Those with no kids & no relatives to leave money, is your withdrawal rate still 4%?

[O2Bfree]

No kids here, but my WR will likely be below 4% because I'm a naturally frugal type. Currently, I plan to leave excess funds to my niece and a few charities. That's not a goal though, and if my frugal streak fades I'm fine with leaving very little or nothing.

 

[Car-Guy]

One kid and several relatives but I don't "plan" on leaving anyone anything. I hope/plan to have enough left over to pay for my own burial but that's about it. In reality, I don't think I'll be able plan that well and spend it all but I'm trying. So the DD may get something out of my demise.

 

[aaronc879]

One kid and several relatives but I don't "plan" on leaving anyone anything. I hope/plan to have enough left over to pay for my own burial but that's about it. In reality, I don't think I'll be able plan that well and spend it all but I'm trying. So the DD may get something out of my demise.

I will inherit almost nothing but my parents did at least pre-pay their funeral costs. Did you know that's an option. It can really reduce the burden on your heirs. I plan to do the same thing.

 

[MRG]

No kids and no close family. For the first 6 years we've been staying at 3%. This year we blew by that in June and are still spending. Probably hit 6% this year then back to a more normal 4. I don't plan on my SS until 70 which is a good portion of our monthly expenses so we will have to work harder to spend.

 

[Amethyst]

It is commonly observed that people in care facilities with no family to watch over them, aren't treated as well. Therefore I would expect such people to allocate a larger %age of net worth to paying for the best possible facility - plus care advocates and aides.

 

[Car-Guy]

I will inherit almost nothing but my parents did at least pre-pay their funeral costs. Did you know that's an option. It can really reduce the burden on your heirs. I plan to do the same thing.

Yep, but I'm not paying those (***** *******) a dime in advance. I'd like to spend it all before I go but in reality I know I'll be leaving well over a million and that's in the worse case... I've haven't scrimped on much of anything, especially in the past 40 to 50 years, but I told my DD to go the cheapest and easiest route possible for my final expenses. ex. No services, no casket and cremation in a cardboard/plywood box...

 

[RunningBum]

It is commonly observed that people in care facilities with no family to watch over them, aren't treated as well. Therefore I would expect such people to allocate a larger %age of net worth to paying for the best possible facility - plus care advocates and aides.

Yes, definitely. Even if you do have family, it's better to be in a good place where that should be less of a worry. So many people here talk about spending more while they are healthy, but now at age 86/84 my folks are going to be spending easily more than double what they ever did in the 24 previous years of retirement. But, anyone who wants to limit their options to places that take Medicaid, spend away. Maybe the options are better in other areas than where my folks live.

 

[youbet]

Yes, definitely. Even if you do have family, it's better to be in a good place where that should be less of a worry. So many people here talk about spending more while they are healthy, but now at age 86/84 my folks are going to be spending easily more than double what they ever did in the 24 previous years of retirement. But, anyone who wants to limit their options to places that take Medicaid, spend away. Maybe the options are better in other areas than where my folks live.

Totally agree.

In our early 70’s and FIRE’d 14 years, DW and I have chosen to have 10 years of private pay care set aside. If not used, then DS’s family gets it. Medicaid can be pretty iffy.

Fortunately, we’re comfortable with our spending even with that chunk of our FIRE portfolio set aside in this way.

 

[RetireBy90]

The point of the 4% “rule” is to have your next egg last through expected lifetime, not to leave a legacy. I would hope that any “rule” would leave some left because no one can know if you need one more year of spending.

 

[youbet]

The point of the 4% “rule” is to have your next egg last through expected lifetime, not to leave a legacy. I would hope that any “rule” would leave some left because no one can know if you need one more year of spending.

Well..... historically you would have left a legacy 95% of the time.

 

[Lewis Clark]

Our goal is not to be a burden on anyone else, financially or otherwise. If we leave money on the table, that's better than the alternative to us.

 

[RetireBy90]

Well..... historically you would have left a legacy 95% of the time.

But the point of 4% “rule” is have enough to get there on. So looking at a higher rate would increase the chances that you would outlive your funds. I guess I’m looking at the question from another angle. What is a “safe” rate to get acceptable odds of not outliving your funds. My withdraw plan is made to ensure we have funds through retirement. If there are some funds left for a bequest, great but only goal is to fund our retirement years with some confidence.

As the artist said can’t take it with you when your gone, just want enough to get there on. Solve that problem and you “win”.

 

[HI Bill]

I wanted to follow the 4% rule, but found it to be a bit too limiting, as I want to have a house early in ER, dive, and hopefully travel, while my health is presumably better. I don't expect to have a constant WR throughout the remainder of my life, especially if it lasts for 20-30+ years or so. Bernicke's 'rule' fit my mom's spending profile, almost to a T, up until the end. If she hadn't had a good friend who helped her with meds, shopping, and doctor's visits (and hadn't had dementia and refused paid help), the last 3 years would have been more expensive.

I plan to 'pre-spend' from age 55 (next year) to age 70 or 75, with a starting WR of 4.3-4.7%. Then, when SS kicks in, if the portfolio is lower than starting, then I'll adjust the spending to account for SS and the lowered 'new' starting value, a la VPW; if it's even, or up, then SS will give the spending a boost. While there's some risk, even if the portfolio drops by 50%, that with SS, and moving from the house to a condo (which is my mid-term plan, regardless of assets) should be more than enough to offset the loss.

 

[RenoJay]

I feel like for those of us who likely and lucky to have more than we’ll need, it really comes down to the question of whether you get more joy from accumulation or from spending. As stupid as it sounds, I get more joy from watching the numbers on the spreadsheet grow than from buying expensive things I don’t really crave. Hopefully that’ll make some charities very happy one day when they receive a surprise windfall from my estate.

 

[HI Bill]

...I get more joy from watching the numbers on the spreadsheet grow than from buying expensive things I don’t really crave. Hopefully that’ll make some charities very happy one day when they receive a surprise windfall from my estate.

Good for you! I've deferred so much spending, that I could easily buy some new sports car, some higher-end audio and video gear, a boat, and even build a home theater add-on to the house, if I had extra $. Still, we will likely have no heirs, and whatever is left will go to something like the Cousteau Society.

 

[Hermit]

Having just gone through Alzheimer's with a dear friend who passed away last month after more than 10 years battling the disease, I will have a big stash to make sure I do not have to go through the agony of Medicaid he and his wife went through. I have no spouse, but I do wish to be in a position to afford a nicer place than the bottom dregs if I ever need assistance. I will be doing QCDs, but with no intention of trying to lower my stash before I die. Its more because I am a tightwad and don't want to pay the taxes on the RMDs. I do have kids and they and my favorite charity will split whatever is left over if anything when I die.

 

[unclemick]

Charity. Between covid and 27 years of ER, I will leave some on the table.

Heh heh heh - Plus ' a really really cheap SOB' in the early years of ER before I learned to loosen up.

 

[Sunset]

Yep, but I'm not paying those (***** *******) a dime in advance. I'd like to spend it all before I go but in reality I know I'll be leaving well over a million and that's in the worse case... I've haven't scrimped on much of anything, especially in the past 40 to 50 years, but I told my DD to go the cheapest and easiest route possible for my final expenses. ex. No services, no casket and cremation in a cardboard/plywood box...

Cheapest would be to not claim the body, just remove the wallet

 

[Sunset]

I feel like for those of us who likely and lucky to have more than we’ll need, it really comes down to the question of whether you get more joy from accumulation or from spending. As stupid as it sounds, I get more joy from watching the numbers on the spreadsheet grow than from buying expensive things I don’t really crave. Hopefully that’ll make some charities very happy one day when they receive a surprise windfall from my estate.

Might be better to donate some now, so you know some of it went to the "right" spending.

It would suck to be in heaven, and find out the CEO spent it on redecorating his/her office with gold taps, or something like what happened to this generous fellow:

https://www.cnbc.com/2017/10/13/aft...million-to-unh-critics-question-spending.html

 

[teejayevans]

The problem with the 4% rule is that studies show that retirement spending goes down as you get older with the exception of healthcare expenses (nursing home). I don’t religiously follow the 4% rule, more of a guideline. I have spent more but only if my investments are doing well.

 

[CyclingInvestor]

62, 14 years retired, no wife/kids.

I always considered 4% a general planning tool, not a real-time rule. I feel free to spend the dividends from my stock portfolio, which could be 3% at a market high or 8% at a market low, and have averaged around 4.5%. As they have grown 7-8% annually over the years I no longer spend all of them and am currently reinvesting about 1/4 of them to buy more stock, as I also get a great deal of enjoyment out of watching the numbers grow on the spreadsheet.

 

[EastWest Gal]

62, 14 years retired, no wife/kids.

I always considered 4% a general planning tool, not a real-time rule. I feel free to spend the dividends from my stock portfolio, which could be 3% at a market high or 8% at a market low, and have averaged around 4.5%. As they have grown 7-8% annually over the years I no longer spend all of them and am currently reinvesting about 1/4 of them to buy more stock, as I also get a great deal of enjoyment out of watching the numbers grow on the spreadsheet.

It also provides cheap entertainment[emoji16]

 

[Markola]

The problem with the 4% rule is that studies show that retirement spending goes down as you get older with the exception of healthcare expenses (nursing home). I don’t religiously follow the 4% rule, more of a guideline. I have spent more but only if my investments are doing well.

+1. Also, one’s personal inflation rate can be less than the overall inflation rate by choosing substitutions.

 

[DayDreaming]

I have no kids so I guess my estate would be inherited by some distant relatives that I've never met. I spend well under 4% and don't plan to change that because spending more $$ doesn't make me any happier. When I do have a major expense, it's nice knowing that I don't have to worry about it.
Actually, I don't want my money going to far distant relatives, so I better get a will made and have it all go to some charities.

 

[Dd852]

Currently 60 DW 66. Fired eight years ago. No kids. Always planned on using the 4% rule but frankly old penny pinching habits die hard and we’ve been around 3% of liquid assets each year of retirement. It is nice knowing we have lots of head room but irritating thinking we will probably die with huge savings. Nice for charity I guess.