ziggy29
Moderator Emeritus
Yes, this would be like incorporating a cheeseburger into a vegan diet.I don't think working counts as a 4th leg because then it wouldn't be retirement.
Yes, this would be like incorporating a cheeseburger into a vegan diet.I don't think working counts as a 4th leg because then it wouldn't be retirement.
Oops. I didn't intend to say "don't ever retire". My intent was to say "Don't retire now, wait until you have a larger nest egg." I edited my post to make that point clear.
You should be able to find the number by plugging your info into FIRECalc like MichaelB did.
Click on the tabs shown along the bottom of this page view:
Reporter: "So, Groucho, what are you investing in?"I figured that. But I also ran the numbers through FIREcalc and saw that at age 65 things are still iffy for a fixed income only portfolio with a 3.3% WR. Even at that age, either more money, lower expenses or shorter life expectancy is needed for a 90% probability. Work 'til 70 might do it but that is forever IMHO.
Edit to add: it is amazing what even 25% stocks will do to improve the likelihood of better outcomes
I would love to die penniless.
You really need to find your comfort level somewhere between "love" and "scary".Still seem to come up with 0 failures but show a low that is scary.
But, gee, it's just a tiny little nick each year instead of a great big amputation!Inflation risk is very real and you are totally discounting it. )
The nagging problem with inflation is it's not how much stuff you don't buy each year, it's the ever increasing price of the stuff you do buy - food, for example.Nords:
I agree with your Inflation Analogies, overall it is relatively minor to us based on our current lifestyle, with the exception of House Taxes and Insurance our expenses are low'ish. Also inflation is somewhat localized and personal. If you buy a lot of stuff every year and are a huge consumer, then yes it is a big chunk, but as one gets older inflation also depletes somewhat from the posted numbers. Yes it is a factor but not a big as a lot of folk imply.
The nagging problem with inflation is it's not how much stuff you don't buy each year, it's the ever increasing price of the stuff you do buy - food, for example.
Here's a list of 10 common grocery items. All have at least doubled in price over the past 30 years, some have tripled or quadrupled.
You do eat, right?
Also inflation is somewhat localized and personal. If you buy a lot of stuff every year and are a huge consumer, then yes it is a big chunk, but as one gets older inflation also depletes somewhat from the posted numbers. Yes it is a factor but not a big as a lot of folk imply.
OK I will bite, on average the stuff that is important has doubled in 30 years. And BTW Chocolate Chip Cookies, ICE Cream and Chips are not on my weekly list. Not that we do not partake occasionally but not often, and it will nor break us when we do. Milk is though and let us assume it is like butter and eggs.
Using Eggs as an example. Eggs have gone up say 90c in 30 years. (I know it is less but I am giving inflation the benefit of the doubt). That is 3c per year. I think we can afford that. Let us say we consume 1 dozen eggs every 2 weeks which is probably true. Our egg bill will go up about 6c per month per year. Again I think we can afford that. That is 72C per year vs 30 years ago, not a deal breaker. PS Canada's dairy and poultry prices are silly as they are regulated on the up side.
Gas, electricity and other forms of energy would be better examples but of course our illustrious leaders do not count those under inflation.
Food for us is the least of our worries. This again proves my point that inflation is subjective. We do not eat red meat only pork, Chicken and Fish, but I am sure the same applies to them. Fish probably the most.
Again for US personally. Food is not the issue, we eat too much anyway. It is healthcare that has far escalated all of those put together. For my personal circumstance, healthcare is the one I worry about the most, which is ironic as stress causes illnesses and the cures is causing it. [mod edit]
Using Eggs as an example. Eggs have gone up say 90c in 30 years. (I know it is less but I am giving inflation the benefit of the doubt). That is 3c per year. I think we can afford that.
I am just loving all the opinions, thank you. And yes I did apply a small inflation to the FireCalc.
A portfolio with consistent annual market growth of %, fixed income returns of %, and an inflation rate of %
A portfolio with random performance, with a mean total portfolio return of % and variability (standard deviation) of %. Assume an inflation rate of %.
I have just so many friends that lost so much of their nest eggs in the market crash and ups and downs have NOT returned them back to status quo. It is VERY hard to accumulate at our age, but very easy to loose.
SWR
Nords:
I agree with your Inflation Analogies, overall it is relatively minor to us based on our current lifestyle, with the exception of House Taxes and Insurance our expenses are low'ish. Also inflation is somewhat localized and personal. If you buy a lot of stuff every year and are a huge consumer, then yes it is a big chunk, but as one gets older inflation also depletes somewhat from the posted numbers. Yes it is a factor but not a big as a lot of folk imply. And yes I am taking what meager SS that we will get into consideration.
SWR, it's obvious you don't believe inflation will have an appreciable impact on your retirement even though history says otherwise. I sincerely hope you are correct because the consequences of getting it wrong aren't pretty.
My work here is done...
Not really, it is just it is the least of my worries at this particular juncture. I am fully aware that rampant inflation over time can be devastating. Currently it is relatively low. That may change of course and will warrant attention at that time. It is still somewhat subjective though. I can deal with that after the major (in our minds) issues are covered.
The point which other posters are attempting to make is that it is very difficult to detect whether you appear to be even slightly aware that low inflation over time will also be devastating.I am fully aware that rampant inflation over time can be devastating. Currently it is relatively low. That may change of course and will warrant attention at that time. It is still somewhat subjective though. I can deal with that after the major (in our minds) issues are covered.