Any stories of portfolio running out?

[jazz4cash]

Not the same. SS disability is much better.

SSI is the absolute SHTF backup if all else fails, like not having enough SS credits, etc.

Thanks. That’s a relief.

 

[WWDog]

Inflation to pay for all the money the government has spent recently is on the horizon. I'm tighter than ever on my money and I think I'm in good shape unless things get really crazy.

 

[pb4uski]

^^^^ Since when has the rate of inflation been correlated with federal budget deficits or the federal debt?

 

[rayvt]

When interest rates decrease a lot, the issuer wants to refinance at a lower interest rate, same as you would with refinancing your house. They refund your principal, sometimes with a call penalty, and then you have to go out and find another bond to buy. Which will likely be paying a much lower interest rate.

This happens a lot with preferred stocks--which are basically bonds that trade like stocks. Generally have around 40-50 year maturity but are callable after 5 years.

I had a lot of money in preferreds over the years, but in the last 3-4 years all the good one (high yielding investment grade) have been called. They immediately come out with a new issue at a lower yield.

Public Storage (PSA) is very aggressive at this.

 

[Souschef]

My mom passed away at 102, and since she had all her funds in CD's basically paying little,her income dropped. She did have some stock that she promised to her grandchildren. I told my sister, who was handling her finances, that she needed it more than the grandchildren so sell it, which she did.
I also have a cousin, who I have mentioned previously, who was put on earth to be a bad example. She blew through two inheritances, had to sell her house, and is now in an apartment.

 

[jollystomper]

I was just reading a thread by @Dawgman who decided he's 'over saved,' which doesn't seem uncommon here.

Has anyone actually ran out, or gotten close to running to the end of their portfolio in this community?

My guess is that, within this type of community, folks are more likely to run out based on excessive risk, greed, or elderly mental challenges vs. spending, inflation, or personal financial surprises.

The folks I know of IRL who seemed well off but then ran into difficulties were due to pursuing "too good to be true" returns, and placing a lot of their portfolio into things that they did not realize the downsize risk of, or were outright scams.

 

[Sunset]

...
I also have a cousin, who I have mentioned previously, who was put on earth to be a bad example. She blew through two inheritances, had to sell her house, and is now in an apartment.

Weird, but this is so familiar, it sounds like we are related.
My sister "blew through two inheritances, had to sell her house, and is now in an [-]apartment[/-] retirement apartment."

 

[Koolau]

Although neither set of parents FIRE'd, they both ran out. Well, more accurately, they came out essentially even. Both mother and MIL survived their spouse and ended their days in a care home. By shear luck or providence (I'll go with providence) their last check to the home was the last of their money.

We were prepared to step in if needed, but it wasn't needed but YMMV.

 

[wildsun]

Not sure there would be many stories of failure admitted to on this site, but who knows?

There should be. We all can learn as much from failures as we learn from successes.

 

[Music Lover]

I know 6 people that cashed out a fed govt. defined benefit COLA pension just before it locked in at age 50.

Sadly, 1 of them passed away shortly after. 4 of them were back working within 3 years. The 6th person didn't have very many years of service and had saved and invested outside of the work pension. He's been retired for 10 years now and is doing well.

 

[Dtail]

There should be. We all can learn as much from failures as we learn from successes.

I agree and possibly it would be more helpful than the success stories, especially if due to investing errors or a SORR event with large withdrawals.

 

[Exchme]

My dad thought he had plenty, so after he retired, he and my step mom travelled and saw the world. He set up a trust (with high fees of course) in case he got sick. Sure enough, he spent the last decade of his life in the Alzheimer's unit and that time coincided with the 2000 and 2008 crashes.

Since he was supporting my step mom + paying the nursing home, state & federal taxes on IRA withdrawals, trust fees, etc., the money drained away and he passed with maybe 1.5-2 years worth of expenses left. So didn't quite run out, but close. (Come to think of it, he did it about right - spent it when healthy enough to enjoy it and had just enough to get by with after that)

 

[gauss]

I know 6 people that cashed out a fed govt. defined benefit COLA pension just before it locked in at age 50.

Sadly, 1 of them passed away shortly after. 4 of them were back working within 3 years. The 6th person didn't have very many years of service and had saved and invested outside of the work pension. He's been retired for 10 years now and is doing well.

I know 2 people that had long blue-collar careers at large companies. They had both earned traditional pensions, however, they chose to cash them out.

They were involved with Financial Advisers who subsequently lost all of the money.

They are the only 2 folks I know who seem to be having a relatively hard time with retirement--financially speaking.

-gauss

 

[tenant13]

My dad thought he had plenty, so after he retired, he and my step mom travelled and saw the world. He set up a trust (with high fees of course) in case he got sick. Sure enough, he spent the last decade of his life in the Alzheimer's unit and that time coincided with the 2000 and 2008 crashes.

Since he was supporting my step mom + paying the nursing home, state & federal taxes on IRA withdrawals, trust fees, etc., the money drained away and he passed with maybe 1.5-2 years worth of expenses left. So didn't quite run out, but close. (Come to think of it, he did it about right - spent it when healthy enough to enjoy it and had just enough to get by with after that)

He's my hero! I kind of expect dementia to hit me hard (runs in the family) and that sounds like the absolute perfect way to wrap things up - except for suffering with Alzheimer for 10 years. I sincerely hope heart attack will take care of me when the time comes (already had one).

 

[Koolau]

I know 2 people that had long blue-collar careers at large companies. They had both earned traditional pensions, however, they chose to cash them out.

They were involved with Financial Advisers who subsequently lost all of the money.

They are the only 2 folks I know who seem to be having a relatively hard time with retirement--financially speaking.

-gauss

Reminds me of two guys my age I w*rked with who were convinced they could FIRE with the help of a broker. (They thought I was stupid for staying on - they also thought I must be "rich" because I was "professional" while they were "hourly.") They also thought they were much smarter than I was - but that's another story and their retirement "plan" was just part of their outsized egos.

So their broker convinced them to (IIRC) write covered calls. I don't even completely know what that means and I don't care. Here's the really interesting part: Their broker was so bad that these two guys actually won an arbitration (which I've never heard of anybody winning) and got some of their money back! Even with that, they both had to go back to w*rk. As far as I know, they are still w*rking. Naturally, YMMV.

 

[pacergal]

A co worker took her lump sum pension, just at the 2008 crash, convinced by her advisor she could do better. Ended up coming back to work "on call" for another 10 years before she fully re-retired.
Another co worker switched to another company, withdrew his pension due to being badly in debt. He is still working at the other company.

 

[bolt]

Netflix's "Dirty Money" episode 8 or 11, look it up.

An atty., along with the town & state's (Needham, Ma) compliance steal*(imo) a compentent elderly individuals 1-2M+ in assets for claimed maintenance issues like trimming trees, not owed taxation.

You might find it enlightening.
I'd heard similar crediable stories elsewhere nationwide, NV was another location iirc.

I've heard of families, robbing family elders of wealth leaving them clueless & destitute. Then the elderly decline to prosecute, unreal.
The state refuses to do clawbacks, its perplexing.
Watch your resources!

Good luck & Best wishes......

 

[atmsmshr]

All of my grandmothers (surviving spouse) died essentially penniless, but in good nursing homes at 94 yo. DW's grandparents were similar. Out of those four couples, only my father's parents had a portfolio with stocks. Nearly all of that went to LTC.

My parents (early 80s) lived frugally and have $1M socked away in conservative CDs, cash, small bit in stock and a paid for house. Pretty good for a teacher and nurse retiring at 59.

My in-laws, lived large and on the edge for decades - displaying wealth instead of saving. In the early 2000s, they dropped an eye popping amount to remodel their house, kept a stabled horse, and new car leases (Tahoe and Mercedes). Also bought 10 acres of desert in Scottsdale as an (illiquid) investment that they later tried to sell to me when the bottom dropped out during the Great Recession. With 2 kids at home an a disabled DW, I did not take their (unrealistic) offer. Evidentially they had kept their stash in stocks, and just blew through it after the drop. Subsequently, they took out a reverse mortgage and declared bankruptcy. Electrical Engineer trained and previous corporate VP/ entrepreneur FIL worked until March of this year (age 87) as a cashier at Walgreens instead of applying for SNAP and other programs we looked up. With covid pandemic, we asked him to stop and said we (and a brother in law) would assist when unemployment runs out. I have harbored some resentment for years for their lifestyle, but try not to let it show with DW or her parents.

Funny thing, I learned my retirement savings and investing strategy early on during visits to the in-laws by reading Forbes, Fortune and Money magazines.

Apparently, FIL did not read his own magazines.

 

[Drake3287]

I was just reading a thread by @Dawgman who decided he's 'over saved,' which doesn't seem uncommon here.

Fortunately or unfortunately, I'm in this same situation. To large of a savings to actually use up without wasting it plus I'm still saving $3,000 a month from my pension income that's not being used.

I agree that many of us on this forum are in a similar situation. Hard for many people like myself to spend money after spending decades saving it.

 

[Markola]

I’ve noticed that even people without portfolios manage to muddle through.

 

[iloveyoga]

We could easily cut back and live on our pensions if needed.

 

[brett]

No, but we have a few relatives who have, or will, essentially retire with nothing.

DW gets very tired of them commenting about how 'lucky' we are.

They are clueless.

 

[Out-to-Lunch]

DW gets very tired of them commenting about how 'lucky' we are.

I have not experienced this yet, but I expect to upon retiring early (57) next summer. Formulating my response... Do you think this is possibly a good reply:

"Oh, what part of it do you think was due to luck?"

 

[GTP2022]

I have not experienced this yet, but I expect to upon retiring early (57) next summer. Formulating my response... Do you think this is possibly a good reply:

"Oh, what part of it do you think was due to luck?"

I'm going to steal that one in early 2022!

 

[SecondCor521]

I have not experienced this yet, but I expect to upon retiring early (57) next summer. Formulating my response... Do you think this is possibly a good reply:

"Oh, what part of it do you think was due to luck?"

I don't think it's a good reply, honestly. Unless your intent is to just get them to stop saying that sort of thing to you.

From what I have seen so far, there are people who think it's mostly due to hard work, good decisions, a good education, and a person's raw ability. These people will not kvetch at you. (They will also mostly not learn from you either, for the most part.)

There are other people who think it is more about the color of your skin, the health you were born with, the people you were born to, the country you were born in, the looks you were born with, and the things that happen to you, including the good things that were given to you and the bad things that happened to others. These people may kvetch at you, and I think your response will not persuade them to join in a respectful discussion between their point of view and yours.