Early Retirement & Financial Independence Community

Early Retirement & Financial Independence Community (https://www.early-retirement.org/forums/)
-   Life after FIRE (https://www.early-retirement.org/forums/f29/)
-   -   Any stories of portfolio running out? (https://www.early-retirement.org/forums/f29/any-stories-of-portfolio-running-out-106204.html)

tmitchell 10-29-2020 06:24 PM

Any stories of portfolio running out?
 
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?

audreyh1 10-29-2020 06:35 PM

Maybe we’re not old enough yet, LOL!

foxfirev5 10-29-2020 06:42 PM

FWIW. Nobody here has run thru a true failure sequence. Time will tell.

RunningBum 10-29-2020 06:58 PM

There have been a couple of people who have gone back to work though, haven't there? Wasn't there someone who was heavy on BofA with their dividends, and he really got tagged? As I recall he bravely came back here briefly to tell his story.

NW-Bound 10-29-2020 08:38 PM

During the Great Recession of 2007-2009, there were some posters who showed apprehension of their stash getting pummeled, and feared that they would not have enough. They eventually dropped out and never posted again.

The market has been bullish in the last 10 years. The recent turmoil was nowhere near enough to cause the same problem as it did 10 years ago. We will have to wait and see.

MuirWannabe 10-29-2020 09:18 PM

Quote:

Originally Posted by RunningBum (Post 2504177)
There have been a couple of people who have gone back to work though, haven't there? Wasn't there someone who was heavy on BofA with their dividends, and he really got tagged? As I recall he bravely came back here briefly to tell his story.


Yes, I believe that was Vacollector. He told his story in a couple old threads from the day. He really got hurt, although I seem to recall he slowly hung in there and was somewhat recovering. He was brave in his admissions of some big mistakes.

pb4uski 10-29-2020 09:49 PM

Quote:

Originally Posted by MuirWannabe (Post 2504208)
Yes, I believe that was Vacollector. He told his story in a couple old threads from the day. He really got hurt, although I seem to recall he slowly hung in there and was somewhat recovering. He was brave in his admissions of some big mistakes.

Quote:

Originally Posted by RunningBum (Post 2504177)
There have been a couple of people who have gone back to work though, haven't there? Wasn't there someone who was heavy on BofA with their dividends, and he really got tagged? As I recall he bravely came back here briefly to tell his story.

I found this:

Quote:

Originally Posted by VaCollector (Post 1467401)
Yep…inherited shares of BAC…retired knowing that I could get by on the dividends and would have the continued growth to fund most anything else I could imagine…

Then came the banking fiasco and BAC's troubles….still decided to try and make it work rather than return to it….I'm sill poorer and still holding BAC….

To add to my incredible investment skills, when I sold the 3 rental properties that we owned at the peak of the real estate market, I also put those funds in BAC (before the meltdown) :dance: ….only to watch those funds melt away too….


Some of us never learn!!


cyber888 10-29-2020 11:19 PM

Any stories of portfolio running out?
 
I know stories of people with less than $2000 savings and are on SSI .. divorced. One person I know .. hubby emptied their bank account. If she has a little more, she hid the money to continue getting SSI. You stop getting SSi if you have more than $2000 in savings. These people don’t usually come to FIRE discussions. I knew one old school manager who was getting $75,000 a year and had no college degree and got unemployed in 2008 - he was never able to find another managerial job. His savings run out. He does janitorial job for,a school now and stayed with his mother. When his mom died, the family decided to give him their mom’s house, since he took care of her.

Dtail 10-30-2020 02:55 AM

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

tmitchell 10-30-2020 08:09 AM

I guess not surprising there are no big stories here with this lot. In fact I haven't really heard any stories of running out anywhere in the FI community. Maybe just the mindset!

RunningBum 10-30-2020 08:19 AM

As NW-Bound said, the last 10 years have been very good to the market, and had low inflation. About the only way to fail would be unexpected catastrophic expenses or taking too much risk with a single stock. Or there's all the ways that lottery winners blow through their money, so I guess that goes to the mindset of people here to not do that.

Check back in another 10 years. Hopefully we have more of the same, but who knows?

calmloki 10-30-2020 09:58 AM

I dunno - we're down about 3 new 2020 Grand Touring Maxda CX5s in the last 19 days. Might not take 10 years to start seeing some failures. Guess we'll keep driving the 2017. Do hope that most of our tenants continue to pay rent, unlike the several who haven't bothered for the last 5 months. Count us in the Dawgman camp though, thank heavens.

SecondCor521 10-30-2020 11:07 AM

The only person I know of who even came close to running out was Rob Bennett, aka h o c u s.

There were several here in the 2008/2009 downturn who got nervous. I think some reallocated their portfolio to be less risky and thus probably did permanent damage. I believe some went back to work to protect the portfolio; these folk probably did fine and in retrospect didn't need to work but it wasn't a bad idea at the time.

harllee 10-30-2020 11:32 AM

The Continuing Care Retirement Community where DH and I plan to move requires you have a certain amount of assets and income before you move in (you have to provide a financial statement). The CCRC has a trust fund in case anyone ever runs out of money--they have never kicked anyone out. I asked if anyone ever had to use the trust fund. I was told there were 2 ladies, each over 100, who had run out of money and were getting payments from the trust fund. I guess anyone of us could run out of money if we live long enough.

walkinwood 10-30-2020 11:44 AM

Quote:

Originally Posted by SecondCor521 (Post 2504383)
The only person I know of who even came close to running out was Rob Bennett, aka h o c u s.

There were several here in the 2008/2009 downturn who got nervous. I think some reallocated their portfolio to be less risky and thus probably did permanent damage. I believe some went back to work to protect the portfolio; these folk probably did fine and in retrospect didn't need to work but it wasn't a bad idea at the time.

Count us as ones who went back to work, but in retrospect didn't need to.

We worked for a while in 2010 - 9 months for DW, 6 months for me. We had ER'd in May 08, so our skills were still relevant & it gave us comfort to leave our savings to recover. It also gave us more confidence in our ER prospects when we stopped working again.

If we need to, we'll do it again - but it will be years before a "failure" in our portfolio.

rodi 10-30-2020 03:03 PM

I think, in general, folks on this forum tend to be the type to be flexible... If the market has big down turns, they cinch their belts on spending... A natural reaction.

I also think if folks 'perfect plans' turn out less than perfect, they are less likely to post about it here... They quietly slip away...

Stormy Kromer 10-31-2020 06:46 AM

I knew several retirees in the 1970's and 80's who retired with their life savings in bonds, bank savings accounts and CD's planning to live off the interest and a modest SS check.


Interest rates went from double digits to near nothing and their bonds got called in.


Inflation ate up what spending power they used to have and many formerly wealthy people died without much wealth left at all in about 10 years time.


These were people who started life in the Great Depression and were very frugal and practical. They were scared to death of any investment that wasn't FDIC insured and many loathed the stock market. They viewed stocks as an evil investment just for "bankers and big shots" and some compared it to gambling, which is a sin.


My grandparents were of this sort. One kept cash in a cream can buried in the grove and another kept some cash in her deep freeze and another stash in the toilet tank. They saw banks go broke and it wasn't going to happen to them again.


The Depression affected them so hard that they never mentally recovered. They lived poor just in case they had to again. Funny thing is that by living like they were poor, it actually made them poor.

ugeauxgirl 10-31-2020 07:10 AM

I am a retiring FA and saw it happen a few times. There was a local bank that went public and then was acquired by a larger bank. Everyone thought it was bullet proof and many people refused to diversify. 2008 proved that it was not bullet proof.

Also, some people just didn't believe they could spend all the money they had. They didn't save enough and continued their working lifestyle in retirement. They NEEDED a swimming pool, and then a lavish trip to China, and then helping the grandkids with college... They ignored warnings that they were spending more than their portfolio could stand. Eventually they just spent it all.

Not in this community though.

tmitchell 10-31-2020 07:48 AM

Quote:

Originally Posted by Stormy Kromer (Post 2504666)
I knew several retirees in the 1970's and 80's who retired with their life savings in bonds, bank savings accounts and CD's planning to live off the interest and a modest SS check.


Interest rates went from double digits to near nothing and their bonds got called in.


Inflation ate up what spending power they used to have and many formerly wealthy people died without much wealth left at all in about 10 years time.


These were people who started life in the Great Depression and were very frugal and practical. They were scared to death of any investment that wasn't FDIC insured and many loathed the stock market. They viewed stocks as an evil investment just for "bankers and big shots" and some compared it to gambling, which is a sin.


My grandparents were of this sort. One kept cash in a cream can buried in the grove and another kept some cash in her deep freeze and another stash in the toilet tank. They saw banks go broke and it wasn't going to happen to them again.


The Depression affected them so hard that they never mentally recovered. They lived poor just in case they had to again. Funny thing is that by living like they were poor, it actually made them poor.

Wow, what's it mean to have your bonds "called in?" Never heard of that.

ugeauxgirl 10-31-2020 08:20 AM

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.

audreyh1 10-31-2020 09:04 AM

Not all bonds are callable.

Koolau 10-31-2020 11:31 PM

Quote:

Originally Posted by audreyh1 (Post 2504727)
Not all bonds are callable.

Yeah, just the ones I bought back in the day, but YMMV.

Markola 11-01-2020 08:45 AM

Any stories of portfolio running out?
 
Quote:

Originally Posted by Stormy Kromer (Post 2504666)

These were people who started life in the Great Depression and were very frugal and practical. They were scared to death of any investment that wasn't FDIC insured and many loathed the stock market. They viewed stocks as an evil investment just for "bankers and big shots" and some compared it to gambling, which is a sin.


My grandparents were of this sort. One kept cash in a cream can buried in the grove and another kept some cash in her deep freeze and another stash in the toilet tank. They saw banks go broke and it wasn't going to happen to them again.


The Depression affected them so hard that they never mentally recovered. They lived poor just in case they had to again. Funny thing is that by living like they were poor, it actually made them poor.


I knew such a person, a retired professor, who had, among other diverse assets, $100,000 in gold coins in a safe deposit box, which he called, “My go-to-hell money.” I helped him set up an endowed scholarship and, when the dot com bust happened, he was unusually distressed when its principal fell a bit.

jazz4cash 11-04-2020 08:01 AM

Quote:

Originally Posted by cyber888 (Post 2504236)
I know stories of people with less than $2000 savings and are on SSI .. divorced. One person I know .. hubby emptied their bank account. If she has a little more, she hid the money to continue getting SSI. You stop getting SSi if you have more than $2000 in savings.


That is stunning to me. I looked it up to be sure I understood. A relative recently lost her husband and he never enrolled for survivor benefits on his pension. He had his adult children from former spouse as beneficiaries on some small life insurance policies. She had another policy that she took out but it was only half as much as she thought, less than 10k. She’s generally “not good with numbers” and stands a real risk of running out. She says she’s on SS Disability ... not sure if that’s the same as SSI. She does have ~100k from inheritance that is over the 2k resource limit for SSI. Is it wrong for me to hope it is not revealed? $2k in the bank is a pittance (but 100k is not). I suppose she would still qualify for some regular SS if the SSI payment goes away but she expects to file under former spouse’s record and keep the SSI benefit. We help her run errands but won’t get more involved since she has adult children and a sibling that should be stepping up.

JoeWras 11-04-2020 08:09 AM

Quote:

Originally Posted by jazz4cash (Post 2506316)
She says she’s on SS Disability ... not sure if that’s the same as SSI.

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.

jazz4cash 11-04-2020 01:18 PM

Quote:

Originally Posted by JoeWras (Post 2506318)
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 11-06-2020 11:50 PM

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 11-07-2020 10:08 AM

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

rayvt 11-07-2020 12:35 PM

Quote:

Originally Posted by ugeauxgirl (Post 2504713)
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 11-07-2020 01:00 PM

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 11-07-2020 01:33 PM

Quote:

Originally Posted by tmitchell (Post 2504165)
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 11-07-2020 04:06 PM

Quote:

Originally Posted by Souschef (Post 2507484)
...
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 11-08-2020 04:37 AM

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 11-10-2020 05:57 PM

Quote:

Originally Posted by Dtail (Post 2504240)
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 11-11-2020 10:12 AM

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 11-11-2020 11:10 AM

Quote:

Originally Posted by wildsun (Post 2508886)
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 11-11-2020 12:28 PM

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 11-12-2020 07:37 AM

Quote:

Originally Posted by Music Lover (Post 2509118)
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 11-12-2020 07:59 AM

Quote:

Originally Posted by Exchme (Post 2509170)
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 11-12-2020 08:17 AM

Quote:

Originally Posted by gauss (Post 2509455)
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 11-12-2020 10:48 AM

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 11-12-2020 05:04 PM

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 12-16-2020 09:20 AM

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 12-16-2020 12:47 PM

Quote:

Originally Posted by tmitchell (Post 2504165)
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 12-16-2020 03:14 PM

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

iloveyoga 12-16-2020 03:19 PM

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

brett 12-17-2020 10:50 AM

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 12-17-2020 12:09 PM

Quote:

Originally Posted by brett (Post 2528719)

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 12-17-2020 12:14 PM

Quote:

Originally Posted by Out-to-Lunch (Post 2528765)
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 12-17-2020 02:35 PM

Quote:

Originally Posted by Out-to-Lunch (Post 2528765)
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.

Out-to-Lunch 12-17-2020 03:53 PM

Quote:

Originally Posted by SecondCor521 (Post 2528841)
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.

Thanks for the comments. FWIW, after I posted (and before I read this) I reflected that a lot of the things on your list ARE part of my sucess, and I AM lucky. I also "did the right things," but that is a necessary, not sufficient, condition.

One of the musicians I rather like has a lyric: "It takes a whole lot of help to make it on your own."

Keim 12-17-2020 07:26 PM

Quote:

Originally Posted by Out-to-Lunch (Post 2528877)
Thanks for the comments. FWIW, after I posted (and before I read this) I reflected that a lot of the things on your list ARE part of my sucess, and I AM lucky. I also "did the right things," but that is a necessary, not sufficient, condition.

One of the musicians I rather like has a lyric: "It takes a whole lot of help to make it on your own."

Glad you saw that for yourself. Retiring (early or not) does require a degree of luck, along with work and sacrifice. We never know the cards others have been dealt.

Out-to-Lunch 12-17-2020 07:40 PM

Quote:

Originally Posted by Keim (Post 2528979)
Glad you saw that for yourself. Retiring (early or not) does require a degree of luck, along with work and sacrifice. We never know the cards others have been dealt.

Now, to be fair to me, such a response does not deny the role of luck. It invites (admittedly, in the best possible reading), the interlocutor to examine what was luck and what was not.

jazz4cash 12-17-2020 08:11 PM

Maybe something like “Lucky, yes.... but there’s a LOT more to it than that.”

Out-to-Lunch 12-17-2020 08:22 PM

Quote:

Originally Posted by jazz4cash (Post 2529007)
Maybe something like “Lucky, yes.... but there’s a LOT more to it than that.”

I like it!

Dtail 12-17-2020 10:32 PM

I just say yeah got lucky and landed a job on Wall Street and then usually no follow up.

bada bing 12-17-2020 11:25 PM

In 2000 ARCO (Atlantic Richfield Company) was broken apart with the majority of assets absorbed by BP. As part of the sale, the employees were offered a generous severance that included "5&5" (5 years tacked onto years of service and onto age for purposes of pension calculations). This coincided with the end of the DotCom bubble, where any idiot with a brokerage account had been making it as a sideline day-trader. It was perfectly natural for quite a few of the ARCO employees to take their 5&5 pension as a lump sum with plans of day trading to an early retirement fortune. I don't know of one single one out of 20 or so I'm familiar with that weren't back at work within 4-5 years. In many cases unable to find work at anywhere near their previous position or income.

tb001 12-17-2020 11:48 PM

Not running out yet, but 5 years ago we assumed we would be getting an inheritance from DH’s mom. Her and her late husbands pension and SS covered all their expenses plus, she had 7 figures saved and was adding to it every year. I don’t know for sure where she stands financially now, but any inheritance we might have thought was coming is likely gone. In home care is quickly eating up her savings, in spite of having a great insurance plan that covers a chunk of it.

Dtail 12-18-2020 06:18 AM

Quote:

Originally Posted by tb001 (Post 2529066)
Not running out yet, but 5 years ago we assumed we would be getting an inheritance from DH’s mom. Her and her late husbands pension and SS covered all their expenses plus, she had 7 figures saved and was adding to it every year. I don’t know for sure where she stands financially now, but any inheritance we might have thought was coming is likely gone. In home care is quickly eating up her savings, in spite of having a great insurance plan that covers a chunk of it.

Interesting.
Could eventually be in a partial version of your situation.
My father at 90 y.o. now needs 24/7 home care. My parents also have a 7 figure portfolio which was being added to each year, but will decrease for the first time next year.
They also do have an LTC plan, but it will only cover 66k yearly and the cost is around 150k yearly.
Ironically, the nursing home coverage is similar.

What is different is I control all their investments, so I can see what the balances and total spending is.
Additionally, they do have an irrevocable trust for some of their monies, so perhaps the monies won't go to zero.

Andre1969 12-18-2020 07:06 AM

Quote:

Originally Posted by jazz4cash (Post 2506393)
Thanks. That’s a relief.

Yeah, I believe SSDI is the part on your SS statement where it says "If you became disabled right now, your payment would about.... $X,XXX a month".

Looking at my own SS statement, the disability benefit is just slightly below what my benefit would be if I took SSA at 67. However, that may vary from person to person.

At some point though, you quit getting SSDI and get your regular SS benefit, instead. I can't remember if that's at age 65, or your FRA.

My uncle went on disability when he was 61, and I do remember at some point, his benefit went down slightly when he went from SSDI to regular SS. His FRA was 66, but I swear it seems longer ago than that. But, 65 versus 66 is only one year, and my memory ain't what it used to be! :facepalm:

As for SSI, according to the SS website, the maximum SSI payment, as of 2020, is $783/mo for an individual and $1,175 for a couple. However, many states add a supplement to that.

tb001 12-18-2020 09:30 AM

Quote:

Originally Posted by Dtail (Post 2529105)
Interesting.
Could eventually be in a partial version of your situation.
My father at 90 y.o. now needs 24/7 home care. My parents also have a 7 figure portfolio which was being added to each year, but will decrease for the first time next year.
They also do have an LTC plan, but it will only cover 66k yearly and the cost is around 150k yearly.
Ironically, the nursing home coverage is similar.

What is different is I control all their investments, so I can see what the balances and total spending is.
Additionally, they do have an irrevocable trust for some of their monies, so perhaps the monies won't go to zero.

Yes, sounds very similar. DH controls her finances and bills, so he knows the details—I just know he’s worried. She has dementia, but is still ok being at home as long as there is care there, so it’s hard to think of moving her. But 24/7 care gets $$ fast, even when you’re spending very little on anything else.

ncbill 12-18-2020 12:53 PM

Hmmm...I buried a relative last year who was laid off from their job (entire department outsourced) around age 60...cashed in their pension to make it to SS at age 62.

Despite a modest inheritance & me buying out their share of a mountain cabin owned by our extended family they still relied on a HELOC (in addition to the primary mortgage) to make ends meet.

When they died so few liquid funds were left I had to loan their estate enough to payoff both the mortgage/HELOC until the house sold.

However, despite all the above they managed to stay in their home of nearly 40 years until just a few months before their death...still managed to travel out of state a couple of times annually to see grandkids, & kept up with a dozen or so friends locally.

Music Lover 12-18-2020 01:43 PM

Quote:

Originally Posted by ncbill (Post 2529335)
Hmmm...I buried a relative last year who was laid off from their job (entire department outsourced) around age 60...cashed in their pension to make it to SS at age 62.

Despite a modest inheritance & me buying out their share of a mountain cabin owned by our extended family they still relied on a HELOC (in addition to the primary mortgage) to make ends meet.

When they died so few liquid funds were left I had to loan their estate enough to payoff both the mortgage/HELOC until the house sold.

However, despite all the above they managed to stay in their home of nearly 40 years until just a few months before their death...still managed to travel out of state a couple of times annually to see grandkids, & kept up with a dozen or so friends locally.

And that's why some people just don't care about saving...they have enough to get by by their standards. When you try to compare how they live to YOUR standards you can't understand it. But many people in that situation are perfectly content.

I've told the story several times about my friend who couldn't afford to pay his mortgage and had no hope of retiring on a lower income. He sold his house, moved into an apartment, and was debt free for the first time in his life. Within 6 months he leased an $85k vehicle (and has since then has traded up to a more expensive one), and retired early taking an age and years of service penalty. The lease and his rent are about 75% of his monthly income. And he's perfectly happy.

pb4uski 12-18-2020 02:02 PM

Quote:

Originally Posted by Dtail (Post 2529057)
I just say yeah got lucky and landed a job on Wall Street and then usually no follow up.

+1. It's not worth getting into it with them.

I would say something like "Yes, we have been fortunate that we lived below our means and saved regularly as the experts advise and our investments did well so we could retire earlier than many" and leave it at that.

ncbill 12-18-2020 02:26 PM

Quote:

Originally Posted by Music Lover (Post 2529359)
And that's why some people just don't care about saving...they have enough to get by by their standards. When you try to compare how they live to YOUR standards you can't understand it. But many people in that situation are perfectly content.

I've told the story several times about my friend who couldn't afford to pay his mortgage and had no hope of retiring on a lower income. He sold his house, moved into an apartment, and was debt free for the first time in his life. Within 6 months he leased an $85k vehicle (and has since then has traded up to a more expensive one), and retired early taking an age and years of service penalty. The lease and his rent are about 75% of his monthly income. And he's perfectly happy.

Yeah, my relative understood that staying in their home was not sustainable and was open to selling it and moving into an apartment before they got their unexpected terminal diagnosis.

For those interested, their LTC costs were one month in a shared room in an cross-town nursing home (~$8,000) which was awful, then I moved them to a private room in an ALF near me (~4 months @ ~$4,000/month)...on Hospice once institutionalized which covered most needs (medical bed, oxygen concentrator, pain meds)

aja8888 12-18-2020 03:04 PM

Quote:

Originally Posted by bada bing (Post 2529063)
In 2000 ARCO (Atlantic Richfield Company) was broken apart with the majority of assets absorbed by BP. As part of the sale, the employees were offered a generous severance that included "5&5" (5 years tacked onto years of service and onto age for purposes of pension calculations). This coincided with the end of the DotCom bubble, where any idiot with a brokerage account had been making it as a sideline day-trader. It was perfectly natural for quite a few of the ARCO employees to take their 5&5 pension as a lump sum with plans of day trading to an early retirement fortune. I don't know of one single one out of 20 or so I'm familiar with that weren't back at work within 4-5 years. In many cases unable to find work at anywhere near their previous position or income.

The ARCO breakup started in 1985 when I took the initial "package" which was the same (I was in my 40's at the time). At that time, 6,000+ employees took the deal. I went to work elsewhere and did well and collected on the ARCO stuff later on.

RunningBum 12-18-2020 03:12 PM

If I get annoyed enough to respond to a "lucky" comment, I usually say that I made a lot of my luck, or that I put myself in good position to be lucky. I can say a lot to support that if challenged, but I can't recall that I ever have been.

YVRRocketSurgery 12-18-2020 07:38 PM

I really enjoy reading Morgan Housel's writings around the psychology and behavioural aspects of money. One of the topics he's written about a few times and discussed over the last few months while promoting his new book is the impact of luck and chance on success and failure.

In a blogpost, he writes about how it's difficult to quanitify how much luck plays into success and failure. And because it's hard to quantify, it's kind of rude to suggest that someone's success is owed to luck so the influence of luck is often ignored. And conversely, when analyzing why businesses failed, investments didn't pan out, and careers got stuck in neutral, it would be a mistake to just think all are solely because of lack of effort, lack of good analysis, and laziness. Just to quote one paragraph which I feel encapsulates it:
People’s lives are a reflection of the experiences they’ve had and the people they’ve met, a lot of which are driven by luck, accident, and chance. The line between bold and reckless is thinner than people think, and you cannot believe in risk without believing in luck, because they are two sides of the same coin. They are both the simple idea that sometimes things happen that influence outcomes more than effort alone can achieve.
While discussing his book on a number of podcasts, another example Morgan gives is how Bill Gates attended one of the few schools in the US at the time to have a computer. Would there be a Microsoft if he didn't attend that school and had the environment to develop his affinity to computing? Or what would have been if his best friend at the time, who was apparently just as smart and more business savvy, wasn't killed in an alpine accident in his late teens?

A personal example is that I put myself in a position to be selected for some international consulting projects my megacorp won. But how would my career (and savings) have gone if my company didn't want to pursue international projects, which in fact happened a few years later?

The point is, yes, we consciously do things to put ourselves in a better position to succeed, but I would not completely discount serendipity, chance, and circumstance. If someone deems my success as due to luck, personally, I wouldn't feel completely offended because I appreciate that a lot of random things have gone my way.

We also don't have complete and perfect information. People make the best decisions they can with the info they have. And unfortunately, sometimes the variables in the equations don't play out as expected.

socca 12-18-2020 08:20 PM

Quote:

Originally Posted by YVRRocketSurgery (Post 2529612)
The point is, yes, we consciously do things to put ourselves in a better position to succeed, but I would not completely discount serendipity, chance, and circumstance.

A few months ago I encountered an interesting meme: "You are your tribe." I thought this was a bit extreme, but it definitely made me think (and still does). Should I be ashamed of wanting "my tribe" to be composed largely of "winners" (choose your favorite criteria for measuring "success")?

This meme was on my mind when a distant relative popped up recently wanting to be my friend. I don't respect this person's life choices (waiting around for two inheritances rather than earning a living; one inheritance failed to arrive and the other has been greatly delayed because a pesky relative just refuses to die ... :)) I politely declined the request, thus preserving my rather modestly-sized tribe "as is".

Whoops - I guess this thread is going off-topic. Sorry! :greetings10:


All times are GMT -6. The time now is 03:16 AM.

Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.