,974 posts, read 7,749,631 times
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One thing we all know but can forget about, is one' age and marital status. What I do at age 74 and single is probably not the best for all. What I do would not have been best for myself at age 64 and married.
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Old 03-10-2017, 03:15 AM
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the biggest issue is being married and losing a spouse .

your lifestyle usually is planned around both incomes and tax status .

losing a spouse means loss of a social security check ,and now filing single at a time rmd's may be in effect as well .

you may get your ss taxed now as a single too . if you wait to long to sell a house you can lose 1/2 the tax free exclusion too .

while 80% of all married men die married , 80% of all women die alone and live longer too .

so that requires extra planning and thought in to the equation . especially about survivor benefits and taking ss to early
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Old 03-10-2017, 10:31 AM
Location: Loudon, TN
5,788 posts, read 4,841,461 times
Reputation: 19468
Originally Posted by NancyDrew1 View Post
Spend it all and there is nothing left for the children. That's not right.

Life is only going to get worse for them
So many things wrong with this post I don't know where to start. First, not everyone has children. Second, you have no idea how much of their retirement funds a person/couple has given to their kids over the course of their lives. Third, not all adult children are dutiful and deserving of an inheritance. Some adult children of retirees cut their parents out of their lives or lead lifestyles that a parent might prefer not to support (drugs, serial divorce, wasteful spending, bankruptcy, etc). Many adult children would prefer that their parents spend the money that the parents earned on themselves so that they may enjoy an elevated lifestyle after years of sacrificing for their kids.

There is no "right" in this regard. Each family is different and you are making assumptions about others and their value systems.

Finally, life is not necessarily going to "get worse for them". Why would it? No one knows what tomorrow holds, and life for many people gets better and better. It has for me and many of my family members. Others in my family have health issues that predict that their retirements will be much shorter than one would hope. Why shouldn't they spend as much as they can afford to make the best of their final years? Why should they leave an inheritance to kids that are either doing just fine on their own, or who have already abused their parents generosity? Who are you to say what is right?
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Old 03-10-2017, 10:52 AM
29,782 posts, read 34,876,173 times
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I thank God every day that I had the funds to help a son in a child support case that he won and had he not the consequences would have been tragic.
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Old 03-10-2017, 08:08 PM
Location: On the road
5,955 posts, read 2,897,780 times
Reputation: 11397
We're closer to 3% right now because of current low cost of living situation overseas, but I'd be comfortable going up to about 4.2% since with social security (at 70% of what they say it will be) SWR calculators all still have us at or close to 100% historical success. Flexibility in withdrawal strategies can play a big role too, there are lots of studies on different ways relatively minor tweaks based on portfolio performance can make a big difference. Flexibility in expenses is also a plus, if we move back to the US and get uneasy on finances can easily flee back to cheaper living overseas since we know it suits us. Good cheap curry and foot massages for the win.

That said, who cares if someone is more conservative than they need to be? If they are comfortable with their lifestyle at 2% withdrawal rate then lucky them. Who knows what the future holds, maybe having that extra cheese will come in handy.
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Old 04-12-2017, 09:34 AM
Location: RVA
2,167 posts, read 1,267,777 times
Reputation: 4465
OP is no longer a member and was just stirring the pot. Almost goading the more successful people to chime in and validate their post.
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Old 04-12-2017, 11:32 AM
Location: Bay Area California
711 posts, read 443,136 times
Reputation: 1514
Originally Posted by Perryinva View Post
OP is no longer a member and was just stirring the pot. Almost goading the more successful people to chime in and validate their post.
OP also seems to have a history of doing this under a variety of names.
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