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Old 05-06-2011, 01:58 PM   #41
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DH is planning on taking early retirement (at age 55) next year. I know that we will be relatively young for retirees, but I still have been giving A LOT of thought to this. Travel is expensive, but I think it will be better to do it sooner rather than later.
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Old 05-06-2011, 02:13 PM   #42
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Travel is expensive, but I think it will be better to do it sooner rather than later.
Why wait till retirement to travel?
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Old 05-06-2011, 02:58 PM   #43
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Why wait till retirement to travel?
Yes, we have already done some - cruises to the Caribbean, Mexico, and the Mediterranean, but there's a lot more on the list. DH is in one of those predicaments where taking vacation ends up being a double-edged sword because of all the work that piles up while he's gone. As a result, we've only done shorter type trips during the last couple of years and decided we would wait with the loner trips until after retirement - like driving across country.
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Old 05-06-2011, 05:46 PM   #44
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My perspective on this subject strays a bit from the strictly financial. I am considering the take it now approach not regarding a jump in spending but rather a quality of life issue. Would My wife and I be better off by retiring now and improving our health and wellbeing? Our normal activities are virtually free, long walks, tennis, small boating etc. What we lack is the time to do these things on a regular basis. We love to travel but our destinations are strictly the lower 48. The article struck a cord with me and has me thinking.
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Old 05-06-2011, 06:07 PM   #45
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Great find. I must agree. Thank you so much for sharing this with us.
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Old 05-06-2011, 06:10 PM   #46
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I'm surprised by the lackluster protest from the 4% or lower SWR group. Come on people, don't let Scott get away with this.
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Old 05-07-2011, 08:50 AM   #47
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I think there is a great deal of merit to spending more earlier in retirement for most people. The fact is that most people do not have the energy after 75 or 80 that they had at 65. Also, economic studies show that if we look at life expectancy based on "quality of life" markers, the life expectancy in the U.S. is only around 70. This means that the average American can expect to live his/her life after 70 in some distress. Some of us will be lucky; some of us won't.

Taking a look at the social security acturarial table, one can see that out of 100,000 males, ONLY 47,000 ARE ALIVE AT AGE 80! Looking at those who make it to 65, around 41% (or around 32,000) can expect to be dead by age 80.
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Old 05-07-2011, 09:38 AM   #48
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Well, why wait to retirement to spend a little more? Oh, maybe there won't be a retirement if I do that. This is simply another installment on the how much is enough question. Longevity risk is significant no doubt about that. Still bettr safe than sorry in my view. I suspect that running out of money is worse than leaving some behind?
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Old 05-07-2011, 11:17 AM   #49
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I think it is more than "how much is enough." I think that if there is a high probability that my expenses will be less on an inflation-adjusted basis when and if I reach it to my 80s than I might, not only retire earlier, but spend more in the first decade of retirement. Yes, there is always a balance we must strike, but the consequences of planning for an inflation adjustment of 3% or more in the decade from 80 to 90 means a signficant sacrifice earlier for many. There are risks to everything (e.g., hyperinflation) but to say that running out of money is worse than leaving some behind misses the point in my view. The question should be " can I survive my 80s with not taking as much inflation adjusted money from my portfolio as the so-called financial experts say I should?" I don't think anyone wants to run out of money before they run out of life.
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Old 05-07-2011, 11:59 AM   #50
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The question should be " can I survive my 80s with not taking as much inflation adjusted money from my portfolio as the so-called financial experts say I should?" I don't think anyone wants to run out of money before they run out of life.
Ty Bernicke thinks discretionary spending drops with age because he noted that the personal wealth of that demographic was still rising. Even though medical expenses may rise, personal wealth was rising faster.

OTOH his data doesn't account for the last real estate bubble, or whether the rich retirees' wealth was rising much faster than the poor retirees' wealth was dropping. His research isn't based on a lot of data and it hasn't been subject to decades of peer review.

It's just intuitively very attractive, especially when coupled with the "dessert" metaphor.

I'd sure hate to be wrong because some journalist came up with an intuitively attractive metaphor based on sketchy presumptions, scant research, and inadequate data...
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Old 05-07-2011, 12:40 PM   #51
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Those are great points. Does anyone know of data from the 1950s, 60s and 70s that might support or conflict with the consumer finance surveys of 1984 to present?
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Old 05-07-2011, 07:21 PM   #52
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Those are great points. Does anyone know of data from the 1950s, 60s and 70s that might support or conflict with the consumer finance surveys of 1984 to present?
I can read the words, but I don't know what a "consumer finance survey" is, nor why 1984 is considered significant.

If you're asking how spending varies with age, I'd suspect that medical technology and healthcare costs (plus the healthcare legislation) have rendered historical data irrelevant.
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Old 05-07-2011, 07:24 PM   #53
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I don't eat dessert at all.
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Old 05-07-2011, 09:08 PM   #54
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I don't eat dessert at all.
Try it. Might give you a reason to want to live.
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Old 05-08-2011, 05:08 AM   #55
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When to take SS is a financial decision.

IMO - It needs to be done considering current needs and longevity risk. We are planning on the 62/70 approach.

Since we have prepared for retirement, we are in good shape financially. Deferring one SS till 70 makes the plan stronger.

I have seen studies that show that people tend to spend less when they get older in several categories... We have seen this with our family and relatives. Health care cost are the wild card. IMO - it is not just a funding exercise, but a risk mitigation exercise that needs to protect the survivor.


Regarding the general idea of spend it while one is still viable... Absolutely! That is why I am going to FIRE soon.
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Old 05-08-2011, 07:13 AM   #56
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This is simply another installment on the how much is enough question.
Bingo
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Old 05-08-2011, 07:18 AM   #57
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or whether the rich retirees' wealth was rising much faster than the poor retirees' wealth was dropping.
This seems like a pretty critical phenomenon to control for. If he didn't segregate the population by income, I think his conclusions are going to be meaningless to anyone not in the upper strata of wealth.
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Old 05-08-2011, 07:28 AM   #58
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I'm surprised by the lackluster protest from the 4% or lower SWR group. Come on people, don't let Scott get away with this.
I think that is because there is no right answer. Those of us who prefer a more cautious approach can't really criticize those who are comfortable with taking more risk, as long as they understand those risks, and as long as their plan is within the bounds of something that has a chance of working (the guy planning to spend all of the coupon from a 100% high yield bond portfolio comes to mind). And we also have to realize that our tradeoffs aren't the same as everyone elses. A high-income desk jockey can't really offer worthwhile advice to a coal miner about the appropriate tradeoffs between working longer and achieving a lower withdrawal rate.
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Old 05-08-2011, 08:23 AM   #59
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What does "fail" mean?
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Old 05-08-2011, 09:01 AM   #60
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What does "fail" mean?
Good question....

For me, it is the ability to have enough income (via income sources, along with personal investments) that will allow me/DW to live the life we wish for the remainder of our lifetime along with having enough assets to enable to have the next generation live the life they need (not necessarily what they want); not all on "my dime", but to ensure their "success".

For most folks, the next generation is not necessarily a concern; however being parents of a disabled adult "child", we also want to ensure his lifestyle (very minimalist) after we have passed.

If I live to my 90's and have a good stash, I'll expect my private nurse to attend to me in her French maid's outfit while she gives me my daily sponge bath.

If I can't have that? Then I've failed ...
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