U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-06-2017, 02:20 PM
 
6,246 posts, read 4,728,813 times
Reputation: 12795

Advertisements

There we go. I suspect Mathjak's extreme conservatism is a good example of the OP's comments.


Several years into retirement, Mathjak expects to withdraw at a 2% rate. I am several years into retirement and am still using my initial 4% withdrawal rate with a guestimated correction for inflation. If I re-evaluate, I can now consider pulling at a 5% rate, which is more than twice what Mathjak is planning. Why not spend what I have earned? Chances are still very good that we will pass on money to our kids and grandkids. Otherwise I can see no reason to be excessively frugal.
Reply With Quote Quick reply to this message

 
Old 03-06-2017, 02:23 PM
 
6,246 posts, read 4,728,813 times
Reputation: 12795
Quote:
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

Not that I can see. My older daughter and family are doing just fine with government jobs that provide 100% security and will given them good pensions. My younger daughter is just turning 30 and pulling in a decent 6 figure income. I expect that within a few years she will greatly exceed my peak income. Unemployment is really low and salaries are decent for those with skills. That was hardly the case when I was that age.
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 02:36 PM
 
1,040 posts, read 484,865 times
Reputation: 1435
I think what the OP meant was that some people have so much money that they declare the 4% SWR won't work and that they have the $$$ to live on a 2 % SWR so he/she interprets that as a "brag"...I might be way off , but thats how I read it......
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 02:39 PM
 
Location: Florida -
8,763 posts, read 10,840,630 times
Reputation: 16633
My grown son suggested a while back that "If he had the type of savings we have in retirement, he would spend a whole lot more money than we do on entertainment and other things." But, the reality is, we earn about 6-figures in pensions, SS, etc and will soon be forced to start withdrawing even more from our IRA's in RMD's (probably 5-7%) ... but, certainly don't need it and see no point to drawing down our IRA's before then.

If we felt like we were "deprived or doing without things," we might spend more (on what, I'm not sure) - For now, we plan to significantly help all 5 grandkids with college and have traveled often and taken the entire family on a Disney cruise this past year. When it comes to "improving our lifestyle" -- we've always lived within our means, which is why we have the lifestyle and flexibility we do now. We're not bragging, but, our lifestyle is not driven by a desire for "more self-indulgence and stuff"

Unless we encounter some catastrophic health issues, we will probably leave our kids a nice inheritance about the time they get ready to retire. Neither of us got much of anything from our parents 'estate,' but, we've been blessed and very fortunate. Hopefully, we will be able to leave our kids enough to help them enjoy their retirement as much as we've enjoyed ours.

Last edited by jghorton; 03-06-2017 at 02:51 PM..
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 02:40 PM
 
71,524 posts, read 71,712,424 times
Reputation: 49105
Quote:
Originally Posted by jrkliny View Post
There we go. I suspect Mathjak's extreme conservatism is a good example of the OP's comments.


Several years into retirement, Mathjak expects to withdraw at a 2% rate. I am several years into retirement and am still using my initial 4% withdrawal rate with a guestimated correction for inflation. If I re-evaluate, I can now consider pulling at a 5% rate, which is more than twice what Mathjak is planning. Why not spend what I have earned? Chances are still very good that we will pass on money to our kids and grandkids. Otherwise I can see no reason to be excessively frugal.
you are confused

the draw we have is based on the fact we are drawing 100k a year inflation adjusted for up to 8 years from the portfolio waiting for ss to come in . , plus we use other sources of income outside the portfolio until ss cuts in too .

that draw is based on social security kicking in at 70 . that draw is now based on that additional social security money refilling the over 800k the portfolio has spent which will be needed down the road to keep the draw going for possibly 2 decades more .

so hypothetically if we draw 100k from the portfolio a year inflation adjusted and have 30k in pension at 70 that income shifts to 40k from the portfolio , 60k from social security and 30k from pension .

that portfolio balance has had over 800k spent and while some of that has been hopefully replaced by markets you still need to put back a good part of that .

otherwise your draw would be an insane amount based on the original number and you would likely run out of money


no one should be drawing very little from their portfolio while waiting for ss and then taking a whopping raise .

rather your income should be the full amount you expect to take in dollars once ss kicks in and you refill what you spent from the larger ss check .
.

Last edited by mathjak107; 03-06-2017 at 02:51 PM..
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 02:43 PM
 
Location: Central Massachusetts
4,800 posts, read 4,845,678 times
Reputation: 6379
Quote:
Originally Posted by mathjak107 View Post
you are confused

the draw we have is based on the fact we are drawing 100k a year inflation adjusted for up to 8 years , plus other sources of income outside the portfolio until ss cuts in .

that draw is based on social security kicking in at 70 . that draw is now based on that additional social security money refilling the over 800k the portfolio has spent which will be needed down the road to keep the draw going .
in other words you are going to draw down taxed deferred monies and then when you are in the SS years lower taxed deferred income to a more manageable tax hit and continue to expand the taxed principle bucket.
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 02:52 PM
 
6,246 posts, read 4,728,813 times
Reputation: 12795
Quote:
Originally Posted by mathjak107 View Post
you are confused

........
.
You have that right. You can pull 4% now and add social security to it later on. Or you could pull even more now, say 5-6%, and then when social security kicks in you could pull back to less than 4% to recoop. If you are not even pulling 4% now, you never need to pull back later on.


I still believe your thinking reflects extreme pessimism and is way overly conservative.
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 02:53 PM
 
71,524 posts, read 71,712,424 times
Reputation: 49105
we have equal amounts in taxable and retitement accounts .

we are basically taking the whole amount we intend to live on including what ss gives us day 1 of retirement .
once ss kicks in the 70% bigger check will refill what we spent down as well as provide whatever income we still need to draw
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 03:00 PM
 
6,246 posts, read 4,728,813 times
Reputation: 12795
Quote:
Originally Posted by jghorton View Post
My grown son suggested a while back that "If he had the type of savings we have in retirement, he would spend a whole lot more money than we do on entertainment and other things." ......
I have no problem thinking of things to spend money on. We are currently escaping winter with 3 weeks in Hawaii. We would love to have a helicopter trip over the waterfalls and lava fields, but the cost is high...many hundreds each for even a short flight. I just finished $20K in home upgrades/repairs. My wife is scheduling a trip to visit our younger daughter. I am staying home to cut back on the costs as I will be traveling in the RV for several months beginning mid summer. We still want to plan for European trips and I would like to visit NZ and AUS. A hundred K or so vanishes real quick even without thinking about a luxury lifestyle.
Reply With Quote Quick reply to this message
 
Old 03-06-2017, 03:03 PM
 
71,524 posts, read 71,712,424 times
Reputation: 49105
Quote:
Originally Posted by jrkliny View Post
You have that right. You can pull 4% now and add social security to it later on. Or you could pull even more now, say 5-6%, and then when social security kicks in you could pull back to less than 4% to recoop. If you are not even pulling 4% now, you never need to pull back later on.


I still believe your thinking reflects extreme pessimism and is way overly conservative.

we have other income coming in now so we don't need the full 4% from our portfolio ,. if we had no other income coming in then yes we would have to pull at least 4% ,. in fact we came in 10k under goal posts last year .

we will likely spend down more than 800k delaying ss if we wait until 70 . .

if you take ss right away at 62 then the budget can be 4% of the portfolio plus the ss and you can take raises on the way if things are good .

delaying has you drawing the same amount at 62 as an income but you are laying out a lot more cash up front and just putting it back later with the larger ss check. in effect you are still drawing the same amount you would have gotten at 62 with the excess refilling what you laid out up front since the same income is now made up with more ss and less from the portfolio . .


at the end it is close to the same thing ,. the social security kicking in is not a windfall and on top of what you are drawing . it just has the difference you are getting at 70 vs 62 going to replace what you layed out.

don't forget when i say we drop from 3.50% to the 2% range that is based on the initial portfolio amount .

that does not mean at 70 it is 2% of that balance . in fact it is some very very high amount based on the fact of how much was spent down .

Last edited by mathjak107; 03-06-2017 at 03:24 PM..
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top