My parents take out 5-6% of their retirement account per year! (state, coverage)

[TuborgP]

I have no reason to believe we will spend less as we age. If anything we will spend more as the financial picture unfolds. Like Robyn indicates and we have found there are lots of ways to spend discretionary income. You can run FireCalc for ages 55, 65 and 75 and plan accordingly until you hit age 70 and realize your investments are greater and continue to grow in the projections.

[mathjak107]

david blanchette looked in to this as well with his own study .



Section 7: Conclusions
In this paper we use various government survey data and perform an analysis to more accurately
estimate the cost of retirement. We note that while a replacement rate between 70%
and 80% is likely a reasonable starting place for most households, the actual replacement goal
can vary considerably based on the expected differences between pre- and post-retirement
expenses. We also find that retiree expenditures do not, on average, increase each year by inflation
and that the actual “spending cure” of a retiree household also varies by total consumption,
whereby households with lower levels of consumption tend to have real increases in spending that
are greater than households with higher levels of consumption.
When combined, these findings have important implications for retirees, especially when estimating
the amount that must be saved to fund retirement. While many retirement income models use
a fixed time period (e.g., 30 years) to estimate the duration of retirement, modeling the cost over the
expected lifetime of the household, along with incorporating the actual spending curve, result
in a required account balance at retirement that can be 20% less than the amount required using
traditional models. In summary, a more advanced perspective on retiree spending needs can
significantly change the estimate of the true cost of retirement.

https://corporate.morningstar.com/ib...Retirement.pdf

[Macgregorsailor51]

My X has been a burden to the Girls for years.. if it wasn't for 2 daughters that she actually treated rather poorly for all their childhood.. the x would be living Very Sad Lonely BROKE Life..

Originally Posted by mathjak107

the problem is many boomers are sandwiched between boomerang kids and broke parents .

last thing my wife and i would want is to ever be a financial weight on our kids .

[TuborgP]

Originally Posted by mathjak107

found the study which was based on the consumer expenditure survey when it was done .

http://golio.net/My_Homepage_Files/D...ntPlanning.pdf

This is a good link but it also raises the question/issue of the social behavioral characteristics of Baby Boomers v other generations that may have been more mindful of financial prudence than the current wave of retirees joining the ranks now. Boomers have a reputation of being conspicuous consumers and not savers. While older generations during their working years may have spent differently. Old habits are hard to break and spending involves choices and the alternative choices that are being traded off.

[mathjak107]

so far TY has found little differences in that regard . remember they thought the opposite about the depression children but it was unfounded and more age related then generational .

most study's never followed the same people through the decades until sun life did .

[borninsac]

I think a good way to amortize (consume) retirement funds is to use a remaining life expectancy approach like is done for IRA distributions. Take your retirement funds and divide by your now perceived expected life expectancy and that's what you have available for the new year. Some years it will be higher than others depending on how your invested funds did.

Those of us who spent their lives being self-employed and experienced earnings volatility will have no problem with such a model while those who perhaps earned stable salaries (government workers, etc.) may struggle.

In the world in which I earn my living, I'm privy to the finances of my clients. While I realize that those I serve may be different than the masses, not all are wealthy and must pay attention to living within their means. Having said that, I've never experienced a client running out of money.

Your mileage may vary.

[TuborgP]

Originally Posted by mathjak107

so far TY has found little differences in that regard . remember they thought the opposite about the depression children but it was unfounded and more age related then generational .

most study's never followed the same people through the decades until sun life did .

How many Boomers have reached their 70's to be able to make any inferences from? It is a question without data!

[oldsoldier1976]

Originally Posted by TuborgP

How many Boomers have reached their 70's to be able to make any inferences from? It is a question without data!

you hit on a point that is totally true. Boomers are not 70 yet!

[TuborgP]

Originally Posted by golfingduo

you hit on a point that is totally true. Boomers are not 70 yet!

Because of a decrease in pension availability and a lack of work place savings for many along with stagnant wages especially in the middle we may in hindsight be talking about the great retirement gap in America between the haves and have not's. The affordable care act along with social programs have masked the emerging crisis of those in their fifties who have lost their jobs and don't have a place or don't want a place in the emerging work world. If those props fall with budget and deficit reduction cuts you will see a world of hurt at the same time as you see prosperity with others in their late 50's-66. Change the SS retirement age and watch. There are posters in here with RMD's in excess of other posters income from all sources combined.

[mathjak107]

Originally Posted by borninsac

I think a good way to amortize (consume) retirement funds is to use a remaining life expectancy approach like is done for IRA distributions. Take your retirement funds and divide by your now perceived expected life expectancy and that's what you have available for the new year. Some years it will be higher than others depending on how your invested funds did.

Those of us who spent their lives being self-employed and experienced earnings volatility will have no problem with such a model while those who perhaps earned stable salaries (government workers, etc.) may struggle.

In the world in which I earn my living, I'm privy to the finances of my clients. While I realize that those I serve may be different than the masses, not all are wealthy and must pay attention to living within their means. Having said that, I've never experienced a client running out of money.

Your mileage may vary.

using rmd's and following the irs chart in my opinion is a poor idea . no one needs 10% withdrawal rates when they are 90 . they need the money when they are younger .

there are systems that do use the rmd schedule but heavily modified so that does not happen .

it can be just as easy to just take 4% a year of your balance each year . tht gives you more when you are up and less when you are down with one change .

if you are down you just take 5% less then the year before or what you took the prior year , which ever is higher .

that is how we set our maximum budget each year .