Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-02-2016, 02:40 PM   #41
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Teacher Terry's Avatar
 
Join Date: Jun 2014
Posts: 5,409
We helped the kids when they were younger and needed it. My inlaws and parents did that for us too. Often by the time people die the kids don't need the $.
Teacher Terry is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-02-2016, 02:41 PM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 29,850
Quote:
Originally Posted by Chuckanut View Post
One thing I have decided is that I don't want my kids to have to wait until I die to get some help. For example, if I can pay for some education that will give my child significantly higher earnings for the next 20+ years until I pass on, Is that not better than giving them a big pile of money in 20+ years? I think so. It's all relative of course, and depends on one's values and the needs and values of one's potential heirs.

OTOH, I will not pay for them to live higher on the hog than they can with their earnings. LBYM is something they seemed to have learned and are putting into practice, albeit, not always in the ways I would have chosen. But, my father would have said the same about me.
+1

My children graduated with no student loans, and are now making a good living. Barring some catastrophe, they will do well without my help, the same way I did without parental help.

I can spend a lot more now, but I am so used to having a decent stash, just to look at for that feeling of security. Call me Scrooge, but a lifetime habit is hard to change.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 12-02-2016, 02:41 PM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,683
One problem with having a successful safe withdrawal rates (and its a good problem to have) is that in order to get a 90+% success rate, one often has to risk leaving huge amounts of money unspent, thus denying oneself potential enjoyment and comfort in the later years.

One suggestion to 'fix' that problem is to have a variable withdrawal rate - a bit more in up years, a bit less in down years. In theory, it preserves a high success rate while allowing me to spend more total dollars than using a simple fixed rate. Of course, that means the heirs will get less when one passes on.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 12-02-2016, 02:45 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,654
I run our retirement plan using liability matching and a straight .5% real, which is about what 30 year TIPS were at not too long ago. When we started our retirement planning 30 year TIPS were paying ~2% real, and we just thought, eh that's good enough if we can get more or less 2% real yield without any stock market worries, portfolio depletion or sequence of returns risk. But we keep lowering our basic run rate over the years on the kinds of changes that do not lower our lifestyle, like making making the house energy efficient or getting rid of the landline, so .5% real still gets us the same lifestyle now as the 2% in our original plan because our run rate is lower.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 12-02-2016, 03:01 PM   #45
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 29,850
Quote:
Originally Posted by Chuckanut View Post
One problem with having a successful safe withdrawal rates (and its a good problem to have) is that in order to get a 90+% success rate, one often has to risk leaving huge amounts of money unspent, thus denying oneself potential enjoyment and comfort in the later years.

One suggestion to 'fix' that problem is to have a variable withdrawal rate - a bit more in up years, a bit less in down years. In theory, it preserves a high success rate while allowing me to spend more total dollars than using a simple fixed rate. Of course, that means the heirs will get less when one passes on.
It is most likely prudent people who are able to ER and know enough to plan their spending will leave a substantial amount of money behind. Perhaps they will not leave behind the same original stash they start out with, but 1/2 or 1/4. It is for the simple reason that they would throttle back if the economic conditions get tough, and then they do not know their exact expiration date to spend the last dime.

Even if they can see the approach to the end, when it comes they are in no mood to splurge, or even have time to. Sad, but true. I can see myself in that situation, but that's the way it is.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 12-02-2016, 03:05 PM   #46
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 2,517
Quote:
Originally Posted by NW-Bound View Post
+1

My children graduated with no student loans, and are now making a good living. Baring some catastrophe, they will do well without my help, the same way I did without parental help.

I can spend a lot more now, but I am so used to having a decent stash, just to look at for that feeling of security. Call me Scrooge, but a lifetime habit is hard to change.
Agree 100%. We got the kids through college (well two out three ain't bad) and they can support themselves. Anything beyond that is gravy for them.
However I am finding myself stashing a portion of my monthly living expenses just like we did for the last four decades. All for plan A, B, C, D etc. Once a saver always a saver.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
foxfirev5 is offline   Reply With Quote
Old 12-02-2016, 03:12 PM   #47
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 30,446
Quote:
Originally Posted by Chuckanut View Post
One thing I have decided is that I don't want my kids to have to wait until I die to get some help. For example, if I can pay for some education that will give my child significantly higher earnings for the next 20+ years until I pass on, Is that not better than giving them a big pile of money in 20+ years? I think so. It's all relative of course, and depends on one's values and the needs and values of one's potential heirs.
Since we don't have children, but I do have younger siblings as heirs, our strategy will be to gift what we can while we are living. Like us, they will be better able to use it when they are younger, rather than waiting for us to die.

So, I'm not so worried about whether I can spend all our income in older years, as what we don't don't spend on ourselves will be gifted as we can while we are alive.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 12-02-2016, 03:20 PM   #48
Thinks s/he gets paid by the post
 
Join Date: Aug 2013
Location: North
Posts: 2,940
Quote:
Originally Posted by NW-Bound View Post
Hallelujah! Now, how do I change my flight to extend my 2017 european trip from 6 weeks to 12 weeks?
simple, call the airlines and for a small fee, anything can be changed. Don't forget to factor 2x the lodging and food budget though
__________________
AA (Stock/Bond/Cash ): 97.5/0/2.5% MIX (Small/Mid/Large): 25/25/50% BLEND(US/Foreign): 100/0%, REIT (Real Estate Equity): ~50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
kgtest is offline   Reply With Quote
Old 12-02-2016, 04:16 PM   #49
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Dec 2014
Location: Huntsville, AL/Helen, GA
Posts: 5,127
Quote:
Originally Posted by Bamaman View Post
My wife and I got our education and had good jobs for 36 and 30 years. We worked very hard. We lived within our means, saved for our retirement and took some moderate investment risks that paid off in the long run.

After retiring at 58 and 50 years of age, we are financially stable. But we're going to continue living a reasonable standard of living in retirement.

We don't owe our children a better living than they deserve, and it's up to them to make their own lives and save for their own retirement. Up until now, we've dedicated our lives to our children and grandchildren. Our real estate is substantial, and they'll inherit that. But our investment accounts are there for us to spend, as it's now our time in life.
I figured there'd be a little conversation on this one. Our children were offered a free education without student loans, and one took advantage of it. Our youngest is 29 years old and makes bad life decisions. I finally bought a 2800 square foot house to get her to step up and be a better mother to her two children. The son's life was 20 years of a blur smoking pot, but he's been clean for a number of years. Our oldest died in Sept. with a heart attack, and she buried a daughter a year ago and a husband 6 years ago (cancer.)

We've finally reached normal retirement age. We worked very hard, saved hard and want to enjoy our remaining years without everyone spending our retirement money. We'd like a little less drama and looking forward to be a little bored. The kids will have real estate to liquidate, and they'll be okay.
Bamaman is offline   Reply With Quote
Old 12-02-2016, 04:22 PM   #50
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 29,850
Quote:
Originally Posted by kgtest View Post
simple, call the airlines and for a small fee, anything can be changed. Don't forget to factor 2x the lodging and food budget though
The doubling of the other expenses is a given. But the flight change will result in a repricing of the airfare, in addition to that fee. The former is what will void out the good deal that I have been patting myself on the back for scoring.

Nah, I will keep the existing travel plan. Extending the trip will keep me there into the summer, when it is hot and no longer that comfortable. Better save something for next year.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 12-02-2016, 05:01 PM   #51
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 3,071
Quote:
Originally Posted by scrabbler1 View Post
I ERed in late 2008 when the markets were crashing. Despite spending about $24,000 per year in my budget, my portfolio has risen about 40% since late 2008, 8 years ago.


I have run Fidelity's RIP program several times and each time it shows me, under pessimistic conditions, that by age 92 I will be far wealthier than I am today (adjusting for inflation). This is mainly due to the reinforcements which will arrive when I am in my 60s. Those include unfettered access to my IRA (which won't make me any wealthier), SS, and my frozen company pension. And that doesn't count a reduction in my health insurance costs when I become eligible for Medicare in 12 years.


Maybe I buy a house in 10 years once those reinforcement arrive?
Quote:
Originally Posted by W2R View Post
That's what I did. Started getting SS in mid-2014, bought my dream home in mid 2015.

Actually I did not exactly plan my home purchase with SS in mind. I had been looking for my dream home for several years, and happened to find it in 2015. Still, getting SS helped a lot once I finally found the home I wanted.

There are so many expenses involved in purchase of another home, selling, moving, fixing up, and so on. It's frightfully expensive IMO, more than I had anticipated so I'm glad I didn't spend any more than I did.
I'm drawing SS, a pension, and on Medicare. I can withdraw a little bit from IRA/401k, but any more and my costs will go up quite a bit for Medicare. If I withdraw what I need to finish building my house, my Medicare costs will go up substantially. For me, withdrawing from tax deferred accounts is anything but "unfettered". W2R, did you run into this problem in purchasing your dream home?
Hermit is offline   Reply With Quote
Old 12-02-2016, 05:10 PM   #52
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 3,071
Quote:
Originally Posted by Chuckanut View Post
One thing I have decided is that I don't want my kids to have to wait until I die to get some help. For example, if I can pay for some education that will give my child significantly higher earnings for the next 20+ years until I pass on, Is that not better than giving them a big pile of money in 20+ years? I think so. It's all relative of course, and depends on one's values and the needs and values of one's potential heirs.

OTOH, I will not pay for them to live higher on the hog than they can with their earnings. LBYM is something they seemed to have learned and are putting into practice, albeit, not always in the ways I would have chosen. But, my father would have said the same about me.
DW and I made that same decision before DW passed away over 7 years ago. It worked for DD, but DS is half way through year 7 in his undergraduate degree. He has another couple of years to go. Its hard to renege on a commitment made with DW. I did change his free support to loans that I am backing in the hopes that it will encourage him to complete his degree. Hence the issues in my post above. Sometimes LBYM is not so easy.
Hermit is offline   Reply With Quote
Old 12-02-2016, 05:12 PM   #53
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 45,263
Quote:
Originally Posted by Hermit View Post
I'm drawing SS, a pension, and on Medicare. I can withdraw a little bit from IRA/401k, but any more and my costs will go up quite a bit for Medicare. If I withdraw what I need to finish building my house, my Medicare costs will go up substantially. For me, withdrawing from tax deferred accounts is anything but "unfettered". W2R, did you run into this problem in purchasing your dream home?
I withdrew from taxable. My TSP is my only tax deferred account, and it has strict restrictions on withdrawal. Even withdrawing from taxable, I miscalculated and my AGI was $2K over the limit, so my Medicare costs are going up. That's OK, I'll just cut back on something else.

At first I was really upset about it but my insurance and property tax are much lower than I expected, so it all balances out, at least sort of. Life is short and I'll choose to focus on how happy I am to be living in my Dream Home, instead of beating myself up about making a mistake that means more of my spending is on Medicare now than previously.
__________________
Happily retired since 2009, at age 61.
W2R is offline   Reply With Quote
Old 12-02-2016, 05:37 PM   #54
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 3,071
Quote:
Originally Posted by W2R View Post
I withdrew from taxable. My TSP is my only tax deferred account, and it has strict restrictions on withdrawal. Even withdrawing from taxable, I miscalculated and my AGI was $2K over the limit, so my Medicare costs are going up. That's OK, I'll just cut back on something else.

At first I was really upset about it but my insurance and property tax are much lower than I expected, so it all balances out, at least sort of. Life is short and I'll choose to focus on how happy I am to be living in my Dream Home, instead of beating myself up about making a mistake that means more of my spending is on Medicare now than previously.
My assumption is that your (or my) Medicare costs would go back down when income goes back down in following years. Will you take your tax return into SS to show that your income went back down and hopefully get your Medicare costs lowered as soon as possible?

I have considered breaking the first tier, but it would only net me $20k or so before taxes plus a few $k for increased Medicaid for the year. That is not much income gain for the additional expense.

As you indicated, this is not that bad a problem to have in the grand scheme of things.
Hermit is offline   Reply With Quote
Old 12-02-2016, 05:51 PM   #55
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 45,263
Quote:
Originally Posted by Hermit View Post
My assumption is that your (or my) Medicare costs would go back down when income goes back down in following years.
I don't think that assumption is valid. The change in income has to match one of the reasons listed in the letter they send you. These are:

marriage
divorce
became a widow
spouse stopped working or lost income from income producing property due to a disaster
spouse's pension plan was reorganized, terminated, etc
spouse received a settlement due to employer's bankruptcy etc

Since I have been single for 19 years, none of these apply to my situation.

Also, they specifically state, "We cannot make a new decision if your income has changed for a reason other than those listed above, such as receiving one time income from capital gains". So, I think I'm SOL.

Quote:
Originally Posted by Hermit View Post
Will you take your tax return into SS to show that your income went back down and hopefully get your Medicare costs lowered as soon as possible?
Nope.

Quote:
Originally Posted by Hermit View Post
As you indicated, this is not that bad a problem to have in the grand scheme of things.
I think this is what my late father used to call a "character building experience". Oh well. I have survived worse I suppose. Besides, most people are spending a lot more than me on health insurance.
__________________
Happily retired since 2009, at age 61.
W2R is offline   Reply With Quote
Old 12-02-2016, 06:09 PM   #56
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,867
If you can go into retirement with no debt and some income sources like a pension and/or a rental and are frugal then there's need to touch any savings or investments.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 12-02-2016, 06:38 PM   #57
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 29,850
Quote:
Originally Posted by Hermit View Post
My assumption is that your (or my) Medicare costs would go back down when income goes back down in following years. Will you take your tax return into SS to show that your income went back down and hopefully get your Medicare costs lowered as soon as possible?
Quote:
Originally Posted by W2R View Post
I don't think that assumption is valid. The change in income has to match one of the reasons listed in the letter they send you. These are:

marriage
divorce
became a widow
spouse stopped working or lost income from income producing property due to a disaster
spouse's pension plan was reorganized, terminated, etc
spouse received a settlement due to employer's bankruptcy etc

Since I have been single for 19 years, none of these apply to my situation.

Also, they specifically state, "We cannot make a new decision if your income has changed for a reason other than those listed above, such as receiving one time income from capital gains". So, I think I'm SOL...
What?!? There's a cliff in Medicare too, and not just in ACA.

Whoa, there are cliffs everywhere. And some, once you fall down off, you can never climb back up. Once you are declared "rich" you get stigmatized forever.

Only in the US of A.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 12-02-2016, 06:45 PM   #58
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 29,850
Well, I just have to look although I still have a few years till Medicare.

It appears that when your income goes down in subsequent years, you will get readjusted when the lower income gets reflected in your tax return.

See: https://www.ssa.gov/pubs/EN-05-10536.pdf.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 12-02-2016, 06:49 PM   #59
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 45,263
Quote:
Originally Posted by NW-Bound View Post
Well, I just have to look although I still have a few years till Medicare.

It appears that when your income goes down in subsequent years, you will get readjusted when the lower income gets reflected in your tax return.

See: https://www.ssa.gov/pubs/EN-05-10536.pdf.
See page 7, which I think lists the exact same original wording of the list of requirements I was summarizing above. It won't get readjusted unless you meet one of those requirements, right?
__________________
Happily retired since 2009, at age 61.
W2R is offline   Reply With Quote
Old 12-02-2016, 06:55 PM   #60
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 29,850
Yes, but I think it is about getting an immediate reduction of Medicare premium when you have one of the listed life events.

For the case of capital gain income, maybe it has to be counted for the entire year before a readjustment downward.

I could be wrong, but was led to that thinking by the following statement. Note the word "monthly".

"you have new information and may need a new decision about your income-related monthly adjustment amount"

and

"If you filed a federal income tax return for the year in question, you need to show us your signed copy of the return..."
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
I'm worth more than Bill Gates ls99 Other topics 1 06-15-2016 06:20 AM
46% of American retirees have no more than $10,000 in savings at the end of life. bondi688 FIRE and Money 8 09-01-2012 02:57 PM
This is worse than service being dead cute fuzzy bunny Other topics 34 05-09-2005 12:03 PM

» Quick Links

 
All times are GMT -6. The time now is 01:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.