inheritance

[cute fuzzy bunny]

I find it curious that an option to not leaving an inheritance to family, friends or a worthy cause is to leave one for an insurance company instead.

With a basic 4% swr plan, you're just about as likely to leave little or nothing as to leave a pile.

Hows this for a plan? Spend a reasonable amount and if you feel life getting short while you still have a lot of money left, stop by a couple of insurance companies every now and then around 5pm and start handing out hundred dollar bills to the departing execs as they climb into their expensive cars. They'll be happy, you'll get to see the joy on their little cherubic faces, and you wont have a bunch of pesky money lying around going to other unworthy people.

 

[megacorp-firee]

I find it curious that an option to not leaving an inheritance to family, friends or a worthy cause is to leave one for an insurance company instead.

With a basic 4% swr plan, you're just about as likely to leave little or nothing as to leave a pile.

Hows this for a plan? Spend a reasonable amount and if you feel life getting short while you still have a lot of money left, stop by a couple of insurance companies every now and then around 5pm and start handing out hundred dollar bills to the departing execs as they climb into their expensive cars. They'll be happy, you'll get to see the joy on their little cherubic faces, and you wont have a bunch of pesky money lying around going to other unworthy people.

whoops ... get up on the wrong side of the bed today CFB?
A bit more sarcasm then usual.

 

[cute fuzzy bunny]

Whoops. The sarcastic knob was accidentally knocked to 11. My bad.

But that last bit would make for a pretty good movie, hmm? I'm thinking Albert Brooks out there in the parking lot with a big wad, passing it out left and right?

 

[megacorp-firee]

Whoops. The sarcastic knob was accidentally knocked to 11. My bad.

But that last bit would make for a pretty good movie, hmm? I'm thinking Albert Brooks out there in the parking lot with a big wad, passing it out left and right?

hey ... no problem ... was the entertainment for the day for me ...
just caught me by surprise ...
yeah ... I can see it ... Albert Brooks, ... hunnerd dolla bills ... love it.

 

[cute fuzzy bunny]

just caught me by surprise ...

Very uncharacteristic of me.

I'll see to it that it doesnt happen again.

 

[Nords]

I wonder what is keeping them from enjoying their money? Perhaps some counseling would be in order?

No, this is a good point. Spending money can be a lot less enjoyable than it looks. It can be just another kind of green waste.

For example, we've built up a 3300-watt photovoltaic solar system from used parts scoured off classified ads & eBay. Some work was done by an electrician and most of it was done by us-- making our own mounts, crimping our own wiring & connectors, crawling around on a hot slippery roof, drilling a couple dozen holes in it, and wiring together high-voltage panels made out of 10-year-old silicon. Total cost was about half of retail, and after tax credits it'll be about 25 cents on the dollar.

We could've budgeted the retail bucks up front, and if we'd bought modern high-power-density panels then we'd probably double the array's capacity and only be paying the $16 minimum on our electric bill for the rest of our lives.

But where's the fun & satisfaction in handing over our credit card to the solar installers? We've tremendously enjoyed planning and executing this project over the last three years, and it's not about the money.

The same trend applies to most of our lifestyle. The things that bring us pleasure don't require a lot of possessions or exotic experiences. Living below 4% isn't an issue and, barring multiple repeats of 1966-82, we'll probably end up with more money than we'll know what to do with.

So we'll boost our charitable giving now to fill in the cracks between 3-4% SWRs. We'll make sure our kid always maxes out her Roth IRA and maybe in her 40s we'll start gifting. Maybe we'll pay for the grandkid's colleges, or maybe we'll contribute to other college scholarships. Maybe we'll travel in business or even first class, and maybe once in a while we'll eat out just because we're lazy.

But I can't talk spouse out of her 32" CRT TV, let alone into a 54" HD LCD home theater system...

 

[MikeD]

knob was accidentally knocked to 11

I love that joke.

Mike D.

 

[Khan]

No, this is a good point. Spending money can be a lot less enjoyable than it looks. It can be just another kind of green waste.

For example, we've built up a 3300-watt photovoltaic solar system from used parts scoured off classified ads & eBay. Some work was done by an electrician and most of it was done by us-- making our own mounts, crimping our own wiring & connectors, crawling around on a hot slippery roof, drilling a couple dozen holes in it, and wiring together high-voltage panels made out of 10-year-old silicon. Total cost was about half of retail, and after tax credits it'll be about 25 cents on the dollar.

We could've budgeted the retail bucks up front, and if we'd bought modern high-power-density panels then we'd probably double the array's capacity and only be paying the $16 minimum on our electric bill for the rest of our lives.

But where's the fun & satisfaction in handing over our credit card to the solar installers? We've tremendously enjoyed planning and executing this project over the last three years, and it's not about the money.

The same trend applies to most of our lifestyle. The things that bring us pleasure don't require a lot of possessions or exotic experiences. Living below 4% isn't an issue and, barring multiple repeats of 1966-82, we'll probably end up with more money than we'll know what to do with.

So we'll boost our charitable giving now to fill in the cracks between 3-4% SWRs. We'll make sure our kid always maxes out her Roth IRA and maybe in her 40s we'll start gifting. Maybe we'll pay for the grandkid's colleges, or maybe we'll contribute to other college scholarships. Maybe we'll travel in business or even first class, and maybe once in a while we'll eat out just because we're lazy.

But I can't talk spouse out of her 32" CRT TV, let alone into a 54" HD LCD home theater system...

I agree that spending more money is not necessarily fun.

I hear: "You should be spending more!"

I think: "On what?"

There is already too much stuff in the house, and I have been giving stuff away.

I am quite happy staying home and puttering.

Tomorrow I shall bring in the last of the plants for the coming hard freeze, and put the garden to bed for the winter.

In the future I may move or travel, but right now I don't want to.

I live on the pension and consider all the other money as a $400K emergency fund.

 

[HobbyDave]

I assume the whole "spend the money, forget the kids thing" doesn't in reality mean dying with $0. It just means spending as if you don't care if you end up with a large sum at death.

On the flip side, I've heard of people still working, because "I have enough for my wife and I, but I want to make certain we leave a good sized chunk for the kids". I find that a bit sad. I understand working hard to provide for your kids while you're an employee, but when you're ready for retirement, it seems sad to keep working just so that your adult children can get a sum of free money when you die?

So I think it's a bit less than black & white. They're most likely not going to die broke, but they're probably in the group of saying "my kids can save for themselves, I'm going to spend my money"

As for spending more, there are certainly lifestyle differences which can make money more or less useful. If you garden, perhaps it wouldn't make a huge difference. But if your hobby is sailboat racing, you could theoretically have more fun if you had better sails (and could then win, because who doesn't like winning?). Or the obvious "travel" money. You could certainly travel on the cheap (as many have), but I've seen some very cool looking expensive vacations as well. The snobs are on both the rich & poor side of the caste system

 

[youbet]

I assume the whole "spend the money, forget the kids thing" doesn't in reality mean dying with $0. It just means spending as if you don't care if you end up with a large sum at death.

Actually, after reviewing OP's kickoff post to this thread, I think it actually does ask the question "how do you get to spend it all winding up with zero bux at the end?" And that seems to be the ongoing, unanswered question on this forum since we don't know our life expectancies or future investment returns.

Just doing a Firecalc run and examining the graph that shows ending portfolio values tells the story.......... Following an SWR strategy and assuming that historical data can reasonably test future scenarios yields only the conclusion that you'll wind up somewhere between broke and wealthy!

It's the part of RE planning I find most facinating! You've got to actually play the game to know the final score! Or buy an annunity..........

 

[haha]

Modern American retirement is giant social experiment in real time. Maybe this is why the Fed panics when stocks are off a few %.

IMO, if we ever do get a hard and sustained movement down, we are likely to find that many are not able to make the recommended allocation adjustments.

If you are 70 years old and have been spending $50,000 or so off a $1,250,000 portfolio, I would like to be a fly on the wall if that portfolio gets down around $900,000. And of course, if it goes on very long it could get quite a bit lower, just from the continual attrition from living expenses.

If you aren't scared your spouse likely is.

Another thing is that most of this planning is based on unrealistic assumptions. "Let's assume that the CPI reflects inflation in necessities" (it doesn't); "Let's assume that interest rates will reflect true inflation as they have for much of 20th Century American history" (they don't- could anyone think sub 5% long term treasuries are very likely to give a real return, even before tax?).

Overall, all of us living from assets rather than entitlements are forced to be speculators. Some realize that, others don’t. But our view of these processes can’t change the way they unfold.

Ha

 

[Keim]

As I read this thread I can't help but be reminded of an old Richard Pryor/Gene Wilder film called Brewsters Millions. Pryor inherits big bucks, but to do so he is required to spend $10 million dollars in a short period of time, and have absolutely nothing to show for the money spent when he is done. So, he starts buying rare postage stamps and using them for regular mail, etc. Funny stuff!