Enough - How much is that?

[foxfirev5]

When I graduated, I made a pact that I would work for 30 years and retire for 30 years. I was planning based on time not money. OMY meant 31 and 29 etc. So even though I was making big bucks, I avoided OMY.

A relative just fell of his Peloton dead of a heart attack at age 48. He was trying to lose some pounds for a pending trip to Jamaica. Time >> Money

Approaching 19 years retired. Still have more money than when we retired.

Only 5 years retired but your experiences sum it up for me. See others go make it very certain I can adjust my expenses with little effort.

 

[Leo1277]

With the system in the US of everyone fighting for their own with 401ks, IRAs and the like, there is one huge hidden cost that all of us are aware of and which deserves quantifying. For those of us who have FireCalc 100% - which is the measure that we can with reliable expectation "make it" financially - it most likely means that a good chunk of our hard earned money will be left over when we pass. The average amount of the "leftovers" are a substantial percentage of the peak net worth. And this is a real loss of productivity of the funds, since you can't just take say 1/2 of what the average boomer has left over and go on a world cruise with it; or alternatively, conclude that 50% FireCalc is alright because on average, all the 50% FireCalc folks will have zero leftovers. On the other hand, for those that run out of money before they run out of time, the situation is even more dire.

So overall, our retirement financing system makes quite inefficient use of the capital that it holds - you either have too little and need to get food stamps and live on Mac&Cheese, or too much and leave it on the table in the end. Both of these are a great waste and economically very inefficient.

Of course this does not consider the inheritance given to the kids, but aside from the fact that not everyone has kids or wants to leave them huge chunks of money at the end, this is also a questionable benefit, since the kids don't know how much they get and can't reliably plan for it or use it for anything beforehand, and all it does is put the FireCalc gamble on them. Except in percentage terms, it is even worse, since a decent "leftover" inheritance from a 100% FireCalc boomer may likely end up being more than their own net worth at the time.

So there are huge hidden costs in the system. Of course you could avoid that by buying a SPIA with COLA; but then the gamble is what the prevailing interest rates are at the time you do this, and again this can amount to a factor of two of your retirement cash flow. Other countries solve this by a much more far reaching system like US Social Security; not saying this is ideal, but at least it removes the gambling.

 

[Music Lover]

It's actually worse than that. If you don't have enough, you will find out during your lifetime. Only if you had enough, that answer will only be known after your demise.

Not always. I know several people with a COLA govt pension and little to no savings. They'll probably keep spending every penny until they die and then the pension ends.

So, one could accurately say that they have exactly enough and won't run out.

 

[foxfirev5]

To Leo,
Slippery slope. I'd rather gamble on the outcome. That's why I'm here.

 

[Leo1277]

Not always. I know several people with a COLA govt pension and little to no savings. They'll probably keep spending every penny until they die and then the pension ends.

So, one could accurately say that they have exactly enough and won't run out.

Yes, that's right; but these COLA government pensions are few and far between, and a pension from some private entity, which is also getting very rare these days, doesn't have the same level of security.

 

[Leo1277]

To Leo,
Slippery slope. I'd rather gamble on the outcome. That's why I'm here.

Yes, very slippery slope, I agree. The problem is, "winning" means I have leftovers at the end; but at least with a normal lottery, I can spend the money I won. Here I never know if I really won until I'm ready to check out from this world, and at that point I am not sure I can get much fun out of knowing I won. But on the other hand, if I lose, I sure will know that I did and suffer for it, and likely only at a time when I don't want to or can't join the work force again. Strange game...

 

[disneysteve]

The problem is, "winning" means I have leftovers at the end; but at least with a normal lottery, I can spend the money I won. Here I never know if I really won until I'm ready to check out from this world, and at that point I am not sure I can get much fun out of knowing I won.

I don't think that's entirely true. If you get up in years and find that you've done well and have way more money than you could possibly spend in the remainder of your lifetime, that's when people start doing some serious philanthropy. There are certainly a few charities my wife and I would love to be able to make large donations to.


If we retire at 60 with $3M and find ourselves at 75 or 80 or 85 with it having grown to $6M or $8M, we'll happily start writing some large checks.

 

[Leo1277]

I don't think that's entirely true. If you get up in years and find that you've done well and have way more money than you could possibly spend in the remainder of your lifetime, that's when people start doing some serious philanthropy. There are certainly a few charities my wife and I would love to be able to make large donations to.

If we retire at 60 with $3M and find ourselves at 75 or 80 or 85 with it having grown to $6M or $8M, we'll happily start writing some large checks.

That makes sense, and it's a good use for that money, especially if it's still in a 401k and the recipients are tax exempt. We are doing heavy Roth conversions nowadays to empty the pre-tax buckets so that when taking SS at 70, we don't have a high tax burden, and are considering that if there's anything left in the 401k come RMD, we'd be doing just that. I am already starting to assemble lists . But similar to leaving it to the kids, the risk of the gamble is now put on the charity. We are all just so used to gambling...

 

[Dalmore]

When DW and I were discussing retirement, we talked about our satisfaction with what we have today. We talked about fantasy things; a 2nd house in Pacfic NW (doable), but if we're going to fantasize, why not add a house in the English countryside too, and other luxury wishes. We are both very satisfied with our current lifestyle and to make the jump to the fantasy spending levels would take another $10m+ which we would have a hard time making before hitting an age where we wouldn't be able to enjoy it, assuming we lived that long. So fantasy spending is still a fantasy, and we retired to enjoy what we have while we can.

 

[albireo13]

Having money left over is irrelevant in my book.
I just care about being comfortable and having a decent life until the end.
If there is money left over, I certainly won't know about it or care about it after
I am dead. The real problem is running out of money while still alive.

 

[Ready]

Enough for us was when we felt we no longer needed to worry about whether we have enough. We know that regardless of what curve ball gets thrown our way - a leaky roof, a major repair, a big medical bill...we can handle it. Having enough to no longer worry about whether you have enough is enough for me.

We are going on four years of retirement and have no regrets about leaving the workforce early, even though we were both high earners and could have made a lot more.

 

[skyking1]

This is a battle I have with my DW fairly regularly. Well...not a battle per se, just not much in agreement. We are 100% FI according to Firecalc and have more than enough money. Nonetheless, I can't convince her to stop w*rking...she has a fear of not having "enough" which is just like her parents. They have WAY MORE than enough, but still own multiple businesses and WILL NOT STOP. They are getting up there in the years and think they are immortal.

I have lost a lot of former co-workers to cancer in the last few years and it's eye opening. What I can say (and I think others would agree) is that I don't have ENOUGH time left in this life. Do I want to live forever? Well, probably not...but I also know that the time left is finite and unknown.

Not sure what my point is...except yes, I have enough money but probably not enough time.

For your in-laws, it is not a matter of possessions. They simply know no other way. It is the stopping that is alien for them.
I suspect that many times people fear that stopping is giving up and dying.

 

[martyp]

For me, enough was when my retirement benefits were more-or-less equal to what I was living on. My pension and social security are cost of living adjusted so I have not lost any purchase power during the past 10 years. I lost about 20% of my retirement savings in 2009 but that wasn’t enough to sway my decision.

Enough is not just a $$ figure. It is also the cost of not retiring. Whether you are unhappy in your job or life. Your health status and life expectation. Also your ability to live within your means and be happy.

 

[Markola]

I always think of the old guy who was “security” at a golf course for which I worked during college. He’d ride around chatting enjoyably with people and I never saw him leave the golf cart. He liked to say, “I’m doing this job for fun to get out of the house. I don’t need the money. I have a military pension, a government career pension and Social Security. What would I do with more money?” He seemed as bullet-proof as any hedge fund manager to me and was certainly content.

 

[Music Lover]

Having money left over is irrelevant in my book.
I just care about being comfortable and having a decent life until the end.
If there is money left over, I certainly won't know about it or care about it after
I am dead. The real problem is running out of money while still alive.

Most people here won't run out, in fact many of them have more than they retired. But even less successful people will still have SS every month and a house they can sell if things get tight.

There are a lot of people on this site living quite comfortably on less $3 - $4000 a month who could sell their house and live off the proceeds for a decade or two, even longer supplemented by SS. Even if they have $0 savings.

 

[disneysteve]

There are a lot of people on this site living quite comfortably on less $3 - $4000 a month who could sell their house and live off the proceeds for a decade or two, even longer supplemented by SS.

In the course of all of my planning, I do think about the fact that right now, today, we have $1.7 million saved. If we spend $6,000/month, that would support us for 283 months or 23.6 years. That would take me to 80 and doesn't count SS and assumes a 0% return on our portfolio. Even if we spend $7,000/month (which is where we were pre-COVID), that's 20 years without SS or any positive returns.


Maybe we're all being way too conservative in our planning.

 

[marko]

I'm no psychologist, but I wonder if humans (or at least those driven to succeed/accumulate) never have 'enough'.

We tend to make goals--"first million, second million, third,--and once we reach that plateau it is not matter of "comfort" --food,shelter,clothing-- but more a matter of the challenge to increase it. It's sort of a 'what's over the next hill' mentality.

 

[MissMolly]

I'm no psychologist, but I wonder if humans (or at least those driven to succeed/accumulate) never have 'enough'.

We tend to make goals--"first million, second million, third,--and once we reach that plateau it is not matter of "comfort" --food,shelter,clothing-- but more a matter of the challenge to increase it. It's sort of a 'what's over the next hill' mentality.

This describes me to a "T"

 

[daylatedollarshort]

My goal is more low overhead than increasing net worth these days. I like the math challenge and hunt for bargains / easy side income. If you don't spend much you don't need a lot of income. Like my 2% cash back credit card pays for all my annual museum, park, zoo, garden, winery passports, seat filler and other membership passes / subscriptions and then a lot of of what we do during the year is free or cheap. I can plan a day in Sonoma going to an art museum, a hike at a state park and two wineries with a picnic lunch at one of the wineries and just pay for tips at the wineries and gas. I keep a picnic supply cabinet with a pretty table cloth and stocked with dollar or two dollar bargain items from outlet and dollar stores like stuffed grape leaves, drinks, quinoa salad and nuts for picnics on the go. I grew up poor so I'm pretty happy simply not having to work and living like this.

 

[Nemo2]

I grew up poor so I'm pretty happy simply not having to work and living like this.

Ditto....we don't have too many 'needs', and we have fewer 'wants'; our Canadian 'equivalent' of Social Security, and our dividend income from investments, generates more than we spend, even when we (used to) travel (mainly to Europe) twice a year.

The 'nut' increases, but we feel no urge to spend it (presently).....if friends' kids, the granddaughters, etc, end up with it good luck to them.....right now, it's there if we need it...but we hope the 'need', (which for us generates negative connotations), never arises.

 

[livingalmostlarge]

When you want to hang it up. My dad still won't give it up at 90. But I guess who am I to tell him no? My mom hung it up at 55 and only because she had a vision problem. But she laments about how she should be working.

I told her I plan on meeting done at 54. She's like you can't be done at 54, you'll have accomplished nothing. You'll have wasted your life, education, etc. Apparently I need a high power career and lots of money to "Accomplish".

As for DH? He says no way is he retiring at 55. I want him to and he says no. he's 43 so who knows. He absolutely refuses to contemplate retiring before DK are done with college and I know we'll have enough, we are closing in on having enough now.

So some people have a goal (DH) no retirement till kids are done with college. Doesn't matter if we don't have to pay for college he just can't do it.

 

[Leo1277]

I'm no psychologist, but I wonder if humans (or at least those driven to succeed/accumulate) never have 'enough'.

I think that's quite to the point. Human genes are based on our experience over many many millennia, and by far the dominating threats were, one, there just never quite enough food or water so it's best to horde as big a stash as you can, and two, there is always the threat of raids by others or of natural disasters, so be clever in how you store your stash.

These genes are what in our times of plenty lead to, one, growing waistlines and 401k accounts, and two, recognizing that diversification is useful. I really believe that most of human behavior is as simple as thinking "what would caveman do".

 

[Walt34]

I really believe that most of human behavior is as simple as thinking "what would caveman do".

This way of looking at it really simplifies a lot of philosophical issues, questions, and discussions.

 

[daylatedollarshort]

By retiring early, and having assets in asset classes not counted by the FSA (small businesses and retirement plans) our kids had grants for 100% of college tuition. Plus we utilized community college, online courses, transfer programs, paid internships, tutor job, tax credits, and probably more I've forgotten so that college cost us very little out of pocket.

A young adult I know worked part-time, lived at home, went to community college, then transferred to and graduated from U.C. Berkeley in a high demand major, and even had a semester studying abroad. It just seems like there are good ways, at least in our state, to have a great education without spending a fortune. Having a high net worth of course makes life easier, but there is more than one way to skin a cat. Low overhead has its advantages, too. Some of our kids' friends' families have gone into debt and/or spent hundreds of thousands on low demand undergraduate degrees, and in some case the kids dropped out without graduating. So in those cases spending a fortune on college didn't really lead to a high quality education or job opportunities compared to a more focused, low overhead approach.

 

[Fermion]

Having money left over is irrelevant in my book.
I just care about being comfortable and having a decent life until the end.
If there is money left over, I certainly won't know about it or care about it after
I am dead. The real problem is running out of money while still alive.

I mostly only want to have enough money until living is not fun. It is pretty fun right now and I do want to see humans on Mars, but not really interested in living in extreme pain or with severe dementia.