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Saving too Much
Old 07-13-2016, 09:48 PM   #1
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Saving too Much

Well, I guess we officially have a problem a this forum.

"The people who are most effective for saving for retirement — who live frugally and manage to save a big piece of their income — get that so ingrained into their behaviors that by the time they retire with their healthy nest egg, they can’t turn the switch,” said Kitces. “They end up underspending that dollar amount all through their retirement, compounding growth takes hold, the wealth starts to build up, and they die with much, much larger nest eggs and find out that not only could they have spent more in retirement, but they could have spent more during their accumulation years.”"

How saving too much can make your retirement less satisfying - MarketWatch
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Old 07-13-2016, 09:56 PM   #2
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Yup. I'm making more dough than I can spend just sitting here on my butt eating caviar and drinking champagne.

I'm upgrading the caviar to the $100/oz stuff.
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Old 07-13-2016, 10:13 PM   #3
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Such a problem is easier to fix than the opposite savings situation.
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Old 07-13-2016, 10:28 PM   #4
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Anecdotally I would say people around here support this idea as many have stated they retired at 3-4% and now have much more than they started with, some taking out less than 2% a year.


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Old 07-13-2016, 10:50 PM   #5
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Most of these articles imply that spending more money equals more retirement happiness, but the topic is certainly debatable, especially after a certain point. I don't think Bill Gates would be any happier spending more money on himself than he already does.
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Old 07-14-2016, 09:53 AM   #6
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I think the issue is great savers are good at deferred gratification. Some are so good, they defer it beyond the grave.
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Old 07-14-2016, 09:59 AM   #7
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Another point to think about is in order to grow your next egg to support a 2% withdrawal rate as compared to 3% or 4% may involve working 5 to 10 years longer. If you enjoy working, that is not so much an issue, but you do give up a significant portion your retirement. (Duration)
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Old 07-14-2016, 10:19 AM   #8
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Another point to think about is in order to grow your next egg to support a 2% withdrawal rate as compared to 3% or 4% may involve working 5 to 10 years longer. If you enjoy working, that is not so much an issue, but you do give up a significant portion your retirement. (Duration)
+1 Exactly!

I couldn't do 10 more years of time to get to a "really safe" SWR, whatever that is, so I bailed at a "hopefully safe enough" SWR.
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Old 07-14-2016, 10:19 AM   #9
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On average, however, this 4% rule is overly cautious — a “safe” rate of withdrawal is closer to 6%. This also happens to be in the best interest of the financial adviser, who oversees a portfolio that will not just serve the client, but ensure that there is a big sum of money to be managed by the estate, keeping the advisory fees rolling on in perpetuity.
6%? There is NO way I could ever see myself allowing a 6% draw, and that's with me having a good pension that more than covers our expenses!
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Old 07-14-2016, 10:25 AM   #10
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6%? There is NO way I could ever see myself allowing a 6% draw, and that's with me having a good pension that more than covers our expenses!
6% is mighty fine if you retire at 67
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Old 07-14-2016, 10:31 AM   #11
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Somebody once said.......You can never be too thin and never have too much money.
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Old 07-14-2016, 10:35 AM   #12
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Somebody once said.......You can never be too thin and never have too much money.
"A woman can never be too rich or too thin", is attributed to Wallis Simpson, Duchess of Windsor, who was certainly very thin and very rich.

I have no argument with this sentiment. Most of us will have to be happy with the thin ones, the rich ones are usually surrounded by barbed wire

Ha
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Old 07-14-2016, 10:54 AM   #13
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"A woman can never be too rich or too thin", is attributed to Wallis Simpson, Duchess of Windsor, who was certainly very thin and very rich.

I have no argument with this sentiment. Most of us will have to be happy with the thin ones, the rich ones are usually surrounded by barbed wire

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I like the way you express yourself.
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Old 07-14-2016, 10:56 AM   #14
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I think there may be quite a few on this site that have over saved or are now underspending. Hard to change after a while. Our heirs will thank us.
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Old 07-14-2016, 11:22 AM   #15
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Order placed;


1 Russian Osetra Caviar Karat 3.5 oz (100g) $255.00
1 Mother of Pearl Caviar Spoon - Small
1 Paddlefish Caviar Metal Tin 4.4 oz (125g) $89.00
1 CREME FRAiCHE 8oz (227g) $5.99
1 Premium Norwegian Smoked Salmon 4 oz (113g) $11.25
Subtotal: $361.24
Discount: -$10.62
Shipping: FedEx Standard Overnight


Ha, burned another $350 -
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Old 07-14-2016, 11:33 AM   #16
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I'm one of those ending up deferring my retirement by five years which I forecast will decrease my WR from 4% to 2.6%. It just gives a bit more flexibility if the missus' half of the nest egg doesn't play out as planned.
If we both meet our targets, I'm pretty sure we'll easily be able to ramp up our spend with our travel as we likely will place more value on comfort as the years go by. I don't suspect we'll come close to burning through our nest egg but it does give a level of comfort around the question of longevity and I also don't mind leaving a legacy.
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Old 07-14-2016, 11:37 AM   #17
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This recent thread,

Most retiree will never draw down their portfolio?

is quite similar and may be of interest to those who are interested in the present thread. It links to Kitces's blog article directly, instead of through Marketwatch.
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Old 07-14-2016, 12:00 PM   #18
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6%? There is NO way I could ever see myself allowing a 6% draw, and that's with me having a good pension that more than covers our expenses!
Nuts, 6%, I should have retired years ago

More seriously, looking at the original Kitches article, it looks like 6% is AVERAGE historic SWR, as opposed to 4%, essentially worst case historic (assuming 30 yr retirement). Actually, I'm a big fan of his articles, especially sequence of return, but folks need to be careful not to misread or oversimplify.

In the end, I'm not too concerned about average SWR. I'm more interested in avoiding a high likelihood to eating cat food after 20+ yrs...
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Old 07-14-2016, 12:07 PM   #19
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I think there may be quite a few on this site that have over saved or are now underspending. Hard to change after a while. Our heirs will thank us.
I think that's the issue. Most retirees keep the same traits that got u to ER. If you're a normally frugal person that's how you'll be in retirement

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Old 07-14-2016, 12:29 PM   #20
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I'm still learning to give myself permission to spend on stuff that I can afford. Mostly with travel. Like - it's OK to spend up for stuff that will make a trip more convenient or comfortable or enjoyable.

In other words - it's not automatic.
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