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

[Kroeran]

Rambler - My kids are the same. They make very poor financial choices and my son before moving to Israel was addicted to alcohol and Shisha. My fear for him is he gets too much money he will go back to his old ways. He has been sober and working for 3 years now without problems but I know the reality is alcoholics only very rarely completely recover and the first serious pressure on them they revert fast. In my military career I dealt with hundreds of cases of substance abuse and in only 1 single case did that person recover completely and that was through religion. So, I am supportive but not optimistic.

My daughter more or less despises me after the divorce as I was for some reason blamed for the entire divorce. Maybe someday she will see my side of it but it doesn't look that way. She calls her mother daily at a minimum and me maybe twice a year. So, I feel no guilt at leaving her nothing. She has become a flaming liberal and I cannot relate to her at all now. So, for me it best to leave things alone. What is ironic is her mother will leave everything to some gay cause or her multiple lesbian partners and nothing for the children. Maybe my daughter doesn't care about it.

For the son, some young people, especially high functioning STEM ‘ers, are finding a novel version of “spiritual“ anti-religion via Thomas Warren Campbell’s budding Simulationist international movement. Clean living is a fundamental finding of his quantum science based research.

For the daughter, I would focus on her interests and dreams and construct a scenario that enables you to spend some time together.

Depending on the scale of your money....something imaginative and irresistible for her that is presented as her doing a favour for you.

 

[hanginthere]

You sound like Suzie Ormon "Make sure the last check you write bounces" Actually you will distribute your assets to someone. You can either draw up a will or die intestate in which case the state and folks whom you might not rather inherit your assets will divide them up. Find a good charity that shares something that your passionate about. An accountant and a tax attorney can name it in your will and unlike individuals, they won't owe taxes except what you may owe from a retirement account. I don't have children and my kin doesn't need money but I have a charity that provides services to kids who do need help. Hope this helps

 

[Old Microbiologist]

Dd852 - Part of the problem we have is having to report specifically every single day in the year that your aggregate accounts exceeded $10K. I never know these dates and our Hungarian bank doesn't have the ability to figure it out without a long bureaucratic hassle. This is what I mean by onerous. So, we take careful steps to never go over the $10K rule so avoid the process. The other smaller issues arise when transferring funds (over $5k) from US accounts to overseas accounts which require a request to the FINCEN (FBI) for clearance. Normally, the transferring bank does this but it is up to the taxpayer to make certain it is done. There is also the minor requirement to report the ending balance on 31 December as well as having to check the silly box on the 1040 which states you have overseas accounts. Failure to do any of these get you into hot water. The problem is our collective pensions are more than $10k a month and all are government pensions yet our government still examines everything as if we are potential criminals and is never very willing to be friendly about these issues. I have only had to be examined once since moving overseas and it was a draconian experience all about not having checked the box and our 1040 was prepared by a US accounting firm who just simply forgot to check the box as they were in Maryland and we were here in Hungary so it was something they probably hadn't ever had to do before. This triggered an audit which we of course passed but was not a pleasant experience as we live 2 hours from Budapest where the US Embassy is located and it required several trips. We also had several large transfers actually get held up by the FBI over why we wanted to transfer the money. One was for a car purchase and the other for my yacht purchase. I mentioned all of that as it is a pain in the butt for us living overseas and most Americans are blissfully unaware of any of this.

I will also add we had to scramble to find a US bank that would actually service us living overseas. We were cancelled with short notice by Bank of America (we had Platinum accounts with a cash aggregate of over $350k in three accounts. I received a letter from them 1 day before they closed our accounts. Mail from the US can take months as I just received my letter about receiving the COVID relief payment soon so that took 4 months to get here. It seems large banks such as BoA do not want to have accounts with Americans who reside permanently overseas as it puts a lot of extra reporting requirements on them. I was able to find a US Credit Union that has branches on the US military bases in Italy and was able to open an account over the phone and get the money wire transferred the same day. It was a scramble to get done and the services at the Credit Union not as good as we had at BoA. Then you have the issue of overseas banks not wanting to have US customers and the EU privacy laws so we have to go to our bank every year and sign a declaration that we give permission for them to report on us to the IRS. Many overseas banks refuse to have US citizens because of these onerous reporting requirements. Ours is okay so far but is based in the Netherlands but has branches around Europe. We were stockpiling US dollars which we keep in a safe for any time the excess gets close to $10k and would order money from our European bank. That used to be easy but now that is also being examined closely and I can only do this through a single branch located about 50 miles away and my local branch is no longer permitted to order US dollars.

These are just some of the things we have to deal with routinely that most Americans are unaware of.

 

[Old Microbiologist]

Kroeran - Yes, my son is doing okay. My fear is if he inherits too much he will go on a hooker and blow tour of Europe. He is doing fine but COVID has him, like so many young people, currently unemployed. The same for my daughter in NYC. She was doing videos for Cheddar and was laid off and now fired. Both kids have degrees his in history and hers in Film Arts. What I meant about choices and advice they ignored.

She is in NYC and I am in Hungary. Not too much opportunity to get together. I have brought her here twice both tragedies as she is a drama queen and extremely high maintenance. She brought along boyfriends who had to absorb the pain but apparently even my expression when she throws a tantrum is "too critical". I will add she is an aspiring actress and somewhat beautiful. She considers herself a comedian but I do not find her funny at all. Politically she is now one of those AOC type of progressives and I am a realist who is cynical about American politics and US foreign policy. Anyway, she is reactionst to anything I have to say and firmly committed to her ideals which I see as ridiculous. So, not too much in common. My wife is a world renowned photographer who has received many awards for her work and is an excellent portrait photographer dut she specializes in Still Life and landscapes but also does people. During her last visit in 2018 my daughter wanted to get a new headshot and my wife posed her and was moving her hair when my daughter starts screaming about don't touch me and had a melt down. This was after 2 hours of preening. Her boyfriend was in a state trying to calm her down so it all ended in tragedy without any photos. So, good luck to her as an actress if she can't have anyone touch her.

I am actually close to my son and we speak often. I visit him in Israel at least once a year up until this year for obvious reasons. My wife also has a sister and her son and family there and I have a niece and her 6 kids there as well so it is a somewhat complicated chore to go there. My son is in Beer Sheva but the rest are in Jerusalem. It is easier to bring him here but that is usually complicated with girlfriends and their assorted issues (twice similar experiences to my daughter which makes me think this is some new phenomena in younger people today). His last girlfriend had self prescribed dietary issues because of her "immune" problems. My PhD is Immunology and I am a vaccinologist by training so it is tough to sit there being lectured on immunology by someone who is loud, aggressive, and completely wrong. So, the last time I told him no girlfriends. With my daughter boyfriends are a requirement as she needs a handler.

 

[levindb]

You sound like Suzie Ormon "Make sure the last check you write bounces" Actually you will distribute your assets to someone. ...

The concept of "last check bounces" is for planning purposes. Some people plan to give their heirs/charities $1 million...which is also for planning purposes. We believe that giving with a warm hand is better than giving with a cold hand, therefore our giving it built into our annual budgets...but we still plan for that last check to bounce.
There is no expiration date printed on our bodies, so if we do not make it to the date we are planning, then wills/trusts come into play. The concept of "last check bounces" is somewhat selfish, in that you plan to spend your retirement funds on YOU first...similar to the days when we were w*rking, we would pay ourselves first by putting away money for our retirement.
We also believe that telling your children that you will give them $1 million when you pass might put a target on your back...(that is supposed to be funny)

 

[cyber888]

The concept of ‘making the last check bounce’ is interesting. Rather than that, some people will probably leave this earth with $100,000 in credit card debts. LOL. That’s better than bouncing a $100 check.

I remember a guy. He was a green card holder, a permanent US resident. But he decided he did not want to be a US citizen and was going back home to Asia. So, he open tons of new credit card, I think $60,000+. Then he use it to buy tons of electronic items and other stuff .. fLat screen TV, etc, and ship it in 2 large container to Asia. He sold all the stuff when he went back to Asia with a nice profit. Never paid back the credit card companies. He’s retired now, and just do scuba diving and stuff. He was a smartass with no guilt for what he did.

 

[VungTau]

I would still keep the early withdrawals to 4% or less - otherwise I could imagine a scenario where I am, say, 85 and having a balance close to zero would leave me extremely stressed.

When I approach the end of runway, maintaining a constant balance of 7-10 years of living expenses would allow me to sleep a lot better at night. I would be quite happy to leave that to my nephew and nieces or some worthwhile charity

So is the end of the runway taking off or landing?

 

[VungTau]

Our problem is my military pension comes to our Hungarian bank and because of FATCA rules we must keep the balances below $10K or face onerous reporting requirements, which if you fail to do, can result in a 50% loss of all assets. This is my benevolent government serving me as a citizen. So, we end up moving money around between accounts and spending down the overseas account as much as possible. We have shifted to using Transferwise which has saved us quite a bit in fees.

I do the FATCA reporting each year and it is a breeze. I just save last years and make a couple adjustments - done! Also, Fidelity will do free wire transfers overseas if you want to cutout the TW expenses. Good luck!

 

[Ronstar]

We have no kids, and we will leave distant relatives and charities whatever we have left after we’re gone. But our financial plan doesn’t include maximizing whatever’s left.

Now that ss is coming in and I’m tethered to home base by Covid and elder care, I’m around a 1% wr.

But I would take our wr above 4% if given the chance.

 

[flyingaway]

Should those retirees without kids be more careful about the end planning? I could probably ask my children for help if I run out of money at 90 years old, given the fact that I have treated them well when raising them.

 

[OldShooter]

... But I would take our wr above 4% if given the chance.

Post #80 has the solution to your problem:

... We believe that giving with a warm hand is better than giving with a cold hand, therefore our giving it built into our annual budgets ...

Actually it is quite satisfying to give from warm hands, especially now that we can do it with QCDs..

 

[scrabbler1]

I have no kids and my one sibling, a younger brother, is married with a kid but is wealthier than I am. In a will I drew up with a lawyer back in 2008 (just before I retired), I am leaving some money for him, some for his son (now 16), some to friends and charities, and most of it to my ladyfriend of 16 years. She has little money and doesn't live with my but lives nearby, so if I were to croak before she does (she is my age), i'd want her to be set financially for life.


My spending is around 2% of all assets, including the tIRA I can't touch for a few more years (I am 57). If I exclude the tIRA, the spending rises to about 3%. HI and medical costs have been the most volatile, with income taxes second (they rise only if income spikes, so I don't worry much about covering that; I have recently changed my portfolio to more stabilize the income to get back on the ACA subsidy train). I'll be back under 2% overall in 2020.


I have been helping out my LF with some expenses. What seems like a large amount to her ($15k) is still pretty small to me, and has no impact on my budgeting - as long as I am not doing it every year.

 

[Go-NoGo]

So is the end of the runway taking off or landing?

Take off into the white light and the great blue beyond

 

[Rushmore]

Reading this with interest. No kids long ago divorced. No significant other. Three nieces: one a decent woman who I wouldn’t mind leaving some to, the second is her sister- she has a temper I’ve had a couple of run ins with her. The last run in left me Leary, she never apologized but we do speak when we’re together. They’re both in their mid 30. Both far poorer than I was at that age and both more financially more irresponsible. They’re both live for the moment. My other niece is around 10. I like her, but here immediate family is in a very good position financially. I try to do things with her

I am at a loss as to dividing assets. In my heart I’d like to leave the middle one out totally but that would probably not be good. Of course I won’t be here to know will I?

I have increased my spending but old habits die hard. I have turned the ac down and the heat up the last few years...progress I guess��

 

[RunningBum]

Reading this with interest. No kids long ago divorced. No significant other. Three nieces: one a decent woman who I wouldn’t mind leaving some to, the second is her sister- she has a temper I’ve had a couple of run ins with her. The last run in left me Leary, she never apologized but we do speak when we’re together. They’re both in their mid 30. Both far poorer than I was at that age and both more financially more irresponsible. They’re both live for the moment. My other niece is around 10. I like her, but here immediate family is in a very good position financially. I try to do things with her

I am at a loss as to dividing assets. In my heart I’d like to leave the middle one out totally but that would probably not be good. Of course I won’t be here to know will I?

I don't know if it's still true, but I had always heard that you should leave people like that at least a token amount. That way they can't contest the will with the claim that you weren't of sound mind and simply forgot them. Makes sense to me.

 

[OldShooter]

I don't know if it's still true, but I had always heard that you should leave people like that at least a token amount. That way they can't contest the will with the claim that you weren't of sound mind and simply forgot them. Makes sense to me.

Yes. If you leave her out or give a token amount, be sure to have an attorney do the will and other paperwork so there are no mistakes. Not DIY. Ideally, an attorney who is younger, who will probably still be around if she decides to make a fuss. I would cut her out, too. It's your money --- you don't "owe" it to anyone.

To solve "irresponsible" and for the minor, your attorney may advise protecting your money and your intentions with testamentary trusts.

 

[Amethyst]

Why bother with a token? Just say you're aware that you have a niece/son/second cousin once removed, named _______________, and it is your wish that they receive nothing from your estate. No reason needed.

I don't know if it's still true, but I had always heard that you should leave people like that at least a token amount. That way they can't contest the will with the claim that you weren't of sound mind and simply forgot them. Makes sense to me.

 

[Z3Dreamer]

Rushmore, just name the 2 favored nieces as beneficiaries of your IRAs, bank accounts, whatever. Therefore, they are not included in your probate estate. Change deed to house to add the favored nieces.

Now, get a will drawn up. Have a codicil that lists the valuable personal property. This codicil would direct that the listed property go to the favored nieces. You can change the codicil without writing up a new will. The will would further direct that BAD niece gets 100% of your assets. Well, since you have excluded everything of value with titling and the codicil, bad niece gets that pencil in your drawer and the spices and pots and pans in your kitchen.

This would obviously be a cruel joke, but...

 

[Rushmore]

Thanks for the ideas. Will be mulling them over. Would like something I could change pretty easily because she may mature...if I live long enough. ��