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 01-10-2018, 06:49 AM
 
Location: the Old Dominion
295 posts, read 149,259 times
Reputation: 1382

Advertisements

Yes.
Reply With Quote Quick reply to this message

 
Old 01-10-2018, 07:54 AM
 
13,891 posts, read 7,395,585 times
Reputation: 25379
Quote:
Originally Posted by mathjak107 View Post
but remember "average inflation figures " are meaningless when spending down . they are part of your sequence of return risk which determine the biggest part of your success rate .

like average returns being off by as much as 15 years in how long the money will last just based on sequence , the inflation as it comes in creates the same situation .


it was actually inflation , not market returns that did those who retired in 1965/1966 in . so looking at inflation as a 3% average means nothing because it was almost 6% over their 30 years periods .

the fact it historically leveled out to 3% is meaningless for those who had to survive when it tripled to almost 6% over their 30 years .

you can never look at anything in isolation or out of sequence when it comes to spending down a portfolio .

if you see enter an assumed inflation rate or assumed return in any calculator , DON'T USE IT if you are spending down from that money .
It's also a few things other than just sequence risk on inflation rates.

Seniors tend to require more labor-intensive services than the general population. Goods aren't rising in price anywhere near as fast as labor.

In the current political climate, you kind of have to assume that Medicare and Medicaid "reform" is coming. If you want the same coverage, it's going to cost a heck of a lot more. I'm budgeting for a two tiered senior health care system where the base system most seniors can afford has lousy coverage. I have $10K per person penciled in and I suspect I'm way underestimating.
Reply With Quote Quick reply to this message
 
Old 01-10-2018, 08:15 AM
 
Location: NC
6,549 posts, read 7,970,518 times
Reputation: 13460
Absolutely need to pay attention to inflation. In general, costs appear to double over 30 years. So the million dollars you have on the day you retire is only worth half that the day before you pass on. Broad generalization, I know. The cost of real estate can increase even faster. That means with a steady withdrawal rate and the last $ being spent when you are, it is only worth a likely $750K. And that is only if you have prepaid your taxes.
Reply With Quote Quick reply to this message
 
Old 01-10-2018, 08:41 AM
 
2,952 posts, read 1,637,153 times
Reputation: 5292
Yes we do. Also figure our rates of return after this years inflation.

I am trying to cut back on 'thing's . I want to send back some items jewelry, art, we bought at Sothebys or Christies. They have grown in value substantially. Many we've had for 30+ years. We wouldn't be buying these items at todays values.

Hubs says they are a great hedge against inflation. I said we already planned for that. He says OK, so I don't want to get rid of them.
Reply With Quote Quick reply to this message
 
Old 01-10-2018, 09:16 AM
 
71,520 posts, read 71,712,424 times
Reputation: 49105
many studies following retirees through retirement show that those with discretionary income spend in a smile shape .

they spend lots of money early on going and doing things . my mid 70's spending falls off a cliff . it tends to stay down until mid 80's when healthcare kicks up .

a lot of what is no longer bought , or done offsets a lot of the costs of what is still paid for . .

the wild card is long term care needs
Reply With Quote Quick reply to this message
 
Old 01-10-2018, 02:08 PM
 
Location: Loudon, TN
5,780 posts, read 4,830,089 times
Reputation: 19411
Our pensions have a COLA, SS has a COLA, our investments will compound over time, eventually our entertainment and acquisition budget will go in reverse when we get to a point where we no longer want to travel and we are downsizing our possessions. We continue to strive to reduce routine household expenses, without impacting our entertainment budget. In other words, pay less for the boring stuff so we have more for the fun stuff.
Reply With Quote Quick reply to this message
 
Old 01-10-2018, 04:23 PM
 
29,775 posts, read 34,860,277 times
Reputation: 11705
Quote:
Originally Posted by TheShadow View Post
Our pensions have a COLA, SS has a COLA, our investments will compound over time, eventually our entertainment and acquisition budget will go in reverse when we get to a point where we no longer want to travel and we are downsizing our possessions. We continue to strive to reduce routine household expenses, without impacting our entertainment budget. In other words, pay less for the boring stuff so we have more for the fun stuff.
Don't know the amount of your pensions and SS but when combined even a 2% COLA increase compounded can have a solid impact on income and if spending less than that combined amount it can become part of a inflation controlling plan.
Reply With Quote Quick reply to this message
 
Old 01-10-2018, 04:51 PM
 
Location: Forests of Maine
30,680 posts, read 49,437,227 times
Reputation: 19129
Quote:
Originally Posted by eliza61nyc View Post
Do you budget for inflation in your retirement planning?
No.

My pension usually gets a COLA bump every year. Anywhere from 1% to 6%

We focused on trying to get our retirement to be as bill-free as possible. But we did not do anything to account for inflation. After 16 years of retirement, we are doing okay.
Reply With Quote Quick reply to this message
 
Old 01-11-2018, 08:34 AM
 
29,775 posts, read 34,860,277 times
Reputation: 11705
One way or the other it is to your advantage to grow your income in retirement. Otherwise you could be at long therm risk.
Reply With Quote Quick reply to this message
 
Old 01-11-2018, 08:54 AM
 
2,593 posts, read 5,288,316 times
Reputation: 5188
I don't PLAN for inflation.

But I keep some $ in the stock market. I live below my means. I own (free and clear) a house in a well-managed HOA so my housing costs are comparatively predictable. And I am prepared to adjust discretionary spending if necessary.
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
Similar Threads
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