How much can we realistically spend for a long time?

[Aerides]

So instead of modelling for you + spouse spending, up it to cover a 3rd person, and you should be fine.

Or carve out a chunk of your nw now, consider that a separate bucket and earmark that for your son, enough to cover a reasonable expense amount for an adult for the next 70 years. With your NW, even if you considered a $1m slice off for your Son, that still leaves you with more than enough to support spending above $100k.

FWIW, at 25 I was still a bit of a twit. I was working full-time, but financially a bit of a train wreck and made several bad decisions over the next few years after that age. But by 32 or so I got my act together, and ER'd at 47.

 

[youbet]

It's not subjective that the OP will need a much bigger nest egg, if it's for 3 people for 70 years.

No doubt. But advise given regarding the parenting of the son inside of the parent-child relationship is subjective. Simply accepting that the way OP described the situation is the way it's going to be and working with those numbers would be objective. And there is plenty of variability there to analyze and comment on without the anecdotal (and likely irrelevant) examples of how the family relationship would be handled if they were doing it.

But we're all human and, of course, it's lotsa fun to ignore OP's request and inject our feelings about the parent-child relationship and score it based on our own viewpoints.

 

[RetiredHappy]

I posted in another thread that we intend to support my son for the rest of his life because he has high functioning autism. There is similarity in OP's situation and ours in terms of how to ensure the child get a good inheritance after the parents are gone. My son lives in his own fully paid off home. I paid for that home and it is in his name.

For starters, we bucketize our money. I have 2 fixed term deferred income annuities using my IRA money. The later start date one goes to him as primary beneficiary which will continue to pay after my death. The earlier start date one has my husband as primary and my son as contingent beneficiary.

All my taxable investments will not be used to fund our retirement and my son is the sole beneficiary. My husband has a small taxable account which is also not used to fund our retirement. It will first go to me and then me to him.

My husband's IRA account goes to me and on my passing, to my son.

Our home should net around a million dollars and it will also become my son's inheritance.

I am very comfortable with all these buckets, knowing which will be spent and which will become my son's money. My son has no idea how much he will get as I have been pushing him to get a job, any job, so that he gets some socialization and a job is good for his self esteem. I told him that he will get some inheritance from me but it won't be enough to last his lifetime and hence he needs to work. In reality if he doesn't work, he will be fine financially.

 

[HawkeyeNFO]

OP, does your kid have a medical or psychological condition? If the answer is "no," then he really ought to be moving out of the house. Sounds like he has a lack of discipline and/or initiative. Military can take care of that, if he qualifies.

 

[pjigar]

I told him that he will get some inheritance from me but it won't be enough to last his lifetime and hence he needs to work. In reality if he doesn't work, he will be financially fine.

We have an intellectually disabled son. He grows very very slow intellectually. Thankfully he is fully functional physically. He loves cars and may not ever be able to drive on road (unless autonomous cars become norm when he grows up). He is an excellent driver off road with ATV, UTV, Electric Scooter, Bicycle, you name it! But we still tell him the same thing: You have to work and earn money if you want to buy your own car. We would make sure that he finds a job as soon as he is able because it is good for his well being. Everything we do with him has an end goal of enabling him to live independently. YMMV.

PS: Like I said, we are planning for a perpetual retirement for us and my son but he doesn't need to know that.

 

[latexman]

OP, does your kid have a medical or psychological condition? If the answer is "no," then he really ought to be moving out of the house. Sounds like he has a lack of discipline and/or initiative. Military can take care of that, if he qualifies.

The military is building their cyber security and cyber black Ops capability right now! Recall the recent ransom ware attacks. I’d take him and go talk to a recruiter.

 

[ivinsfan]

The military is building their cyber security and cyber black Ops capability right now! Recall the recent ransom ware attacks. I’d take him and go talk to a recruiter.

Military life is hard enough for people who want to serve...


They can't take all the unmotivated kids hanging around in Mom and Dad's basement.

 

[HawkeyeNFO]

They can't take all the unmotivated kids hanging around in Mom and Dad's basement.

USMC drill instructor with a Smokey the Bear hat and a BIG voice might be just what the basement dweller needs!

 

[RunningBum]

I did not say that my son will never work or make any money.

I am just planning for the worst case, similar to many of you here planning for a 50% drop in the market some day.

The worst case might be that he never works or makes any money, AND blows through what you leave him in a few short years. So you'd need to figure out how much you can spend now, and set up some kind of trust for him to dole out the money over time. You are the only one here who knows your son, but it seems like you shouldn't ignore the second part.

 

[mountainsoft]

the conversation should go something like this....."Dude, WTF....I'm tired of working....you got about 6 months to get it figured out...cause we're retiring". PROBLEM SOLVED!!

That's basically the approach I took with my daughter, though phrased in a little less threatening way. I reminded her we were retiring in a few years and we couldn't estimate our future expenses as long as she was still living at home. We needed a year or two of living on our own like grownups to see what mom and dad would spend by ourselves. She kind of rolled her eyes and blew it off as Dad nagging her again, but I could tell it registered with her.

It wasn't so much that my daughter didn't want to move out, she's just a creature of habit. She has a hard time changing anything about her daily routine, even if she knows it would benefit her.

In the end, I went apartment shopping myself and when I found one I thought she could afford I took her to see it. We lucked out the landlord was willing to give her a chance and worked with us. Everything has been smooth sailing since then. I'm proud of her.

 

[Joylush]

I’m in a similar quandary but with a greater net worth. I have two independent 30 year olds that I want to start gifting to but don’t trust they have the maturity to manage it. And the last thing I want to do is disincentivized them from being productive citizens.

If your son has never lived on his own or learned how to budget and manage for himself, how do you imagine he will suddenly be able to handle a large inheritance? My two are self-sufficient and I worry about this greatly. Someone who has no experience with living on their own would need a trust managed by someone else or I don’t know that you will successfully achieve your goal of providing for your son for the rest of his life when you’re gone.

 

[Retch The Grate]

So based on what I've read on Big ERN's website (mentioned earlier in thread) a 3% withdrawal rate works on 60 year periods with basically any reasonable asset allocation, so my perpetual withdrawal plan is to do 3% but instead of inflation adjusting, just adjust up to 3% of my highest portfolio value, that way doing a better job of fitting to any increased growth while still remaining an indefinite historical success.

 

[ncbill]

USMC drill instructor with a Smokey the Bear hat and a BIG voice might be just what the basement dweller needs!

Like I said...Guard/Reserve is part-time, he can continue to work on whatever project back at home most of the time.

My last kid in college will be joining the Guard to fulfill his military commitment since Uncle Sam paid his undergraduate tuition/fees.

In the particular military community he has already been approved to join there are lots of opportunities to network for lucrative civilian contractor jobs as well...win-win.

 

[Sunset]

+1 It is hard to describe the positive psychological benefits of working and having a job and having your own money.... DS would have been content to sit at home and play video games if we had let him but we nudged him out of the nest.... and he is a much better person today as a result.

I like the idea of the Guard too.

Even with a full time job DS finds plenty of time to play video games.

+1

Besides, if OP's son took a job working for someone else, the pay would probably start at $70K /yr . He would be exposed to lots of other people (programmers, designers) at the company to spark great ideas for games/apps.

Lots of time after work to chase the $$$$ game money (which is really a LOT harder than someone not working at a game company thinks).

 

[Sunset]

OP, does your kid have a medical or psychological condition? If the answer is "no," then he really ought to be moving out of the house. Sounds like he has a lack of discipline and/or initiative. Military can take care of that, if he qualifies.

Frankly, it might be the parents that need to go for some counseling on being a parent.
Silly as it sounds, it's not taught in schools and I have seen lots of parents making big mistakes with their "children" both young and adult children.

It could be the parents that are holding back the "child" , which can have a crippling effect on the child's life (career, marriage, friends, etc).

 

[rai-zero]

So you can spend about 120k from your portfolio “forever” without diminishing portfolio value. Plus your 40K from SS. So total 160k is what I would spend.

Just a technical point, can’t *spend* $160k because of taxes which will be around (?) i don’t know maybe 15-20%

 

[rai-zero]

I’m sure there is some info missing. Why would any non- disabled 25 year be incentivized to be a productive adult if they knew they’d be supported by their parents for their entire life? That doesn’t make any sense.

+1

 

[Librarian]

We have a similar situation

I’m in a similar quandary but with a greater net worth. I have two independent 30 year olds that I want to start gifting to but don’t trust they have the maturity to manage it. And the last thing I want to do is disincentivized them from being productive citizens.

Inlaws are beginning to distribute their large portfolio, beginning with dismantling the family corporation they established years ago that includes the children & grandchildren.

Our YA children (DS26, DD23 & DS21) will each be getting around $250K.
We have been talking about this for several months & how easy this money could be to fritter away--it FEELS like a lot but could easily be run through.
We suggested buying a home, though not really sure any of them is at that place in their life. So we are recommending investing.

DD is already very good with goals & saving so not too worried about her (and she is the only one who may be ready to buy a home).

DS21 is getting an accounting/business degree so he likely already knows to be wise; we have had discussions & he is on the same page as us.

DS26 has a Master's degree in sports psychology. He & a buddy moved to CA Jan. 2020 as his buddy is a budding musician (also has a Master's). They had no attachments, seemed like a good time. Yeah, couldn't predict a pandemic. So basically barely treading water for the last 18 months. And Sports Psych jobs were gutted (collegiate level) as well. He is moving back home next month.
I worry most about him as he feels lost right now. We assured him that he could live with us as long as he needed (He is hoping to get a job & NOT stay with us long--he has gotten used to living on his own). He WANTS a career but is frustrated right now. It will help to have him here to help encourage him to invest. I don't THINK the $ will disincentivize him to figure out his life...hope not. (he did express frustration that his siblings were "further along" than he is at 26...I reminded him we all expected that from his incredibly Type A sister & that his brother is exactly where he was at the same age...and that a Master's Degree IS something)

Having children was truly my greatest joy--but it is so difficult to see them in pain. Not trying to "fix" things but will be there for him if he needs help & support.

 

[Lienlord]

Is this a situation where a Trust could be established FBO the adult son? Parents could be Trustees while living, with a successor trustee (not son) designated after their death. An amount could be set aside now in separate investments, but controlled by parents. Upon their death, their remaining estate be added to the trust, with explicit instructions for future distributions.

We should remember that many cultural differences exist WRT children living at home. Multi-generational family living is the norm in many other countries.

We were fortunate that our youngest son lived at home all through his college years. He moved out 6 months after graduation and starting his career job. I still remember sobbing like a baby his last night at home; excited for him to start his life but sad this phase was over! He was 24 at the time, and only moved 5 miles away! LOL
My wife said it was clear I hadn't emotionally prepared for this eventuality!

 

[ivinsfan]

Lienlord in most of these multi gen cultures the younger generation is supposed to take care of the older generation!!!

 

[Lienlord]

Lienlord in most of these multi gen cultures the younger generation is supposed to take care of the older generation!!!

True, and maybe he does and will (just not in a financial capacity).

 

[karen1972]

My only comment is I'd just ignore the SS since it won't be there for the whole 70 years and once one of you passes, the increase in taxes alone may eat what the other is receiving.

Over that amount of time I'd be starting at 3% WR and just re-evaluate every few years as things evolve.

 

[pjigar]

+1

Besides, if OP's son took a job working for someone else, the pay would probably start at $70K /yr . He would be exposed to lots of other people (programmers, designers) at the company to spark great ideas for games/apps.

Lots of time after work to chase the $$$$ game money (which is really a LOT harder than someone not working at a game company thinks).

+1. Almost everything (worth its salt) I learned, ideas or otherwise, was AFTER I started working. And I have a master degree!

 

[daylatedollarshort]

Just a thought for the OP. When they were younger, we used to pay one of our kids a stipend to do volunteer work at a science museum. They still had to work for their money, but they were around retired scientists and one or two Nobel laureates, which we hoped was an enriching and motivating environment for them. Also, it is easier to get and keep a job as a volunteer, but still gave them the idea they had to work to get paid (by us at that time). Being a docent also helped develop their social skills for paid work later on.

 

[dixter]

the answer could be as simple as keeping the yearly income down to the current medicare Part B Part D IRMAA Premium Brackets... unless you just like to give free money to the government... remember, medicare irmaa uses yearly income starting at 63 yrs old... the government doesn't like people who have saved lots of money over the years.. so in return they will fine your success by charging you more for medicare and SS taxes...besides the normal taxes on withdrawals....

https://thefinancebuff.com/medicare-irmaa-income-brackets.html