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Old 01-02-2017, 03:32 PM   #21
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With all our discussion here about withdrawal strategies, returns, AA's and such, has anyone run out of money or known someone who has or nearly has? I am assuming people take action as they see the inevitable and ward off disaster. I wonder sometimes if we worry too much or if the threat is truly real.

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It almost begs the reverse question... how many saved a bunch of loot and then fast forward 10 yrs from RE you 1) never spent what you thought you would, 2) your portfolio is worth more than it was when you started/or what you expected? Would you have gotten earlier on less if you knew then what you know today?
I don't talk to any retirees about money outside of the forum, except for my brother who is doing fine.

I'm in my 8th year of retirement, and my portfolio is worth more than it was when I started (and also more than I expected). But then what would you expect for a 2009 retiree? That turned out to be a pretty excellent year to retire.

If I knew then what I know now, I would have done exactly the same. The market has only gone up, up, up since 2009. This can't last forever! I want to be well positioned for the next market crash so that is doesn't feel so much like a suckerpunch.

Got to consider the long view.
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Old 01-02-2017, 03:51 PM   #22
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I would save a bunch without charity, gift giving, and travel. If I jettison the 2nd home, I will save even more.
Agree with the first three. But our snowbird home saves us a bunch. Viva Mexico!
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Old 01-02-2017, 03:58 PM   #23
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Come to think of it, when one has a paid-for home and is on Medicare, has no car payments, just stays home to surf the Web and cooks own meals, what are the expenses? Food is darn cheap, and then old people do not eat that much. Wine bottles under $10 are plenty good. Heck, my favorite wine currently is a box wine.
This is exactly how my DGM lived for many years. She owned her modest home. It was located in a small city with reasonable property taxes. Her main entertainments were playing cards (and winning card tournaments!), TV and socializing. Vacations were simply visiting relatives and the very occasional AAA coach tour before she got too old for those.

Well, she did enjoy her bourbon too...

Money can go a long way in such circumstances.
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Old 01-02-2017, 04:22 PM   #24
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I am in my ninth year of retirement .I retired right at the start of the melt down . I did not have to return to work but I had to take a big budget cut .So these big run ups make me feel slightly insecure .
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Old 01-02-2017, 05:58 PM   #25
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Having SI (non-COLA pension now plus SS once eligible) that pays/will pay even with expected inflation for much of the essentials makes all the difference for me. Having observed and suffered from parents who were truly horrific when it came to money, I would not have had the courage to RE at 55 nor even really any earlier than 65, if I live that long, even with all the planning and 100% calculator results. Those impressionable early years were that emotionally devastating, irrational as that is. Now, the inevitable market downturn or even a crash will make me sad (by perhaps reducing travel and donations and at most perhaps some small luxuries like frequent eating out) but never panicked.
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Old 01-02-2017, 06:26 PM   #26
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MIL passed about six months after running out of money at 87 years old. Said she never figured she would live so long. My folks are still kicking, more like shuffling really. They never indulged in much of anything, retired not by choice at 59 and have amassed a high 7 figure nest egg - and still drive to multiple stores to take advantage of sales and coupons weekly. While I'm grateful I won't have to cover their late-life expenses, I'm sad that their frugality and desire to accumulate superseded living a life outside their home. We are trying to find a balance between these two scenarios.
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Old 01-02-2017, 06:31 PM   #27
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I used to post as Oldbabe then disappeared from here about 2010. I have popped in now and then and saw this thread on the issue of early retirees running out of money. I never ran out of money but have to say that the crash of -08-09 scared me a lot. I kept working part time, even though I could have retired earlier than I did. And I'm glad for it.

Can't say I was careful with budgets etc but I did set a goal to be mortgage free with no debts at age 65. I knew I'd have no control over the stock market so kept my allocations very conservative. Missed out on a lot of the big run up in stocks but have felt very comfortable with my choices. so now two years into full retirement I think I'm pretty much set for the long term at this point. But who knows?

I learned a lot from this forum and highly recommend it.
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Old 01-02-2017, 06:36 PM   #28
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I thought I was posting right under Music Lover about the people cashing out their pensions. That was sad.
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Old 01-02-2017, 06:39 PM   #29
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MIL passed about six months after running out of money at 87 years old. Said she never figured she would live so long. My folks are still kicking, more like shuffling really. They never indulged in much of anything, retired not by choice at 59 and have amassed a high 7 figure nest egg - and still drive to multiple stores to take advantage of sales and coupons weekly. While I'm grateful I won't have to cover their late-life expenses, I'm sad that their frugality and desire to accumulate superseded living a life outside their home. We are trying to find a balance between these two scenarios.
Great post. Life's adventure should continue after FIRE.
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Old 01-02-2017, 07:10 PM   #30
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I thought I was posting right under Music Lover about the people cashing out their pensions. That was sad.
One of the fellows that cashed out used the money to pay off their house, buy new cars for him and his wife, and take a couple trips. She was still w*rking so they had regular money coming in. Everything went well for a couple years until she caught him cheating and filed for divorce. Neither one could afford to buy half of the house from the other so it went up for sale and now they both live in apartments.

3 years has gone by since the divorce and sale of the house. His half of the proceeds probably gave him enough to live on for 5-6 years but of course that's not enough. He is now back at w*rk as casual staff 3 - 4 months a year at a far lower wage doing menial work like stuffing envelopes into slots and moving carts around. He left just before turning 50 and is now 55. Had he stayed, he would have been eligible to retire with a COLA govt. pension the day he turned 55 and would have been set for life.
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Old 01-02-2017, 07:12 PM   #31
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My mom probably is going to run out of money. She had a nice home and downsized to a condo. My step dad passed away about 10 years ago. She has a gov't pension, a small SS check and an annuity and five years ago she had about $350K in investments. She moved to an Erickson retirement community in Baltimore. She started out with a nice two bedroom unit in the independent section -- she was happy and financial well. A couple of falls later -- she had to move to the assisted living facility. The cost was $7000+ per month plus meds. The care at the AL facility was terrible -- we moved mom to another AL center in Southern PA. Mom was there for about a year and her health declined and she was moved to the skilled nursing care section. The monthly cost is $14,000 a month. Mom does have LTC insurance -- 4 years worth -- paying $8000 a month, but she'll exhaust that this year. So within 18 months she'll run out of money. The facility will keep her when her money runs out and she fork over her SS and pension.

The problem is mom's mind is as sharp as a tack. He body is failing her. 30+ year of diabetes has taken it's toll. She's unable to walk from the bed to the bathroom, she cannot do daily activities and is unable to manage her medicines. Even with the care at the assisted living facility mom is extremely unhappy. I get it, she's being warehoused until she takes her last breath. She's lost everything. She's the last of her family. She's suffering and there's not a lot that can be done. She's asked me to take a leave of absence from my job, help her establish a residence in Vermont and find a physician who will provide a lethal dose. Unfortunately, God does not have a good plan for the elderly in poor health.
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Old 01-02-2017, 07:20 PM   #32
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My mom probably is going to run out of money. She had a nice home and downsized to a condo. My step dad passed away about 10 years ago. She has a gov't pension, a small SS check and an annuity and five years ago she had about $350K in investments. She moved to an Erickson retirement community in Baltimore. She started out with a nice two bedroom unit in the independent section -- she was happy and financial well. A couple of falls later -- she had to move to the assisted living facility. The cost was $7000+ per month plus meds. The care at the AL facility was terrible -- we moved mom to another AL center in Southern PA. Mom was there for about a year and her health declined and she was moved to the skilled nursing care section. The monthly cost is $14,000 a month. Mom does have LTC insurance -- 4 years worth -- paying $8000 a month, but she'll exhaust that this year. So within 18 months she'll run out of money. The facility will keep her when her money runs out and she fork over her SS and pension.

The problem is mom's mind is as sharp as a tack. He body is failing her. 30+ year of diabetes has taken it's toll. She's unable to walk from the bed to the bathroom, she cannot do daily activities and is unable to manage her medicines. Even with the care at the assisted living facility mom is extremely unhappy. I get it, she's being warehoused until she takes her last breath. She's lost everything. She's the last of her family. She's suffering and there's not a lot that can be done. She's asked me to take a leave of absence from my job, help her establish a residence in Vermont and find a physician who will provide a lethal dose. Unfortunately, God does not have a good plan for the elderly in poor health.
Wow, thanks for sharing and I am sorry to hear about your Mom.
There are many take a ways from your story. Hopefully we can all learn from her circumstances.
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Old 01-02-2017, 07:26 PM   #33
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I know several "successful/smart" people - doctors, business owners - that retired during the peak of the late 1990's bull market, assuming 10%+ returns would be easy, who ended up back in the work force after the 2000-2002 correction.

However, I agree with the earlier poster who said most people here, with their attention to detail, frugal habits and 100%+ Firecalc success, are probably underspending and are going to leave a larger legacy than they ever dreamed.
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Old 01-02-2017, 08:13 PM   #34
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I know several "successful/smart" people - doctors, business owners - that retired during the peak of the late 1990's bull market, assuming 10%+ returns would be easy, who ended up back in the work force after the 2000-2002 correction.

However, I agree with the earlier poster who said most people here, with their attention to detail, frugal habits and 100%+ Firecalc success, are probably underspending and are going to leave a larger legacy than they ever dreamed.
We will play/plan hard not to make our kids even richer at our deaths; already booking trips that we couldn't take the time for while we were practicing. But will be like Athena53 and others--most of our spending is going to be highly discretionary and can/will be slashed if we start getting into grey areas. Have no qualms doing percentage of portfolio with floor at 2% of starting portfolio--even that is more than what we live on now. (of course, most would slot us into the first "successful/'smart'" group anyway--not realizing how much we belong in this forum!)

On the running out, my family history is much like others--you don't need a ton of income if you are healthy (the wildcard) and have inexpensive tastes. Grandma, a prototypical blue-collar widow, up until age 97 had great joy in dumping $10 into the cheap slots once or twice a week--and sometimes she'd win.
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Old 01-02-2017, 08:22 PM   #35
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+1

I track my expenses for the same reason. Same as you, I would save a bunch without charity, gift giving, and travel. If I jettison the 2nd home, I will save even more.

Come to think of it, when one has a paid-for home and is on Medicare, has no car payments, just stays home to surf the Web and cooks own meals, what are the expenses? Food is darn cheap, and then old people do not eat that much. Wine bottles under $10 are plenty good. Heck, my favorite wine currently is a box wine.
The scenario you describe can last a long time even under really difficult economic conditions. I.e as long as one doesn't have any debt and medicare and SS keep going ( assuming "they" don't muck those up), one can survive. What buggers up that scenario is health issues, having to go to assisted living, or a nursing home. Even when the body holds up mental issues can screw up the survival scenario real nice...
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Old 01-02-2017, 08:24 PM   #36
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However, I agree with the earlier poster who said most people here, with their attention to detail, frugal habits and 100%+ Firecalc success, are probably underspending and are going to leave a larger legacy than they ever dreamed.
That's me...modest income my whole life but paid off a house and I will be quite comfortable on my modest pension when it kicks in in a few months. Probably due to that modest income, I chose inexpensive hobbies that cost little or nothing and I also became a good DIYer to save having to pay someone $$ every time something broke.
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Old 01-02-2017, 08:38 PM   #37
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I don't know any retired people that ran out of dough, only those that are still working.
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Old 01-02-2017, 10:10 PM   #38
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I guess it could be possible with some catastrophe event. Nursing homes will empty the bank in a hurry. If stocks went south and never rebounded we all would be in the same boat.
With SS and savings I should never run out unless some event I can't foresee.
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Old 01-02-2017, 10:50 PM   #39
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With all our discussion here about withdrawal strategies, returns, AA's and such, has anyone run out of money or known someone who has or nearly has? I am assuming people take action as they see the inevitable and ward off disaster. I wonder sometimes if we worry too much or if the threat is truly real.
I personally think you have to worry enough to manage the risk. Sitting here today, there are a few things I cannot know: 1) how long DW and I will live, 2) how healthy we will be (imoldernu's sugar post is freaking me out right now...), 3) how reliable are our income sources in retirement. These constitute risks that require some consideration.

Risk is all about managing consequences and their associated probabilities. For longevity, I use the six-sigma tail value of age 100, plan for savings withdrawals to last at least that long. For income source reliability, I am arranging multiple sources, both pensions and savings, if one falters it won't take us down the tubes. For health, well, doggonit, I'm going to go and throw all the sugar we have in the trash. Oh, when DW gets home....
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Old 01-03-2017, 04:30 AM   #40
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I don't know any retired people that ran out of dough, only those that are still working.
+1
My God, what a great observation!

I suspect knowing there's a limited source of income people better regulate themselves.

At the same time, people in retirement might slowly find themselves downsizing unconsciously if they have to. ("oh, we decided to not go to Europe this year" "Let's get rid of the other car" "Let's eat in more").

As noted however, readers of this forum will skew the responses.
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