I'm 66, retired for 21 years now. Never had a huge pile of money but have owned my house. I haven't invested at all other than my house. Checking and savings account. I never felt comfortable with the concept of "How much can I spend?" In my earning years it was "How much can I save?" My thinking in retirement has been "How much can I not spend?" One rule I have is hobbies must not cost a lot and have the option of earning money. That has been my security. If I was to run out of money I would have these hobby experiences to switch back to earning. This is basically the same as "do what you love" idea for a career. I did that. Loved programming computers and so that's what I did in my career. To me that was better security enabling retirement than a pile of cash. I could always go back to earning as a programmer. In retirement my hobbies have included home remodeling (I've fixed up and sold 3 of my homes, working on #4 now. The cap gains funded my retirement) and gardening. My total spend for everything has been about $600/mo for the past 15 years. For the past 4 years I haven't eaten out at all. Before that I loved eating out...and eating. But is that really enjoyable? That's the question I ask myself..."Do I actually enjoy..." I sure didn't like being fat and the health risks. So I eliminated eating out, switched to low carb and found I liked not being fat more than I enjoyed eating non-stop. That's the secret imo. Most people will say they love their lifestyle...BUT if you don't question that lifestyle, don't test alternatives, how would you know?
This entry has much wisdom. I was wanting to keep my cdl license after I retired. But I was basing my decision on that I would still be healthy and strong. I see relatives that their strength has diminished in spite of doing everything possible to retain it. It is impossible for them to return to their prior vocation. I really thought old age was a excuse to be lazy. I was wrong. I am now researching for myself on how to find tools and strategies on how to offset some of the physical problems as possible. I see the relatives using mechanical devices and services to retain a adequate life. Some have had to make humbling concessions such as allowing themselves to be bathed by others. I hope to have a cheerful attitude like they have.
Great presentation. Just subscribed. I should point out that another way to ameliorate the investment drawdowns is to have multiple income streams, and yes, this includes annuities. This strategy is working out well for me.
Another great presentation. With most people living much longer, a 50/50 portfolio allocation is too conservative, in my opinion, let alone 30/70, especially if you want to leave a legacy. Personally, I plan to do 70% stocks, 20% bonds, 10% cash and utilize a guardrails withdrawal strategy that follows market performance. That will be enough in cash to cover more than 2 years of expenses with an additional 4-5 years covered in low risk bonds, and enough in stocks to ensure long term growth. I intend to grow my assets throughout retirement for legacy purposes.
I will have the same allocation with a few more years of cash to use when the market is down . Will be taking 5 pct a year and not taking any inflation adjustments
I'm not expecting to have a flat withdrawal rate when I retire next year, but vary it according to go go, slow go and no go years. something like 10 years at $50k, 10 years at $40k and 10 years at $30k. Would try to avoid taking out of market in down years with a simple bucket approach
I don't understand the calculations that you did. They don't take into account how old you are or how many years you might be needing to withdraw either a certain amount or percentage.
We're planning to do 100% stocks. Will re-evaluate closer to the time. If possible, we'd like social security to cover our core expenses, and take social security benefits at 70. I'll calculate what we'd like to bring in at age 70 and subtract what we'd get from social security. This also accounts for if one person passes away before then, so its based on the lower social security benefit at age 70. I'll then calculate how much we'd need at the age we retire (ex. 60) in order for that money to grow to cover the gap at age 70. I'll then subtract that amount from what we have invested at the age we retire to get the early retirement amount. In my example, the early retirement amount needs to last 10 years (70 - 60 = 10). If the early retirement amount is enough to cover those 10 years we are good. We'll save a cash reserve prior to retirement as a buffer for when the market is down and for any big emergencies. If we don't have enough money by then, we'll have to make some decisions like work longer and/or reduce expenses if possible. If we have more money than needed, then that's good. If it's possible to retire even earlier than 60 then that's even better.
