Why retirees don't spend down (pensions, inheritance, depression, states)
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There is a lot of truth to your statement. It took me 60+ years to get there. My wife, myself, and our financial advisor know where we are financially and perhaps the government. Our children probably suspect we have reached and exceeded that milestone, but they don't know for sure. I've always enjoyed our lifestyle and really have a hard time changing it just so we can spend MORE $money$.
If we need more money for whatever, I transfer it to our checking account..simple.
The Depression hit my grandparents really hard. They lost everything and they became migratory refugees. It took them thirty years of scrambling to get back to home ownership again, and it had a huge impact on their worldviews.
My parents grew up as migratory farmworkers, and they were just in the process of climbing up into sharecropping when I was born.
My mother used to tell me about one year, when she was a teenager. Her mother had signed on for a job hauling explosives and left the family with a 50-pound gunny sack of black-eye peas and a huge quantity of cornmeal to get them by for 3 months [along with as much poke salad as she could pick from alongside the road]. It was during WWII, grown women all had jobs in factories or truck driving. So when my mother 'came of age' as a woman she was cooking plack-eye peas, corn bread and poke salad three times a day to feed her younger siblings and their father. Her mother had gotten a job as a truck driver hauling explosives for an ammo plant.
My parents and grandparents all lived lives of extreme frugalness.
They tried hard to get my generation to learn from what happened to them. Never consume all that you earn, never trust a banker, keep the larder full and the gunpowder dry.
At times I feel like if I spent money frivolously my relatives would climb up out of their graves and haunt me.
My pension gives us more than enough to support us.
Our investment properties have been shifted to corporate ownership with our children as members of the corporations.
And now that we have both started taking S.S. I suspect our S.S. income will go directly to charity.
I turn 70 in 3 years and will begin drawing my social security. My investments have grown more than I ever imagined. Instead of trying to find material things to spend my money on, I have decided to start a foundation for people that can’t afford to pay their vet bills. My cat died at the age of 5, of hypertrophic cardiomyopathy. It was a terrible death and it still haunts me. His bill for 10 days in the ICU was $7,000. I was able to pay for his care and not worry about the bill for his treatment. My other cat died of kidney disease and her vet bills were over $5,000 in her last year of life.
A lot of people can’t afford to pay for that level of care, so I plan to start a foundation and use my own money to help people with their vet bills. That is how I will spend down my money, and it will bring me more happiness than an expensive house, car, or any material things could ever give me.
Make no mistake...
If I knew when I was gonna croak I'd spend it ALL.
Every last dime.
Watched my parents...come 80 you don't need money.
So my plan is/was to spend it ALL prior to 80.
Thanks god, I spent it in my 50's and 60's. Money well spent.
Now I have to have a conversation with my daughter.....do you remember that bumper sticker....."we are spending our children's inheritance".
I need to tell her we arel on our way to meeting our goal....All gone by 80. She will get a bunch of property that she can sell....but no money for her to keep it.
Watched my parents...come 80 you don't need money.
So my plan is/was to spend it ALL prior to 80.
Thanks god, I spent it in my 50's and 60's. Money well spent.
Now I have to have a conversation with my daughter.....do you remember that bumper sticker....."we are spending our children's inheritance".
I need to tell her we arel on our way to meeting our goal....All gone by 80. She will get a bunch of property that she can sell....but no money for her to keep it.
The article says that people who get their retirement income mostly from pensions or annuities spend more than those who get their retirement income mostly from portfolio withdrawals (people with total assets of $1-3M spend 26% more, and people with total assets of $3-5M spend 47% more, if they have pension/annuity compared to those with same total assets who don't have pension/annuity). That makes sense, ie, most people don't set up a pension plan or an annuity in order to hoard money from it - that stuff is for ongoing expenses by definition, because next month the same pension/annuity check will arrive (+cola or laddering of annuities for inflation), so no point in hoarding the previous checks.
The article says that people who get their retirement income mostly from pensions or annuities spend more than those who get their retirement income mostly from portfolio withdrawals (people with total assets of $1-3M spend 26% more, and people with total assets of $3-5M spend 47% more, if they have pension/annuity compared to those with same total assets who don't have pension/annuity). That makes sense, ie, most people don't set up a pension plan or an annuity in order to hoard money from it - that stuff is for ongoing expenses by definition, because next month the same pension/annuity check will arrive (+cola or laddering of annuities for inflation), so no point in hoarding the previous checks.
That could make sense.
I always knew that I was going to be forced onto pension, so it never entered my mind that my investing was for the purpose of supporting us in our retirement. I knew I had that part covered.
And now 20 years later, I am stuck in that groove. My Standard of living costs are a bit less than my pension, I am still investing. Suddenly I have begun receiving S.S. and I have no idea what to do with it.
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