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

[TrophyHusband]

[MOD EDIT], my retirement portfolio peaked in Nov 2021. 2.5 yrs later and it still hasn't recovered.... and I'm not even retired. The longer this goes on, the further that retirement date keeps slipping further into the future.

 

[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!

Quoting my own post I should have added, when we start SS in 16 months or less, our withdrawal rate will be at 1%. That is why I expect our portfolio to peak again.
I also have a piece of land I have had on my books at $155k for 10 years, the state is widening the road, and will buy the frontage frontage. It is in the perfect spot for the construction people to warehouse dirt, gravel, drainage pipe, trucks, and all the supplies they use. My hope is the state buys it for this purpose, but if not, the wider, better road enhances the value.

 

[Alex The Great]

The peak may be right now, because I still work but plan to retire very soon. I have no idea what will happen next. There is 50/50 chance that assets will go up or down depend on market condition since there will be no support from earned income anymore.

 

[pc95]

A lucky minority might say when they die, but for us likely would be at 57 yro when I retire.....if the job will let me retire earlier with health benefits, then earlier.

 

[dknighd]

I expected my "nest egg" to peak about when I retired. And so far that has been the case.


The day after I retired we bought a dual life annuity. So we exchanged balance for income. So our "nest egg" balance immediately went down.


Since then we've been spending at about 6% annually, while we defer SS income.
We also bought another small annuity, and we currently plan to buy another small one about when I claim SS.


I "expect" my balance has peaked, and I'm OK with that. I don't expect our balance will ever go to zero, and it is possible we have not yet seen the peak.

 

[PointBreeze]

I anticipate my nest egg peaking in my late 80s, as I’m anticipating I’ll move into some type of assisted living arrangement then and my withdrawal rate will shoot way up. My spouse is 16 years older than me and I have no children, so there will be no one to help me to age in place. My parents are 88 now, and in a CCRC in the independent living section. If my father were alone, he’d be in assisted living now. My mother’s great, but one little thing could push her over into needing significant help. I’ll help them stay independent as long as possible, but I can see how precarious their independence is getting.

So my projections show my net worth starting to drop precipitously in my late 80s.

Of course, none of us have a crystal ball, and I could go earlier and leave my nieces and nephews a nice surprise inheritance, or I could age better than my parents. But I already have an artificial hip (parents don’t have any) and arthritic knees and back (Dad had the back, Mom has the knees, but neither have both), so I’m trying to be realistic.

 

[dknighd]

If I live long enough, and quit spending from my nest egg, it could go up forever.

 

[Koolau]

Sorry, but have we yet talked about the effects of inflation? IOW if we all adjusted our nest eggs back to their buying power, would that change our results? I don't have enough info right now, but I'm guessing the past two years of inflation has exceeded my nominal growth. With that in mind, I guess that would be a peak - though I hope it's only a brief valley. I guess we will see. YMMV

 

[dknighd]

Sorry, but have we yet talked about the effects of inflation? IOW if we all adjusted our nest eggs back to their buying power, would that change our results? I don't have enough info right now, but I'm guessing the past two years of inflation has exceeded my nominal growth. With that in mind, I guess that would be a peak - though I hope it's only a brief valley. I guess we will see. YMMV

The funny thing is that inflation does not matter. As long as my nest egg does not go below zero (in nominal or real dollars) we'll be fine. I hope.


I am pretty sure my nominal nest egg will likely be more than my real nest egg. But who knows. As long as both above zero I'll have money spend. I can only hope it will be enough money!!!!!

 

[Koolau]

The funny thing is that inflation does not matter. As long as my nest egg does not go below zero (in nominal or real dollars) we'll be fine. I hope.


I am pretty sure my nominal nest egg will likely be more than my real nest egg. But who knows. As long as both above zero I'll have money spend. I can only hope it will be enough money!!!!!

I agree that as long as your nest egg never goes to zero while you're alive, it's not a big deal. But we're talking about peak of our personal stashes. With that in mind, it occurred to me, inflation might well reduce the "value" of your stash faster than the nominal amount increases it. Is that potentially "peak" or do we only consider nominal? Honestly not trying to throw a wrench into the w*rks, just trying to see how it might affect me (and others, of course.) YMMV

 

[dknighd]

I agree that as long as your nest egg never goes to zero while you're alive, it's not a big deal. But we're talking about peak of our personal stashes. With that in mind, it occurred to me, inflation might well reduce the "value" of your stash faster than the nominal amount increases it. Is that potentially "peak" or do we only consider nominal? Honestly not trying to throw a wrench into the w*rks, just trying to see how it might affect me (and others, of course.) YMMV

Nominal is easier to keep track of.

 

[Koolau]

Nominal is easier to keep track of.

Yeah, I think that's a given. Understanding how far that nominal will go in your final years is probably more useful. YMMV

 

[dknighd]

Perhaps trying to predict your peak years, either nominal, or real, does not matter?

 

[Markola]

^^^^ It’s fun and human nature to want a growing nest egg but the actual, better goal should be having enough money for life.

 

[Alan]

Perhaps trying to predict your peak years, either nominal, or real, does not matter?

I agree.

And then there are taxes to consider. 76% of our nest egg is in a Roth, 24% is in after-tax investments.

 

[Koolau]

Perhaps trying to predict your peak years, either nominal, or real, does not matter?

True. But if we take that seriously, we probably should drop this thread!

 

[kcowan]

Deleted

 

[kcowan]

I used one of those longevity calculators to estimate nest egg mean lifetime needed:
M 88 (+-4)
F 93 (+-5)
and so do not peak during those years.

However my portfolio is a cherry pick from S&P500 so it has exceeded the index most years.

I assume that they will have a total return 2% ahead of inflation.

 

[youbet]

I'm surprised how many are living a fully retired lifestyle and yet their FIRE portfolios are still growing in real terms.

 

[Koolau]

I'm surprised how many are living a fully retired lifestyle and yet their FIRE portfolios are still growing in real terms.

The long (mostly) bull market in equities hasn't hurt anything and most of us seem to have "over saved." YMMV

 

[Ronstar]

I'm surprised how many are living a fully retired lifestyle and yet their FIRE portfolios are still growing in real terms.

Well as long as portfolio return pct exceed WR pct and inflation pct, then portfolio values should grow.

We can control WR, but inflation and market returns are the wild cards. IMO, it's going to be tough to keep nest egg peaking with high inflation that is also dragging down market returns.

 

[youbet]

Well as long as portfolio return pct exceed WR pct and inflation pct, then portfolio values should grow.

We can control WR, but inflation and market returns are the wild cards. IMO, it's going to be tough to keep nest egg peaking with high inflation that is also dragging down market returns.

I look at the lowest line of the FireCalc output graph for guidance. That's the line most of us follow most closely since it shows how your plan would have done under the least favorable historical conditions.

My line has a downward slope. Some brief upward jogs, but it generally heads down. I make it to 30 years without coming close to running out of funds and since DW and I are 76 YO, that means we won't come close to running out of money. But it also means that we've probably already peaked in terms of the real value of our FIRE portfolio.

Are the folks who say their peak value is still far out in the future saying that the bottom line of their FireCalc output graph slopes upward. That is, given the worse case of historic scenarios, their FIRE portfolio continues to grow in real terms?

A sweet situation for sure.

 

[SecondCor521]

I look at the lowest line of the FireCalc output graph for guidance. That's the line most of us follow most closely since it shows how your plan would have done under the least favorable historical conditions.

My line has a downward slope. Some brief upward jogs, but it generally heads down. I make it to 30 years without coming close to running out of funds and since DW and I are 76 YO, that means we won't come close to running out of money. But it also means that we've probably already peaked in terms of the real value of our FIRE portfolio.

Are the folks who say their peak value is still far out in the future saying that the bottom line of their FireCalc output graph slopes upward. That is, given the worse case of historic scenarios, their FIRE portfolio continues to grow in real terms?

A sweet situation for sure.

I think most people, including me, are talking about their actual individual personal experience. For most recent FIREes, this is well above that worst case downward sloping line that you're focused on. In other words, most people don't retire at the worst time (or if the retired recently enough, they don't know yet that it is the worst time, like early 2021 retirees).

I'm not sure if those lines on FIREcalc are real or nominal.

In my case, my actual individual performance so far is that my FIRE stash is about twice the amount I retired with in nominal terms since I retired in 2016.

If I plug all my current relevant numbers into FIREcalc, my worst case line does actually go up and ends up at about 2x my current FIRE stash at the end of the planning period (36 years for me).

 

[FLSUnFIRE]

I hope mine doesn't "peak." As a 49 year-old FIREd guy, I am close to 100% equities other than a small cash position. I expect long-term returns to be higher than my spending in real and nominal terms and continued portfolio growth. Short/Mid term, I expect lots of peaks and valleys . My current high water mark is Oct 21, three months after my FIRE date but the market is flirting with new highs so I might get above that soon. It's possible that some point way in the future that I'll decide I've won the game as many here have and go more conservative/increase spending or that I'll have some life event which significantly increases my spending (medical issue, etc). If that happens then it's possible I'll have seen a peak but in all likelihood, it would be more of a plateau than peak with a steep decline. For now, I'm still in a growth mindset and am counting on that growth to self-insure LTC down the road.


Chart of my NW because it's interesting, lots of "peaks" along the way -most due to market volatility but a few due to life events. Sure hope I'm not done setting them!

 

[big-papa]

What I've seen when backtesting amortization based withdrawal methods is that once retirement starts, the portfolio value remains steady around some mean +/- until the last 10 years when it begins to drop in value as the withdrawal percentage begins to consistently outpace portfolio returns - it's by design. Anyway, it also represents an opportunity to shift gears by changing allocation, purchasing a SPIA, changing withdrawal methods or sticking with amortization but pushing the planned end of retirement date out.

Cheers