Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-27-2016, 01:18 PM   #21
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,455
We have been semi-retired for 4 years and have been doing more traveling then in the past. Last year we took 2 big trips of a month each. This year we will do an Alaskan cruise and a rv trip. DH is 58 and I will be 62 soon. All the studies show that people don't travel nearly as much in their 70's. Also we have been going to Europe while we are physically able to climb the tower of Pisa, etc because we don't know how long we will be able to do those types of things. We took a cruise and there were a lot of old people in terrible shape with walkers, wheelchairs, etc.
__________________

__________________
Teacher Terry is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-27-2016, 02:13 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Here's the recommendation:

Quote:
The planner tells [John and Jane] that they might be able to spend about 4 percent a year, or $40,000, from their fund. “You’ve got a 95 percent chance of being able to spend that much, adjusted for inflation each year, for 30 years. . . .

There’s only one problem.

John and Jane would really like to spend $60,000 a year from their fund

Is there a solution?

Yes. And it’s simple. Increase the annual income withdrawal, but don’t adjust for inflation. Make it a constant amount. If they do that, they can withdraw more than $60,000. They can take $68,750 every year for 30 years and still have a 95 percent probability of not running out of money.
So what does FIRECalc say about drawing $60K without inflation adjustments versus 4% with the normal inflation adjustment?

It doubles the probability of failure from 4.3% to 8.7% for a 60/40 portfolio over 30 years.

It shortens the minimum length of time until 1st portfolio failure to 17 years from 25 years.

It reduces the median portfolio value after 10 years to about $1.1MM from 1.3MM

It generally reduces total nominal spending over a 30 year period even though it fails more frequently.

30yrs Starting$60K Fixed $40K + CPI% Diff
1900 1,800,000 1,926,175 -6.6%
1930 1,800,000 1,419,181 26.8%
1960 1,800,000 2,649,352 -32.1%
1980 1,800,000 2,332,288 -22.8%

On the plus side, that nominal spending is significantly front end loaded. And total nominal spending can be higher during periods of deflation. Or it can be significantly lower during periods of high inflation.

All of the above is also completely dependent on the retiree's discipline in implementing a declining standard of living for the rest of their lives. Failure to maintain that discipline will worsen all of these results.

Whether or not this is an acceptable risk is of course a personal preference.
__________________

__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 03-27-2016, 02:14 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,591
Quote:
Originally Posted by Teacher Terry View Post
We took a cruise and there were a lot of old people in terrible shape with walkers, wheelchairs, etc.
In all fairness, there are also a lot of old people in great shape. I'll never forget a week-long rafting trip we took through the Grand Canyon about ten years ago. One of the guys on our raft celebrated his 75th birthday during the trip, and was one of the strongest climbers in the group on our daily hikes. We asked him how he managed to stay in such good condition, and his answer was that he lived in Phoenix and ran up Camelback mountain almost every morning before breakfast.
__________________
braumeister is offline   Reply With Quote
Old 03-27-2016, 02:32 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Dec 2015
Posts: 1,086
Quote:
Originally Posted by youbet View Post
In this pic, taken last autumn on the Nantahala River (NC), DW and I are both 68 yrs old. It was still fun. Admittedly, 5 yrs ago we would have been doing it in our kayaks and without the guide!

But, I agree, procrastinating on experiences likely best enjoyed when younger just to have "extra padding" in the FIRE portfolio later is risky business. We've really cut back on our paddling adventures due to back problems I've developed and DW's shrinking "sense of adventure."

BTW, I'm the guy in the blue baseball cap in the left front seat. DW (who picked her seat based on not wanting to experience as much frigid water) is in the left rear seat in the light colored Tilly hat. We were on a camping trip to Smoky Mountain National Park with some friends (who are with us in the raft).
Love it...BTW, the guy in the back doesn't look like a spring chicken.
__________________
HadEnuff is offline   Reply With Quote
Old 03-27-2016, 02:33 PM   #25
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 423
Quote:
Originally Posted by Moemg View Post
That is a great idea . I am so glad I did all the adventure travel in my 40's & 50's . Let's face it white water rafting is not as much fun at 69.
I was an avid backpacker and mountain biker during much of my w*rking years, but only had a few weeks of vacation yearly. Now, both DW and I are FIRE'd but travel has become more of a pain. We've become high maintenance (eg: can this be served gluten-free, dairy-free, vegetarian?) and we haven't camped sleeping on the ground in a decade (bad back). Even non-camping travel has become a headache. Perhaps we've just gotten lazy and have different priorities now in ER.

I do miss sleeping beneath the stars and waking to sunrise in the mountains. I just can't bring myself to offload the last of my backpacking gear...

So, if you have adventurous travel of any kind, go for it while you can. Who knows what will change later in life!
__________________
Living the dream...
FreeBear is offline   Reply With Quote
Old 03-27-2016, 02:41 PM   #26
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 423
Quote:
Originally Posted by youbet View Post
In this pic, taken last autumn on the Nantahala River (NC), DW and I are both 68 yrs old. It was still fun. Admittedly, 5 yrs ago we would have been doing it in our kayaks and without the guide!

But, I agree, procrastinating on experiences likely best enjoyed when younger just to have "extra padding" in the FIRE portfolio later is risky business. We've really cut back on our paddling adventures due to back problems I've developed and DW's shrinking "sense of adventure."
We're "water" folks too, similar story, even though we are younger. We loved to be out in our kayaks in open water. I actually looked forward to "heavy weather days" to take a pounding in the breaking surf.

Physical issues and also "shrinking sense of adventure" have taken their toll on us too. I'm glad we did some scary stuff when younger, even wish that we had done more earlier but the w*rk thing got in the way.
__________________
Living the dream...
FreeBear is offline   Reply With Quote
Old 03-27-2016, 02:48 PM   #27
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 423
Quote:
Originally Posted by hurricane harry View Post
The older I get the less I need. Of course a good hobby is important.
I value my freedom more than material goods.
+1

Oh yes!

To be fair, I have a ton of "material goods" from my w*rking days that still serve me well. Actually, I finally have the time to enjoy them and everything else about life now that DW and I are FIRE'd
__________________
Living the dream...
FreeBear is offline   Reply With Quote
Old 03-27-2016, 03:25 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
I certainly don't deny myself today, and still stay within our means.

BUT

I also see people here sweat long term care costs as a big looming expense in old age.

I don't conclude that I'll necessarily spend less. I might spend more. It won't be on things I enjoy though - rather necessities becoming more expensive.

So I just don't see costs decreasing. Maybe during those later years of not traveling so much because you can't, you are able to save more towards those final years that all of a sudden costs go up quite a bit.

I'm expecting a U shaped curve.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 03-27-2016, 03:36 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,968
And Kitces and others seemingly confirm the U shape for spending.

I am expecting a somewhat assymetric U, relatively gradual decline with the potential for a short but sharp $ increase nearer the end. That could mean the cumulative average decreases even if the last few years are much higher. Of course, how it all plays out will vary considerably from person to person.

https://www.kitces.com/blog/estimati...pending-smile/
Attached Images
File Type: png image.png (45.7 KB, 32 views)
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 03-27-2016, 04:21 PM   #30
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
Fortunately or unfortunately, it depends on how you view things, I had the hedonic till when I was in my teens. I don't think I ever denied myself anything. My husband urged me to spend. But car has not been my thing. So I guess, I e got that out of my system, now I can live a more non- hedonic life style.


Sent from my iPad using Early Retirement Forum
__________________
When I post IIRC, that means going by memory. Google is your friend for facts. Stop being a lazy bum, I can't do all the googling for you. I'm lazy too. LOL
Fedup is offline   Reply With Quote
Old 03-27-2016, 04:27 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Quote:
Originally Posted by Midpack View Post
And Kitces and others seemingly confirm the U shape for spending.

I am expecting a somewhat assymetric U, relatively gradual decline with the potential for a short but sharp $ increase nearer the end. That could mean the cumulative average decreases even if the last few years are much higher. Of course, how it all plays out will vary considerably from person to person.

https://www.kitces.com/blog/estimati...pending-smile/
Thanks for the link.

He points out that usually the spending decrease in the early to middle years more that makes up for the sharp rise at the end. We can only hope so.....

But that probably applies to non-early retirees. DH is just 60, I'm 56. We're still able to spend a lot on discretionary things. I don't think we'll hit the bottom of the U just yet.....
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 03-27-2016, 04:32 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quote:
Originally Posted by Midpack View Post
And Kitces and others seemingly confirm the U shape for spending.

I am expecting a somewhat assymetric U, relatively gradual decline with the potential for a short but sharp $ increase nearer the end. That could mean the cumulative average decreases even if the last few years are much higher. Of course, how it all plays out will vary considerably from person to person.

https://www.kitces.com/blog/estimati...pending-smile/
Dirk Cotton has stated also even with the "U" spending curve, spending still declines as we age.
__________________
Options is offline   Reply With Quote
Old 03-27-2016, 05:07 PM   #33
Full time employment: Posting here.
 
Join Date: Apr 2015
Posts: 903
Quote:
Originally Posted by Gone4Good View Post
Lets try a hypothetical and see how it feels . . .

"I know I can't really afford to buy a new BMW now but I can still make the numbers work if I promise that I'll buy a used Hyundai as my very next car when I'm older and not quite so hip."
Not quite BMW as maintenance on that gets to be expensive once warranty runs out but a Lexus is certainly an option (and keep for at least 10 years). There's a pretty good chance I'll croak before needing a replacement vehicle so I might not even need to buy that Hyundai. Also, travel is something that will be easy for me to cut when the choice is between that or paying for essentials.

Honestly, my grandmother was wheelchair-bound for the last 3 decades and hasn't traveled at all.

Also, something I'd like to point out on the Kitces report, the U-shape is not spending per se. Rather it's the rate of change in spending. For the high spend, high net worth individual, spending goes down during the entire period. The difference is, perhaps, spending going down by $4K/year at around 70 years old but it only goes down by $500/year at age 75.
__________________
hnzw_rui is offline   Reply With Quote
Old 03-27-2016, 05:50 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,031
My family has longevity so I have observed my relatives as they have aged . Most of them slowed down in their middle 70's ( less travel ) but once they reached their 90's medical care soared especially once you need home assistance or assisted living .
__________________
Moemg is offline   Reply With Quote
Old 03-27-2016, 07:46 PM   #35
Full time employment: Posting here.
 
Join Date: Aug 2009
Posts: 522
Quote:
Originally Posted by audreyh1 View Post
Thanks for the link.



He points out that usually the spending decrease in the early to middle years more that makes up for the sharp rise at the end. We can only hope so.....



But that probably applies to non-early retirees. DH is just 60, I'm 56. We're still able to spend a lot on discretionary things. I don't think we'll hit the bottom of the U just yet.....

The U seems only to occur if health care spending increases, and as he states if you have a medigap policy, then even this doesn't happen. So it seems for many on this board the U doesn't exist at all. The exception, of course, is long term care.


Sent from my iPad using Early Retirement Forum
__________________
bmcgonig is offline   Reply With Quote
Old 03-27-2016, 08:14 PM   #36
Full time employment: Posting here.
 
Join Date: Mar 2015
Location: philly
Posts: 876
Quote:
Originally Posted by Markola View Post
Affording "Travel" seems to be assumed as a tradeoff here but there are plenty of ways to travel that are much more fulfilling and lower cost than the Four Seasons kind. Just use one's frugality skills for "Travel" as in every other sphere, and go.
lol, Markola, actually the reason why I have been frugal is to enjoy a nicer vacation.
I totally admit, I never understood traveling and living "lower" for lack of a better word than at home.
I truly don't want to travel and go motel style.

I will die happy if I never have to fly coach again in life.


But besides the type of travel, I'm hoping that I'll do "more" of it
__________________
bclover is offline   Reply With Quote
Old 03-27-2016, 08:25 PM   #37
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,395
Quote:
Originally Posted by audreyh1 View Post

I don't conclude that I'll necessarily spend less. I might spend more. It won't be on things I enjoy though - rather necessities becoming more expensive.

So I just don't see costs decreasing. Maybe during those later years of not traveling so much because you can't, you are able to save more towards those final years that all of a sudden costs go up quite a bit.

I'm expecting a U shaped curve.
As others have mentioned there is a U shaped curve, but later life spending is still less than it was before. I also recognize that this is individual and you may be right about you.

But, I have watched a lot of relatives and DH's relatives get older as well as other people and they slow down as the get older and spend less. My mom is in her 90s and, yes, she does pay for services now that she didn't pay for when she was in her 70s. She has someone who comes in and cleans her house, she pays for yard work, and so on. But, her overall spending is less. She still lives on her own, but she gets tired easily so she doesn't go out that much. She doesn't want to take trips now. She spends a lot, lot less. And, so did all those other people. Yes, a few people needed long term care, but most of them had it in home. Now, DH's mother was an exception. She had a severe stroke and spent about 8 years in a nursing home before she died. And, yes, she ran out of money at some point. But she was fine because there wasn't really anything else she needed to spend money on at that point. Still she was an exception far outside the norm in terms of long term care stays.
__________________
Katsmeow is offline   Reply With Quote
Old 03-27-2016, 10:24 PM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Quote:
Originally Posted by W2R View Post
There's another simple solution. Retire with enough money that you can have what you want and need, both now and in your later years.

Of course, that assumes non-infinite consumer urges, an attitude that Madison Avenue types probably regard as being completely despicable. One would have to settle on some particular lifestyle as being "enough".
That's our plan. We do a lot of fun (to us) events each week and none of it costs much with some Groupons, annual reciprocal memberships and unsold ticket subscription lists. We do have a travel budget and take some longer vacations, but a few weeks vacation each year is not going to make or break our retirement funding either way.

We did a lot of whitewater activities when we were younger. We used to belong to an outdoor adventure co-op, so some of those kinds of activities are already off our bucket lists. We've moved on to different hobbies now that we are older and feeling more mortal.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 03-27-2016, 10:30 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Quote:
Originally Posted by bmcgonig View Post
The U seems only to occur if health care spending increases, and as he states if you have a medigap policy, then even this doesn't happen. So it seems for many on this board the U doesn't exist at all. The exception, of course, is long term care.


Sent from my iPad using Early Retirement Forum
I'm expecting long-term care costs which aren't covered by Medigap.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 03-27-2016, 10:45 PM   #40
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 2,258
Quote:
Originally Posted by Amethyst View Post

Example: We just got a quote for mowing our 3-acre lawn: $290 per mow. Over a season, that adds up to the cost of a very nice lawn tractor. So we are going to buy one.

Wow, I didn't know getting the lawn mowed cost that much.


Sent from my iPhone using Early Retirement Forum
__________________

__________________
tmm99 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Why Not Spend More on Me Now than Later? Birdie Num Nums Life after FIRE 86 02-17-2014 08:18 PM
consumer staple tilt ducky911 Stock Picking and Market Strategy 2 08-30-2012 03:27 PM
"Spend More, Get Less? The Health Care 'Conundrum'" Coach FIRE Related Public Policy 19 07-13-2009 12:07 PM
Income: More is less? Less is more? Sam FIRE and Money 9 08-19-2006 08:01 PM
More about CPI and hedonic adjustments sgeeeee Other topics 2 06-06-2005 07:56 PM

 

 
All times are GMT -6. The time now is 02:55 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.