Running out of money vs. Too much money but couldn't enjoy it

[NW-Bound]

Well, unless we can see the end of our life, and many posters want to live past 100, can we ever be sure that we will leave behind a lot of money? The market god may just take it all back in the next few years.

 

[cyber888]

I just talked to a colleague at work as we saw each other at the parking lot. We've been friends for years but never talked about retirement. So, I opened up about the issue and asked him straight - I asked "when are you retiring Lar?" He says "I don't know. I don't have any retirement plans." I asked - "How old are you?". He says "I'm 68, and wife is 66. But we cannot retire." I said "Why not?" He says "I still have 2 mortgages, not much saved, and we'll work till we croak. I will work till I'm 75 or until I can. Let's just say - we spent our retirement to enjoy our money in our younger days." I said "Well, you can collect maximum SS at 70 and that's in 2 years". He says "That won't be enough with our 2 mortgage payments and we have horses." I'm still shaking my head in disbelieve, because he and his wife are probably pulling $200K a year or so.

 

[Mulligan]

My parents will likely pass with millions, but it's a very conscious decision. They have everything they want and they like the "game" of building net worth.


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Same here with my dad and his wife... This question wouldn't resonate with him as he has no interest in spending his money. His last breath will not be "I should have spent more money". The thought just doesn't compute with him.


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[ejman]

I just talked to a colleague at work as we saw each other at the parking lot. We've been friends for years but never talked about retirement. So, I opened up about the issue and asked him straight - I asked "when are you retiring Lar?" He says "I don't know. I don't have any retirement plans." I asked - "How old are you?". He says "I'm 68, and wife is 66. But we cannot retire." I said "Why not?" He says "I still have 2 mortgages, not much saved, and we'll work till we croak. I will work till I'm 75 or until I can. Let's just say - we spent our retirement to enjoy our money in our younger days." I said "Well, you can collect maximum SS at 70 and that's in 2 years". He says "That won't be enough with our 2 mortgage payments and we have horses." I'm still shaking my head in disbelieve, because he and his wife are probably pulling $200K a year or so.

Well, I can certainly understand the "we have horses" part. My wife got into mini horses a couple of years ago (we retired 12 years ago) and let me tell you, we are certainly contributing to the equine economy. We had as many as 40 goats before we got our 5 horses - no comparison -

 

[NW-Bound]

We had as many as 40 goats before we got our 5 horses - no comparison -

I have never had any animals other than cats, but I know one can get milk from goats to make cheese, and I have never heard or read about horse milk.

So, goats definitely contribute to your financial well being, in contrast to horses.

 

[Sunset]

OK, I just HAVE to weigh in on this thread. As always, I have many opinions (who me, opinionated? yep). Some of these opinions may not be all that popular but here goes:

My views are that someone who has achieved bliss, contentment, nirvana, or whatever you wish to call it, in life, does not have a duty to toss it out the window and engage in hyperconsumerism when they are already content.

If someone is already content, it seems to me that very little enjoyment can be had from just spending more money on things/experiences for the sake of spending it. Sometimes not spending can provide more enjoyment than spending. Sometimes the greatest new experiences are free. Sometimes extra things are just an albatross.

I see zero reason for someone who is content to feel obligated to spend everything they've got, even though they do not find doing this is necessary for further contentment, so as to not have a penny left when they die.

My thinking is that it is not immoral to leave money to one's heirs, or to charity, and at the same time to ensure that one has enough money to live to over 100 years old without depending on someone else's tax dollars.

Now, on the other hand, if someone is truly NOT content, then that's a different matter.

* If you always longed to, say, go on a photographic safari in Africa, and can afford it, then do it while you're young.

* If you always wanted a Dream House and can afford one, then buy one and move (and hurry up with that too - - moving before you're 65, in my experience, was a whole lot less exhausting and stressful than moving after 65).

* If you want to travel by RV before you die, then by all means buy a nice one if you can afford to do so, and take off! Again, this is probably better done while you are young enough to see well and drive safely.

And so on. But if you would rather just stick with the status quo, there's nothing inherently wrong with that either. Just make sure that is really what you want, and that you are truly content.

I feel pretty content.

I grew up poor, at one point we were so poor in the summer we ate chicken wings nearly every night, as the butcher gave them away free.
Christmas was "pick a present not more than $20".
My parents always rented their home.
I got to wear my cousin's hand-me-downs.

Now, I feel content and rich, we travel when we can, we eat out at restaurants about twice a week without a special reason.
My clothes closet is stuffed with clothing, I really need nothing.

This does not mean I'm going to waste my $$$$, I bought a brand new vehicle for 32K as I have no desire to spend more as it more than satisfies my needs.

 

[ejman]

I have never had any animals other than cats, but I know one can get milk from goats to make cheese, and I have never heard or read about horse milk.

So, goats definitely contribute to your financial well being, in contrast to horses.

True that. Goat milk cheese is wonderful, as is goat milk soap. As to milk from horses, I seem to recall reading some place that in Mongolia they drink mare's milk. A tad difficult with our horses though being that they are geldings...

 

[daylatedollarshort]

Well, I can certainly understand the "we have horses" part. My wife got into mini horses a couple of years ago (we retired 12 years ago) and let me tell you, we are certainly contributing to the equine economy. We had as many as 40 goats before we got our 5 horses - no comparison -

How cute! We went to a mini horse show last year. They were all adorable. If we lived in a more rural area I would love to have mini horses.

 

[braumeister]

people often settle into a "groove" in retirement. Just make sure it isn't a "rut"

Very nicely put.

 

[dadu007]

Some people are homebodies and are very content to live a simple but fulfilling life. Did you know he was unhappy or are you saying because he did not party and have so called fun that he must have been unhappy?

I'm a bit late following up, but I will answer it this way:
My stepmother complained all the time that my father never wanted to travel or do anything...he just wanted to sit on the couch or at his PC and watch stock tickers all day. He was way too paranoid of losing money instead of using the money he had to make his life more enjoyable. He had no hobbies, was a hypochondriac and constantly bitched about everything. I can say with a fair amount of certainty that he was not happy.
Wish I had a happier parenting story!

 

[brett]

It is about experiences more than assets for us. That said, we definatly plan on leaving a nestegg for each of our two children. How much will depend on the market. Don't really see much of an issue with this. My guess is that our children will not have the financial resources that we have. The wealth gap in our country is widening with our changing economy.

We downsized and got rid of the real estate. Good job too because the market here is in the toilet and going south quickly. We are very happy renters...no responsibility and our money is not tied up.

So we travel anywhere from 4-5 months per year. Don't have a second winter home. Instead we spend 3 months travelling to and in warm climates that we like or are on our respective bucket lists.

Health care cost are not an issue for us so we do not really worry about that. Just have to ensure that we are not depleting our assets at a rate that we cannot sustain.

 

[Sarah in SC]

Pro tip on airag, aka fermented mare's milk--it tastes like thin sour cream that's been left in the sun a few days. Slightly alcoholic. Definitely not a craze that will be exported from Mongolia anytime soon. But yak cheese is delicious, if anyone wants to start raising them!

Your story about the guy who can't retire because he has two mortgages and horses really struck me--we have a friend that could be that guy in another 15 years. I wish something were different, but I don't see that happening.

 

[Souschef]

I have decided, that instead of taking my RMD by just moving the assets from my IRAs to a taxable account, I will give the funds to my 4 sons (2 of mine and 2 of my wife's).
Why? because at that rate the IRA will last another 25 years, and the kids need the money now. My mom died this year at the age of 102!
It has very little impact on our lifestyle or other investments. We both get SS and small pensions.

 

[Turn_the_Page]

I grew up in a happy home and probably didn't realize until I was in high school that we were nowhere near rich. Two pairs of pants to last a year, maybe 3 new shirts.

Parents never complained. Dad worked part time in his profession until maybe 75. They stayed in my childhood home, 1300 sf, 1 BR, 1 BA. Yes, 1 BR with two boys. Turns out there was a 'den' that was our BR. Their active social life was mostly with church friends.

Once dad died, mom couldn't handle the home alone. We sold it and moved her to a senior apt. $800 a month including all meals. This was a converted high-rise hotel, so she basically had a hotel room with a bath. No kitchen, no living room, no porch, etc. $800 a month was also her SS check. Net worth ~$70k after the house sold. Once the Alzheimer's kicked in, we burned through that in short order.

They never complained. I think it really helped me to grow up this way. Yes, having money is better. I doubt that many of us in our nice homes, new cars, etc are any happier than they were.

 

[audreyh1]

I have decided, that instead of taking my RMD by just moving the assets from my IRAs to a taxable account, I will give the funds to my 4 sons (2 of mine and 2 of my wife's).
Why? because at that rate the IRA will last another 25 years, and the kids need the money now. My mom died this year at the age of 102!
It has very little impact on our lifestyle or other investments. We both get SS and small pensions.

I also believe in gifting today rather than waiting. Our recipients are our siblings, and even though I am the eldest, they aren't getting any younger either!

 

[kcowan]

My father, on the other hand, could not point to much happiness. Which life would you want?

My brother lived the same kind of life. I always had suggestions on what he could do to make life better. He would have none of it. He liked his simple life. He loved counting his money (like Scrooge).

(I was not my brother's keeper.)

My brother is 59 years old. He has lived at home all his life, with my mother -- not to take care of her but because he does not want his own place, plus he is incapable of making decisions or commitments. He pays half the monthly expenses -- which comes to about $350 per month.

You described my brother! Never had his own car. No relationships. Believed he would live no longer than his maternal uncle. (He was right!)

 

[Mulligan]

My brother lived the same kind of life. I always had suggestions on what he could do to make life better. He would have none of it. He liked his simple life. He loved counting his money (like Scrooge).



(I was not my brother's keeper.)

Although most here are more balanced in terms of saving and spending, that in itself doesn't make life more enjoyable. I have learned to accept people who do not spend any money and love counting it, can be just as happy. And trying to change them more than likely will not help.
I kind of put it to terms I can relate too. Spinach may be healthy and good for you, but I hate it. And if I was forced to change and eat it to replace my unhealthier foods, I would be miserable, despite being healthier. It is definitely about personal preferences. Some of my friends are very envious of my retired lifestyle and have told me so. Other friends have told me, if they lived like I did they would go crazy and rather work until they die. I believe both sets of friends are being truthful.


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[mickeyd]

taking my RMD by just moving the assets from my IRAs to a taxable account, I
will give the funds to my 4 sons (2 of mine and 2 of my wife's).

That's plenty generous of you but what happens if at year 15 or so you decide that you need to keep the RMD for your own purposes. Will the "no distribution" to the kids (who by this time are counting on the cash infusion) cause ill will or financial woe for them?

 

[Souschef]

The kids do not expect it. They are all extremely grateful for the gift, and were brought up right by their mother.
I can understand there are some greedy grasping kids, but fortunately not ours.

 

[Fedup]

I know more cases of leaving too much behind. In fact I only knew of one case of died broke, my sister's last boyfriend. He started out with under one million and ended up over 30 years on welfare and died suddenly.
The cases of leaving too much behind were numerous. One left $5 million, kept having OMY but died at 63, single female with a moocher boyfriend. He did get some of her IRA, but the rest of her assets went back to her family.


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