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Old 02-05-2016, 09:04 PM   #41
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When you are old with creaky and arthritic bones, your eyesight and hearing shot, your palate dull, your hands trembling, your walk a shuffle on shaky legs, what do you care to spend your money on?

If you are not afflicted with any physical deterioration, then you are not old no matter what your age. Spend away.

My dad is close to that point and I convinced him to shake a $150 out of his massive nest egg to buy himself a Chromebook since he didn't like his Ipad. Yes, it cost me 3 digits out of my inheritance, but it was money well spent. And I got a $150 of entertainment out of it, getting him to quit poking the screen with his fingers thinking that would open up a website!


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Old 02-05-2016, 10:20 PM   #42
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Does anyone here plan to adjust their withdrawal rate upwards as they age?
That's my hope/plan. I retired earlier than I had originally expected to, and with a smaller stash than I was planning for, so have been living on an ~2 - 2.2% WR in the hope I can increase that a little as I get older. I do expect my housing costs to increase at some point, and will have no problem with having extra fun money

Like you, I don't have a strict plan or formula, but am certainly hoping to be able to splash a bit more cash around in the future. As frugal as I am, it sure is fun spending money
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Old 02-05-2016, 10:25 PM   #43
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A nursing care facility that doesn't abuse me and hires hot nurses to bathe me and convincingly pretend I'm attractive.
Reminds me of the care home my Dad was in. He loved it when the nurses told him they were going to give him his bath. I do hope they were paid well for putting up with all his flirtatiousness. They seemed to bear it all with great humor, bless 'em!
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Old 02-06-2016, 09:38 AM   #44
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Yeah, that's the conventional wisdom. I always wonder how much of that data is influenced by people who find themselves income constrained. If people had the resources to spend what they wanted, would their spending go down?
My parents are 78.

My mother has cancer in her spine and can't do much outside the house due to limited mobility. Their expenses are way down because they no longer travel and she doesn't do anything that costs money. YMMV, but after seeing how our families are both dealing with life in the 70s/80s (aunts/uncles on both sides etc), I am inclined to think the answer is often yes.
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Old 02-06-2016, 09:54 AM   #45
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YMMV, but after seeing how our families are both dealing with life in the 70s/80s (aunts/uncles on both sides etc), I am inclined to think the answer is often yes.
I agree.

My parents, older siblings and my close relatives (those who did not die early), all had reduced spending as they aged. It wasn't based on income constraints but on the lack of ability and/or desire to go and do the things they did in the early years of their retirement.

My motto: Use it before you lose it.

Edit: Actually there was a spike in my parent's spending near the end. My mom spent the last three years of her life in a nursing home. My dad was her roommate for several months before he died, then she died a year or so later.
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Old 02-06-2016, 10:00 AM   #46
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My parents are 78.

My mother has cancer in her spine and can't do much outside the house due to limited mobility. Their expenses are way down because they no longer travel and she doesn't do anything that costs money. YMMV, but after seeing how our families are both dealing with life in the 70s/80s (aunts/uncles on both sides etc), I am inclined to think the answer is often yes.
Sorry to hear about your mom.

And now that I think about it, our health care expenses later in life may not be that much larger than what we're paying now. We're currently 44 and pay a ton for individual health insurance that is nothing more than catastrophic coverage. So we pay huge premiums every month and still have to pay out of pocket for pretty much whatever care we get.

At 70 my mother pays about a third of what we each do for far better coverage under Medicare.

Of course that could all change in 20+ years, and not likely in my favor.
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Old 02-06-2016, 10:45 AM   #47
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It seems like an obvious thing to do. The older we are the less likely we are to deplete our portfolio at a given withdrawal rate.

Using FireCalc to figure the highest withdrawal rate possible from a 50/50 portfolio that still results in 100% success you get these results for various withdrawal periods:

40 yrs - 3.3%
30 yrs - 3.7%
20 yrs - 4.6%
10 yrs - 7.5%

Does anyone here plan to adjust their withdrawal rate upwards as they age?

I think I probably will, although I don't have anything formulaic in mind.
It is true that the older you are, the less time you have and the higher WR you can spend. But the Bernicke effect is also very real. People claim that they plan to stay globe trotters into their 80s because they see such traveling geezers at the airport, but I see plenty of 60 and certainly 70 year olds in nursing homes or rehab centers when I visited my father and father-in-law there, and many did not last long either.

Youngsters in the early 40s have too much time ahead and risk to indulge and should stay with a lower WR. But for older retirees, perhaps a compromise is go use a higher WR when you enter your 60s, and to not panic to see your stash shrinking somewhat.

I myself try to maintain a constant spending pattern. When SS is accounted for, that means an initial WR higher than 3.5%, which then drops down when SS starts. I doubt that I can go broke this way, but seeing your stash drop in bad market years takes some getting used to.

FIRECalc can model the effect of SS addition to spending easily enough. It tells me I can spend 20% more than what I did last year. And I doubt that I will last another 30 years, the retirement period I used in FIRECalc.
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Old 02-06-2016, 11:15 AM   #48
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My plan is to do the opposite. Get more out in the first two years. Then decrease by half. Then RMD withdrawing rate. This is for my husband's account. In 10 years my SS will kick in. I plan to leave my untouched until I must take it. But these are only 401k type of accounts. I have other buckets I can tap, some are taxable accounts.


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Old 02-06-2016, 11:31 AM   #49
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Youngsters in the early 40s have too much time ahead and risk to indulge and should stay with a lower WR. But for older retirees, perhaps a compromise is go use a higher WR when you enter your 60s, and to not panic to see your stash shrinking somewhat.
That's pretty much where I'm heading with the question. If you retire early with a low WR (like us), it seems obvious that you wouldn't need to stay as conservative in your 60's as you were in your 40's.

As for not being able to spend the money when I'm older . . . I've always fancied a peid-a-terre in Paris or maybe just a flat in Manhattan. Having "too much money" won't be a problem.
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Old 02-06-2016, 02:04 PM   #50
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My dad is close to that point and I convinced him to shake a $150 out of his massive nest egg to buy himself a Chromebook since he didn't like his Ipad. Yes, it cost me 3 digits out of my inheritance, but it was money well spent. And I got a $150 of entertainment out of it, getting him to quit poking the screen with his fingers thinking that would open up a website!
That's my mom right there.

She recently retired at 62 with a full (but modest) pension and my dad is still working. They are set to get $35-40k in social security in another few years. And they have probably $2 million or more in the bank.

Yet she's worried about tiny expenses and trying to cut corners all over. She's driving a 20 year old Honda with 200k+ miles on it. I've suggested she could probably afford to buy a new(er) used car but she says "I'm on a budget".

She's hesitant to spend on fun travel while she still can. "I'm on a budget".

She doesn't have an actual budget and hasn't determined exactly how much she could spend every year without depleting her portfolio later in life. I've suggested they crunch the numbers or meet with their financial advisor (you pay him, why not use him?).

I imagine they will learn from us that it's okay to spend more in retirement as long as you have a plan with some degree of safety. I just hope it's before they are 70+ and/or suffer from some disability.

The good news is my inheritance will probably be rather rotund. The bad news is I don't think they'll ever be able to spend all their funds.
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Old 02-06-2016, 02:28 PM   #51
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My plan is to do the opposite. Get more out in the first two years. Then decrease by half.
+1. I wish to have a lot of discretionary spending the first couple of years while I'm (hopefully) still healthier. I plan on 5-6% SWR first year but will not automatically adjust annual withdrawals for inflation. I'll just let inflation eat up the discretionary budget if the market's not doing too well.

Mind, if everything goes according to plan, I will have a COLA pension that will cover >100% of essential living expenses so pretty much all my retirement savings will be available for discretionary spending (bar a certain amount earmarked for LTC).
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Old 02-07-2016, 09:14 AM   #52
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+1. I wish to have a lot of discretionary spending the first couple of years while I'm (hopefully) still healthier. I plan on 5-6% SWR first year but will not automatically adjust annual withdrawals for inflation. I'll just let inflation eat up the discretionary budget if the market's not doing too well.



Mind, if everything goes according to plan, I will have a COLA pension that will cover >100% of essential living expenses so pretty much all my retirement savings will be available for discretionary spending (bar a certain amount earmarked for LTC).

I agree I am thinking the same thing...
Still 12-18 months away. Could change my mind by then, I was really hoping others before us would give insight how they did it. Or should have done


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Old 02-07-2016, 10:50 PM   #53
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I agree I am thinking the same thing...
Still 12-18 months away. Could change my mind by then, I was really hoping others before us would give insight how they did it. Or should have done
Here's an interesting article regarding "hedonic tilt":

https://assetbuilder.com/knowledge-c...now-less-later

Also, cfiresim can model various spending models. I've used that to check portfolio success rates with my desired spend. At this point, I'm still far, far away from retirement and just trying to figure out how large a nest egg I need.
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Old 02-07-2016, 10:55 PM   #54
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I can see spending dropping when older, but then again I might opt for a really nice CCRC. And we're self insuring for LTC - so what I don't spend in the earlier elderly years might get used up in the later elderly years.
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Old 02-08-2016, 11:05 AM   #55
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It sounds like I am one of the few who is planning to do what the OP was inquiring about, adjust their withdrawal rate upwards as they age, at least for a time.

Initially, if all goes well with life and the portfolio, my WR will be between 1.5% and 2.5%. There are a few reasons for this low WR: I will be RE before 50 and am frankly scared, regardless of what the calculators say, about my funds holding up. I am also currently in good health and still really enjoy very low cost activities.

If all goes well with the portfolio and life in general, I hope to be comfortable with slowly increasing this WR if additional funds are needed to enhance my enjoyment. I do not see any need to spend down my assets for the purpose of spending more now, unless the spending more now enhances my life in some way. (Spending money does not bring me pleasure as it does some people, in fact, quite the opposite.)
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Old 02-08-2016, 03:08 PM   #56
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Our projections have a somewhat higher WR now and for the next several years while we are still paying for junior's college and then dips when our DB pensions kick in at age 60. In the out years (if we get there), we are expecting a rising WR as inflation takes it toll on healthcare and long-term care expenditures. No single year WR is more than 3%.
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Old 02-08-2016, 03:17 PM   #57
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Depending on how my portfolio does, I may tweek my WR, but probably not until I am in my mid 60s.
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Old 02-08-2016, 03:21 PM   #58
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Will if my portfolio keeps increasing.
I am expecting my initial WR to be very low, <2%, as it might need to last 40 years. I would expect to raise it as I get older, especially if asset values rise.
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Old 02-08-2016, 04:05 PM   #59
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what is VPW?
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Old 02-08-2016, 04:06 PM   #60
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what is VPW?
See post 18 on page 1
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