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Old 01-12-2016, 02:44 PM   #161
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Originally Posted by Cool_Sparrow View Post
I agree. This is what William Bernstein also warns about relying too much portfolio success probabilities in Backtest based or Monte Carlo calculators. He specifically says planning beyond 80% success probability is futile as it only increases the probability of a non-financial event (like war, turmoil or disease) in ruining the retirement.
I think you are taking Bernstein's rhetoric too literally. After all Bernstein is the fellow pushing liability matching portfolios to reduce failure probability to ZERO in the absence of economic/political/military collapse.

If you look at his article (retirement calculator from hell, part III) he is still talking about low withdrawal rates of 3%.

Probably the way to think about this is to use a decision tree: 80% of the time the MC/Firecalc based probability determines your outcome. The other 20% of the time it goes to hell in a hand basket and it doesn't matter what withdrawal rate you use.
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Old 01-12-2016, 03:07 PM   #162
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I think you are taking Bernstein's rhetoric too literally. After all Bernstein is the fellow pushing liability matching portfolios to reduce failure probability to ZERO in the absence of economic/political/military collapse.

If you look at his article (retirement calculator from hell, part III) he is still talking about low withdrawal rates of 3%.

Probably the way to think about this is to use a decision tree: 80% of the time the MC/Firecalc based probability determines your outcome. The other 20% of the time it goes to hell in a hand basket and it doesn't matter what withdrawal rate you use.
+1. Thank goodness, his statement is misinterpreted here more often than it should be, even though Bernstein plainly states otherwise in the same article...
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Old 01-12-2016, 03:34 PM   #163
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Maybe they do not accept medicaid, but when you are in a nursing home that accepts medicaid they cannot provide a different level of service. I have personal experience with this. If a bed is open where i live they cannot refuse you.

I understand if the home accepted medicaid every ones treated the same. But the one's that don't can provide more care for more dollars.

That seems to fly in the face of all the people who died in a Medicare eligible homes with millions. Perhaps these folks wanted to leave something behind. So those millions had value to them.
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Old 01-12-2016, 06:24 PM   #164
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Originally Posted by Cool_Sparrow View Post
I agree. This is what William Bernstein also warns about relying too much portfolio success probabilities in Backtest based or Monte Carlo calculators. He specifically says planning beyond 80% success probability is futile as it only increases the probability of a non-financial event (like war, turmoil or disease) in ruining the retirement. I think Moneygrubber is simply saying that planning portfolio success probabilities beyond a reasonable level (say 80-90%) ignores other risk factors in life that don't support this probability of longevity. It is a thorny problem but then there is no universal right answer here. I aim for 95% success rates in my FireCalc projections just to avoid extreme skews of tail events but to each their own.
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Totally false, If I plan for 95% success probability, I have no more chance of non-financial event ruining my retirement, than my neighbor who has a 75% success probability.

The non-financial events that can ruin my retirement have nothing to do with how much or less I saved for retirement.
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Old 01-12-2016, 06:37 PM   #165
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The non-financial events that can ruin my retirement have nothing to do with how much or less I saved for retirement.

Not really sure what you mean by this. Most "non-financial" events like getting really sick morph into financial expenses (i.e. needing expensive care). Put another way, short of keeling over dead, or an act of God/War in the insurance sense of the meaning, everything (or nearly anyways) is translatable into $s & cents.

Thus the more $ reserves one has, the more insulated one is from life's vagaries. So save those pennies kids... 😉


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Old 01-12-2016, 06:37 PM   #166
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Totally false, If I plan for 95% success probability, I have no more chance of non-financial event ruining my retirement, than my neighbor who has a 75% success probability.

The non-financial events that can ruin my retirement have nothing to do with how much or less I saved for retirement.
Would you like it better if he said "relative likelihood" rather than probability? If there's a 10% chance of an asteroid impact or zombie apocalypse or cancellation of your Itunes account - whatever non-financial event would really mess up your retirement - then going for a 99% success rate may not be the optimal way to spend one's life.
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Old 01-12-2016, 08:04 PM   #167
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Planning for it is fine, but folks talk about it like its a sure thing.
Really? Which 'folks'? Give me some links, from non-whackos.

We plan for all sorts of things without expecting them to happen. Do you expect your house to burn down? But you have insurance.

When you go for a trip to the store, do you buckle your seat belt? Does that mean it is a 'sure thing' that you will get in an accident, or does it mean you are planning for it?

I think you have developed a thought, and just want to believe it. Sometimes that happens because people don't have the (small) extra funds it takes for planning, and want to describe those that did plan as some kind of extremists who are out of touch with reality, to make them feel better about their decision.

PS - whoah! I didn't refresh this page I had open since this morning - I had no idea so many had posted since then. If all I did was cover old ground - sorry!

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Old 01-12-2016, 08:09 PM   #168
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I don't know about the rest of you guys, but I know for a fact that I will die on February 14, 2069, at the age of 110, when I am shot by the jealous husband of my 28 year old paramour. My last $50 will have been spent on the bottle of Veuve Clicquot that we drank before we hopped into bed.
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Old 01-12-2016, 08:44 PM   #169
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...

PS - whoah! I didn't refresh this page I had open since this morning - I had no idea so many had posted since then. If all I did was cover old ground - sorry!

-ERD50
I just skimmed, and I see I did cover old ground. See post 100:

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What a stupid premise for a thread. I don't see anyone talking with any certainty that they will live to be 95. I see many talking that plan for 95 or older, just in case they live that long. There is a huge difference between the two. I have fire insurance for my house. I guess that means I am certain my house will burn, right? Same logic.

Why is it that we get a few people who come on here criticizing people for planning for very old age? It's none of your damn business if I want to work an extra year or two to handle that possibility. You want to plan for 75 or 80, go right ahead, just don't come asking me for any money if you outlive yours.

Go find one (serious) post where someone has said with certainty that they will live to 95.
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Old 01-12-2016, 09:06 PM   #170
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Totally false, If I plan for 95% success probability, I have no more chance of non-financial event ruining my retirement, than my neighbor who has a 75% success probability.

The non-financial events that can ruin my retirement have nothing to do with how much or less I saved for retirement.

That's not what I meant. If a non-financial event is going to mess up your retirement calculations (one of the outcomes can be positive from a financial sense in that you could drop dead much sooner than any actuarial model), then it doesn't matter that decades ago, you relied on 75% probability or 95% probability to determine your safe level spends from your asset base. What I meant is those who demand near 100% certainty in safe spend levels (modeled decades in advance) is that they vastly underspend so the 'relative likelihood' of a non-financial risk upsetting your retirement calculation is higher. Therefore, I believe Bernstein is saying >80% simulation driven probability as good enough for retirement planning purposes. Note he is not saying that we use median scenario that is 50% prob, but 80%. My guess is he is looking at a balance between running out of assets at end of life versus leaving large estates by chronic underspending. Each person derives their own comfort level here, I use 95% (and not 99-100%) so that the rare tail events don't drive my spending decision over 40 years. Even this leaves a sizable estate in 95% of the cases.


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Old 01-12-2016, 09:37 PM   #171
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A Psalm of Life

BY HENRY WADSWORTH LONGFELLOW

Tell me not, in mournful numbers,
Life is but an empty dream!
For the soul is dead that slumbers,
And things are not what they seem.

Life is real! Life is earnest!
And the grave is not its goal;
Dust thou art, to dust returnest,
Was not spoken of the soul.

Not enjoyment, and not sorrow,
Is our destined end or way;
But to act, that each to-morrow
Find us farther than to-day.

Art is long, and Time is fleeting,
And our hearts, though stout and brave,
Still, like muffled drums, are beating
Funeral marches to the grave.

In the world’s broad field of battle,
In the bivouac of Life,
Be not like dumb, driven cattle!
Be a hero in the strife!

Trust no Future, howe’er pleasant!
Let the dead Past bury its dead!
Act,— act in the living Present!
Heart within, and God o’erhead!

Lives of great men all remind us
We can make our lives sublime,
And, departing, leave behind us
Footprints on the sands of time;

Footprints, that perhaps another,
Sailing o’er life’s solemn main,
A forlorn and shipwrecked brother,
Seeing, shall take heart again.

Let us, then, be up and doing,
With a heart for any fate;
Still achieving, still pursuing,
Learn to labor and to wait.

My dad died at 69 just nine months after retiring to a place where he planned to golf everyday. One reason I am pulling the plug at 57 this June.


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Old 01-12-2016, 09:50 PM   #172
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Old 01-13-2016, 06:26 AM   #173
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I understand if the home accepted medicaid every ones treated the same. But the one's that don't can provide more care for more dollars.

That seems to fly in the face of all the people who died in a Medicare eligible homes with millions. Perhaps these folks wanted to leave something behind. So those millions had value to them.
What is a Medicare eligible home? As far as I know and the experience with my parents, Medicare does not cover the cost of a nursing home. Medicaid covers nursing home costs if or once the patient is Medicaid eligible. Often times nursing homes roll the dice and accept private pay patients and they are betting the person will die before their assets run out and Medicaid takes over the bill.

My experience showed me that most private pay nursing homes look great, nice buildings, expensive furniture, nice decor. That is to sell the nursing home to the people who are putting mom and pop in the home, it's where they would want to be. When your loved one needs a nursing home, they no longer care or even see tile floors, painted cinder block walls etc, what matters most is the number of nurses and nurses aids to patient ratio and generally the state run medicaid eligible homes have the best ratios.

Take a look some time at the statistics of how long people live after admission to a nursing home. The vast majority of men die < 6 months of being admitted. Women tend to live much longer after being placed. I remember visiting my father in the last months of his life, he died 5 months after being placed, and I wondered where are all the men? LTC costs are a bigger issue for women than men. If a man is single, and you can afford one year in a nursing home odds you will have enough. LTC insurance is probably a bad bet for a single male.
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Old 01-13-2016, 07:13 AM   #174
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What is a Medicare eligible home? As far as I know and the experience with my parents, Medicare does not cover the cost of a nursing home. Medicaid covers nursing home costs if or once the patient is Medicaid eligible. Often times nursing homes roll the dice and accept private pay patients and they are betting the person will die before their assets run out and Medicaid takes over the bill.
My bad Medicaid not Medicare.
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Old 01-13-2016, 11:46 AM   #175
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Cannot argue with the statistics of number crunchers, the human factor and the unquantifiable that we gain through life experience confounds those like you that look at only stats.
Yet another flawed assumption, one of many that the OP has made in this thread, that those of us who use statistics exclusively use stats.
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Old 01-13-2016, 12:29 PM   #176
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Originally Posted by Gumby View Post
I don't know about the rest of you guys, but I know for a fact that I will die on February 14, 2069, at the age of 110, when I am shot by the jealous husband of my 28 year old paramour. My last $50 will have been spent on the bottle of Veuve Clicquot that we drank before we hopped into bed.
Better buy the Veuve now, it won't be $50 in 2069 (closer to $250)...
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Old 01-13-2016, 02:23 PM   #177
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Originally Posted by Backdraft57 View Post
My dad died at 69 just nine months after retiring to a place where he planned to golf everyday. One reason I am pulling the plug at 57 this June.
My Mom died when my Dad was 65. She was 57 and taken by breast cancer. My Dad lived for 30 more years alone.

I decided to retire at 55 but ended up working until 60 to fund my divorce. I don't worry about statistics. We should be OK.
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Old 01-13-2016, 03:35 PM   #178
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I don't know about the rest of you guys, but I know for a fact that I will die on February 14, 2069, at the age of 110, when I am shot by the jealous husband of my 28 year old paramour. My last $50 will have been spent on the bottle of Veuve Clicquot that we drank before we hopped into bed.

Lol!


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Old 01-13-2016, 03:38 PM   #179
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A Psalm of Life

BY HENRY WADSWORTH LONGFELLOW

Tell me not, in mournful numbers,
Life is but an empty dream!
For the soul is dead that slumbers,
And things are not what they seem.

Life is real! Life is earnest!
And the grave is not its goal;
Dust thou art, to dust returnest,
Was not spoken of the soul.

Not enjoyment, and not sorrow,
Is our destined end or way;
But to act, that each to-morrow
Find us farther than to-day.

Art is long, and Time is fleeting,
And our hearts, though stout and brave,
Still, like muffled drums, are beating
Funeral marches to the grave.

In the world’s broad field of battle,
In the bivouac of Life,
Be not like dumb, driven cattle!
Be a hero in the strife!

Trust no Future, howe’er pleasant!
Let the dead Past bury its dead!
Act,— act in the living Present!
Heart within, and God o’erhead!

Lives of great men all remind us
We can make our lives sublime,
And, departing, leave behind us
Footprints on the sands of time;

Footprints, that perhaps another,
Sailing o’er life’s solemn main,
A forlorn and shipwrecked brother,
Seeing, shall take heart again.

Let us, then, be up and doing,
With a heart for any fate;
Still achieving, still pursuing,
Learn to labor and to wait.

My dad died at 69 just nine months after retiring to a place where he planned to golf everyday. One reason I am pulling the plug at 57 this June.


Sent from my iPhone using Early Retirement Forum

Yup, me at 55, bernstein and kictes be dammed!



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Old 01-13-2016, 03:40 PM   #180
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Yet another flawed assumption, one of many that the OP has made in this thread, that those of us who use statistics exclusively use stats.

So what do you use?


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