Bernicke Model vs Constant Spend Level

[tb001]

I think that problem exists for the constant spending model too. Probably all models. LTC or major health related events need to be addressed. In the Bernicke or constant spending model, I would want to know that I’d have a pretty significant sum left in my later years that would essentially be my LTC insurance. If I don’t spend it, it would be my estate/inheritance.

For us us a natural decline in spend with aging, a la Bernicke, would go a long way towards paying for several years of ltc. But obviously depends on your initial budget and how much travel and other btd stuff is in there.

 

[tmm99]

I think that the LTC is a concern for any spending model like some people here are saying.

Bernicke's method seems a bit steep in that he thinks our activity level declines in our mid-50s and keeps on declining until the 70s then stabilizes. A lot of us spend a whole lot more money in our 50s and 60s because we have more time when we retire and travel more. If you have kids that leave their nest in your mid-50s, I get that your spending will decrease, but otherwise, I think we end up spending more money well in our 70s and then maybe decline some in our 80s as it becomes more challenging to travel a lot.

I do enjoy seeing tons of money left at the end of life when I use Bernicke's method, but it's just a nice fantasy IMO.