At What Age Do You EXPECT Your Nest Egg $ To Peak?

[Toocold]

I thought my peak would be when I sold my SARs after I left megacorp and had to pay a huge amount to our friends in the government, but that wasn't the case.

I'm now thinking my peak could be now, right before we fully pay our kids' college education for the next 5 years. I'm not sure though.

Or perhaps it would be in the future when I decide to go crazy and buy some lambo's for the h*ll of it, only to trash it the next day. Who knows.

 

[Markola]

I project three scenarios:

Black Swan: Something so bad we get wiped out and have to survive on SS. I just hope it doesn’t happen before age 70.

Vanguard Projection: Our portfolio sees Kitches’ classic Smile Shape, wherein it peaks at retirement, bottoms before SS, then starts to rise again through life.

All Bets Are Off: My side hustle is accumulating a controversial asset class that we may not discuss here, which is so far six figures for me. If it simply keeps doing what it’s been doing, kaboom. It’s nice to have things to study and engage in that gives one entertainment and hope as we get older, in the same way that some trade stocks and options actively well past the time that they need the money.

 

[Koolau]

I project three scenarios:

Black Swan: Something so bad we get wiped out and have to survive on SS. I just hope it doesn’t happen before age 70.

Vanguard Projection: Our portfolio sees Kitches’ classic Smile Shape, wherein it peaks at retirement, bottoms before SS, then starts to rise again through life.

All Bets Are Off: My side hustle is accumulating a controversial asset class that we may not discuss here, which is so far six figures for me. If it simply keeps doing what it’s been doing, kaboom. It’s nice to have things to study and engage in that gives one entertainment and hope as we get older, in the same way that some trade stocks and options actively well past the time that they need the money.

Ahh, yes. You're into the gold plated widgets. Very controversial, indeed.

But seriously, I'm betting graphing most of our portfolio values look a bit strange because of things like SS timing (different times for his and hers, as well) and also as pensions kick in at various times. And then, there are inheritances for some of us. (Clearly, no smiles for us!)

Overall, I just don't seem to be spending fast enough to keep up with Mr. Market - or in the current case, my old megacorp stock exploding. Who knew?

Guess I should get into gold plated widgets just to be sure. YMMV

 

[LateToFIRE]

I'm seeing a pattern here. I wonder if it's a "thing" within our community or if maybe "rich" people (like most of us) just naturally increase their wealth. Many of us don't spend 4% (adjusted for inflation.) So, maybe it's more or less backed in the cake once you start toward FIRE and keep the faith once retired. It's a little puzzling.

I sure hope I don't ruin the pattern when I retire! I won't have much by way of pension to draw on. But, the idea of watching my nest-egg dwindle is excruciatingly uncomfortable.

 

[Milkman]

Interesting topic. I retired 9 years ago. Now I am 73. I have been tracking withdrawal amounts and annual % of withdrawal rates. My average annual withdrawal rates average 2.7%. After I turned 72, some of this has been mandated by RMD amounts. On the other hand, since I took Social Security at 70 I have been plowing more money back into savings than when I was still working and planning for retirement. Last year our combined withdrawal rate was significantly less than 2% and the lowest annual withdrawal rate since I retired. Our total investment amounts peaked in January of 2022 mainly due to investment returns and will hopefully continue to increase with future market returns. But our combined investment account values are almost 50% higher than when I retired.

 

[fosterscik]

Interesting topic but as many have said, it's very difficult to predict. So far my "peak" was 18 months ago, but funds are now recovering and with SS yet to be claimed I predict I will never have a sustained decline. But who knows...

 

[jazz4cash]

I don’t expect to peak, ever. I don’t care about leaving a legacy. The excess is insurance against some black swan or maybe LTC. The 4% SWR just seems very conservative vs nominal equity returns. Fido RIP does show a peak and running out at some point only when I plug in above average inflation and market returns significantly below average.

 

[Zathras]

I expect our portfolio to peak when either, or both of us start long term medical care.
Hoping that never happens, but if it does, that will likely be the peak.

 

[jollystomper]

I do not expect ours to peak. From an income/expense view, in 5 years of retirement our withdrawal rate has been about 1%, and our nest egg has grown. My pension, while non-COLA, is relatively large. I have not yet taken my SS (hoping to hold out until 70), but if I took it today (age 65) pension + SS + interest and dividends would be greater than our spending. Our portfolio is relatively conservative (35-40% stock allocation) so we do not get the wildest of the market swings, and have yet to be forced to sell equities for expense money.

The biggest unknown will be health and long-term care. We have self-insured against that, so that may be when our portfolio peaks. Beyond that, we have to be wary of any enticing scams, and hope we retain enough intelligence to avoid falling prey to them .

 

[Markola]

Ahh, yes. You're into the gold plated widgets. Very controversial, indeed.

But seriously, I'm betting graphing most of our portfolio values look a bit strange because of things like SS timing (different times for his and hers, as well) and also as pensions kick in at various times. And then, there are inheritances for some of us. (Clearly, no smiles for us!)

Overall, I just don't seem to be spending fast enough to keep up with Mr. Market - or in the current case, my old megacorp stock exploding. Who knew?

Guess I should get into gold plated widgets just to be sure. YMMV

Lol!

 

[GravitySucks]

Probably 2021, age 62, year 8 of retirement.
I started gifting to my adult daughters and am hoping to pamper myself with some BTD. Hard to bring myself to spend after all these years.
But Fido says if the markets are average or better going forward I will have more than ever in another 8 years or so.

 

[Andre1969]

FireCalc gives me a 100% chance of success, as in, never running out of money. However, there's always the chance that investments peak, and then there's a big downturn, and I die before my assets see a full recovery.

But, as far as forecasting some kind of peak, where it's nothing but a slow downhill burn from there on out, I can't foresee that happening in my case.

In theory, a bad economy and/or exorbitant medical bills late in life might trigger something like that, so anything's possible.

 

[Koolau]

FireCalc gives me a 100% chance of success, as in, never running out of money. However, there's always the chance that investments peak, and then there's a big downturn, and I die before my assets see a full recovery.

But, as far as forecasting some kind of peak, where it's nothing but a slow downhill burn from there on out, I can't foresee that happening in my case.

In theory, a bad economy and/or exorbitant medical bills late in life might trigger something like that, so anything's possible.

Long Term Care is probably the most likely scenario to "peak" your nest egg IMHO. YMMV

 

[ncbill]

Probably when I'm dead after subtracting any uncovered costs for the below, even though I plan to buy generous LTCi.

LTC experience with my mom included seeing many too many nursing homes & is the reason I specify palliative care only in my health care POA once diagnosed with any terminal illness.

Including any form of dementia.

 

[ShokWaveRider]

At the current burn rate, it should last 1.75 - 2 x as long as we do. I am comfortable with that as it takes into account unexpected expenses.

 

[Koolau]

Probably when I'm dead after subtracting any uncovered costs for the below, even though I plan to buy generous LTCi.

LTC experience with my mom included seeing many too many nursing homes & is the reason I specify palliative care only in my health care POA once diagnosed with any terminal illness.

Including any form of dementia.

Don't know your age, but for LTCi, bring lots of money - especially if you are "older." We started early (age 51) and it's still quite a wallop in January when premiums come due. It's a lot of coverage, but the premium is a lot also. YMMV

 

[Jeffman52]

Who knows that the future holds? Not me. So in reality I cant know how it's really going to play out. However making some assumptions on health, the market, and our spending, it looks like our (DW and I) portfolios continue to go up until my wife and I are both gone. There is a small dip between retirement and when we both start drawing SS. But after that it just goes back up again.


But we have to be flexible. If the market was to go through a really extended downturn or stay flat for years, then eventually it affects the investments. We would then either tighten our belt and lower spending, and/or be willing to see those investments decrease in value as we spend out of them top support our spending.

 

[Koolau]

Who knows that the future holds? Not me. So in reality I cant know how it's really going to play out. However making some assumptions on health, the market, and our spending, it looks like our (DW and I) portfolios continue to go up until my wife and I are both gone. There is a small dip between retirement and when we both start drawing SS. But after that it just goes back up again.

But we have to be flexible. If the market was to go through a really extended downturn or stay flat for years, then eventually it affects the investments. We would then either tighten our belt and lower spending, and/or be willing to see those investments decrease in value as we spend out of them top support our spending.

What an excellent point, Jeffman52. I've already HAD my dip. It was during the "great unpleasantness" ca 2008, etc. We went through 2 expensive rehabs of two different condos. Our cash went to virtually zero and we were breaking into my 401(k) and we were converting tIRAs to Roths. THAT was our dip. I hope we never have another until we die.

Thanks Jeffman52 for reminding me.

What a time that was. First and only time I really doubted our "plan" since the numbers were crashing all around us. BUT, as everyone knows, there was light at the end of the tunnel - and this time, it was NOT a locomotive coming at us.

 

[MichaelL]

I don't expect my investments to peak in my life time. I expect to withdraw about 2.5% and I anticipate earning more than that. I'm not a penny pincher and I go out as much as I want. I just don't have that much that I want to spend money on. I don't have a mortgage or debt and I live in an income tax free state.

 

[53anddone]

In the five years since I retired my NW has increased around 14% and I have paid for 75% of my kids college during this time. Our current WD rate is averaging around 3%, so I don't expect it will ever peak.

 

[Pointby2]

Our nest egg peaked 18 months ago right about my 67th birthday. 76% of the investments are in our Roth accounts which is good. (Tax deferred is now zero)

We have been gifting for the past 8 years to our adult children and will continue to do so.

Unless the market goes crazy, and I don't expect that it will, ours probably peaked at roughly the same time and same age.

 

[Time2]

Our nest egg seems to have peaked in Dec 2021, I was 66 years old. However I expect to have it peak again, hopefully soon!

 

[brett]

I am 71. An optimist.

My hope is that I do not yet know when our investments will peak.

Hopefully the peak will be reached years from now at the quarter end when we fall off our respective perches and move on to the next world.

 

[rodi]

Up and down with the market so peaks come and go.

This. And I lost my crystal ball so I can't predict the peaks or valleys of the markets in the future.

We're withdrawing less than 3% of our current portfolio... but our portfolio is bigger than when we retired - we're taking out the inflation adjusted 4% of our original portfolio. Overall the market has been good. Might have to look into BTD opportunities to pull it up to 3% of current portfolio.

 

[Tadpole]

In my mid 70s I am rolling more than peaking. Granted the roll is upward a little, more like a slight, almost unnoticeable slope. So, I think I have peaked broadly and should recede from here. My income has decreased, my taxes have increased, and Medicare will increase in 2025 because I am now a widow with RMDs. To be honest, the rate increase hit one of my retirement accounts which was invested in Vanguard Target Income. Excess income has been holding it up, not smart investing.