Retirement Reality

[mpeirce]

I'm assuming longevity (my 6th grandfather was the oldest living veteran from the French and Indian War - 95 was pretty darn good back in those days!) and planning accordingly. That means a heft emphasis on stocks for the long term (if I hit 95 I've got over 40 years to go).

If I lose that bet, the kids get to [-]blow[/-] spend the money any way they choose.

 

[traineeinvestor]

I have no idea how long I will live, and would rather not know. What I do know is that I do not want get to my sixties or seventies and be faced with a choice between cutting back on our lifestyle or needing to
w%#k at that age.

I also know I don't want to have to spend a couple of decades fretting about whether I will outlive my money or not.

 

[rodi]

My financial planning is different than my life planning.

I'm realistic - and have made arrangements for all sorts of scenarios: I die first leaving DH to go on, He dies first, and I have to get by without him, we die together before the kids are of age. I looked at longevity (on his side of things) and earlier death due to cancer (my side of things)... not to mention cognitive decline or physical decline requiring support (memory unit, home health aide, nursing home.)

I tried to come up with a plan for all of this.

But I also tried to come up with a plan that maximizes happiness in the NOW. I retired at age 52... to maximize that happiness in the NOW. We're frontloading our budget a bit to travel NOW, vs when we're frail. I'm not spending out of my means - but I am spending on things that make me happy NOW.

Sure my kids might inherit some when I kick it - but if my financial plan works out (vs reality life expectations) I won't run out of money till after I'm 90 and DH is 100. And our back up is our home equity... which is significant. If I'm 90 I don't need/want a two story house - so selling won't be a problem.

Moneygrubber - you seem to be suggesting that accounting for longevity in the financial plan is a bad thing. I think there are plenty of people who find the balance between planning for longevity but still grabbing happiness now.

 

[Moneygrubber]

My financial planning is different than my life planning.

I'm realistic - and have made arrangements for all sorts of scenarios: I die first leaving DH to go on, He dies first, and I have to get by without him, we die together before the kids are of age. I looked at longevity (on his side of things) and earlier death due to cancer (my side of things)... not to mention cognitive decline or physical decline requiring support (memory unit, home health aide, nursing home.)

I tried to come up with a plan for all of this.

But I also tried to come up with a plan that maximizes happiness in the NOW. I retired at age 52... to maximize that happiness in the NOW. We're frontloading our budget a bit to travel NOW, vs when we're frail. I'm not spending out of my means - but I am spending on things that make me happy NOW.

Sure my kids might inherit some when I kick it - but if my financial plan works out (vs reality life expectations) I won't run out of money till after I'm 90 and DH is 100. And our back up is our home equity... which is significant. If I'm 90 I don't need/want a two story house - so selling won't be a problem.

Moneygrubber - you seem to be suggesting that accounting for longevity in the financial plan is a bad thing. I think there are plenty of people who find the balance between planning for longevity but still grabbing happiness now.

Planning for it is fine, but folks talk about it like its a sure thing.


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[Fedup]

One sure thing I will live till 100, at least that's in my spreadsheet, and husband till 110.


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[Davis65]

Great discussion topic, moneygrubber.

We moved my mother into a nice retirement home at 85 - two rooms, balcony where she sat out every day during the summer, fridge and microwave. The last resident didn't leave in a box - he moved down the hall to a pokey single room with no balcony because he is running low on money. He's still in a nice place, but he's disappointed.

If I don't get the full 95 years than my plan affords me, I will write a strongly-worded letter to whoever is in charge of these things.

 

[Moneygrubber]

Great discussion topic, moneygrubber.

We moved my mother into a nice retirement home at 85 - two rooms, balcony where she sat out every day during the summer, fridge and microwave. The last resident didn't leave in a box - he moved down the hall to a pokey single room with no balcony because he is running low on money. He's still in a nice place, but he's disappointed.

If I don't get the full 95 years than my plan affords me, I will write a strongly-worded letter to whoever is in charge of these things.

Lol..


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[Beachgrl]

I recently posted asking people working in the construction trades to post their pension options they chose and why, and in that post I mentioned a conversation with a fellow union carpenter wife who's husband recently retired and she tells me she was told by the people they sat down with to discuss the pension options that men don't live very long after retirement (sorry that's a run on sentence). That was a real eye opener and downer for me (I suspect dh knows this quite well being on the job for 20+ years already). I am 40 and dh is 48 and we are planning on BOTH of us retiring when he turns 55 or therabouts.

Yes, to the OP in my mind it is a plan that we control, or at least it had been until I got slapped with a reality check after my conversation with that woman. Of course I realize that life turns on a dime. I live in NYC, born and raised. Just watch the news here for 5 minutes and you can just decide to crawl into a hole and never come out.

But interesting thread nonetheless.

 

[taykinitezy]

...the question of one's own life longevity is the only one I would like to know the answer for practical reasons but I wouldn't want to know for sanity reasons.....in regard to earlier comments...DW has an uncle who turns 90 in 2 months...lucky enough to retire with full Ford Motor Co. pension at 62....wife and 3 kids are now all deceased....comments from him during a recent visit...."I guess I'm really getting a full payout on my pension" (28 years and counting)......."I never thought I would outlive all my kids"......life can certainly be bittersweet.

 

[MRG]

If you plan you have to have an end date.

Both my parents lived into their 90s. DF would joke Metlife had paid out more years on his pension than he'd worked there.

 

[samclem]

I recently posted asking people working in the construction trades to post their pension options they chose and why, and in that post I mentioned a conversation with a fellow union carpenter wife who's husband recently retired and she tells me she was told by the people they sat down with to discuss the pension options that men don't live very long after retirement (sorry that's a run on sentence).

I have heard comments hinting that "people die soon after retirement", but it really doesn't pack much meaning. Is it supposed to mean that retiring leads to an early death? I doubt that, but sometimes that is the implication. Things that enter into the discussion:
-- People who get sick (cancer, a debilitating illness or chronic poor health, etc) are likelier to retire soon if they are able. They are also likelier to die relatively young It's not the retirement that killed them.
-- Similarly, people who are poor are likely to delay retirement until they can no longer physically work. It's not the retirement that kills them.

 

[igsoy]

My great grandmother, grandmother, and grandfather on my dad's side all lived past 90. I take after my dad, so I have to hope my portfolio will last that long.

 

[pb4uski]

I'm curious, why cat food? Is it much cheaper than people food? Because I know some of the meals my mom cooks (for family of 4) cost less than $5 for raw ingredients and there's usually plenty of leftovers.

Instant ramen is like 30 cents.

It's just a saying for chrissakes.

I used to eat a lot of Tuna. Always cheaper than cat food.

Tuna 14.8 cents an ounce Great Value Chunk Light Tuna in Water, 5 oz, 4 ct - Walmart.com

Cat food 7.2 cents an ounce 9Lives Seafood and Poultry Favorites Wet Cat Food Variety Pack, 5.5-Ounce Cans (Pack of 24) - Walmart.com

Eat for 1/2 price.

 

[Sunset]

Full disclosure, stirring the pot, saved well, retiring at 55 in a few months, adhere to diversification, withdrawal rate strategies and 95 planning, reflecting on what i feel is the absurdity of it all sometimes, when your at the finish line you reflect a bit, maybe i am nuts,,,
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Here is a plan for you.

I estimate you make it to seventy
So spend all by that date with levity
Then push your delete key
Its the only way with certainty

 

[shotgunner]

I think Moneygrubber has a point and it is something I have thought about. How many of us have run FIRECALC over and over again looking to be sure we 100% probability of success with various scenarios taking us all the way out to age 95?

According to the CDC, from data that is 10 years old, a white 50 year old male has a 5.4% chance of living to 95. A 60 year old white male making it to 85m only 35% chance. Odds of living to or past age 85 for a while make are not good. It's kind of sobering to read, calculate and contemplate.

As far as having the money for a balcony suite in a nursing home. My experience with all my relatives who have entered such facilities is that either due to pain, immobility or dementia they were no longer able to enjoy the smallest things in life. If your lucky you might still enjoy the taste of food or a conversation with a friend or loved one.

So, whether we admit it or not it seems many of us, myself included are very afraid of running out of money. A fear some say is stronger than death. Does it really make sense to have a plan with 100% probability of success for a less than 20% chance of surviving to that age. Or should we lighten up a little and use 90 to 85%?

Of course if one of our goals is to leave an inheritance for children then planning a 100% to age 95 or even 100 makes sense.

Here is where I found the stats for probability of surviving to a particular age.

http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_21.pdf

 

[marko]

My Dad passed at 57 and all his siblings died before age 65.
Mom is still out dancing at 86, sharp as a tack and her father was still riding a bike at 92.

Unfortunately, I take after my Dad physically but he was a heavy smoker and I never have so...hoping for the best, preparing for the worst.

 

[DrRoy]

Planning for an eventuality isn't the same as predicting...

Absolutely. If after a couple decades you have more money then you need, then do more, give more, leave more.

“Plans Are Useless, But Planning Is Indispensable”. Gen. Dwight Eisenhower

 

[braumeister]

Operating on the principle that what does not kill me makes me stronger, I try to live dangerously and have as many near-death experiences as possible.

I estimate that each close call increases my life expectancy by a measurable percentage.

 

[Moneygrubber]

I think Moneygrubber has a point and it is something I have thought about. How many of us have run FIRECALC over and over again looking to be sure we 100% probability of success with various scenarios taking us all the way out to age 95?

According to the CDC, from data that is 10 years old, a white 50 year old male has a 5.4% chance of living to 95. A 60 year old white male making it to 85m only 35% chance. Odds of living to or past age 85 for a while make are not good. It's kind of sobering to read, calculate and contemplate.

As far as having the money for a balcony suite in a nursing home. My experience with all my relatives who have entered such facilities is that either due to pain, immobility or dementia they were no longer able to enjoy the smallest things in life. If your lucky you might still enjoy the taste of food or a conversation with a friend or loved one.

So, whether we admit it or not it seems many of us, myself included are very afraid of running out of money. A fear some say is stronger than death. Does it really make sense to have a plan with 100% probability of success for a less than 20% chance of surviving to that age. Or should we lighten up a little and use 90 to 85%?

Of course if one of our goals is to leave an inheritance for children then planning a 100% to age 95 or even 100 makes sense.

Here is where I found the stats for probability of surviving to a particular age.

http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_21.pdf

My point exactly.


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[travelover]

Wa....wa....wa....wait a minute. Are you saying I'm gonna die?

 

[LARS]

After reading this thread, I have concluded that there are three little words, which have the ability to strike fear into the hearts of most (all) LBYM Early Retirerees: "But... what if".

Sadly, I am not immune from this tendency. Indeed, one might argue that the trait is essential to amassing wealth. For without it, you would just spend.


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[cyber888]

David Bowie dead at 69. John Wayne dead at 72. Elvis dead at 42. Jimmy Stewart dead at 89. Michael Jackson dead at 50. Fred Astaire dead at 88. Dean Martin dead at 78. Bruce Lee dead at 32. Elizabeth Taylor dead at 79. Bing Crosby dead at 74. Farrah Fawcett dead at 62.

 

[LARS]

David Bowie dead at 69. John Wayne dead at 72. Elvis dead at 42. Jimmy Stewart dead at 89. Michael Jackson dead at 50. Fred Astaire dead at 88. Dean Martin dead at 78. Bruce Lee dead at 32. Elizabeth Taylor dead at 79. Bing Crosby dead at 74. Farrah Fawcett dead at 62.

You left off the most compelling person, which summarizes the problem: Jesus Christ. He was dead at 33, but resurrected days later only to be immortal. Try running FireCalc on that scenario...


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[braumeister]

David Bowie dead at 69. John Wayne dead at 72. Elvis dead at 42. Jimmy Stewart dead at 89. Michael Jackson dead at 50. Fred Astaire dead at 88. Dean Martin dead at 78. Bruce Lee dead at 32. Elizabeth Taylor dead at 79. Bing Crosby dead at 74. Farrah Fawcett dead at 62.

George Burns, Bob Hope, and Queen Elizabeth (the Queen Mother) all lived past 100.


The plural of anecdote is not data.

 

[REWahoo]

I can play, too!

77 Actors & Actresses who died over the age of 90