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Going broke at 81
Old 10-30-2005, 01:29 PM   #1
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Going broke at 81

Okay... you ER today
You calculate your net worth
You invest accordingly
You run the #'s through Firecalc

All the data allows you to have enough money to maintain your current lifestyle until age 81
After your 81st birthday the only possible source of income is Social Security (if it's there) Medicare same situation.
If married your spouse has the same.

Are you confident or not?
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Re: Going broke at 81
Old 10-30-2005, 01:47 PM   #2
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Re: Going broke at 81

One consideration might be which end of the gene pool your family is from -- long-lived or short-lived.

omni
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Re: Going broke at 81
Old 10-30-2005, 01:49 PM   #3
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Re: Going broke at 81

Doesn't inspire much confidence in me.
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Re: Going broke at 81
Old 10-30-2005, 01:49 PM   #4
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Re: Going broke at 81

Quote:
Originally Posted by GTM
Okay... you ER today
You calculate your net worth
You invest accordingly
You run the #'s through Firecalc

All the data allows you to have enough money to maintain your current lifestyle until age 81
After your 81st birthday the only possible source of income is Social Security (if it's there) Medicare same situation.
If married your spouse has the same.

Are you confident or not?
So are you saying you are broke at 81, or are you out of liquid assets and in possesion of a paid for mcmansion ?* And just how many years is it til 81 from today.* Got that evil inflation factored in?
Lastly, just how big is the cut when you hit 81 as in from what to what?
The if married is kind of key, as two small checks trumps one small check most of the time. I guess that one may be difficult to predict.
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Re: Going broke at 81
Old 10-30-2005, 01:55 PM   #5
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Re: Going broke at 81

Quote:
Originally Posted by GTM
Are you confident or not?
No way! Planning to live to 105.
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Re: Going broke at 81
Old 10-30-2005, 02:02 PM   #6
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Re: Going broke at 81

Quote:
Originally Posted by JPatrick
So are you saying you are broke at 81, or are you out of liquid assets and in possesion of a paid for mcmansion ?*

If you have a house now and dont sell it by then , yes

And just how many years is it til 81 from today.* Got that evil inflation factored in?

81 minus your current age


Lastly, just how big is the cut when you hit 81 as in from what to what?

Not sure of the question
81 no income left except SS (maybe)
But if you have a home you can sell it or get a reverse mortgage.


The if married is kind of key, as two small checks trumps one small check most of the time. I guess that one may be difficult to predict.

2 checks will probably suffice
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Re: Going broke at 81
Old 10-30-2005, 02:13 PM   #7
 
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Re: Going broke at 81

I think you should set FireCalc to live to 100 at a minimum. More importantly I think you need to Have income to support at least twice of what you need to live on. This would not include Travel, Dining Out etc. etc.

That way if we have another Great Depression, you can cut your Budget in half and still survive quite nicely.

Also my Budget does not stay the same in my FireCalc withdrawals. When and if I'm 85, spending money will not be as much fun as spending it today. So I have extra amounts in my spending from age 55-75, and reduce the budget after age 75. - Still maintaining twice what I actually need.

All these are failsafes for market downtowns, major unexpected expenditures or other calamities. Reverse Mortgages and downsizing the home are not even in the plan (another option for the exexpected)

I am planning on having my principle at least 50% gone by the time I'm 90. Folks that don't plan on spending principle are living poorer than they need to and just making their heirs richer.
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Re: Going broke at 81
Old 10-30-2005, 03:24 PM   #8
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Re: Going broke at 81

I would not be comfortable risking a SS only budget at 81.* At 91 maybe.* SS might suffice to get by, but that would be a crummy way to spend your last few years.* I suppose there is always a reverse mortgage option but that was not mentioned in the original post.

Cut-Throat,* I thought I was conservative!...a budget that can be cut by 50%,
planning on living to 100+?* I suspect that few could swing that.* I am allowing for maybe a 25% cut in a pinch, and planning for 95 though that probably wouldn't be a good thing*
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Re: Going broke at 81
Old 10-30-2005, 04:50 PM   #9
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Re: Going broke at 81

Cut-Throat,* Re your 11 categories for cutting, I did a rough calculation using same and I still have a tough time reducing spending by more than 25% or so...thus I conclude your budget is indeed "well padded".* *

No matter, if things got as bad as "Cinderella Man" I would be happy to bust up furniture for fire wood or eat beans 3 meals a day.* I suspect we would all find some way to get by.*

GTM, sorry for the semi-hijack of the thread.*
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Re: Going broke at 81
Old 10-30-2005, 05:10 PM   #10
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Re: Going broke at 81

Quote:
Originally Posted by Rok
Cut-Throat,* Re your 11 categories for cutting, I did a rough calculation using same and I still have a tough time reducing spending by more than 25% or so...thus I conclude your budget is indeed "well padded".* *

No matter, if things got as bad as "Cinderella Man" I would be happy to bust up furniture for fire wood or eat beans 3 meals a day.* I suspect we would all find some way to get by.*

GTM, sorry for the semi-hijack of the thread.*
Not a highjack all are valid pieces of info.

Even though we can cut back on many things alot of new expenses can arise at age 81.

Medical expenses, nursing care, medications etc.
Whos knows how much of the tab the government will be able to pick up then.
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Re: Going broke at 81
Old 10-30-2005, 05:36 PM   #11
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Re: Going broke at 81

Quote:
Originally Posted by Cut-Throat
I think that everyone headed for retirement should have a budget that could be cut by 50%, if it had to. - I'm not saying that I'd enjoy cutting my Budget by 50%, but I could make it.
Sounds like we need a poll.* The most I could realistically cut is 40%.* If I were single without kids, I could cut a lot more (probably closer to a 70% cut based on a budget for one) by living with very little heat in the winter by wearing extra clothes and spending more time at the library, eating hamburger and tuna fish instead of filet mignon and lobster, and coming to the edge of deprivation (not too far off from how my family was when I was a kid anyway, so I'm used to it).
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Re: Going broke at 81
Old 10-30-2005, 06:41 PM   #12
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Re: Going broke at 81

How much you can cut back is greatly determined by how close to the edge you are financing your retirement. *The original post implied a retiree who was stretching his finances, possibly too much so. *Cut-Throat, on the other hand, seems to have a well funded retirement plan. *Not everyone will be able to afford Cut-Throat's level of security, but I think a reasonable retirement plan should anticipate a life span that extends beyond 81.
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Re: Going broke at 81
Old 10-30-2005, 07:28 PM   #13
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Re: Going broke at 81

Oh all right,* 30% and that's my final offer* *

Anything more would likely also involve divorce.* *
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Re: Going broke at 81
Old 10-30-2005, 07:58 PM   #14
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Re: Going broke at 81

Quote:
Originally Posted by . . . Yrs to Go
How much you can cut back is greatly determined by how close to the edge you are financing your retirement. *The original post implied a retiree who was stretching his finances, possibly too much so. *Cut-Throat, on the other hand, seems to have a well funded retirement plan. *Not everyone will be able to afford Cut-Throat's level of security, but I think a reasonable retirement plan should anticipate a life span that extends beyond 81.
Agree that it's virtually impossible to come up with a meaningful number as everyone starts from a different place. Easier to come up with $$ budgets as have been discussed at length in other threads. Having said that, spouse and I would want about a 25% cushion that we could cut to get through some bad times. Anything more would be a dramatic shift in daily life no matter where you start from.
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Re: Going broke at 81
Old 10-30-2005, 08:28 PM   #15
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Re: Going broke at 81

Quote:
Originally Posted by Cut-Throat
I am planning on having my principle at least 50% gone by the time I'm 90. Folks that don't plan on spending principle are living poorer than they need to and just making their heirs richer.
My sentiments exactly.* I am glad to hear someone else say this - I had been thinking everyone else was planning to preserve all their capital forever.*
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Re: Going broke at 81
Old 10-30-2005, 08:59 PM   #16
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Re: Going broke at 81

Quote:
Originally Posted by Sheryl
My sentiments exactly.* I am glad to hear someone else say this - I had been thinking everyone else was planning to preserve all their capital forever.*
So you reach 90 years old. And you still need your 4% SWR, but now half your capital is gone. Are you gonna sit back and say, "well, I'm only gonna live another 2 years." Or are you going to think you could live another 15 years?
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Re: Going broke at 81
Old 10-30-2005, 09:17 PM   #17
 
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Re: Going broke at 81

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So you reach 90 years old.* And you still need your 4% SWR, but now half your capital is gone.* Are you gonna sit back and say, "well, I'm only gonna live another 2 years."* Or are you going to think you could live another 15 years?
Only if you are math challenged!

For example. say you start out with 1 Million and you hit age 90 with $500K. The 4% withdrawal rate would have started at $40K. Even under your mattress, $500K would provide another 12 1/2 years, which would bring you to 102 1/2* - Seems pretty safe to me!

And this does not even factor in Social Security or return on Investment (Inflation as well, I know)
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Re: Going broke at 81
Old 10-31-2005, 04:52 AM   #18
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Re: Going broke at 81

Quote:
Originally Posted by Cut-Throat
I am planning on having my principle at least 50% gone by the time I'm 90. Folks that don't plan on spending principle are living poorer than they need to and just making their heirs richer.
Quote:
Originally Posted by Sheryl
My sentiments exactly. I am glad to hear someone else say this - I had been thinking everyone else was planning to preserve all their capital forever.
I think it's a very different mindset for those who have kids versus those who don't. Not better or worse, just very different.
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Re: Going broke at 81
Old 10-31-2005, 04:53 AM   #19
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Re: Going broke at 81

Yrs and CT, I'm with you, planning to live well into my 90's (although if I go by family history I won't even get close).
CT and Sheryl, I'm with you that DW and I feel free to spend every dime we have, we've given our kids guidance, strength, solid family and spiritual backing and a good education, the money's for us.
CT, one small difference. *While we probably won't be spending as much after 85, we still plan to enjoy it just as much if not more -- the sorta "we've pulled one over on you by still being here" idea. *
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Re: Going broke at 81
Old 10-31-2005, 06:16 AM   #20
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Re: Going broke at 81

It really would be interesting to see what people are actually planning to live on at 55, 65, 75, 85 & beyond. It would also be nice to see what makes up that amount, i.e., SS, COLA or Non-COLA'd pension, 401k WD, IRA WD, dividends, interest, cap gains, etc. Lastly, what % of the portfoilio would be left at each interval.

Probably should be fresh post but thought I'd plant the seed here.

Pete
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