I can't be all alone here. Like most on this site (I would assume), long time big % saver, always LBYMs, "relative" frugality in my genes, worked the plan with an designed exit at 55 (when kid 4 was out of the nest/independent). I moved the goal posts many times as I dialed in my desired retirement spend (FatFire growing by inflation annually), ran (what now appears to be ridiculously) conservative assumptions (i.e. no SS, all my withdrawals taxable as income despites having 50% in after tax accounts). Fast forward to today, I'm 56, decided on a phase out (still earning income mainly because my biz is still very lucrative even on a very part time/Covid world basis and I need to fill some idle time). None the less, I have started running real calculators that take into account a "real" withdrawal strategy, which includes plugging in my basis on my after tax accounts, tax implications based on our current known taxes, a conservative 75% of SS at age 70, a 6% annual return on a 60/40 AA, and all the models say I will easily double my NW by age 94! Yes, 1st world problems that can be solved thru charity and gifting to kids. None the less, funny how we play Jedi mind tricks on ourselves to motivate us to "get to the number" and then you get there and wonder why you worked like a dog to hit some magical number that was overkill. Anyone else wakeup to this?
Had an epiphany... I may have over saved
- Thread starter DawgMan
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pb4uski
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Similar dilemma here... unless the world goes to hell in a handbasket it is likely that our heirs and charities will end up well when we are "below the grass". But on the other hand, if $100k fell out of the sky into my lap only if I spent it I think I would have a hard time doing so as we are not wanting for anything. OTOH, I think DW could do it fairly easily.
Who ever thought that it would be a bigger challenge to spend so you don't leave a huge legacy than to save for retirement?
Who ever thought that it would be a bigger challenge to spend so you don't leave a huge legacy than to save for retirement?
I wouldn't say we woke up to this; rather, I planned for worst case scenario and, so far, haven't experienced it. I'm not, however, worrying about doubling net worth by time of death in real terms. DW, who made most of our money, has proven adept at spending it on travel--even in 2020. 
Bottom line, in our situation, far better to have worked an extra year or two (at jobs we truly liked), than to have cut it too close.
Bottom line, in our situation, far better to have worked an extra year or two (at jobs we truly liked), than to have cut it too close.
RunningBum
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Yeah, I overshot, but my job was ridiculously easy the last few years with not much infringement on my time. But did I really overshoot? Depending how long my mother lasts in memory care, I could be blowing some dough there. Yes, we know about Medicaid, but right now that looks to be a much worse option than where she is at now. So now I'm glad I worked OMY for a few extra years.
So, you may find that money useful after all. If not, more to your heirs or charities. I'm fine with both of those as well.
So, you may find that money useful after all. If not, more to your heirs or charities. I'm fine with both of those as well.
Great segway to the 2nd half of my pickle... legacy concerns. My plan was always to spend it all (spend it/enjoy it while on this side of the sod) enjoying it with family/friends/experiences and perhaps a few things, but now that I am starting to do real-time math, I see I may have options. DW and I have started to have discussions about being strategic in gifting to kids at certain times/reasons, but want to avoid the kids "expecting" any annual gifts... natural tendency could lead to entitlement. Also started thinking about taking a "mini-Buffet" approach and setting a limit on what we gift each kid whne we hit the dirt nap, giving the rest away to a charity. Work in progress.
This and not quite comfortable with what I am going to do with all my free time has kept me playing...
Yes, planned for the worst, but I am realizing possibly to a fault!... I planned for worst case scenario and, so far, haven't experienced it...DW, ...has proven adept at spending it on travel--even in 2020.
Likewise, DW has a knack for the good stuff. Me, a few vices like nice cars, good wine, a little technology, ... otherwise, give me a T-shirt and jeans.
This. Planned for worst case and the vast majority of the lines in firecalc are more than double net worth at the end.
I had a different experience than OP... Planned to retire at 55, worked the plan, saved the money, revised the plan... and hit the "done" point well ahead of age 55... so I retired at age 52. Since I had kids later than most - I still have kids under roof, even though I've been retired for 6 years.
Car-Guy
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Recognized that some years ago! The DW and I started gifting the annual no tax maximums to the DD a few years ago.... Other than that, I've been practicing blowing that dough on an accelerated schedule.
Nothing wrong with this! My conservative nature just made me a chicken to do anything until I knew I launched #4!
Oh, forgot to mention, I have grandkid 1 and 2 & 3 are due 1st quarter so we now have a new way to spend $$!
Congrats on the grandkid(s). Definitely a great way to blow the dough!
CardsFan
Thinks s/he gets paid by the post
We are in the same boat. Retired in 2016 @ 60. Hind sight says I could have gone earlier, BUT: the "Great Recession" put a wrinkle in the plan. While the market was going up, retiring in 2012-2015 just looked too risky.
Now we sit, at age 65, with 38% more than retirement day.
No complaints. If my biggest retirement worry is trying to minimize taxes for us and our heir (DS), I guess I have won the game.
DS doesn't know it, but it looks like his retirement is also pre-funded.
Now we sit, at age 65, with 38% more than retirement day.
No complaints. If my biggest retirement worry is trying to minimize taxes for us and our heir (DS), I guess I have won the game.
DS doesn't know it, but it looks like his retirement is also pre-funded.
tmm99
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Mine is way more than double, but I don't want to increase my spending until SS starts in 4 years. I want to be cautious. I can always spend more when/if it grows substantially. I just feel blessed that my NW is higher now than when I retired 5 years ago, even considering inflation.
One more Segway... I planned for a pretty big annual spend that grows annually by inflation (3%), but generally believe the real pattern will be go go years, slow go years, no go years. The spend should worst case look like a smile (if we hit heavy med needs later in life). Best case, it will trend down. This is spend is before any charity. Case and point, 1 more reason i (many of us) have oversaved
audreyh1
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You can gift even more and pay no tax. You just have to file form 709 in years that you gift more than the annual exclusion so that the excess is taken off your estate exemption.
I didn't think we oversaved when I semi-retired 5 years ago at 57, since the 9 years to SS full withdrawal age seemed a looooonnnnnggg time.
But the portfolio kept going up gradually to the point that DW fully retired 2 years ago while I kept working 1/2 time online for half pay (gig ended in May).
Now the 4 years to SS full retirement doesn't seem very long and the portfolio is up about 35%. When I/DW start drawing SS we will really have oversaved; I'm trying to loosen the strings next year in hopes that international travel will be safer, particularly next fall.
I'd like to trade in the Silverado for a Rivian or cybertruck in a few years, now that I have solar panels.
But the portfolio kept going up gradually to the point that DW fully retired 2 years ago while I kept working 1/2 time online for half pay (gig ended in May).
Now the 4 years to SS full retirement doesn't seem very long and the portfolio is up about 35%. When I/DW start drawing SS we will really have oversaved; I'm trying to loosen the strings next year in hopes that international travel will be safer, particularly next fall.
I'd like to trade in the Silverado for a Rivian or cybertruck in a few years, now that I have solar panels.
Car-Guy
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Yep, I have considered that but I don't want to overly spoil her.
SecondCor521
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I retired in 2016 at age 46, so I'm a relative newbie.
Four things happened that have put me into the position of worrying more about a runaway portfolio than a cat food situation:
1. I hit 4% in 2014 and kept working for two more years because the job wasn't that bad. Since I had the house paid off and had a high income but low expectations, I was saving a lot and just shoveling it into the market.
2. My kids' college has cost less out of pocket than I projected. A combination of scholarships, their choice to attend public in state schools (well, two out of the three), and some financial aid.
3. In my planning I assumed zero non-portfolio income. I have a lot of little random income throughout the year, and it actually adds up to about 2/3 of my expenses.
4. Planning for the worst case includes planning for high inflation and strongly negative market returns. Personally I have low to no inflation and the market has been good.
Overall, most of us plan for the worst on each variable, and the worst on each variable individually rarely happens. The worst on all variables simultaneously at the same time that we choose to retire is almost guaranteed (knock wood) not to happen.
Four things happened that have put me into the position of worrying more about a runaway portfolio than a cat food situation:
1. I hit 4% in 2014 and kept working for two more years because the job wasn't that bad. Since I had the house paid off and had a high income but low expectations, I was saving a lot and just shoveling it into the market.
2. My kids' college has cost less out of pocket than I projected. A combination of scholarships, their choice to attend public in state schools (well, two out of the three), and some financial aid.
3. In my planning I assumed zero non-portfolio income. I have a lot of little random income throughout the year, and it actually adds up to about 2/3 of my expenses.
4. Planning for the worst case includes planning for high inflation and strongly negative market returns. Personally I have low to no inflation and the market has been good.
Overall, most of us plan for the worst on each variable, and the worst on each variable individually rarely happens. The worst on all variables simultaneously at the same time that we choose to retire is almost guaranteed (knock wood) not to happen.
Congrats on your success, as you say, not a bad problem to have.
That said, it's nothing a winter estate in Hawaii and summer hobby ranch in Montana can't fix. I'm only half joking.... why not deploy the excess capital into assets you can enjoy, which ideally keep up with inflation, but always sell if you needed to raise more capital for retirement?
I'm in a similar position, and I'm probably going to go the 2nd home route. I can always downsize to a single home if I ever need the extra cash.
That said, it's nothing a winter estate in Hawaii and summer hobby ranch in Montana can't fix. I'm only half joking.... why not deploy the excess capital into assets you can enjoy, which ideally keep up with inflation, but always sell if you needed to raise more capital for retirement?
I'm in a similar position, and I'm probably going to go the 2nd home route. I can always downsize to a single home if I ever need the extra cash.
Rambler
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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.
Sunset
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If the estate is small, the estate tax is small.
If the estate is all land, then the estate would have to sell some to pay the tax, and the kids get the rest.
I cannot see where the estate is small and the IRS wants kids to pay a tax
Closet_Gamer
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We're well on our way to an overshoot. I wanted to be done at 50, hit the number (and exceeded it) this year at age 49. I've agreed to w*rk for 3 more years. As these are peak earning years, it looks like I will be 15-20% over my target when I do pull the pin.
For now that's just a pleasant spreadsheet forecast.
We'll see what actually happens.
For now that's just a pleasant spreadsheet forecast.
We'll see what actually happens.
iloveyoga
Thinks s/he gets paid by the post
Same story here....I only have one big thing I would change. I wish we had done one extravagant vacation trip when my kids were young. We always went on a fun summer trip, but they were very modest and in hindsight we could have splurged a bit.
Yep, I did the same thing while "working" and saving, just plugged everything into a conservative forecast, assuming SS would not be there, assuming my fat spend would grow until I croak, assuming I pay income taxes on 100% my withdrawals. While I am still earning income, I started looking/modeling my investments/assets "as if" I was fully retired at the end of last year, modeling real numbers at real tax rates... big paradigm shift, eye opening. What I was so pleasantly surprised to see was I could live off my after tax $$ solely until RMDs hit when I model the real numbers (i.e. basis, projected interest/dividends/fund capital gains, return of capital, capital gains created by sales). I way over shot my projected tax burden during my earlier forecasting years. Also, despite not in my plan, I have come to expect now there is a high probability SS will be there in some amount (I have discounted it to 75%).
