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

[Midpack]

I assume we'd all be happy if our $ portfolio never peaked (and that IS the goal for some who want to leave $ for family/charity), just increased year after year until we go poof.

So I am asking for those here for which a residual is not a primary goal, when do you actually expect your [-]NW[/-] nest egg to peak, maybe a 'guard rail' amount/range over time/age that would make you consider adjusting spending down or up.

I have always expected our [-]net worth[/-] nest egg to peak somewhere along the way and begin to decline. Some with a BTD approach may expect a peak at 65 yo. Others who plan to leave a big $ amount behind the peak goal is never. And some what me worry?

The chart is just a simple illustration for a 65yo 30 yr 4% withdrawal (inflation adjusted) [-]net worth[/-] SHD nest egg by age - purely theoretical. The 2% line is just returns that are 2% higher than annual spending increases (e.g. 5% returns with 3% spending increase).

• 2% peaks at age 73, 8 years into retirement
• 3% peaks at age 84, 19 years in
• 4% never peaks

I considered a poll, but there are too many legit alternatives IMO.

Do you have some rough (or firm) $ waypoints that you're watching as the years pass?

 

[skyking1]

Our situation is messy, but I expect our nest egg to peak in about 8~10 years due to some real estate and business investments.
I can't say about NW. I think those are two distinct things.

 

[Alan]

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.

 

[street]

Interesting topic! I have often wondered about this, but I have no idea how I would even come close to coming up with an answer.

I would say I would peak before RMD age but not sure on that either. Taxes will be a large expense for me at that time, but all depends on market conditions at that time. I plan on reinvesting all RMD money's when I receive it back into the markets. I still think I can stay under the 2% spend rate even with taxes to pay.

I did see a simulation of my plan and it had for reinvesting that money it would keep growing on a normal market condition.

And in NW, property could keep things in check as far as peak grow also.

Great topic and hoping to learn more on views of this and what other say, about their thoughts.

 

[ShokWaveRider]

Ours seems to be increasing annually depending on our expenditures. We have never really thought about a peak as such. Say we needed to spend ~$30k for a new roof or pool enclosure, it would go down, but the following year would be back up. We have no one to leave anything to other than the 2 chosen charities that are in our will. For all of our retirement years we have been plodding along with no real decrease but with a steady, but not dramatic increase.

 

[Midpack]

Our situation is messy, but I expect our nest egg to peak in about 8~10 years due to some real estate and business investments.
I can't say about NW. I think those are two distinct things.

Fair point, I have edited the OP.

BTW, same chart below with 3% initial WR vs 4%, all else the same. Massive difference. 2% return over spending peaks at age 91, 3-4% never do. The not shown 2.5% initial WR (our target) is kinda absurd...

 

[pb4uski]

Once I start SS in a few years I expect that SS and my small pension will slightly exceed our spending, so there will never be a peak. That is in both nominal $$$ and real $$$.

Also, the above doesn't factor in any potential inheritances which could be substantial.

We need to start spending more.

 

[Dtail]

Could be if an expected rough number comes in for inheritance, otherwise who knows?

 

[Car-Guy]

Looking in my rear view mirror , I expect mine peaked 6 or 7 years ago. Been blowing that dough and enjoying my younger retirement years while I can. As I have gotten older, my ability to blow that dough like I want is slowing and my NW is creeping back up. So who knows.

 

[skyking1]

Well done, Car-Guy.

 

[Major Tom]

I have absolutely no idea. I will most likely be basing my spending partially on what my NW does (which is currently the same as my nest egg/portfolio, as I don't own property). I live on my own, and don't have a plan to spend down my nest egg. If it continues to increase as I age, that would represent an opportunity for me to move into a nice care facility if I happen to need it when much older. There's a very slight possibility that an opportunity to purchase property may come along in the next 5-10 years. If that happens, I expect my nest egg to decrease fairly significantly at that point.

For me, there are just too many variables.

 

[CardsFan]

Like pb4uski, I expect ours will never peak. We don't have a pension to speak of ($104/month), but now that we are taking SS, our WR is less than 2%. And there is a strong potential for an inheritance of about 16% of our current nest egg.

I guess we should BTD, but we already do everything we want, and have no desire for a second home. Even if we decided to snowbird 4-6 months a year (renting), instead of our normal 1 month, the WD would not get to 3%.

 

[NoiseBoy]

I retired at 57 with a non-COLA'd pension from my mega-corp that covers the basics. It's actually a bit more than I had factored into my retirement plan due to the fact that I worked an extra (pandemic) year. When I turn 62 I will start a smaller civil service pension that has a 3% fixed COLA (compounding!) and I also plan to start drawing my Soc Sec.

Since I knew that I wanted to travel more when I retired, I built a ladder of 5 year CDs to cover the income gap between my mega-corp pension and my age 62 reinforcements. Therefore, I am currently spending down my portfolio, but only by a small amount, which is actually lost in the total market returns. I'm still reinvesting my dividends, except each year's CD, but otherwise I'm not adding to my savings any longer.

To the OP's question, when I turn 62 I should have enough annuity income from my three sources to fund both my needs and my wants leaving my portfolio to grow. Since I do not have any heirs nor any other reason to leave a legacy, I do think about how big of a next egg I need to feel really safe. It will probably be a round number that feel I really good about, and then I can start to BTD! Therefore, I don't have an age target, rather I have an invested assets target.

 

[pacergal]

I honestly don't know. We have pensions and SS income, and keep our budget below those numbers, save some each month. We take from investments only if we can't cash flow something. Possibly will re invest RMDs, or give to kids if not needed for current living expenses.
But, you never know what could happen in the mean time. Hopefully, we have enough for our lifetime. I can give up the "wants", as long as the "needs" are taken care of.

 

[PatrickA5]

This last month saw a record for our Net Worth, but I'd say there is a decent chance ours has peaked at this point (both aged 65). Our only income is my SS payment. No more paychecks, no pensions, and no more possible inheritances - so the remainder of our spending will come from our investments.

Our projected WD rate is 4% for the next 5 years until DW collects SS and then it would be lowered to around 2%. Years with big one-time purchases will require higher WDs. With only 35% in stocks, I doubt we'll actually gain overall (after WDs), but I guess it could happen. We also don't live in an area that has huge gains in real estate values.

 

[MarieIG]

There are too many unknowns for me to be able to estimate this.

It is possible that some accounts will increase (Roth) while others decrease (traditional IRA).

 

[djsander]

If I go tomorrow it would have been about 2 years ago or so. If I don’t then no telling. Once I draw SS it will cover all our monthly bills plus some. So, we will go to a zero % withdrawal rate except for unexpected expenses and any BTD type things. The BTD won’t be extravagant as my wife is a very conservative live below your means person. I won the lottery with her. I have to encourage her to spend anything. We talk about any spending that is out of the norm.

 

[Mr. Tightwad]

NW seems to only go up. I would guess my peak will be when I go to the cemetery.

 

[gauss]

I still have a lot of moving parts here until things really settle down. However, given that I spend < 1/2 of the standard SWR I suspect it will peak when DW and I die.

-gauss

 

[Jerry1]

This year me and DW took SS. That and my pension pretty much cover our spending. I expect my portfolio to continue to increase until we have medical care issues that start to drain our funds. While I expect it to increase, my hope is that it at least stays stable. Growth, covering inflation, would be the next better thing.

 

[W2R]

At What Age Do You EXPECT Your Nest Egg to Peak?

I dunno. It keeps going up and up for the most part as far as just plain dollars are concerned, but I haven't included inflation in that.

So anyway, if we are just talking dollars, I'd say the day I die would be the day it peaks (barring humungous unexpected medical or other expenses due to old age).

But would its purchasing power be at its peak the day I die? Probably not depending on inflation.

I have to admit that instead of our usual $8-$12 take-out lunch, today I suggested to Frank that we should choose the "Shrimply Irresistible" lunch at our favorite restaurant for take-out, even though it costs $15 each.

Felt like a spendthrift! But hey, what is money for, right? It was SO delicious.

 

[COcheesehead]

Still slowly going up, but I am starting to realize that if we don’t spend it, someone else will. We have no heirs so really trying to focus more on BTD.

 

[Midpack]

Still slowly going up, but I am starting to realize that if we don’t spend it, someone else will. We have no heirs so really trying to focus more on BTD.

We're finding old habits hard to break as well...

 

[ERD50]

"Peak" -Some might consider this semantics, but I just think of it as the proper use of a word.

If our nest egg increases until we die, it peaked at death. That is still a peak. To "never peak" really makes no sense (even a perfectly flat line has a 'peak' - it's just the same as every other point!). On any graph, regardless of what it is being measured, if the last point is higher than all the rest, you point at that and say "that's the peak".

I think what OP is asking is "Do you expect your nest egg to decline at a certain age?

I have no expectations either way. The future is unknown, and the wide variance in outcomes in a FIRECalc output graph (above and below starting values) tells us quite a bit about the past. The only thing I can reasonably expect (but again, based on history) is to not run down to zero before I (we) die.

-ERD50

 

[Still Learning]

Forecast our investments, savings, expenses, RMDs, taxes, house renovations, car replacements, discretionary spending, etc. out to age 85 and our NW continues to grow so probably looking at major expense due to long term care or income reduction due to one of us passing.


Spent every dollar of our discretionary budget last year but way behind this year due to health issues which now appear to be behind us. Making plans to start spending that budget.