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Old 10-24-2020, 10:37 AM   #41
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I like the idea of dying as I spend my last dollar but I havenít figured out how to do that just yet.
Use all of your money to buy annuities. I don't recommend that, but it's how you would do that, without worrying about living . In seriousness, you could put a significant chunk toward SPIAs, probably with inflation protection, but I'd still want some extra money to handle emergencies or large irregular expenditures like cars. I haven't taken a hard look at SPIAs yet myself, but you'd want to make sure the insurer is very sound.
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Old 10-24-2020, 10:48 AM   #42
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It is very likely that our ending portfolio balance will be far higher than our starting balance, and we have no children to leave it to. But I'd much rather leave money on the table than run out. And, looking back, there is nothing else that I needed or wanted to spend it on.
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Old 10-24-2020, 10:52 AM   #43
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We likely oversaved, too, but you never know what could happen, so it is not something I worry about. If I need/want something, and have the money to buy it, thats a good thing to me. I am not going to stress over the fact that I may have saved too much!!
I feel blessed, and have the ability to help my kids and give to charities.
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Old 10-24-2020, 10:59 AM   #44
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If you're not quite feeling ready for a vacation/second home, might I suggest you start out draining off your excess funds with a horse or a boat? They both also have the "advantage" of increasing your healthcare spending!
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Old 10-24-2020, 12:20 PM   #45
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I am not going to assume we over saved until we reach our deathbed.

This was my intent. One of my principles in life is "do not be a burden to others". I wanted to have more than enough to never be financially dependent on anyone else. The LBYM and frugality results, for us, are worth it. We do not spend now because I am afraid of leaving "too much"; We spend now - and not just on ourselves - enjoy it.
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Old 10-24-2020, 02:17 PM   #46
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I am not going to assume we over saved until we reach our deathbed.

This was my intent. One of my principles in life is "do not be a burden to others". I wanted to have more than enough to never be financially dependent on anyone else. ...........

My philosophy, too. I don't know how it will end for DW and I, but I want to have the very best care for both of us to the last. If that means we don't leave a dime, so be it.
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Old 10-24-2020, 03:44 PM   #47
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Perhaps the cost of planning such that the chances are extremely small that you will need to eat cat food in retirement is that that, in all likelihood, you will end of with a big excess in the end.

First world problem, but it helps me sleep soundly at night.

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Old 10-24-2020, 04:08 PM   #48
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Wow. Congrats. You can retire now ! Don't wait too long. When I hit my number, I'm out.
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Old 10-24-2020, 06:36 PM   #49
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We avoid this in case they change the estate exception rules again such that there isn’t enough estate left to pay the taxes, and have the IRS come after the kids after we are gone. We helped out kids with their down payment on their home by working with them to get the needed gift in their hands over two tax years, but in reality only a couple weeks apart from gift to gift. We will be doing the same for the other child if they ever decide to settle in one place long enough to buy a home.
For some reason we are not concerned about this scenario.....
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Even better: The IRS recently issued a ruling that it wouldn’t “claw back” those large gifts should the estate tax exemption revert back to the old threshold after 2025, giving taxpayers assurance that any planning they do today will hold up. However, if you don’t use up the full exemption amount and the threshold does get reduced in the future, you won’t be able to do so retroactively.
https://www.cnbc.com/2020/02/18/crea...exemption.html
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Old 10-24-2020, 06:59 PM   #50
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I retired 16 months ago, and when the pandemic hit I got quite anxious. I had been living on my after tax money and still had plenty (sold some non performing real estate and had the rest in cash), but the big drop in the market was scary so soon after retiring. I got unemployment through a bit of a fluke, and got used to a pretty comfortable check. Now itís a small check, and I had to return to the calculators to allay my anxiety.

They did. Like pretty much everybody here, the months since March have been awfully good to my NW. when I hit my number I began working part time, and continued to age 66. Did I oversave? Depends. If I need LTC in the later years Iíll be fine, but if it happens soon it could be tight. If the pandemic does serious long/term damage to the economy, I think I will have saved enough, but possibly not too much.
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Old 10-24-2020, 07:18 PM   #51
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I am not going to assume we over saved until we reach our deathbed.
A variation on Solon and Croesus - "Count no man happy until the end is known." (Herodotus, Histories, Book 1)
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Old 10-24-2020, 07:55 PM   #52
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For some reason we are not concerned about this scenario.....

Quote: Even better: The IRS recently issued a ruling that it wouldnít ďclaw backĒ those large gifts should the estate tax exemption revert back to the old threshold after 2025, giving taxpayers assurance that any planning they do today will hold up. However, if you donít use up the full exemption amount and the threshold does get reduced in the future, you wonít be able to do so retroactively.

https://www.cnbc.com/2020/02/18/crea...exemption.html
Wow, that's really interesting. I could see my estate, including real estate, being over the $5.5 million mark if things go right. But I can't see gifting a significant amount before 2025 since I'll only be 64. I guess since it probably won't be that much over $5.5M it's not that big of a deal, or I could donate enough to charity to cancel out the estate tax.
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Old 10-25-2020, 03:20 AM   #53
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I had forgotten about the already built-in (post) 2025 sunset. Obviously this gives time to those who are in a position to make huge gifts. But yeah, we’re not old enough to do so on that massive scale.

I expect furious activity in 2025 if it looks like reversion is inevitable.

As it happens we did make fairly large gifts this year and each of us will be filing 709 against our individual estate tax exemptions.

Where did you get $5.5M? Looking at the same cumulative inflation adjustment the old threshold would be around $5.26M today. Did you mean $5M inflation adjusted?
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Old 10-25-2020, 06:59 AM   #54
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A variation on Solon and Croesus - "Count no man happy until the end is known." (Herodotus, Histories, Book 1)
+1 We are essentially in OP's situation. We are currently at about 1-1,5% withdrawal.
When DW hits RMD age in four years we will probably start gifting s fair amount to the kids but we won't overdo it. Other than, some specific charitable giving, we plan to give the bulk of the remainder to the kids. Buffet is directing the bulk of his billions to charity but he is has designated many millions to each of his kids. I don't have billions so I want to make sure the kids are in decent shape and that will take most of our pot. They don't have the safety net of a COLA'd Federal pension like me.
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Old 10-25-2020, 07:03 AM   #55
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Where did you get $5.5M? Looking at the same cumulative inflation adjustment the old threshold would be around $5.26M today. Did you mean $5M inflation adjusted?
Direct from the IRS.
https://www.irs.gov/businesses/small...yed/estate-tax

Quote:
A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013, $5,340,000 in 2014, $5,430,000 in 2015, $5,450,000 in 2016, $5,490,000 in 2017, $11,180,000 in 2018, $11,400,000 in 2019, and $11,580,000 in 2020.
It was nearly 5.5M in 2017 before it was doubled (with inflation) in 2018. Assuming they return to half in 2025, it'll be $5.79M + inflation from 2021-2025.
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Old 10-25-2020, 07:22 AM   #56
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I like the idea of dying as I spend my last dollar but I havenít figured out how to do that just yet.
Clark Griswold being given a such a suggestion.


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Old 10-25-2020, 10:07 AM   #57
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I was starting to feel like we were running up the score, so to speak, saving more than I had any intention on spending...then work dried up, and now we're living fine a little below our projected retirement budget, just to be sure that the later years are more secure. If I go back to work, then maybe we have oversaved a bit; if I don't, then maybe we haven't. I'd rather have some left over than run out before we die!
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Old 10-29-2020, 05:43 AM   #58
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Interesting discussion. Mentioned elsewhere, I was FI at 51 but stayed until 58 (yeah, I know.)

Probably a couple of years past FI, I was at my desk and sauntered down to the break room to buy a soda - which was sort of my daily, afternoon ritual. It had always made me feel just a bit profligate to spend (in doz days) $.65 on a 20 oz diet Coke. After all, it's not like I couldn't have gotten water from the fountain. I was used to thinking "Every cent I spend now is MORE than a cent I won't have in FIRE."

For some reason, it suddenly hit me. How AM I ever going to spend all the money I have already saved. I would have to buy a LOT of sodas and a lot of other stuff to get rid of my stash! I wouldn't say I (usually) obsessed on my portfolio, but I checked it often to reassure myself that I COULD leave any time the BS bucket got full. So I guess it was fresh in my mind that I had this chunk of money when ever I did pull the trigger to leave Megacorp.

Now, 20 years or so later (15 retired) I have the same thoughts as OP. I may have saved too much. Alternately, maybe I just haven't ever gotten over my frugal ways. I've never flown first class, for instance, even though I could. What's up with that? So, honestly, my epiphany came even before FIRE. Now, the reality weighs on me every once in a while. I never planned to leave a big stash to kids - to charities, maybe, but not people that money might ruin.

So, I guess I'll decide not to worry about it. I'll continue to w*rk on "blowing that dough" (I'll think about that in the morning.) OR, maybe inflation will rear its ugly rear (heaven forbid.)

So I don't have an answer. I just feel blessed that THIS is an issue rather than thinking about going back to w*rk. Okay, I feel much better now though YMMV.
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Old 10-29-2020, 06:08 AM   #59
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Every once in a while I get the thought in my head that we have over saved, then the stock market will have a day that pushes those thought to the back of my mind.
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Old 10-29-2020, 06:43 AM   #60
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I think we oversaved as well but time will tell. In our case, I wanted to retire and my DH kept saying he'd feel safer if we had just a little more. When we do finally start drawing, it'll probably be less than 2.5%. Yup, saved too much.
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