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Old 01-22-2021, 08:44 AM   #1
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Here's my situation.

Covid retired me a few years before I planned but , hey maybe a blessing in disguise. Im married and neither I nor my wife ever had children ( Im 60, she's 57) We have a decent IRA, a small annuity that pays me each moth and she is a retired teacher ( meaning if I go she cannot collect ss payments from my benefit )

My question is this, if you had no real need to leave a big wad of cash to heirs would it fundamentally affect the way you invested / drew down your nest egg ? I mean, I love my nieces but they live more lavish lives than we do right now and Im not compelled to do without in hopes that they get more upon our demise ,

Any thoughts from the group ?
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Old 01-22-2021, 09:01 AM   #2
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I have no need to leave money to my daughters, but that doesn’t change my spending. Having a large amount left at the end is the result of a break on healthcare. Meaning that I must not have needed LTC. Having a nice size portfolio is my insurance against large healthcare expenses later in life. If I change my spending and use that money up, then I’d have to suffer the consequences by way of diminished care in my later years if needed. So, either the heirs get it or the healthcare system gets it. Either way, doesn’t change my current spending behavior.
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Old 01-22-2021, 09:25 AM   #3
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We are 65 and 62 and have no children/heirs either. While still early in the spending phase we definitely plan to not leave much behind. Although that is easier said than done especially being frugal and having a hard time spending.
Up until a month ago we were still 100% FIRE taking everything from investments/savings. My wife received her first small pension check last month but 0it is enough to go from 100% FIRE to about 75% FIRE and now 25% SIRE. When she turns 70 we will claim her SS and be about 100% SIRE. Then once I claim SS we will be about 175% ! So in theory I should probably go to 100% equities at that point but probably won't.
In the interim we still maintain a fairly conservative AA.
One could argue that we should be pretty aggressive now or a t any point knowing all are expenses with 75% to spare will be covered but I can't bring myself to that point.
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Old 01-22-2021, 09:33 AM   #4
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We have 2 children we adore and get along great with and as of now 4 grandchildren, but we don’t have any plans to leave them anything - and they know that. Now if things go as expected there will be a nice inheritance for them, but we won’t adjust our lives one bit to make it happen. Like Jerry1 said the healthcare system also has a chance of getting that money, but we aren’t adjusting our spending for them either!
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Old 01-22-2021, 09:36 AM   #5
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We are both retired, and between SS and our small pensions, almost all of our expenses are covered.
As I have stated before, we give our sons a gift each year, as we feel they need it now, not in many years ahead.
We also donate to a number of local charities such as a food bank, homeless shelter, and hospice.
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Old 01-22-2021, 09:41 AM   #6
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I agree with you Foghorn, nothing wrong with enjoying your savings for you and in your retirement. The only difficulty with your plan is how do you control the spend rate to the end, when that end date is not known with much certainty?

Since you have hopefully 25-30 years (or more!) of life, I still think your investment strategy needs to consider long term, which also means staying with equities as a decent proportion of AA. The main culprit is inflation and it's erosion of your savings. That is where equities will benefit to grow and offset the inflation factor. If it helps, have a shorter term proportion of your total savings in a subset of more conservative investments to use as spending for 1-3 years or so. Then you can feel better about volatility in the short term. The rest go with your AA and do some rebalancing to recharge the short term bucket periodically.


ETA: good point mentioned by previous posts above about considerations for long term care, or even rising healthcare costs in general.
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Old 01-22-2021, 10:02 AM   #7
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I only have stepsons, and my deal with DH is that if he goes 1st (he's 13 yrs older), I'll still leave half of whatever is left to them. If I check out first, he'll leave half to my Mom/ siblings.

That said, our plan is to spend as freely as we wish and have made no promises other than there will be a house (probably where we are now) to sell then divvy up the money someday. Nonetheless, by my calculations there will be a pile of money at the end. Many women live to over 100 in my family, so I plan to that age for me. Chances are high I won't make it too 100 due to previous lifestyle choices- which my current healthy life style may/ may not negate. If I do though, I sure don't want to do it poor.
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Old 01-22-2021, 10:23 AM   #8
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Quote:
Originally Posted by Foghorn Leghorn View Post
Here's my situation.

Covid retired me a few years before I planned but , hey maybe a blessing in disguise. Im married and neither I nor my wife ever had children ( Im 60, she's 57) We have a decent IRA, a small annuity that pays me each moth and she is a retired teacher ( meaning if I go she cannot collect ss payments from my benefit )

My question is this, if you had no real need to leave a big wad of cash to heirs would it fundamentally affect the way you invested / drew down your nest egg ? I mean, I love my nieces but they live more lavish lives than we do right now and Im not compelled to do without in hopes that they get more upon our demise ,

Any thoughts from the group ?
The young wife and I are in exactly the same situation only a couple years older (i.e. - no children, retired teacher subject to GPO). We plan to live, invest and spend just as we always have, which I think would be the same with or without children. Maybe a little more travel than before retirement, but generally the same standard of living. I can't see spending more money just to spend it and I don't worry about "leaving money on the table". Also, having a good remaining sum in our plan is our insurance against the costs of long term care. If we are lucky enough to avoid that fate, our niece and nephews or their children will get more than a few bucks someday, although there also likely will be bequests to charities. (In any event, that is only my vision. If I go first, the young wife might just spend it all on Lorenzo the pool boy.)

So, to directly answer your question, not having any children does not alter our investing or drawdown plans.
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Old 01-22-2021, 10:30 AM   #9
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Quote:
Originally Posted by Foghorn Leghorn View Post
... My question is this, if you had no real need to leave a big wad of cash to heirs would it fundamentally affect the way you invested / drew down your nest egg ? I mean, I love my nieces but they live more lavish lives than we do right now and Im not compelled to do without in hopes that they get more upon our demise ,

Any thoughts from the group ?
No, I've already told my kids that if they get an inheritance then it is estimating error on my part.

That's not totally true though as we are very well funded and only spend a little more than half of what we theoretically safely could spend.

So in overfunded situations there are two schools of thought... one is that you have "won the game" and have no need to invest in equities and take any risk.... the other is that since you have more than you need, any excess can be invested aggressively because if you ended up with a loss it would not ruin you.

And of course, if each of those two extremes is safe, then anything in-between is as well.
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Old 01-22-2021, 10:31 AM   #10
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I have 3 kids and if I am still in my condo they will inherit and split the proceeds. I don’t worry about leaving money for them. I helped them when younger and needed it.
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Old 01-22-2021, 10:45 AM   #11
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talk me through

Quote:
Originally Posted by Foghorn Leghorn View Post
Here's my situation.



Covid retired me a few years before I planned but , hey maybe a blessing in disguise. Im married and neither I nor my wife ever had children ( Im 60, she's 57) We have a decent IRA, a small annuity that pays me each moth and she is a retired teacher ( meaning if I go she cannot collect ss payments from my benefit )



My question is this, if you had no real need to leave a big wad of cash to heirs would it fundamentally affect the way you invested / drew down your nest egg ? I mean, I love my nieces but they live more lavish lives than we do right now and Im not compelled to do without in hopes that they get more upon our demise ,



Any thoughts from the group ?


We have no kids and our plan shows spending down our portfolio by age 95. However, that doesnít include what should be 7 figures in home equity by then. One never knows anything but odds are, I will outlive DW. If so, I figure Iíll make things as simple and easy as possible on myself whomever has to deal with my affairs.

For example, Iíd probably rent, maybe even a furnished apartment and get rid of most of my own stuff, which Iíll just be hauling around at that point. If I rent, someone else will be doing maintenance.

Second, I figure Iíll put most financial assets into a Charitable Remainder Unitrust or series of Charitable Gift Annuities, both of which would be administered by financial professionals, which together with SS would provide guaranteed income for life as my faculties decline. Iíd make my younger brother the beneficiary of the payouts of those instruments as long as he lives, then the principle would benefit 1-2 major national, reputable charities that have lots of lawyers. That way, since they know they are beneficiaries, Iíd have powerful allies in helping me prevent financial shenanigans if I outlive all my relatives and go to a nursing home.

This way, Iíd end up with good income till the end but few assets for any executor to deal with, and a good feeling that Iím leaving a legacy for causes I cared about.
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Old 01-22-2021, 10:50 AM   #12
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No need to leave intentionally anything 'liquid' or 'cash'. You can always leave them your house. If they sell your house when you are gone, that's still a big amount of cash to them.
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Old 01-22-2021, 03:05 PM   #13
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DH and I are 69 and 70 and no children and no family we want to live our assets to. Our estate plan is to leave most of our assets to various charities we are interested in at the second death if there is anything left. I think our asset allocation is probably more conservative since we do not have children--our main concern is having enough to live on ourselves, if there is nothing left at the end that is OK. Because we have no children we plan to move a Continuing Care Retirement Community in the near future. We will move in an independent living apartment and there is assisted living, skilled nursing and memory care if we need it. The CCRC we have chosen is the Life Plan model where you pay a fairly large move in fee and then a monthly fee that stays the same no matter whether you live in independent living or in a one of the areas where you get more assistance like skilled nursing. With this plan you do not need to buy long term care insurance.
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Old 01-23-2021, 12:03 PM   #14
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thank you each for the insight and thoughts
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